The Indian Media & Entertainment (M&E) sector is a sunrise industry. The momentum of spends on leisure and entertainment is higher than the economic growth, owing to favourable demographics and rising disposable incomes. With new media, or rather digital media, making a rage, the Indian M&E industry is standing at a new inflection point.
Rise in digital content consumption, launch of innovative content delivery platforms, higher penetration in tier II and tier III cities, enhancing reach of regional media and regulatory shifts are major factors that are driving the growth of the sector.
The entire M&E landscape is witnessing a shift; thanks to cable digitisation, wireless broadband penetration, increasing direct-to-home (DTH) penetration, digitisation of film distribution and growing internet usage.
Key highlights pertaining to the India M&E industry are discussed hereafter:
With an estimated value of Rs 329 billion (US$ 5.76 billion) in 2011, the overall television (TV) industry is expected to expand at a compounded annual growth rate (CAGR) of 17 per cent through 2011-16 to reach Rs 735 billion (US$ 13 billion) by then, according to report jointly prepared by KPMG and an industry body. 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.
The radio industry in India has around 36 FM radio operators and is estimated at Rs 1,200 crore (US$ 210 million).
Taking into account listenership in both metros and non-metros, the overall radio industry registered a growth of 15 per cent to reach Rs 11.5 billion (US$ 201.33 million) in 2011 as against Rs 10 billion (US$ 175.10 million) in 2010. The growth, as per the analyses, was driven by volume increases in certain markets and rate increases for the leaders in metros.
Rapid growth of DTH, cable digitisation and launch of new digital platforms for content delivery have revolutionised media distribution in India in past few years. This has not only facilitated development of targeted media content, but has also enhanced effective and wider reach across diverse markets.
Moreover, there is increased proliferation and consumption of digital media content through newspapers and magazines, digital film prints, and online video and music or entirely new categories such as social media. As a result, spends on online advertising is also on upsurge as against the conventional modes.
Digital advertising is anticipated to grow at a CAGR of 30 per cent during 2011-16. Digital ads spend accounted for about 5 per cent of total M&E industry revenue in 2011 wherein the growth was largely boosted by higher internet penetration and development of new devices.
Indian M&E industry is largely represented by the country's music and films. Where on one hand, the year 2010 saw structural shift from physical formats to digital ones, the year 2011 witnessed a wider range of viable options for music consumption through different digital platforms, on the other. The Indian music industry registered a growth of 5 per cent in 2011 over 2010, achieving revenues of Rs 9 billion (US$ 158.66 million) in the year.
Hindi film industry is also getting experimental and international in its approach. The momentum gained in 2011 is expected to continue in 2012 wherein several high budget releases are lined up for viewers. The Indian film industry is anticipated to grow at a CAGR of 10.1 per cent to touch Rs 150 billion (US$ 2.63 billion) by 2016. The industry is estimated to have garnered revenues of around Rs 93 billion (US$ 1.63 billion) in 2011, reflecting a growth of 11.5 per cent vis-à-vis 2010.