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TV industry to touch Rs 975 billion in 2019: FICCI KPMG Report

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MUMBAI: There is some good news for Indian broadcasters, who even after digitisation of phase I and II cities, have not been able to reap its full benefits. According to the ‘FICCI KPMG Indian Media and Entertainment Industry Report 2015,’ the sector will see a higher subscription revenue growth, which will outstrip advertising revenue increases.

The report, which was released on 25 March highlights that the subscription revenue will grow at an annualized 16 per cent; higher than ad revenue's 14 per cent annualised growth. This will be on account of better monetisation, courtesy digitsation. According to the FICCI KPMG report, television industry in India, which is estimated at Rs 475 billion in 2014, will grow at a CAGR of 15.5 per cent to reach Rs 975 billion in 2019. 

Highlights of the report: 

Paid C&S penetration of TV households 

The number of TV households in India increased to 168 million in 2014, implying a TV penetration of 61 per cent, even as the Cable and Satellite (C&S) subscribers increased by 10 million in 2014, to reach 149 million. Excluding DD Freedish, the number of paid C&S subscribers is estimated to be 139 million, implying a paid C&S penetration of 82 per cent. The paid C&S subscriber base is expected to grow to 175 million by 2019, representing 90 per cent of TV homes. 

DTH ARPU Growth

While subscriber addition for direct to home (DTH) operators was muted in 2014, they had a healthy revenue growth due to sustained increase in the average revenue per user (ARPU). DTH operators have seen an ARPU increase of around 12 to 15 per cent in 2014. While some of the ARPU increase was driven by DTH operators’s ability to continue to push price hikes, the more promising trend is that DTH operators are able to increase collections from customers by providing additional services such as HD channels, premium channels and other value added services (VAS).

There are close to four million HD subscribers, accounting for 10 per cent of all DTH subscribers, while 15 to 20 per cent of incremental subscribers in 2014 were HD subscribers. 

Broadcasting

Television advertising revenue bounced back in 2014 led by the Indian general elections and the improved macro economic outlook due to a stable government at the centre. 

The total TV advertising market is estimated to have grown at 14 per cent in 2014 to Rs 155 billion. Going forward, TV advertising in India is expected to grow at a CAGR of 19 per cent to reach Rs 299 billion by 2019. 

In 2014, the subscription revenues for broadcasters grew at only 10 per cent to Rs 75 billion. This is expected to grow at a CAGR of 22 per cent from 2014 to 2019 to Rs 201 billion. 

The increase in declared subscriber base and increase in revenue share of broadcasters of the subscription pie is expected to drive up the share of subscription to total broadcaster revenue from 33 per cent in 2014 to 40 per cent in 2019.

Content Production

The size of Indian TV content production industry is RS 30 billion, excluding news, animation and sports. Of this, Hindi language content contributes to two-third of the market, with regional languages contributing the rest. 

Digital Media

Digital ad spends accounted for 10.5 per cent of the total ad spends of Rs 414 billion in 2014. Digital media advertising in India grew around 45 per cent in 2014, and continues to grow faster than any other ad category.

The number of internet users in India is closing on to 300 million, thus dethroning USA as the second largest internet enabled market, the largest being China. The year on year growth stands at 31 per cent. 

The total number of wired internet connection stands at 20 million, whereas there are 210 million wireless internet connections in the country. Smartphone penetration is 10 per cent, which is lower than the average global penetration which stands at 25 per cent. Driven by reduction in tariffs of 2G, 3G and introduction of 4G, the number of wireless internet connections is estimated to reach 402 million by 2017 and 528 million by 2019. 

It is estimated that 52 million new internet users will login to the digital world by mid-2015. India is expected to reach 640 million internet users by 2019. 

Internet users to grow faster than TV viewers

In 2014, the number of TV viewers in India was 825 million, as compared to the number of internet user at 281 million. The CAGR for TV viewership is estimated to be around three per cent from 2014 to 2019, whereas the number of internet users is expected to grow by 18 per cent during the same period.

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