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PROJECT REPORT
Media & Entertainment
MENTOR : Prof. Laxman
Submitted By:
Batch:
2009-11
Mr.
Satish Suryawanshi
Mr. Vijay
prakash
Evolution
Mass media helps in connecting people and
"brings the globe into our glance". Let us take a look into the
history as well as origin of mass media, which is also
popularly known as public media. Mass media includes print
media like newspaper and magazines, electronic media like
radio, television and video and new age digital media like
internet, blogs and mobile phones. To know the origin and
history of media, we should know the growth and evolution of
mass media.
History and Origin of Media & Entertainment
History of mass media can be traced back to
the early days of dramas that were performed in various
cultures. However, the term Mass Media originated with the
print media that was also its first example. The first
newspaper was printed in China 868 A.D, but due to the high
cost of paper and illiteracy amongst people, it didn’t prosper.
Regarding the origin of the Mass Media, Europe can boast to
be the primary source. It was Johannes Gutenberg, who for
the first time printed a book in a printing press in 1453.
Gradually, during the period post-Second World War, radio,
television and video were introduced. The audio-visual
facilities became very popular as they provided information
and entertainment. Of late, it is the Internet which has
become the latest and most popular of the mass media.
Here, information is been generated through various websites
and search engines. One can play games, listen to radio while
working and chat with friends and relatives, irrespective of
location. It also gives information on various topics such as
literature, politics, science, sports, fashion, movies,
education, career, jobs etc. similar to other types of mass
media.
Thus, due to the progress of science and technology,
history of media has evolved and reached the present-day
world of internet, cellular phones, blogs, podcast
Key Drivers
Economic growth of the country in general and rising
disposable income levels in particular.
Gradually liberalizing attitude of the government.
Greater interface with international companies.
Privatization and growth of the radio industry.
Advancement in Technology.
Favorable regulatory initiatives.
Liberalized foreign investment regime.
The size of E&M in India is currently estimated
at Rs. 437 billion and is expected to grow at a compounded
annual
growth rate of 18 percent over the next five years. In the last
year, the Industry has grown by 20 percent.
The Indian Entertainment and Media industry is
projected to grow from an estimated Rs. 437 billion to Rs. 1
trillion in 2011, translating into a cumulative growth of 18
percent over the next five years. One of the key reasons for
this high projected growth is the fact that the Entertainment
and Media industry is a cyclical industry that grows faster
when the economy is expanding.
The Indian economy continues to perform
strongly and one of the key sectors that benefits from this
fast economic growth is the E&M industry. It also grows faster
than the nominal GDP during all phases of economic activity
due to its income elasticity wherein when incomes rise, more
resources get spent on leisure and entertainment and less on
necessities. Further, consumption spending itself is
increasing due to rising disposable incomes on account of
sustained growth in income levels, and this also builds the
case for a strong bullish growth in the sector.
Television
Subscription revenues are projected to be the
key growth driver for the Indian television industry over the
next five years. Subscription revenues will increase both from
the number of pay TV homes as well as increased
subscription rates. The buoyancy of the Indian economy will
drive the homes, both in rural and urban (second TV set
homes) areas to buy televisions and subscribe for the pay
services. New distribution platforms like DTH and IPTV will
only increase the subscriber base and push up the
subscription revenues
Growth of TV Channels in India
The number of private satellite TV channels has
grown astronomically over the years, from 1 TV channel in
2000 to 273 TV channels in 2007 (till 31.12.2007). The
number of non-news & current affairs TV channels has grown
from 0 to 115 and that of news & current affairs TV channels
has grown from 1 to 158.
DTH Service
Direct-To-Home (DTH) Service refers to distribution
of multi-channel TV programmes in Ku Band by using a
satellite system for providing TV signals direct to subscribers'
premises.
DTH provides subscribers the advantage of
geographical mobility meaning thereby that once a customer
purchases DTH hardware, he/she can continue to use the
same unit anywhere in India. DD DIRECT+ is India's first and
only Free To Air (FTA) Direct-To-Home Service being provided
by Prasar Bharati. Apart from Prasar Bharati - a public service
broadcaster, M/s Dish TV India Ltd. M/s Tata Sky Ltd, and M/s
Sun Direct TV Pvt. Ltd. M/s Reliance Big TV Pvt. Ltd., M/s
Bharti Telemedia Ltd.and M/s. Bharat Business Channel Ltd.
have also been granted license for operating DTH service.
