FICCI-PWC report: Indian M&E set to grow by 18 per cent
According to the report, the technological advancements and policy initiatives taken by the Indian Government that are encouraging the inflow of investment, and initiatives by private media companies will prove to be the key drivers for the E&M industry.
According to the report, the technological advancements and policy initiatives taken by the Indian Government that are encouraging the inflow of investment, and initiatives by private media companies will prove to be the key drivers for the E&M industry.
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The
2007 annual edition of the FICCI- Pricewaterhouse
Coopers report estimates that the Indian Entertainment
and Media (E&M) industry is poised to grow
at 18 per cent compounded annual growth rate (CAGR)
to reach Rs 1 trillion by 2011 from its current
size of Rs 437 billion. The industry has been
forecast to outperform the economic growth in
each year till 2011. |
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According to the report, the technological advancements and policy initiatives taken by the Indian Government that are encouraging the inflow of investment, and initiatives by private media companies will prove to be the key drivers for the E&M industry. The rising income levels and consumerism fuelled by the country’s strong economic growth are also aiding the growth of demand for entertainment.
Commenting on the future of the industry, Timmy Kandhari, Executive Director & Leader, Entertainment & Media Practice, PWC, said, “Convergence will continue to play a crucial role in the development of the Indian entertainment and media industry where consumers will increasingly be calling the shots in a converged media world. With more favorable policy initiatives expected to be introduced by the government in the near future, a move towards a better intellectual property rights regime, growing investment from big Indian as well as foreign companies, and the deluge of technological advancements, there is only one direction for the Indian E&M industry to go - Up!”
The FICCI-PWC Report has defined 2006 as a year of start of convergence for the media industry. The services available through different network platforms promote consumers to the top of the value-creating hierarchy, allowing them to enjoy the all-new social media experience -- ‘Lifestyle Media’. The report believes that the importance of accurate audience measurement will be greater than ever before and media consumption models will gain significant importance.
Forming
of Media Powerhouses
A number of collaborations between value chain partners
are encouraging the diversification of several media
companies across different segments of the industry.
Companies such as Reliance’s Adlabs, Bennett,
Coleman & Co. Ltd and Zee Group have presence across
several segments of the E&M industry, ushering the
dawn of ‘media conglomerates’ in India.
Advertising
spends
Indian advertising spends in 2006 registered a growth
of over 23 per cent to reach Rs 163 billion. “While
today the low ad spends may seem like a challenge for
the Entertainment and Media industry, it also throws
open immense potential for growth,” points out
the report. This potential can be estimated by the fact
that “even if India was to reach the global average,
the advertising revenues would at least double from
the current level of around Rs 163 billion.”
Foreign
investment
The year 2006 saw the maximum flow of foreign investment
to the industry. Around 22 FDIs for media proposals
are under the scrutiny of the Ministry of Information
and Broadcasting, while as many as 13 proposals were
cleared in 2006 itself. Overall, in the last three years,
the industry has secured foreign investment of over
Rs 4 billion.
Key
Findings
| Medium | Current sizeRs. | Projected size by 2011Rs. | CAGR |
| Television | 191 billion | 519 billion | 22% |
| Filmed entertainment | 191 billion | 175 billion | 16% |
| Print media | 85 billion | 232 billion | 13% |
| Music | 7.2 billion | 8.7 billion | 4% |
| Radio | 5 billion | 17 billion | 28% |
Television
The current size of the Television industry is estimated at Rs 191 billion, with a projected figure of Rs 519 billion by 2011 at a CAGR of 22 per cent. Last year, the major developments included the implementation of CAS in selected cities, launch of IPTV services and the entry of the second DTH player. These new distribution platforms are expected to increase the subscriber base and thereby making subscription revenues a key growth driver for the Indian television industry over the next five years.
Filmed
entertainment
The filmed entertainment category, with a current size
of Rs 85 billion, will be aided by the advancement of
technologies like digital cinema halls to reach Rs 175
billion by 2011 with a CAGR of 16 per cent. The corporatisation
of the industry and the Home Video section will play
a major role in this growth.
Print
media
Print media, with a projected size of Rs 232 billion
by 2011 at a CAGR of 13 per cent, is now at Rs128 billion.
The growing need for content and opening up of the sector
to foreign investment are the key drivers of growth
in the print media. Current estimates show that the
reach of the medium in India has increased to 222 million
people. This industry has potential to grow still larger
as 369 million literate people in India are still not
tapped by any publication.
Music
With a present size of Rs 7.2 billion, the Music industry
is poised to grow at a CAGR of 4 per cent to reach Rs
8.7 billion by 2011. ‘Mobile music’ and
‘licensed digital distribution’ services
are projected to fuel the recovery of the music industry,
in spite of piracy plaguing the industry the world over.
Ringtones currently constitute the dominant component
of the mobile music market. Licensed digital distribution
services are also contributing significantly to growth
in all regions. The boom in the Radio industry is also
expected to have a positive impact on the music industry.
Radio
With a projection of Rs 17 billion by 2011, the Radio
industry is presently at Rs 5 billion. The CAGR is 28
per cent. The effects of the government policy changes
in 2005 were evident in 2006 with 245 licences sold
to private players and several new FM radio channels
being launched across the country.
Medium
Current
sizeRs
Projected
size by 2010 Rs
CAGR
Live
entertainment
9
billion
19
billion
16%
Out-of-home
advertising
10
billion
21.5
billion
17%
Internet
advertising
1.6
billion
9.5
billion
43%
Live
entertainment
The Live entertainment industry, presently at Rs 9 billion,
is estimated to grow to Rs 19 billion by 2010 at a CAGR
of 16 per cent. The growing number of corporate awards,
television and sports events is helping this sector.
However, issues like high entertainment taxes in certain
states, lack of world-class infrastructure and the unorganised
nature of most event management companies continue to
hinder growth of this industry.
Out-of-home
advertising
OOH advertising, at a current size of Rs 10 billion,
is expected to reach Rs 21.5 billion by 2010 with a
CAGR of 17 per cent. With big players like Star Network
and Bennett, Coleman & Co. Ltd entering the OOH
advertising industry and the numerous innovations, this
sector is poised for growth in the years ahead.
Internet
advertising
Currently at Rs1.6 billion, the Internet advertising
industry is poised to grow at a CAGR of 43 per cent
to reach Rs 9.5 billion by 2010. With a 59 million PC
literate individuals in the country, the options are
only growing in the industry.
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