India Pitches for US TV Production Outsourcing

03 April 2006

"Hiring someone in New York will cost $140 an hour, compared with $20 here," claims Prannoy Roy, chairman of English-language news channel operator New Delhi Television.

His words should send cold shivers down the spines of all working in US TV, save the corporate accountants and those in front of the cameras.

Roy is referring to costly technical, editing and post-production functions in America's massive TV industry, much of which could soon be outsourced to India and other low-cost parts of the globe.

NDT has recently entered into an alliance with Genpact, the subcontinent's largest provider of offshore outsourcing services, thirty-three percent of which is owned by US multinational General Electric, parent of NBC.

This powerful duo, with will initially target US studios and TV networks, offering to dramatically slash the cost of digitizing libraries of old analog programs - creating graphics and subtitles, editing of raw footage, tagging material and archiving programs.

But to Roy and his colleagues, even this juicy segment of the US market is merely the Andean trickle that eventually becomes the Amazon.

According to the Indian entrepreneur, around seventy percent of the global media and entertainment industry's output - valued in 2005 by PwC at £770 billion ($1,339bn; €1,103bn) - could be digitized. And about the same percentage could be outsourced, potentially offshore to India.

Says Roy: "There's a lot of stuff which is expensive but easy to do. There are fifty years of analogue tapes lying in vaults one mile long and they all have to be put on to disk, logged and meta-tagged. It's a massive one-off task that in many ways is like the Y2K debugging exercise of the late 1990s."

But after completion comes the real crunch.

"For a one-hour program you might shoot for sixty hours and have to cut 57 hours of rubbish before you ... make any real creative decisions," says Roy.

Given his claim that the cost of editing and production in India is one-seventh that of New York, Wall Street's roar of "no contest" can already be heard in New Delhi!

But it won't be an overnight conquest, acknowledges Genpact ceo Pramod Bhasin. He accepts there will be skepticism as to whether showbiz lends itself to the type of process re-engineering that has transformed other business sectors such as banking.

"The growth of the entertainment industry in India has given rise to a lot of skilled people," he says. "I'm certain that it's going to evolve the same way as the rest of our BPO [banking practice outsourcing] once we get a couple of anchor clients."

The European TV industry too should be aware of the huricane approaching from the East, which will likely make landfall in Berlin, Paris and London before it hits New York.

Data sourced from Financial Times Online; additional content by WARC staff