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Media and Entertainment Industry

June, 2013

Indian Media & Entertainment Industry: Brief Introduction

The Indian media and entertainment (M&E) industry has massive reach. The industry is largely driven by increased digitisation, growth of regional media, robust film industry and emergence of new media for content delivery. The Indian M&E industry is projected to grow 11.8 per cent to clock revenues worth Rs 91, 700 crore (US$ 16 billion) in 2013, according to an industry report. While conventional media such as television (TV), print and radio continue to be dominant segments, animation, visual effects, films and music are also posting strong progress owing to content and the benefits of digitisation.

Moreover, the Government's drive towards digitalisation and addressability for cable television by 2014 is expected to provide a boost to direct-to-home (DTH) and digital cable growth.

In a nutshell, alignment of entertainment, information and telecommunication is increasingly affecting India's overall M&E industry. Launch of more advanced media devices over the last decade has facilitated access of the same content on a variety of media platforms. This is helping in emergence of new business models and revenue streams, not only for content providers, but for a variety of new players becoming a part of the new media ecosystem. With all these factors well-in-place, the M&E sector certainly is marching towards new horizons of growth.

Market Dynamics

  • The Indian M&E industry grew from Rs 728 billion (US$ 13.6 billion) in 2011 to Rs 820 billion (US$ 14.18 billion) in 2012; marking a growth of 12.6 per cent.
  • Total advertising expenditure (AdEx) across media stood at Rs 327.4 billion (US$ 5.66 billion) in 2012 while advertising revenues increased by 9 per cent.
  • Print continued to be the largest beneficiary, accounting for 46 per cent of the advertising pie at Rs 150 billion (US$ 2.59 billion).
  • Furthermore, television continued to be a dominant segment in the M&E industry while new media sectors (like animation/VFX) and Films and Music segments recorded strong growth. Radio is expected to witness great emancipation, post the roll-out of Phase 3 licensing, at a compounded annual growth rate (CAGR) of 16.6 per cent over 2012-17.

Advertising, Online and Mobile Entertainment

Today, mobile phones and internet go hand-in-hand in a way such that hardware (mobile) is nothing without software (internet). People, especially the youth, largely use mobile phones to access net, not only for entertainment, but also to make payments, gather information and transfer content.

The internet video consumption market in India is growing at a humongous pace, with nearly 80 per cent more videos viewed in 2012 than in 2011.

Similarly, internet and online portals are largely being used by marketers for airing their advertisements and awareness campaigns. Even though traditional media like television and newspapers continue to be the preferred media for seeking information and entertainment (as they garner over 80 per cent of the advertising market in India), the internet has been steadily increasing its share of the advertising pie. Spends on digital media have substantially increased from just over 1 per cent of total Indian advertising spend in the year 2005 to nearly 7 per cent in 2012.

Search advertising accounted for about 38 per cent of the total online advertising spend, translating to about Rs 850 crore (US$ 147.05 million) while display advertising formed a sizeable 29 per cent (Rs 662 crore [US$ 114.52 million]) by March 2013, according to the findings of Digital Advertising in India report, by the Internet and Mobile Association of India (IAMAI) and IMRB International.

Meanwhile, advertisements on mobile phones and tablets have grown from a 7 per cent share in FY 2011-2012 to 10 per cent of the Indian online ad market in FY 2012-2013, amounting to spends of around Rs 230 crore (US$ 40 million). Social media, email and video advertising constitute 13 per cent, 3 per cent and 7 per cent of the online advertising market, respectively.