ndia’s Media and Entertainment: Introduction The Media and Entertainment (M&E) industry is one of the fastest growing sectors in India. The industry primarily involves the creation, aggregation and distribution of content, products and services, news and information, advertising and entertainment through various channels and platforms such as Television, Print, Radio, and Films. Poised to grow at a compounded rate of 14 per cent to touch US$ 28 billion by 2015, the sector registered a growth of 11 per cent in 2010 over 2009 garnering US$ 14. 4 billion in revenue, according to a report released by KPMG and a leading industry body in March 2011. The report estimates the industry to achieve 13 per cent growth rate in 2011. While television and print continued to dominate the Indian M&E industry, sectors such as gaming, digital advertising, and animation VFX grew at a faster rate and show tremendous potential in the coming years. India’s Media and Entertainment: Growth Drivers The industry’s strong growth potential is attributed to factors such as: * Growing potential of the regional markets Increasing media penetration and per capita consumption, and * Rising importance of New Media (online media) driven by changing media consumption patterns * The Government’s thrust on digitisation and addressability for cable television, is expected to increase the pace of digitisation leading to tremendous growth in DTH and digital cable In 2010, advertising spends grew by 17 per cent to US$ 5. 93 billion and accounted for 41 per cent of overall industry size. Revenues from television advertising and subscription are expected to touch US$ 4. billion and US$ respectively during 2015, according to the report. Television Burgeoning channels and rich content have set Indian television industry into an attractive growth phase. The country is the third largest TV market in the world. The television industry is expected to grow by 12. 9 per cent cumulatively over 2009-14, according to PricewaterhouseCoopers (PwC). The industry grew by 15. 5 per cent in 2010 and is slated to register a growth rate of 13 per cent in 2012. TV will remain the highest grosser of revenues and is expected to corner 45. per cent of the total ad pie this year, a further rise from 44. 5 per cent in 2010. Growing popularity of the direct-to-home (DTH) services is an interesting development in the Indian television industry. India had 23. 1 million active subscribers by the end of 2010, as per Media Partners Asia, translating penetration of television homes to 16 per cent. India is also poised to become the world’s largest DTH satellite pay TV market by 2015, with a projected 70 million subscribers.
The shipment of LCD, LED and Plasma TV models almost doubled in India in the January-March 2011 period driven by strong demand from cricket world cup, according to the latest DisplaySearch quarterly India TV shipment and forecast database. The total TV market in India for the first quarter was 3. 7 million units, accounting for 41. 5 per cent of the Asia-Pacific TV market. During this period, LCD TV shipments grew by 94 per cent reaching one million units. Music The music industry in India has always been dominated by film music.
The industry is expected to grow at a CAGR of 28. 6 per cent over 2010-14, reaching US$ 567. 6 million in 2014, reports PwC. With the advent of new technologies such as 2G and 3G, and increasing mobile penetration India’s music industry is scaling on a high note. Handset major Nokia launched its music store in India; Hungama announced the launch of two portals – Hungama. com and Artistaloud and Saregama too launched its music portal. Radio The size of the Indian radio industry was at US$ 171. 8 million with 250 stations in the year 2009 and is expected to reach a size of US$ 360. 32 million with over 700 stations by 2014, says an industry report. With regard to FM radio, 248 Channels were operational in the year 2010 and revenues to the government were to the tune of US$ 11. 23 million dollars. In 2011, the radio industry is expected to clock revenues of US$ 226 million, as per the Pitch Madison Media Advertising Outlook 2011. Animation and Social Media Animation is another area in the entertainment sphere where India has already made a visible impact.
Boosted by higher demand, the fast-growing Indian animation and gaming industry is expected to be worth US$ 2. 5 billion by 2013, clocking a CAGR of around 35 per cent, according to global consultancy Deloitte. Moreover, India is becoming a major hub to which quality animation work is being outsourced. Production for films including the Lord of the Rings, the Harry Potter series, The Chronicles of Narnia, and Spiderman 3 have taken place here during the last few years. In 2010 social media gained significant popularity as a marketing and gaming platform. Cinema and Digitisation
The film industry is monitored by the Indian Motion Picture Producers’ Association (IMPPA), Film Television Producers’ Guild of India, The Association of Motion Pictures and Television Programme Producers (AMPTPP) and The Film Writers Association (FWA). The growth of Digitisation continues to be a key propeller the Indian M;E industry and this trend was even more pronounced in 2010. Film studios saw greater adoption of digital prints over physical and it was the first time in India that digital music sales surpassed that of physical unit sales, according to the report by KPMG and a leading industry body.