The eligibility conditions provide for total foreign
equity holding, including FDI/ NRI/ OCB/ FII, in the applicant
company not to exceed 49%, and within the foreign equity,
the FDI component not to exceed 20%. It also provides that
applicant company must have Indian management control
with the majority representatives on the Board as well as
Chief Executive of the Company being resident Indians.
Filmed entertainment
Indians love to watch movies. And advancements
in technology are helping the Indian film industry in all the
spheres – film production, film exhibition and marketing. The
industry is increasingly getting more corporatised. Several
film production, distribution and exhibition companies are
coming out with public issues. More theatres across the
country are getting upgraded to multiplexes and initiatives to
set up more digital cinema halls in the country are already
underway. This will not only improve the quality of prints and
thereby make film viewing a more pleasurable experience,
but also reduce piracy of prints.
Print media
A booming Indian economy, growing need for
content and government initiatives that have opened up the
sector to foreign investment are driving growth in the print
media. With the literate population on the rise, more people
in rural and urban areas are reading newspapers and
magazines today. Also, there is more interest in India
amongst the global investor community. This leads to
demand for more Indian content from India. Foreign media
too is evincing interest in investing in Indian publications. And
the internet today offers a new avenue to generate more
advertising revenues
Radio
The cheapest and oldest form of entertainment
in the country, which was hitherto dominated by the AIR, is
going to witness a sea-change very shortly. In 2005, the
government opened up the sector to foreign investment –
and this is the key factor that will drive growth in this sector.
As many as 338 licences are being given out by the Indian
government for FM radio channels in 91 big and small towns
and cities. This deluge of radio stations will result in rising
need for content and professionals. New concepts like
satellite, internet and community radio have also begun to hit
the market. Increasingly, radio is making a comeback in the
lifestyles of Indians.
FM radio
During the year, the Cabinet approved the grant of
permission to the FM broadcasting companies for creation of
subsidiaries, and merger/demerger/amalgamations of
companies by way of transfer of shares in partial modification
of the policy on expansion of FM Radio Broadcasting services
through Private Agencies (Phase-II). Total 241 private FM
Channels are operational in 83 cities of the country. A total
amount of Rs.1609 crores received by way of licence fees
from private FM Channels, including Rs.40.5 crores during the
current year. The Government has also conveyed its views on
FM Phase III policy to TRAI and sought for its
recommendation.
FM Policy Phase-II has been well accepted by
all stakeholders, which resulted in huge growth not only in FM
radio industry but also in employment opportunity and has
also created a demand for FM radio in other cities. Keeping
this in mind and to accelerate further growth of FM industry,
the Government intends to further expand FM radio to other
cities through private agencies under Phase-III.
Satellite Radio
At present M/s Worldspace India Private Ltd, a
wholly owned subsidiary of M/s Worldspace Asia Pvt. Ltd.
Singapore is providing these services under an FIPB approval
dated 7.12.1998. World Space has been permitted to
undertake the following activities -
(i) For setting up of a 100% wholly owned subsidiary for
carrying out software programming activities in India in the
fields of educational, sports and entertainment software
programs as under:
(a)Sourcing/commissioning/production of digital audio and
multimedia software programs for international and domestic
market.
(b)Setting up state-of-art studios using latest equipment.
(c)Providing research, consultancy & other service in related
areas.
(ii) To import digital satellite receivers, data adaptors, PC-
add-on cards and accessories and sell the same to the
distributors/ dealers either as customs bonded warehouse
sale or on a cash and carry basis for introducing international
standard, state-of-the-art audio receivers in India to meet the
growing requirement for use of World space systems for
different application including education, disaster
management and development communications.
(iii) To set up customer care centre in all the major centers.
(iv) To carry out various services to its parent/associates
companies in realizing the revenue opportunities arising out
of education, information and entertainment and other
services of World space Systems like collection of revenue.
Usage of revenue collected for activities specified by World
space in India.
(v) To establish a call centre and services.
