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Media and Entertainment

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Media and Entertainment

March, 2012

Brief Introduction

The Indian Media & Entertainment (M&E) industry is highly driven by strong consumption in non-metro and small cities, intense emergence of regional media and burgeoning new media businesses and formats.

According to a report jointly prepared by KPMG and an industry body, the industry registered a growth of 12 per cent in 2011 over 2010. While television (TV) retains its top slot as an entertainment medium, segments like animation, VFX, digital media and gaming are up-coming as major mediums. Multiple movies crossed Rs 100 crore (US$ 20.04 million)-business in domestic theatrical collections and Rs 30 crore (US$ 6 million) mark in Cable & Satellite (C&S) rights.

Advertising spends across all media accounted for 41 per cent of the overall M&E industry revenues, aggregating to Rs 300 billion (US$ 6 billion) while advertising revenues witnessed a growth of 13 per cent in 2011.

Television and Digitisation

Television continues to be the most prominent entertainment medium in the Indian M&E industry. As per the report (by KPMG and another industry body), television would account for almost half of the Indian M&E industry revenue and would also be over twice the size of print media (the second largest media sector) by 2015. While the current level of penetration is estimated at around 60 per cent, there is still a lot of room for expansion on Indian TV landscape. The report further estimates that pay-TV subscription revenue will increase from 65 per cent in 2011 to 69 per cent by 2016.

Moreover, TV accounted for Rs 329 billion (US$ 6.6 billion) of revenues in overall M&E industry in 2011 and is estimated to grow at a CAGR of 17 per cent over 2011-16 to touch Rs 735 billion (US$ 14.73 billion) in 2016.

Indian television industry has undergone many changes over the past decade, majorly due to the introduction of digitised modes which include digital cable, direct to home (DTH) and IPTV. This has not only transformed the business models for the stakeholders, but has also facilitated more choices and convenience to consumers. At present India's DTH subscriber base is totalled at 45 million.

India's top four metros-Delhi, Mumbai, Chennai and Kolkata-will replace all analog television networks with digital transmission from July 1, 2012.

Radio

The radio industry in India has around 36 FM radio operators and is estimated at Rs 1,200 crore (US$ 240.46 million).

Emergence of regional media in a big way has driven the growth of Indian radio segment. According to an industry report, radio is expected to display a healthy growth rate in the years to come. After the advent of Phase 3, the industry will experience another growth wave after the implementation of awaited policies like copyright for radio and the roll out of 4G.

Internet and Mobile Entertainment

Internet has emerged as one of the strongest entertainment mediums owing to increasing internet penetration, higher awareness and changing demographics in the country. Not only for sending mails, watching videos and business related transactions, internet is also being used for intensive shopping by the Indian buyers.

Emergence of internet retailing and e-commerce as a completely new space is driving the growth of number of online shoppers. As a result, the internet retailing companies are getting attracted towards Indian markets which are poised to grow leaps-and-bounds in the years to come. There are about 17 million online shoppers in India and the number is projected to grow over three times in the years ahead.