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Indian media and entertainment biz: $ 28b by 2015

The Indian Media & Entertainment industry grew at 11 percent over 2009 and touched Rs 652 billion and is estimated to achieve a growth rate of 13 percent in 2011, finds the annual study by KPMG for the Federation of Indian Chambers of Commerce and Industry ( FICCI). Overall the industry is expected to register a Compound Annual Growth Rate of 14 percent to touch Rs 1275 billion by 2015.
The report which will be formally released at the inaugural session of FICCI FRAMES 2011 on March 23, highlights a strong recovery in advertising spends as which grew by 17 percent to Rs 266 billion and accounted for 41 per cent of overall industry size.
While television and print continued to dominate the Indian M&E industry, sectors such as gaming, digital advertising, and animation VFX grew at a faster rate and show tremendous potential in the coming years, finds the report.
Contrary to most other markets in the world that continue to witness an erosion of the print media industry, in India, the sector witnessed a growth of 10 per cent in 2010 and is expected to continue to grow at a similar pace over the next five years.
Television saw a tremendous increase in the net DTH subscriber base totaling to 28 million at the end of 2010. Backed by growth in advertising and subscription revenues, the television industry grew by 15.5 per cent in 2010 and is expected to grow at a CAGR of 16 per cent to touch Rs 630 billion by 2015. Television is expected to account for almost half of the Indian M&E industry revenues, and more than twice the size of print, the second largest media sector.
Digitization 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 unit sales.
DTH achieved robust growth of 75 percent in net subscriber base by adding 12 million subscribers in 2010. With the regulatory push on digitization, ongoing 3G rollouts, increasing mobile and broadband penetration, the market for digital distribution platforms is only expected to grow.

Says Rajesh Jain, Head of Media and Entertainment, KPMG, “The resurgence in advertising, growth in subscription revenues, thrust on digitization, and emerging avenues for content monetization were the key growth drivers for the Indian Media & Entertainment industry in 2010. However going forward, it will become imperative for media companies to reset their business models and build greater focus on profitability and changing consumer preferences”.
In 2010 social media gained significant popularity as a marketing and gaming platform. Jehil Thakkar, Executive Director, Media & Entertainment, KPMG, says “Social media offers advertisers and content owners the ability to directly connect with their consumers/audiences. Businesses are now beginning to understand the power of this tool and integrating it into their core marketing plan to reach out to their target audience”.

Key Highlights
TV Households to surge to ~ 156 million by 2015; digitization and addressability to go mainstream. Advertising and subscription revenues to touch INR 214 billion and INR 416 billion respectively
Print: Overall Print industry to see a CAGR of 10 percent to touch INR 310 billion in five years. Regional print expected to grow at a higher rate of 12 percent
Radio: With increase in scale, expected changes in regulation from phase III and music royalty structure, the industry is expected to grow at 20 percent per annum and become profitable
Films: 2010 was a challenging year for the industry. However with better content, increase in multiplexes, investment in research and continued cost corrections, the industry is estimated to grow from INR 83 billion to INR 132 billion by 2015
Out Of Home: With economic resurgence, advertising on this medium bounced back with a growth of 21 percent in 2010 and is expected to reach a size of INR 29.6 billion in 2015
Music: Digital is here to stay! Spurred by environmental factors such as growth in radio, huge telecom subscriber base, live events and performances, device innovations in smartphones, tablets etc. and despite the controversy around royalty the industry is expected to register a healthy growth of 17 percent per annum to cross INR19 billion by 2015
Animation and VFX: Growing demand for content, increasing investments in training talent, growing comfort of Indian production houses for VFX, continued growth in outsourced work, conversion of 2D to 3D formats and emerging digital platforms are expected to help the industry grow at 18.5 percent per annum
New Media: Digital advertising and gaming are expected to witness the maximum growth and account for approximately INR 73.8 billion by 2015. This growth is expected to be driven by the 3 C’s of Consumer, Connectivity and Convergence/. March 21 2011