Community Radio
Radio as a communication medium plays an
important role in the nation's sociocultural, political and
economic development. Community radio, as distinct from
public service broadcasting, serves to bring small
communities together, focuses on the common man's day-to-
day concerns and helps in realising local aspirations. In a
number of countries, community radio has played an
important role in informing and empowering people,
especially the poor and vulnerable groups and gives a voice
to the voiceless.
The Policy on Community Radio was liberalized during the
year 2008 to bring in the civil society and voluntary
organizations working not for profit also under its ambit. Only
educational institutions were earlier permitted to set a
community radio. The policy has been liberalized by the
government with a view to allow greater participation by the
civil society on issues of development and social change.
Presently, 29 Community Radio Stations are operational. Out
of this, 28 institutions were granted permission under the old
guidelines and one Institution viz. Delhi University was given
permission.
Music
The industry has been plagued by piracy and had been
showing very sluggish growth over the last few years, both in
India and globally. However, ‘mobile music’ and ‘licensed
digital distribution’ services are projected to fuel the recovery
of the music industry the world-over. The pace of growth in
mobile music reflects the fact that consumers increasingly
view their wireless device as an entertainment medium,
using those devices to play games and listen to music, while
carriers are actively promoting ancillary services such as
ringtones to boost average revenue per user. Ringtones
currently constitute the dominant component of the mobile
music market. Licensed digital distribution services are also
contributing significantly to growth in all regions.
Live entertainment
This segment of the entertainment industry,
also known as event management, is growing at a fast and
steady rate. While this industry is still evolving, Indian event
managers have clearly demonstrated their capabilities in
successfully managing several mega national and
international events over the past few years. In fact, event
managers are also developing properties around events. The
growing number of corporate awards, television and sports
events are helping this sector. With rising incomes, people
are also spending more on wedding, parties and other
personal functions. However, issues like high entertainment
taxes in certain states, lack of world-class infrastructure and
the unorganized nature of most event management
companies, continue to somewhat check the potential growth
in this segment of the industry.
Out-of-home advertising
Outdoor media sites in India are predominantly
owned or operated by small, local players and are typically,
directly marketed by them to advertisers and advertising
agencies. However, this segment too is witnessing a sea-
change with technological innovations. Growing billboard
advertising is fuelled by technologies such as light-emitting
diode (LED) video billboard. This is a segment that is seeing
interesting technological innovations across the world and is
likely to evolve in India too in the short-term.
Internet advertising
An estimated 28 million Indians are currently
hooked on to the internet. And this rising number is leading
to the growth of internet advertising, which today stands at
approximately INR 1 billion. The internet is being used for a
variety of reasons, besides work, such as chatting, leisure,
doing transactions, writing blogs etc. This offers a huge
opportunity to marketers to sell their products. And with
broadband becoming increasingly popular, this segment is
expected to grow by leaps and bounds.
Recent Developments
During the year 2008-09, 15 proposals for
FDI in Indian entities in the news and current affairs sector
have been approved. Further, permission has been given for
publication of 189 Indian editions of foreign speciality,
technical and scientific magazines. Permission has also been
given for publication of 106 specialties, technical and
scientific magazines by Indian entities, who have taken FDI.
Availability of Indian editions of foreign scientific, technical
and specialty periodicals at an affordable cost has benefited
the students, professionals and the scientific and technical
community greatly.
As a further measure of policy
liberalization, Government has allowed Indian edition of
foreign news magazines for facilitating wider readership at
affordable prices. Also, Government has recently announced
facsimile edition of international news papers to be brought
to be India. Government has reviewed the print
advertisement policy and brought about changes to support
small and medium newspapers.
As per that policy, advertisement support
has been increased from 10% to 15% for Small newspapers
and from 30 to 35% for Medium newspapers, in money terms.
Minimum publication period requirement drastically reduced
from 36 months to 6 months for regional languages
newspapers.
Investment Opportunities
Theatre/ Multiplex Infrastructure
Television Segment
Film Entertainment
Animation Segment
Print Media
Mobile Entertainment
Television Software Content
Advertising
Policy Framework
a. FDI Policy
The government of India has put in place a
liberal and transparent investment policy. FDI up to 100 per
cent is allowed under the automatic route in most
sectors/activities. FDI policy in India is reckoned to be among
the most liberal in emerging economies.
