Indiantelevision.com Team

(17 March 2008 11:00 am)

NEW DELHI: The Indian Entertainment and Media Industry recorded a growth of 17 per cent in 2007 over 2006 with the industry estimated at Rs. 513 billion in as compared to Rs. 438 billion in 2006.

According to the FICCI - PricewaterhouseCoopers 2008 Report on Indian Entertainment and Media Industry to be unveiled at the next FICCI-FRAMES in Mumbai later this month, the Indian E&M Industry is projected to grow by 18% cumulatively over the next five years to reach Rs. 1.157 trillion by 2012.

The report 'Indian Entertainment and Media Industry - Sustaining Growth' reveals that the growth of 17 per cent has proved wrong the forecast of a 15 per cent growth in the previous year. In the last four years 2004-2007, the industry recorded a cumulative growth of 19% on an overall basis.

In 2007, foreign investments in the E&M sector reached a record high of $ 211 million (approximately Rs. 8.5 billion). This was seen as result of the extremely high number of investment deals announced in 2006 and the years before.

The report will be released by Information and Broadcasting Minister Priyaranjan Dasmunsi at the inauguration of FICCI-FRAMES 2008, the biggest Global Convention in Asia on the Business of Entertainment, in March 25 in Mumbai. Over 2500 Indian and foreign delegates from nearly 20 countries will engage in seminars and networking business sessions and social get-togethers in the three-day meet. The annual meet is organized by the Federation of Indian Chambers of Commerce and Industry (FICCI) in collaboration with the entertainment industry and the I and B Ministry.

While the partner country is Switzerland, delegates from 16 other countries besides India have already registered for the mega event. They are Australia, Canada, France, Greece, Germany, Hong Kong, Italy, Malaysia, Pakistan, South Africa, Thailand, the United Arab Emirates, the United Kingdom, United States, Korea, and New Zealand.

The subjects to be discussed include the Changing face of TV news, Resurgence of the language media, Developing animation content, New age technology and emerging production pipelines in animation, Raising capital, Linguistic diversity in Indian cinema, Radio for the masses, Scope of international co-productions, Talent crunch in the industry, Film marketing & distribution, Importance of digital cinema, Animation, IP creation, protection and life cycle, Visual effects, Mobile entertainment, Sports as entertainment, and Revenue streams in multiplexes.

The inaugural session will be addressed by eminent speakers like Swiss Ambassador to India Dominique Dreyer, I and B Ministry Secretary Ms. Asha Swarup; Ms Viviane Reding, European Commissioner, Information Society & Media, European Commission; Mr. Stewart Beck, Assistant Deputy Minister, Investment, Innovation and Sectors, Foreign Affairs and International Trade, Canada; FICCI Entertainment Committee Chairman Yash Chopra, FICCI Entertainment Committee Co-Chairman and Sony Entertainment CEO Kunal Dasgupta; and Mr. Amit Khanna, Chairman, Reliance Entertainment Pvt. Ltd. and Chairman of the FICCI Convergence Committee.

The Advertising industry recorded a growth of 22 per cent in 2007 over 2006 to reach Rs 196 billion in 2007, up from Rs 161 billion in 2006; and contributed 38% of the industry's revenues, up by a percentage from 37% in 2006. In the last four years 2004-2007, the advertising industry recorded a cumulative growth of 20% on an overall basis.

Advertising is experiencing a paradigm shift with digital platforms enabling to reach the critical mass. This had resulted in consumers shifting from passive mediums to spending more time on digitally interactive mediums. Internet and mobile are two keys enablers for the same. Internet advertising is estimated at Rs 4.2 billion in 2008 growing at 32% CAGR, expected to touch Rs 11 billion in 2012. The growth in 2007 over the previous year was of the order of 69 per cent.

