New Delhi, March10, 2013: The Indian Media & Entertainment industry grew from Rs 728 billion in 2011 to Rs 820 billion in 2012, registering an overall growth of 12.6 percent. Given the impetus introduced by digitization, continued growth of regional media, upcoming elections, continued strength in the film sector and fast increasing new media businesses, the industry is estimated to achieve a growth of 11.8 percent in 2013 to touch Rs 917 billion. Going forward, the sector is projected to grow at a healthy CAGR of 15.2 percent to reach Rs 1661 billion by 2017, says the FICCI – KPMG Media & Entertainment 2013 report. Television continues to be the dominant segment; however, the report records strong growth posted by new media sectors, animation/ VFX and a comeback in the Films and Music sectors on the back of strong content and the benefits of digitization. Radio is anticipated to see a spurt in growth at a CAGR of 16.6 percent over the period 2012-2017, post the rollout of Phase 3 licensing.
Total advertising spend across media was Rs 327.4 billion in 2012. In light of continued economic slowdown, advertising revenues saw a growth of 9 percent in 2012 as against 13 percent in 2011 and 17 percent in 2010. Print continues to be the largest beneficiary, accounting for 46 percent of the advertising pie at Rs 150 billion.
Says Jehil Thakkar, Head of Media and Entertainment, KPMG in India, “2012 though a challenging year for the M&E industry, was a year in which important foundations for future growth were laid. The advertising environment went through one of the toughest years in the last decade. However, the implementation of digitization, the stellar performance of the film industry backed by excellent content and digital distribution, the continued growth in regional print and the momentum in new media and the announcement of Phase 3 radio implementation have all finally provided the needed platform to boost the Indian Media & Entertainment industry.”
Key trends: Digitization of distribution has brought in the promise of more sustainable and profitable business models across media sectors. It has enabled the films sector to make a comeback this year. The industry has achieved 77 per cent digitization of screens and expects to be close to 100% digitized in the next 18 months to 2 years. These developments have resulted in increased ability to invest in differentiated content, marketing, and wider releases – all contributing to greater audience engagement and unprecedented box office success across big and small budget movies alike. Overall, digital technology is expected to drive the M&E sector’s growth in a challenging macro environment, by spurring on end-user spending and transparency.
Growth in new media:The rapid increase in mobile and wireless connections continues to drive the growth of internet penetration in India. With better access, through cheaper and smarter devices, audiences (especially the youth) are consuming more content and are getting increasingly engaged.Key beneficiaries are emerging new media segments, which include internet advertising, online classifieds, and gaming, all of which are on a rapid growth path. Going forward, better uptake of 3G connections and the beginnings of the 4G rollout are expected to spur growth further.
Traditional media still going strong: India remains a growth market for 'traditional' media evidenced by the growth last year in TV audiences, radio listenership, and footfalls in theatres. India is an outlier country where print is still a growth market. There is growing overseas demand for quality Indian animation/VFX work at affordable pricing.
Many film studios are building a regional films pipeline. Reliance Big Pictures, Disney UTV Motion Pictures and Eros International are increasingly investing in the regional space. Hollywood films are expanding revenue potential by dubbing across regional languages such as Tamil and Telugu.
Regulatory interventions have been a key enabler of growth for the sector. Anticipated events in 2013, such as continued cable DAS rollout, Phase 3 licensing for Radio and 4G rollout, will spur growth from the medium term.