The tenth FICCI Frames entertainment convention got underway in Mumbai today (Feb 17) with industry leaders chewing over the impact that the global financial crisis is having on the local film and television industries.

Although domestic box office picked up in the fourth quarter of 2008, India's film industry is facing a liquidity crunch that is making it difficult to raise fresh capital. According to a KPMG report, film industry revenues are expected to remain flat at around $2.2bn (Rs109.2bn) in 2009, due to the declining value ofancillary rightsand lower number of releases (see separate story).

'We are feeling the effects, but this is also the time to sit down and reorganise,' said Yash Chopra, chairman of the FICCI entertainment committee and Yash Raj Films. 'This is a time for correction and introspection.'

Kunal Dasgupta, CEO of Sony Entertainment Network, acknowledged there has also been a downturn in the television industry, but pointed to encouraging developments in 2008 such as the launch of the Indian Premier League, the top-rating Colors channel and an increase in original animation content.

'The way to beat recession is through innovation and this is one of the few markets in the world which is still innovating and growing,' Dasgupta said.

Despite the slowdown, around 2,000 Indian and 800 foreign delegates from 25 countries are attending FICCI Frames, with the US as the officialpartner country and a large delegation under the umbrella of the UK Film Council (see separate story). The three-day event is organised by the Federation of Indian Chambers of Commerce and Industry (FICCI).

Intel Corp vice president, legal & corporate affairs, Donald M. Whiteside - who is heading up the US delegation - flagged up some of the concerns of the US entertainment industry which has stepped up its investment in India in recent years. These include regulatory barriers, high entertainment taxes and lax protection of intellectual property rights. 'We can meet the challenges of the worldwide economic crisis by seizing the opportunities provided by working together,' Whiteside said.

Also attending the opening ceremony were Information & Broadcasting and External Affairs minister Ananda Sharma, actress Deepika Padukone and filmmaker Karan Johar who is taking over Yash Chopra's role on the FICCI entertainment committee next year.

Sharma said the government would consider FICCI's calls forIndia's entertainment tax to be subsumed into the goods & services tax which is being introduced in April 2010.

In a later session, India Today chairman Aroon Purie outlined one of the major problemsfacing the Indian broadcasting industry, which is thehigh carriage fees charged by cable operators. 'Consumers pay around $3bn (Rs150bn) to cable operators while net earnings for broadcastersare only (Rs10bn) - this is patently unfair,' said Purie. 'The government should be addressing this issue and not looking at how channels are priced.'

Among delegates scheduled to speak in coming days are NBC Universal International president Peter Smith, producer Barrie M. Osborne, filmmaker Shekhar Kapur and UTV chairman Ronnie Screwvala. Actor Danny Glover is also scheduled to make an appearance.

The event wraps on Feb 19 with the presentation of Living Legend Awards to actors Sharmila Tagore and Shashi Kapoor.