Media and Entertainment
With 161 million television households in 2013, India stood as the third largest television market in the world.

Media and Entertainment Industry

Latest update: March, 2015

Market size of Indian entertainment industry

In 2013, the Indian media & entertainment (M&E) industry registered the growth of 11.8 per cent over 2012 and touched US$ 15.7 billion.

Market size of Indian entertainment industry

Size of major entertainment industry segments (2018)

The television segment dominates the entertainment industry, accounting for 45 per cent of the market share in terms of revenues, which is expected to grow further to 50 per cent by 2018.

Size of major entertainment industry segments (2018)

Advertising revenue forecast

Total spending on advertising across all media stood at US$ 6.2 billion in 2013.

Advertising revenue forecast

Advertising revenue share (2013)

Print is the largest contributor, accounting for 45 per cent of the advertising share.

Advertising revenue share (2013)

Updated: March, 2015

ENTERTAINMENT SECTOR REPORT | March, 2015

Introduction

The Indian Media and Entertainment (M&E) industry is a sunrise sector for the economy and is making high growth strides. Proving its resilience to the world, the Indian M&E sector is on the cusp of a strong phase of growth, backed by rising consumer payments and advertising revenues across all sectors.

The industry has been largely driven by increasing digitisation and higher internet usage over the last decade. Internet has almost become a mainstream media for entertainment for most of the people. Recent statistics and developments pertaining to the sector are discussed hereafter.

Market Dynamics

India’s entertainment and media sector is expected to grow steadily over the next five years as per CII-PwC’s report, titled ‘India Entertainment & Media Outlook 2014’. The industry is expected to exceed Rs 227,000 crore (US$ 36.49 billion) by 2018, growing at compound annual growth rate (CAGR) of 15 per cent between 2013 and 2018.

In 2013, the overall entertainment and media industry was estimated at Rs 112,044 crore (US$ 18.01 billion) and grew by 19 per cent over the previous year. The largest segment, India’s television industry, continued its strong growth momentum led by subscription revenues, representing a year-on-year growth of about 15 per cent. Internet access and internet advertising have been the fastest growing segments with annual growth rates of 47 per cent and 26 per cent, respectively.

Significantly, with the increased penetration of smartphones and expansion of 3G network in India, the country is likely to see around nine billion mobile application (apps) downloads during 2015, which is five times more than 1.56 billion in 2012, as per Deloitte's India Technology, Media & Entertainment and Telecom (TMT) Predictions. This uptick in app-downloads is also expected to increase the revenue from paid apps to an estimated over Rs 15 billion (US$ 241.16 million) as against Rs 9 billion (US$ 144.7 million) in 2014, Deloitte said.

Additionally, industry estimates reveal that video games industry grew at a record 16 per cent in 2013 over 2012; wherein its net worth rose to US$ 277 million. Another report by Research and Markets stated that the Indian animation industry was valued at US$ 247 million in 2013 and is forecasted to grow at 15-20 per cent per annum.

The foreign direct investment (FDI) inflows in the information and broadcasting (I&B) sector (including print media) in the period April 2000 – January 2015 stood at US$ 3,890.94 million, as per data released by Department of Industrial Policy and Promotion (DIPP).