The entertainment and media industry has also benefitted
considerably from the initiatives taken by the government
over the years. The FDI limits in the various segments of the
entertainment and media industry are highlighted below:
b. Film Industry
Under automatic route upto 100 per cent FDI is permitted in
film industry (i.e. film financing, production, distribution,
exhibition, and marketing and associated activities relating to
film industry) subject to the following:
Companies with an established track record in films, TV,
music, finance, and insurance would be permitted
The company should have a minimum paid up capital of
US$ 10 million if it is the single largest equity
shareholder and at least US$ 5 million in other cases
Minimum level of foreign equity investment would be
US$ 2.5 million for the single largest equity shareholder
and US$ 1 million in other cases
Debt equity ratio of not more than 1:1, i.e., domestic
borrowings shall not exceed equity.
c . Radio Industry
Up to 20 per cent FDI is allowed in Radio Industry subject to
an approval from Foreign Investment Promotion Board (FIPB)
in addition to the guidelines notified by Ministry of
Information and Broadcasting.
d. Print Media
The regime of Foreign Investment in Indian
entities publishing newspapers and periodical is as follows: -
I. Foreign investment (including FDI) upto 74% in Indian
entities publishing scientific/technical and speciality
magazines/ periodicals/journals.
Where only Indian editions of foreign
scientific/technical/ speciality journals etc. are being
published with no foreign investment (including FDI) being
made, the Ministry of Information and Broadcasting will give
approvals on a case by case basis subject to prescribed
conditions.
II. FDI upto 26% in Indian entities publishing newspapers
and periodicals dealing in news and current affairs with
suitable safeguards like verification of antecedents of foreign
investor, keeping editorial and management control in the
hands of resident Indians and ensuring against dispersal of
Indian equity.
Industry size and Growth Potential
The Indian Entertainment and Media industry, yet
again, continues to out-perform the Indian economy and, yet
again, is one of the fastest growing sectors in India.
Entertainment and Media industry generally tends to grow
faster when the economy is expanding. The Indian economy
has been growing at a fast clip over the last few years, and
the income levels too have been experiencing a high growth
rate.
Above that, consumer spending is
also on the rise, due to a sustained increase in disposable
incomes, brought about by reduction in personal income tax
over the last decade. All these factors have given an impetus
to the E&M industry and are likely to contribute to the growth
of this industry in the future. Besides these economic and
personal income-linked factors, there are other factors that
are contributing to this high growth rate. Some of these are
enumerated below:
Issues facing the industry (key challenges)
Though the Entertainment and Media industry
is growing in leaps and bounds, the full potential is yet to be
tapped. One of the ways of realizing the potential is not only
the removal of certain obstacles in the industry but also the
provision of certain incentives to key segments of the
industry in order to fuel the industry growth drivers further
and thereby realize its full potential. Some of the
recommendations as provided by FICCI are as below:-
Lack of a uniform media policy for foreign investment
The sector currently lacks a consistent and uniform
media policy for foreign investment. Some of the
inconsistencies include different caps in foreign direct
investment in various segments. This is enumerated below:
• Television distribution: DTH 49% (strategic FDI only 20%);
cable 49% (ownership can only be with India citizens).
• Content (news): Television and print - 26%; radio - nil
• Content (non-news): Television and print - 100%; radio 20%
(only portfolio)
Digitalization of Television Networks
India, today, does not have a national digital policy or
plan. Though the regulator TRAI came out with
recommendations for digitalization of cable networks, there
are several more measures that are required to be taken in
order for the industry to truly benefit from Digitalisation:
Conversion to digitalization should be mandatory and not left
on a completely voluntary basis
A clear time frame needs to be defined for transition to digital
including a launch date and a sunset date Licensing process
for allocation of spectrum should be made stringent to filter
out non-serious players e.g. net worth, proper declaration of
subscriber base, area of operation etc. Fiscal incentives such
as waiver of service and entertainment tax, income tax
holiday, etc. to be provided to operators for transition to
digital.
Uniform Entertainment Tax across all states
Since levy of entertainment tax and regulation of
cinemas is a State subject, the Centre presently has a limited
role to play. The long-standing demand of the film industry is
to shift ‘Entertainment and Media’ from the State List to the
Concurrent List through a constitutional amendments. This
will enable uniform policies for Cinema Construction Bye-laws
and Entertainment tax. There is a need to implement uniform
tax policies across the country, to enable standardized
growth. The recommendation is to have a uniform
Entertainment tax so as to stop reportage of short box office
collections resulting in a loss to the ex-chequer.
