Despite the explosion of consumerism and capitalism in India’s booming cities, more than half of all Indians still live in rural areas.
Cable TV reaches 70 million, mainly urban, Indian homes, but satellite services are now expanding rapidly
India’s media market has been experiencing a great boom in recent years, and analysts predict that there is more to come. The television sector continues to expand, with cable and satellite operators vying for customers. FM radio, only recently opened to the private sector, is taking off in a big way. And even the press, in defiance of world trends, is registering rising circulation figures.
Television, one of the largest and fastest growing segment
• With a growth rate of 15.8 per cent in 2011, Indian television industry stood second when compared with BRIC and other major developed economies.
• In 2014, the television industry in India derived the major share of its revenue from advertising segment (32.6 per cent) and the rest from subscription (67 per cent)
• Nonetheless, the share of subscription in the overall revenue of the TV segment is expected to increase to 69.3 per cent by FY19
The Indian Media and Entertainment (M&E) industry is a sunrise sector for the economy and is making high growth strides. Proving its resilience to the world, the Indian M&E industry is on the cusp of a strong phase of growth, backed by rising consumer demand and improving advertising revenues.
The industry has been largely driven by increasing digitization and higher internet usage over the last decade. Internet has almost become a mainstream media for entertainment for most of the people.
Government Initiatives
The Government of India has supported Media and Entertainment industry’s growth by taking various initiatives such as digitizing the cable distribution sector to attract greater institutional funding, increasing FDI limit from 74 per cent to 100 per cent in cable and DTH satellite platforms, and granting industry status to the film industry for easy access to institutional finance.
The Union Cabinet has approved the model Shops and Establishment Act, aimed at generating employment prospects by allowing cinema halls, restaurants, shops, banks and other such workplaces to remain open round the clock.
Recently, the Indian and Canadian governments have signed an audio-visual co-production deal that would help producers from both countries to explore their technical, creative, artistic, financial and marketing resources for co-productions and, subsequently, lead to exchange of culture and art amongst them.
Furthermore, the Centre has given the go-ahead for licenses to 45 new news and entertainment channels in India. Among those who have secured the licenses include established names such as Star, Sony, Viacom and Zee. Presently, there are 350 broadcasters which cater to 780 channels. “We want more competition and we wanted to open it up for the public. So far, we have approved the licenses of 45 new channels. It’s a mix of both news and non-news channels,” said Mr Bimal Julka, Secretary, Ministry of I&B, Government of India
Road Ahead
The Indian Media and Entertainment industry is on an impressive growth path. The revenue from advertising is expected to grow at a CAGR of 13 per cent and will exceed Rs 81,600 crore (US$ 12.09 billion) in 2019 from Rs 41,400 crore (US$ 6.14 billion) in 2014. Internet access has surpassed the print segment as the second-largest segment contributing to the overall pie of M&E industry revenues.
Television and print are expected to remain the largest contributors to the advertising pie in 2018 as well. Internet advertising will emerge as the third-largest segment, with a share of about 16 per cent in the total M&E advertising pie. The film segment which contributed Rs 12,640 crore (US$ 1.87 billion) in 2014 is projected to grow steadily at a CAGR of 10 per cent on the back of higher domestic and overseas box-office collections as well as cable and satellite rights.
Frank D’Souza, leader – Entertainment & Media at PwC India, said, “Given India’s overall growth in GDP and PCI, it is not surprising that India is amongst the top 10 markets for growth in the sector. Although, in India traditional media like newspaper publishing and cinema has always shown strong growth, we expect that even in terms of absolute total US$ spend, it should get into the top 10 in the early part of the next decade.”
The Indian media and entertainment industry comprises of print, electronic, radio, internet and outdoor segments. With the government aggressively pushing in for digitization of TV, Multi System Cable Operators (MSOs) are expected to lose 15-20% of their subscribers to DTH (direct-to-home) services. Digitization will facilitate increased number of channels and high quality viewing. India is a fast digitizing market and the consumer shift towards digital services is exhibited through the expansion of digitized households. The completion of the digitization process in Phase I and Phase II cities and the rollout in Phase III and Phase IV cities is seen as a positive step for the industry.
The report predicts that China could be overtaking India as the biggest cinema market by 2020 in terms of admissions.
In 2015 admissions were at an estimated 2.04 billion, and in 2020 are predicted to be at 2.80 billion, rising at a 6.6% CAGR.
Box office revenue in India, which stood at $1.64 billion in 2015, is expected to rise to $2.74 billion in 2020, at a 10.9% CAGR.