Film producers and distributors preferred to release their films on digital platforms. In 2010, nearly 60 per cent of the print run was on digital and 40 per cent were physical prints. Due to better content, increase in multiplexes, investment in research and continued cost corrections, Indian film industry is estimated to grow from US$ 1. 85 billion to US$ 2. 94 billion by 2015. Multiplexes Multiplexes are just emerging in India and there is a great opportunity for investing in theatres and multiplexes.
The government’s approval for 100 per cent foreign direct investment (FDI) through the automatic route and extension of tax benefits has provided the required impetus to increase the theatre/multiplex penetration. Internet India is the third biggest internet market, with over 100 million internet user base and the amount of time spent on the Internet for an average user in the country is 16 hours a week. According to Google estimates, 40 million users access Internet through mobile phones and download 30 million applications.
Entertainment is driving the adoption of internet in rural areas with entertainment, communication and instant messaging being the main purposes for access, according to an Internet and Mobile Association of India (IAMAI) report. 41 per cent of the claimed internet users had used the internet for watching, downloading and listening to music or uploading or downloading pictures while 32 per cent also used the internet for email, chat and communication. Print and Publishing The newspaper market in India has grown at 13 per cent CAGR over the last five years to US$ 3. billion in 2010. It will continue on its growth trajectory at an estimated CAGR of around 12 per cent between 2010 and 2013 to reach US$ 5. 9 billion in 2013, according to Ernst ; Young India. India’s Media and Entertainment: Recent trends and Investments * Anil Ambani’s Reliance Broadcast Network (RBN) has signed an equal joint venture (JV) with Luxembourg-based RTL Group SA, to launch two theme-based channels. RTL – a part of Europe’s largest media firm, Bertelsmann AG – operates over 40 television channels and 33 radio stations across 10 countries in Europe.
The JV is planning to roll out the first channel under the new partnership by the middle of 2011. * NDS, a leading provider of technology solutions for the digital pay television industry, has firmed up plans to invest US$ 400 million for research and development work in India Publishers are launching niche publications, upper-end events, coffee-table books, news TV channels, special editions, and luxury magazines and adopting several other initiatives such as entering international alliances.
With an upswing in advertisement revenues, hyper-local editions are becoming increasingly attractive media vehicles to target a specific segment, particularly for local advertisers. * Amar Ujala has launched a Hindi-language youth magazine in 2011 * Similarly, Times Group has launched niche supplements and magazines to cater to upper SEC segments * Dailies such as Hindustan Times, Navbharat Times and Hindustan have launched local editions in metros such as Gurgaon, Noida, and parts of Mumbai such as Borivali, Kandivali and Malad * Zynga Games Network Inc. maker of the two most widely-played social media games globally, CityVille and FarmVille, has begun full life-cycle game development in India with the opening of Studio- * HSBC Principal Investments, the private equity arm of the HSBC Group , has invested US$ 60 million for a minority equity interest in Avitel Post Studioz Limited, a Mumbai-based post-production and media entertainment technology company India’s Media and Entertainment: Government Policies Union Minister of Information and Broadcasting (I;B), Ms Ambika Soni has announced that the Ministry will consider setting up of a “Community Radio Fund”.
The issue will be taken up on a high priority with the key agencies such as the Planning Commission and concerned ministries. The setting up of such a fund would ensure the sustainability and enhanced outreach of the Community Radio Movement within the country. The modalities would be completed within a stipulated time frame. The Ministry has also set up a committee to assess the current rating system for television rating points (TRP) of TV programs and has expressed concern over this current system of evaluation. The MIB has recommended increasing the sample size and switching to a more scientific approach for accurate data.
The I;B ministry has also endorsed the recommendation by the Telecom Regulatory Authority of India (TRAI) to enhance FDI ceiling for DTH TV, Internet protocol TV and teleport from 49 per cent to 74 per cent. India’s Media and Entertainment: Road ahead The second decade of this millennium presents a great opportunity for the M;E sector. The demographic profile of India favours higher spends on entertainment, with the consuming class forming a significant portion of the country’s total households. New distribution technologies like DTH, Conditional Access System (CAS) and IPTV, hold a promising future for the media industry.
Needless to mention, increasing digitalisation will changes the ways in which consumers view channels. These distribution platforms will assist broadcasters in giving direct access to consumers, thus facilitating the provision of not just routine content but also customised value added services (like video on demand). This is very likely to result in increased average revenue per user. References: Press Releases, Report on Indian Media & Entertainment Industry, Journal of Arts, Science & Commerce by ResearchersWorld, Press Release by Internet And Mobile Association of India (IAMAI), Article publication by Ernst & Young