Customs Duty
Customs duty is levied on import of equipment and
other hardware used in the production and post production of
filmed entertainment programs. At a time when India is trying
to position itself as a hub for production of entertainment
and competing in the International market on an equal
footing, the necessary infrastructure and equipment is of vital
importance. To provide impetus to the technological
upgradation of facilities and infrastructure, the necessary
equipment and hardware must be allowed to be imported
without the additional burden of customs duty.
Multiplexes
An Income Tax Concession under Sec. 80 –1B of
the income tax act was introduced, with effect from 1st April
2002, allowing Multiplexes commissioning before 31st March
2005, an income tax rebate to the extent of 50% on book
profits. It is requested that this concession be reintroduced so
as to enable growth of exhibition sector in the country.
Piracy
As India moves into knowledge based economy,
a strong Intellectual Property regime which provides
adequate safeguards to the holder of copyright becomes
increasingly important. The menace of piracy is rapidly eating
away into the foundations of the entertainment industry. The
piracy issue should be handled at three levels; Policy,
Enforcement and Prosecution. The Industry recommends
allocation of specific funds to fight piracy of entertainment
content. This fund should be utilised in Advocacy and
awareness of the piracy issue and also enforcement & legal
matters.
Export Promotion
To promote Brand India, it is important that
Indian companies and producers participate in global festivals
and markets such as the Cannes & Berlin Film Festivals,
MIPCOM, MIDEM, MIPTV, IBC, NATPE, NAB, Interbee, AFM and
CASBAA under a common India umbrella. The Ministry of
Information and Broadcasting has taken initiative by deciding
to set up the task force with the specific aim of export
promotion. This council supported by adequate funding will
act as a catalyst for
exponential growth in exports of Indian Entertainment and
Media Industry.
Co- Production Treaties
Signing of Co-production Treaty with Canada, UK
is already being looked at by the Information and
Broadcasting Ministry. The Industry recommends that the
Government takes on further initiatives to enter into more
such treaties with many more countries so as to provide a
further boost to the Indian Film industry.
Education & Training
The Entertainment and Media industry today faces
an acute shortage of professionals. It is recommended that
suitable incentives should be provided by the Government for
setting up polytechnics, institutes and film schools. It is
recommended that existing universities should include Film,
Broadcast, Event Management and Digital technology in their
curriculum. Similarly, institutes of
Higher Learning like the IITs and the IIMs should be
encouraged to offer specialization in Media & Entertainment
Rationalisation of Customs Tariffs for Gaming Industry
Though the Global Gaming industry has been
growing in leaps and bounds across the world, advanced
gaming consoles are yet to penetrate the Indian market. One
of the primary reasons for the slow adoption is the high rate
of customs tariff applicable on the gaming consoles. The
customs tariff of approximately 36.74% translates to high
prices for such consoles, which affect affordability and
therefore access. These high tariffs are also leading to the
growth of a grey market in such products. Rationalization of
the tariff structures will therefore mean a more affordable
pricing structure that will enable greater
market access for such consoles.
Localization of Animation Content
Presently most of the animated content
shown in the networks are sourced from outside of India and
generally from the existing library at a discounted price. This
is one of the serious impediments on the growth of Indian
Animation Industry.
Many countries like Canada, China, Korea,
France, UK etc have made varying levels of mandatory
localization of content. Hence, FICCI has proposed 10%
mandatory local content on the networks to begin with and to
reach 30% over next three years as more indigenous
animation content gets prepared and
available for domestic / export markets.
Future prospects of industry
With the rapid advancement, in the next 5
to 10 years, it is probable that today’s leading media,
distribution, and advertising companies will continue to be
significant purveyors of branded content, services, and
commercial messages.
The future of Media and Entertainment industry depends
largely on the growth of Indian economy. The Indian economy
is growing at a fast rate; thus, there is also a bright future in
store for all the segments of the media and the
entertainment industry. With the incomes of the people rising
at a fast rate, people are spending more on their
entertainment and leisure activities. India is poised to enter
the period of immense growth in this sector.