The E&M industry saw several deals in 2007 across various segments. As the case last year the television segment generated the most interest among investors
The last year continued the trend towards increased convergence between the E&M industry and the telecom industry. The most notable of these trends were witnessed in the mobile music segment. Other initiatives included newspaper industry going on-line with 'e-papers' and mobile with 'm-papers'. Digital cinema continued to make significant progress in the filmed industry, which also saw a rise in on-line and mobile ticketing sales. Most television broadcasters today have foraying into online and mobile portals.
The current size of the Television industry is Rs 226 billion and is projected to increase to Rs 600 billion by 2012. There was a growth of 18 per cent over 2006 and the compounded annual growth rate in the next five years is expected to be of the order of 12 per cent.

While noting that the TV industry is transforming with digitalization of distribution networks through increase in DTH subscribers which are projected to grow at 44% CAGR over the next five years, the report says there was only lukewarm response to the conditional access system made mandatory from January one last year. .

High growth in advertising revenues and emergence of alternate revenue streams especially SMS is driving the launch of several new channels, especially in the 'general entertainment' genre.

The filmed entertainment sector is expected to almost double in the next five years from the present Rs 96 billion to Rs 176 billion by 2012, with a CAGR of 13 per cent. The sector showed a growth of 14 per cent over 2006.

Emergence of various revenue streams beyond traditional box office is changing the face of the Indian filmed entertainment industry such as television, mobile, internet, home video, merchandise, music, re-make rights and several branded entertainment opportunities. Advent of 'Studio Model' is further de-risking the business; 2007 saw interests by Hollywood studios in India such as Sony Pictures, Viacom and Fox. The entry of players like Moser Baer is changing the Indian model for Home Video from rental to a sell-through. The talent is becoming 'commoditized' and there was huge rush in 2007 to lock-in talent for a long term period.

Perhaps because of piracy and the shift to other forms of entertainment, the rise in the music industry will be from Rs 7.3 billion in 2007 to just Rs 8 billion in 2012, with a CAGR of just two per cent. The industry showed a growth of just one per cent last year over that of 2006, and a growth of just three per cent between 2004 and 2007.

In radio, thanks to FM Radio, the growth is expected to be almost three times in the next five years, from the Rs 6.2 billion in 2007 to Rs 18 billion in 2012 with a CAGR of 24 per cent. The growth in 2007 over the previous year was also of the order of 24 per cent.

Over 150 radio channels had been operationalised by 2007, thus increasing the spread of radio. Phase-III plans have been drawn up which recommend additional 560 radio stations in the next five years

Meanwhile, the Telecom Regulatory Authority of India has recommended that private FM Radio channels should be permitted to broadcast news and the FDI limit should be increased.

In comparison to online media, the growth in print media is expected to be slower, rising from the present Rs 149 billion to Rs 281 billion in 2012 with a CAGR of 14 per cent. The growth last year over 2006 was 16 per cent.

New magazine launches in 2007 dominated the print industry in 2007 as a result of favourable FDI policies and manifested growth potential especially in the high-end niche genres. Newspaper publishing was dominated with the increased regional publications.

Animation, Gaming and VFX will see a tripling of the industry over the next five years, going from the present Rs 13 billion to Rs 40 billion with a CAGR of 25 per cent. The growth in the one year between 2006 and 2007 was 24 per cent.

According to the report, the migration to digital formats is accelerating globally and this trend is likely to emerge in India too. Distribution of entertainment and media content over digital and mobile platforms-online digital streaming, digital movie/TV downloads, video-on-demand, music downloaded from the Internet, music downloaded to wireless phones, online advertising, online video games, wireless video games, and online gaming is like to rise significantly in the next five years.

Timmy Kandhari, Executive Director and Leader TICE (Technology, Infocomm and Entertainment & Media) Practice in PricewaterhouseCoopers in India, says "Digitalization is the future for most segments and companies have to adopt this revolution with appropriate infrastructure, relevant business models, and technology upgradation along with associated costs. As digitization sets in, it will lead to reduction in costs for content and delivery in the long run, shifting the emphasis on quality content."

FICCI Secretary General Amit Mitra describes the growth as robust, and says this has been possible because of enterprise and the networking between the government and industry segments.

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