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Media and Entertainment

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Media & Entertainment

May, 2010

Media, the fourth estate, when entwined with the entertainment component represents an effective facet of consumers in India. Technology has played a key role in influencing the entertainment industry, by redefining its products, cost structure and distribution.

The Indian Media and Entertainment (M&E) industry stood at US$ 12.9 billion in 2009 registering a 1.4 per cent growth over last year, according to a joint report by KPMG and an industry chamber. Over the next five years, the industry is projected to grow at a compound annual growth rate (CAGR) of 13 per cent to reach the size of US$ 24.04 billion by 2014, the report stated. Additionally, the gaming segment is expected to be the fastest growing sector in the M&E industry. The sector showed a 22 per cent growth in 2009 and is expected to grow at a CAGR of 32 per cent to reach US$ 705.2 million by 2014, while the animation segment is expected to record a CAGR of 18.7 per cent in the next five years as per the joint report.

Television

According to the figures released by an industry chamber in March 2010, the Broadcast and Television (TV) sector comprised over 43 per cent of the overall M&E sector wherein the total size of the television sector accounted for US$ 5.7 billion. The broadcast sector is on a strong growth path and the outlook for advertisement expenditure is on a rise for the television sector.

A report by research firm Media Partners Asia (MPA) stated that India is poised to become the world's largest direct-to-home (DTH) satellite pay TV market with 36.1 million subscribers by 2012, overtaking the US. Furthermore, in its report titled 'Asia Pacific Pay-TV and Broadband Markets 2010', MPA said India's DTH subscriber base will increase from 17 million in 2009 to 45 million by 2014 and 58 million by 2020.

Anil Dhirubhai Ambani Group's company, Reliance MediaWorks (RMW) has signed a memorandum of understanding (MoU) with IMAGICA Corp of Japan for film processing services. Under this alliance, RMW, on behalf of IMAGICA, would provide film restoration, image processing and enhancement and high definition (HD) conversion services to the Japanese clients. IMAGICA Corp would work with RMW's Los Angeles-based subsidiary Lowry Digital, which has handled projects for leading studios like Walt Disney, Paramount Pictures, MGM and 20th Century Fox. RMW would be doing the processing job for IMAGICA either in India or in California in the US.

Music

The music industry is a vast entity and over the years it has witnessed change significantly. The potential of the Indian music industry can be better understood from its size estimated at around US$ 182.9 million in 2010, up from US$ 160.9 million in 2008, portraying a growth of 14 per cent during the reporting period. It is expected to grow at a CAGR of 16 per cent over 2010-14 to reach US$ 379.1 million.

Radio

Radio is considered a mass medium. It ideally suits the Indian environment - leveraging its twin advantages of wide coverage and cost effectiveness. Currently, the sector generates annual revenues worth US$ 49.5 million and is growing at around 20 percent annually, according to the joint report by KPMG and an industry chamber.

To exploit the true potential of this sector, frequency modulation (FM) radio needs to step up its penetration to at least 300 stations in 100 cities, which would further attract an investment of US$ 899,160 per radio station frequency, the total additional investment required has been estimated at US$ 247.3 million, according to industry sources.

Radio is expected to grow at a CAGR of 16 per cent over 2010-14 and reach to a size of US$ 361.4 million by 2014.

Globally, radio is enjoying a revival, based on the support of the youth, with players like Radio Mirchi emerging out as one of the clear leaders with over 41.2 million listeners, as per the recently published Indian Readership Survey (IRS) quarter 1 (Q1), 2010.

VedantiNET, the Broadband and application service provider of Guwahati promoted by SM Computer Consultants Pvt Ltd, has launched the service of first Internet Radio of Assam, ‘Radio Assam', in the city.