The global entertainment industry is projected to
reach US$ 1.8 trillion by 2015. The Indian Media and
Entertainment industry is expected to grow at an annual
growth rate of 19% to reach Rs 83,740 crore by 2010.
The expected CAGR of various segments of the
Media And Entertainment industry in India till the year 2010
is as follows:
The expected CAGR of various segments of the Media And
Entertainment industry in India till the year 2010 is as
follows:
Radio - 32%
Music - 1%
Television - 24%
Film Industry - 18%
Print Media - 12%
The projected size of the various segments of the Media And
Entertainment industry in India till the year 2010 is as
follows:
Radio - Rs 1,200 crore
Music - Rs 740 crore
Television - Rs 42,700 crore
Film Industry - Rs 15,300 crore
Print Media - Rs 19,500 crore
Exciting new developments in the technologies
used in Media and Entertainment industry are taking place.
Animations, multiplexes, new distribution channels, the use
of Internet, are redefining the entertainment industry. All
these factors will favour the growth of Media and
Entertainment industry in India.
It is certain, however, that their business
models, revenue streams, competitive dynamics, and core
partnerships will evolve in radically new ways. The path
ahead is fraught with risk as well as rewards. On the supply
side, media providers, network operators, advertisers, and
measurement companies must contend with the challenges
and opportunities that stem from new ways of working with
one another. The demand side faces a similar set of
challenges and opportunities for consumer interaction.
In both cases, video content and delivery
companies must fully grasp that theirs is not a production
challenge of porting media content onto various devices, but
rather an orchestration challenge for delivering a quality
media experience that has lifestyle-enhancing qualities.
As content owners, network operators,
advertisers, and measurement companies begin to deliver
their goods and services through broadband, they become
more reliant on relatively immature technologies and on
partnerships and business relationships considered
unthinkable just a few years ago. These are early days for IP-
based video services, and marketplace participants must
understand how convergence affects current business
processes. During this evolutionary period, many different
paths towards a converged media environment will be tried.
There is likely to be increased complexity, as well as
economic inefficiencies, early on. However, as the different
industry participants collaborate on changing consumer
activity and business models, the refinement of the media
marketplace approach will become possible.
After the buzz of convergence deal-making
and new product launches has subsided, general business
principles rather than novel features will start to differentiate
companies. The payment process for on-demand video
content provides an example. From an operational point of
view, this payment for a single piece of content could include
one or more of the following: direct payment to the content
originator from a consumer; a portion of revenue to the
content originator, passed back by a distribution partner such
as a network provider; or payment by an advertiser for
placing a commercial message.
As we believe that convergence will play a very
crucial role in the development of the Indian entertainment
and media industry where consumers will increasingly be
calling the shots in a converged media world.
The term convergence describes two trends:
the ability of different network platforms (broadcast, satellite,
cable, telecommunications) to carry similar kinds of services;
and the merging of consumer devices such as telephones,
televisions or PCs. From a technology perspective, the twin
forces accelerating convergence are increased broadband
penetration and increased standardisation of networks and
devices to use the Internet Protocol (IP).Convergence
collapses previously distinct media distribution channels (for
example, broadcast/cable television, radio, print, online) into
a single delivery chain. A converged infrastructure supports a
range of interaction modes between users and content.
Convergence will thus require increased
collaboration between value chain partners to drive new
products and services to consumers. For content owners,
conducting researches to understand the needs of the
Lifestyle Media consumers will become crucial. They will need
to develop strategies for owning social networks and
capturing consumer activity information and will need to
develop convergence-native content rather than concentrate
solely on re-packaging existing content for multiple
platforms.
The Indian entertainment and media industry
today has everything going for it - be it regulations that allow
foreign investment, the impetus from the economy, the
digital lifestyle and spending habits of the consumers and the
opportunities thrown open by the advancements in
technology. All it has to do is to cash in on the growth
potential and the opportunities. The government, on its part,
needs to play a more active role in sorting out policy-related
impediments to growth. The industry needs to fight all
roadblocks- such as piracy- in a concerted manner, while
churning out high-quality, world class end products. The
entertainment and media industry has all that it takes to be a
star performer of the Indian economy.
BIBLIOGRAPHY:-
JOURNAL: - The Brand Reporter
WEBSITE: - www.imf.org
www.ibef.org
www.ficci.com
www.indiainbusiness.nic.in
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