Recent development/Investments

  • Cinepolis India Pvt. Ltd, the Indian movie exhibition arm of Mexican chain Cinepolis, is planning to add 60 screens to take its total count to over 250 screens by the end of 2015
  • Turner International India has announced the expansion of its television bouquet for children with the launch of Toonami, a channel dedicated to animated action. This is the American company’s third children’s channel in India after Cartoon Network and POGO. Toonami joins an assortment of over 15 channels in the kids’ genre, which attracts close to Rs 500 crore (US$ 80.38 million) in advertising.
  • Twitter Inc. plans to set up a research and design (R&D) centre in Bengaluru to grow faster in emerging markets. This will be the San Francisco-based company’s first such facility outside the US. Twitter plans to use Bengaluru-based mobile marketing and analytics company ZipDial Mobile Solutions Pvt. Ltd’s team to build this new R&D facility.
  • STAR India, a unit of 21st Century Fox, has acquired the entire broadcast business of MAA Television Network Ltd for an undisclosed amount.
  • Carnival Films Pvt. Ltd, supported by commodity trader Shrikant Bhasi, has agreed to buy multiplex company Stargaze Entertainment Pvt. Ltd from a unit of Mukesh Ambani-controlled Network18 Media and Investments Ltd
  • SRS Cinemas, the multiplex chain of the Rs 5,000 crore (US$ 803.87 million) SRS Group, is currently in an expansion mode and has earmarked a huge corpus to add more screens to its current portfolio of 48 screens to take the total number to close to 100 by the end of 2015.
  • Television and film production company, Balaji Telefilms Ltd has announced that it is entering the American television market by signing an American television series production deal with Indus Media, the firm said in filing to BSE.The deal will see Balaji secure rights to the TV series ‘Brown Nation’, a satirical comedy based on the lives of Indian Americans, the firm said.
  • Television and film production company Balaji Telefilms Ltd has entered into a strategic alliance with Kolkata-based Chhayabani Pvt Ltd to create distinctive and contemporary television content.
  • Jagran Prakashan Limited (JPL), which publishes 12 newspapers including its flagship brand Dainik Jagran, is set to enter the radio space with the acquisition of Media Broadcast Private Limited (MBPL)'s Radio City 91.1 FM.

Government Initiatives

The Government of India has supported this sector's growth by taking various initiatives such as digitising the cable distribution sector to attract greater institutional funding, increasing FDI limit from 74 per cent to 100 per cent in cable and DTH satellite platforms, and granting industry status to the film industry for easy access to institutional finance.

Recently, the Indian and Canadian governments have signed an audio-visual co-production deal that would help producers from both countries to explore their technical, creative, artistic, financial and marketing resources for co-productions and, subsequently, lead to exchange of culture and art amongst them.

Furthermore, the Centre has given the go-ahead for licences to 45 new news and entertainment channels in India. Among those who have secured the licenses include established names such as Star, Sony, Viacom and Zee. Presently, there are 350 broadcasters which cater to 780 channels. “We want more competition and we wanted to open it up for the public. So far, we have approved the licences of 45 new channels. It’s a mix of both news and non-news channels,” said Mr Bimal Julka, Secretary, Ministry of I&B, Government of India.

Road Ahead

The Indian M&E industry is on an impressive growth path. According to the CII-PwC study, the revenue from advertising is expected to grow at a CAGR of 13 per cent and will exceed Rs 60,000 crore (US$ 9.64 billion) in 2018 from Rs 35,000 crore (US$ 5.62 billion) in 2013. Internet access has surpassed the print segment as the second-largest segment contributing to the overall pie of M&E sector revenues.

Television and print are expected to remain the largest contributors to the advertising pie in 2018 as well. Internet advertising will emerge as the third-largest segment, with a share of about 16 per cent in the total M&E advertising pie. The film segment estimated at Rs 12,600 crore (US$ 2.02 billion) in 2013 is projected to grow steadily at a CAGR of 12 per cent on the back of higher domestic and overseas box-office collections as well as cable and satellite rights

Digital advertising is expected to lead the CAGR with 27.7 per cent, followed by radio with 18.1 per cent. Gaming and television are expected to register a CAGR of 16.2 per cent each, followed by growth rates of animation and VFX (15.9 per cent), music (13.2 per cent), films (11.9 per cent) and OOH with 9.2 per cent expected CAGR. Within TV, subscription revenues are expected to be three times more than advertising revenues, by 2018. Growth in the regional reach of print and radio shall provide opportunities to further improve the advertisement revenue.

Exchange Rate Used: INR 1 = US$ 0.016 as on March 24, 2015

References: Media Reports, Press Releases

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

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