INTRODUCTION: The Indian media and entertainment (M&E) industry is one of the fastest growing industries in the country. Its various segments—film, television, advertising, radio, prints media and music among others—have witnessed tremendous growth in the last few years.
According to a report jointly published by the Federation of Indian Chambers of Commerce and Industry (FICCI) and KPMG, the media and entertainment industry in India is likely to grow 12.5 per cent per annum over the next five years and touch US$ 20.09 billion by 2013.
The media and entertainment sector consists of the creation, aggregation and distribution of content, products and services, news and information, advertising and entertainment through various channels and platforms. The media and entertainment industry is one of the fastest growing industries in the world. Ever evolving technologies, extensive use of media by corporate provide both opportunities and challenges to the media and entertainment industry.
Indian Entertainment Industry
Post reforms the media and entertainment industry in India has made tremendous strides. The M&E industry can be further classified into film, television, advertising, print media and music. The Indian entertainment industry came off age and gained global recognition when A.R.Rahman and Resul Pokutty won the Oscars for their work in Slum dog Millionaire.
According to the study by FICCI and KPMG, the television industry, which is currently valued at about US$ 4.63 billion will expand by 14.5 per cent between 2009 and 2013.
Digital distribution platforms such as direct-to-home (DTH) and Mobile TV are transforming the industry. Mobile TV—where content will stream in on mobile phones—which is currently at a nascent stage is poised to grow big with the advent of 3G, according to experts.
Viewership across various segments is increasing and marketers are launching new channels to meet this growing demand. Turner and Warner Bros Entertainment, Hollywood’s leading studio have launched WB, a new Warner-branded channel in India that will showcase blockbuster motion pictures and acclaimed television series.
Further, Television channels such as Cartoon Network, Pogo, Disney, MTV and Star Plus are expanding their product range to tap India’s growing US$ 125.9 million licensing and merchandise market.
BT’s Media and Broadcast Sector has entered into two new agreements with New Delhi Television (NDTV) to be its global network supplier.
Leading television channels, Sun Network and Zee Entertainment, have maintained their number one and two positions, respectively, in the Asia-Pacific pay broadcaster ranks for the second year in a row, according to a report by Media Partners Asia (MPA), an independent international research agency.
Most of the Indians have a ‘Home – Office – Home ‘ life and that wouldn’t change much hence Television is something that would not stop growing and there is sort of mimicing localization effect which seems to work very well. One successful show in Hindi or English – convert into a regional show and you have the local audience glued to the TV. Even with poor service from cable operators or DTH, people can live without food but not without TV. But these guys have to be more cautious while treating their young and influential audience – as these people are now spending more time on social networks and social media. The more you dumb down the more you would loose the creamy audience for which the advertizers pays for.
Industry experts estimate that the current size of the music industry is about US$ 149 million. According to a PwC study, the industry is likely to grow by 2 per cent over the next five years and will be a US$ 164.56 million industry by 2012.
While cassettes and compact discs (cds) have traditionally accounted for most of the sales, future growth will come from non-physical formats such as digital downloads and ringtones, among others. Digital music sales are expected to account for 88 per cent of the total music industry revenue in India by 2009.
The cheapest and oldest form of entertainment, reaching 99 per cent of the population, this segment is likely to see many dynamic changes.
According to the PwC study, revenues from radio are likely to grow at a compound annual growth rate (CAGR) of 24 per cent over the next five years and the industry will grow from US$ 150.52 million in 2007 to US$ 370.22 million in 2012.
Private FM radio has emerged as the fastest growing segment in the media, notching up an average 30 per cent growth in advertising revenues, compared to the industry’s average of 18 per cent, according to ACNielsen’s Radio Audience Measurement (RAM) service. Moreover, it is expected to increase to US$ 218.49 million over the next two years from the current US$ 133.52 million. FM radio broadcasting has expanded at a rapid pace and India today has over 300 FM radio stations.
Recently, Sun TV Network has decided to allow South Asia Multimedia Technologies Ltd, an investment arm of Malaysia-based Astro Group, to increase its stake in its FM subsidiary, South Asia FM, to 20 per cent from the current 6.98 per cent.
Advertising trends showed a healthy growth in the last five years as marketers sought to woo customers for a wide range of products. Radio, internet and cinema have been the traditional mediums of advertising and according to a survey by Adlabs Cinemas and research firm IMRB, in cinema, the 30-second in-theatre advertising accounts for 95 per cent of cinema advertising. The remaining 5 per cent comprises activities in the lobby area such as new car or bike displays, etc. Of the overall advertising spend, currently only around 0.4 per cent (around US$ 15.42 million) is spent on cinema. Print and TV account for the majority of the ad spend.
The number of brands advertised on television witnessed an 82 per cent increase during 2008 compared to 1999, according to a survey by AdEx India, a division of Tam Media Research.
Going forward, digital media advertising (internet, mobile and digital signage) is expected to emerge as the medium of choice for advertisers. Of the available media, it was the fastest growing segment in 2008. According to a FICCI-PwC report, online advertising it is expected to touch US$ 212.03 million in 2011 from the current US$ 57.83 million.
The Indian film industry is the largest in the world in terms of number of films produced per year. The FICCI-KPMG study values the Indian film industry at US$ 2.11 billion and projects its growth at 9.1 per cent till 2013.
The opening of the film industry to foreign investment coupled with the granting of industry status to this segment has had a favourable impact, leading to many global production units entering the country.
Recently, Anil Ambani’s Reliance ADA Group has entered into a production deal with DreamWorks Studios promoted by Hollywood director, Steven Spielberg, to produce films with an initial funding of US$ 825 million for the first three years.
Walt Disney has partnered with Yash Raj Films to make animated movies, the Warner Group is funding the Sippys’ film projects, Viacom has a joint venture with the TV 18 group to form Viacom-18, and Sony Pictures Entertainment has co-produced Saawariya with SLB Films (Sanjay Leela Bansali Films).
Buoyed by the success of its maiden production in India—Chandni Chowk to China (which garnered US$ 8.67 million globally in the first three days of its release)—Warner Brothers Pictures India is set to invest US$ 38.6 million in film production this year.
Fox Star Studios, a joint venture between Twentieth Century Fox and Star, has entered into a multiple-film deal with producer Vipul Amrutlal Shah, marking its foray into the Indian film industry.