MEDIA AND ENTERTAINMENT
The Indian Media & Entertainment Industry grew by US$ 12.9 billion in 2009 to US$ 14.4 billion in 2010, a growth of 11 per cent, according to a report by the Federation of Indian Chambers of Commerce and Industry (FICCI) and research firm KPMG. The report also states that backed by positive industry sentiment and growing media consumption, the industry is estimated to achieve growth of 13 per cent in 2011 to touch US$ 16.2 billion. As the industry braces for exciting times ahead, the sector is projected to grow at a CAGR of 14 percent to reach US$ 28.1 billion by 2015.
Key Trends and Drivers for Growth
Focus on Profitable Growth: Indian M&E companies implemented cost reduction strategies to weather the economic slowdown of 2008-09. In order to sustain profitable growth, several cost control initiatives implemented during the slowdown have continued to prevail despite the industry resuming its double digit growth rate. Incorporation of technology across key business performance areas such as planning, budgeting, CRM, strategic outsourcing, etc. could enable more consistent and profitable growth given the technological advancement in these areas.
Increasing Media Penetration and Per Capita Consumption: Low media penetration particularly across SEC B, C and D segments offers significant headroom for growth. With increase in per capita consumption, discretionary spends are expected to grow and entertainment and leisure platforms are likely to beneficiaries of this trend. Moreover, as metros and tier 1 markets get saturated, media companies are looking to penetrate the tier 2 - tier 3 towns and rural markets. For e.g. multiplexes have expanded across tier 2 towns, while DTH players have helped achieve greater C&S penetration across rural India.
Power of Digitisation: Digitisation continues to be a key growth driver for the Indian M&E Industry and this trend was even more pronounced in 2010. Film studios saw greater adoption of digital prints over physical and it was the first time in India that digital music sales surpassed that of physical units' sales.
Consumer Understanding: With increasing fragmentation and increase in competition, a deeper understanding of cultural and social references through focused study groups would enable players to target their consumers specifically and build loyalty.
Other factors: Regional media channels gaining popularity, different tastes of the audience and thereby different content, growth of the importance of the media are also few factors due to which the Media and Entertainment Sector is growing.
Broadcasting Scenario in
The CAGR for television industry is estimated to be 16 per cent and the CAGR for the radio industry is estimated to be 20 per cent from 2010 to 2015.
India has 138 million TV house hold and is behind only China and USA in the world TV market. India had 600 million TV viewers in 2010, adding almost 140 million viewers from 460 million in 2009.
The Indian Film Industry stood US$ 1.9 billion in overall industry revenues in 2010, indicating a decline of 6.7 per cent with respect to 2009. The industry is expected to grow at a CAGR of 9.6 per cent and reach US$ 2.6 billion in 2014. The key growth drivers for the sector would include expansion of multiplex screens resulting in better realisations, an increase in the number of digital screens facilitating wider releases, higher cable and satellite revenues, improving collections from the overseas markets and ancillary revenue streams like DTH, digital downloads, etc, which are expected to emerge in future.
Television Sector in India
Television Industry in India has gained new momentum due to liberalization and enhanced enthusiasm shown by the broadcasters to seize a huge share of the entertainment and media industry. In 2010, the television industry stood at a staggering US$ 6.5 billion, a rise of 15.6 per cent over 2009 estimate of US$ 5.7 billion. The industry is projected to grow at a CAGR of 16 per cent to US$ 13.9 billion by 2015.
Growth of TV channels: The total number of TV channels (both private and government owned) grew from 461 in 2009 to 626 in January 2011. The number of News and Current Affairs channels was 312 and that of Non-News and Current Affairs channels was 314 up till January 2011.
Foreign Broadcasters: A total of 75 channels have been down-linked till January 2011 by a number of foreign broadcasters.
Direct To Home (DTH) Service: DD DIRECT+ is India's first and only FTA Direct-To-Home (DTH) service being provided by Prasar Bharati (a public service broadcaster). Apart from Prasar Bharati, Dish TV India Ltd., Tata Sky Ltd, and Sun Direct TV Pvt. Ltd., Reliance Big TV Pvt. Ltd., Bharti Telemedia Ltd and Bharat Business Channel Ltd have also been granted license for operating DTH services.
The eligibility conditions provide for total foreign equity holding, including FDI/ NRI/ OCB/ FII, in the applicant company not to exceed 49 per cent, and within the foreign equity, the FDI component not to exceed 20 per cent. It also provides that Applicant Company must have Indian management control with the majority representatives on the board as well as the chief executive of the company being a resident Indian.
HD Growth Wave: Another trend witnessed in 2010 was the entry of HD channels. Apart from 'Food First', India's first HD food channel, 'Movies Now' was also launched in HD. Doordarshan broadcasted the Commonwealth Games (CWG) in HD format. Sports, Movies and Events are expected to be the key demand drivers for HD content. India currently has channels like NGC HD, Discovery World HD, Star Plus HD, Zee TV HD, and two Tamil HD channels and others are expected. DTH operators like SUN Direct, Tata Sky, Dish TV and Reliance BIG TV are heavily promoting their HD services in India .
In 2010, the total size of the Radio Sector was estimated to be about US$ 0.22 billion. It is expected to grow at a CAGR of about 20 per cent to US$ 0.44 billion.
FM radio: In 2010, total 245 Channels are operational including the 25 channels operationalised in the phase I.
Satellite Radio: At present Worldspace India Private Ltd, a wholly owned subsidiary of Worldspace Asia Pvt. Ltd. Singapore is providing services under Foreign Investment Promotion Board (FIPB) approval.
Community Radio: The policy on community radio was liberalized during the year 2008 to bring in the civil society and voluntary organizations working on not -for-profit basis under its ambit. Earlier only educational institutions were permitted to set up a community radio. Presently, 29 community radio stations are operational.