Indian entertainment and media industry

Indian Entertainment & Media industry grew 11.2% in 2010 on the back of improved economic conditions and rebound in advertising spend.

With sustained growth in advertising as well as consumer spend; the E&M; industry is likely to achieve double digit growth in the forecast period.

TV, Print and Film continue to dominate the E&M; industry in the foreseeable future.

Significant revenues in Indian E&M; industry continue to be non-digital though there is good growth in digital spends.

Infrastructure in India is the biggest challenge to the growth of digital consumption and revenues. 

India’s Entertainment & Media sector to continue its double digit growth trajectory in 2011 as per PwC’s latest report titled ‘India Entertainment & Media Outlook 2011’. The industry is expected to touch Rs 1199 billion growing cumulatively at 13.2% CAGR to 2015. 

Indian E&M; industry recorded one of the highest growth rates in the world growing at 11.2% in 2010. This was largely due to rebound in consumer spend, advertising spend and most importantly in the E&M; spend. The industry grew a little slower than expected largely due to the downturn in the film segment.  All the other segments grew as predicted.  The industry is poised for greater growth in the foreseeable future though some key regulatory hurdles remain.

On the way forward, Timmy S Kandhari, Leader – Entertainment & Media Practice, PwC India said:

“The buoyant advertisement spend will have to be supplemented with subscription growth for sustainable profitable growth in E&M; revenues.  Addressable digitisation in the broadcast space and focus on good content across sectors will go a long way in achieving this objective.” 

Outlook for major segments of the Indian Entertainment & Media Industry in 2011-2015 are as follows:

Television: The sector is projected to command half of the entertainment pie by 2015 as it is estimated to grow at a robust 14.5% cumulatively over the next five years, from an estimated INR 306.5 billion in 2010 to INR 602.5 billion by 2015. 

Film: The sector is projected to grow at a CAGR of 9.3% over the next five years, reaching 

INR 136.5 billion in 2015 from the present INR 87.5 billion in 2010.

Print media: The sector is projected to grow by 9.6% over the period 2011-15, reaching INR 282 billion in 2015 from the present INR 178.7 billion in 2010. 

Radio: The sector is projected to grow at a CAGR of 19.2% over 2011-15, reaching INR 26.0 billion in 2015 from the present INR 10.8 billion in 2010. 

Music: Due to the tremendous uptake of the mobile VAS market, the sector is projected to grow at a CAGR of 17.6% over 2011-15, reaching INR 21.4 billion in 2015 from INR 9.5 billion in 2010.

Internet advertising: With rebound in overall advertising, internet advertising too is projected to grow by 25.5% over the next five years and reach an estimated INR 24.0 billion in 2015 from the present INR 7.7 billion in 2010.

Out of home (OOH): The estimated size of Out of home (OOH) advertising spend is INR 14.0 billion in 2010, which is projected to reach INR 24.0 billion in 2015.

Animation, gaming and VFX industry will continue to maintain its growth pace and is projected to grow at a CAGR of 21.4% to INR 82.6 billion in 2015 from its current size of INR 31.3 billion.

Other Factors in the Outlook:

Advertisement Spend

The advertisement spend registered high growth of 14.3% in 2010 as compared to negligible growth in 2009. Internet advertising, with 28% growth, remained the fastest growing segment as an increasing number of advertisers are using online platform to connect with the youth.

Digital vs. Non-Digital Spend

The next five years will see digital technologies increase their influence across the industry and rapid change in technologies and consumer behaviour will continue across all E&M; segments. However, the pace of change will continue to be slower in India as compared to other territories.

On the migration to digital consumption, Marcel Fenez, Global Leader, Entertainment & Media practice, PwC said:

“The Indian consumer is yet to reap the benefits of the enhanced digital experience seen in other markets where smart devices and enhanced bandwidth speed prevail. This is an issue highlighting the need for future infrastructure investment and the overall affordability of devices.”

India, like the rest of the world, will have to contend with rising demand from consumers for digital experience. This is adding new complexities for the E&M; industry in terms of delivery and monetisation. Many of these will need to be addressed by collaboration across the digital value chain.

On the challenges facing the E&M; industry, Timmy concluded:

“While there is good revenue growth, the challenge for the Indian industry would be how to make the growth profitable in all its constituents. Favourable government policies will help but the industry does need to look at their own operating model such that sustained investment in the E&M; sector becomes possible”.

ENDS

Notes to the Editor

India entertainment and media outlook 2011

This2011 edition of the PwC report ‘India entertainment and media outlook 2011’ has in-depth forecasts and analysis of nine entertainment and media (E&M;) industry segments. It has detailed key trends and challenges in each of the segments besides providing their future prospects. In addition, we have provided our views on tax and regulatory issues as well as the technology that is influencing the distribution of content in the industry.

The report has been prepared on the basis of information obtained from key industry players, trade associations, government agencies, trade publications, and other industry sources.  The performance trends in different segments of the industry were analysed and an attempt was made to identify the underlying factors. Models were developed to quantify the impact of each of these factors, to create a forecast scenario.

PwC’s professional expertise, institutional knowledge and global resources of knowledge and excellence were applied to review and adjust those values wherever required. The entire process was then examined for internal consistency and transparency vis-à-vis prevailing industry wisdom.  Feedback from key industry players was subjected to a rigorous validation process to ensure that it was consistent and conformed to the industry feel.

The Global Entertainment and Media Outlook 2011-15

About the Outlook

PwC Global Entertainment & Media outlook 2011-2015, the 12th annual edition, contains in-depth analysis and forecasts of 13 major industry segments across four regions of the globe: North America (USA and Canada), EMEA (Europe, Middle East and Africa), Asia Pacific and Latin America.  To access the Global Entertainment & Media Outlook 2011-2015 online go to:  http://www.pwc.com/outlook.

Digital Spending

Digital spending, as included in the Outlook, consists of broadband and mobile Internet access, online and mobile Internet advertising, video-on-demand, mobile TV subscriptions, digital music, electronic home video, online and wireless video games, digital consumer magazine circulation spending, digital newspaper circulation spending, digital trade magazine circulation spending, electronic consumer, educational and professional books, and satellite radio subscriptions. 

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