TV industry paces up, to grow at 16% CAGR


MUMBAI: India‘s television industry is on the fast growth track again, after slowing down in 2009. The segment has seen a 15.56 per cent rise to Rs 297 billion in 2010, accounting for 45.5 per cent of the overall media and entertainment pie, with strong growth engines from DTH and cable digitisation to guide its pace in the future.

The sector is poised for a 16 per cent CAGR through 2015 to touch Rs 630 billion, according to a Ficci-KPMG forecast.

India is the world’s third largest TV market with almost 138 million TV households, next to China and USA. Cable and Satellite (C&S) penetration has reached close to 80 per cent, fuelled by rapid growth in the DTH sector. New technologies like High Definition (HD), STBs (Set Top Boxes) with inbuilt recorders and delivery platforms like mobiles are rapidly evolving, creating further opportunities for innovation and growth.

Led by FMCG, auto and services, ad sales grew 17 per cent in 2010. Traditional spenders like banking and finance are still among the top ad categories for television, according to the report.

The top 10 categories accounted for 60 per cent of TV ad spend in 2010. 42 per cent of the television industry’s volume share came from FMCG. Ad volumes increased by 24 per cent last year but rates remained flat or fell.

Interestingly, 80 per cent of a channel‘s revenue came from advertising apart from Zee. Ad inventory went up with new channels being launched and increase in the ads per hour. The industry was boosted by product launches and brand extensions, which had been delayed in 2009.

Certain sectors like real estate which were slow in 2009 bounced back in 2010. Advertising by the entertainment sector like films and TV channels also returned into the scene. Travel and tourism has a 10 per cent share and is second to FMCG in terms of TV spends. A new category opened in the handset business.

What also helped was the fact that categories like auto and consumer durables advertised across the year and not just during the festive season.

The share of broadcasters in the subscription pie is expected to touch 30 per cent in 2015, up from 21 per cent in 2010, improving with addressability. For top line broadcasters, the share in subscription revenue is expected to increase from 28 to 36 per cent in 2015.

The Indian television industry added 100 million viewers in 2010 to reach 600 million viewers. The number of channels reached 550 up from 460 in 2009. The numbers of players is growing in the English entertainment space. Over 250 channels are awaiting approval for launch

In terms of genres, cricket commands 80 per cent of ad revenue in sports. For 2011, sports will have a 10-15 per cent share of the total television ad revenue. Hindi GECs will remain the main revenue source for broadcasters due to the reach. Consolidation is expected here as it is investment heavy.

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