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Consolidation, greater reach and growth ahead

Consolidation, greater reach and growth ahead
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First Published: Tue, Dec 30 2008. 07 00 AM IST

Digital road: Sanjeev Kumar Bijli Ramesh Pathania / Mint
Digital road: Sanjeev Kumar Bijli Ramesh Pathania / Mint
Updated: Mon, Jan 05 2009. 10 59 AM IST
Hollywood will look at increasing investments in Hindi cinema
Digital road: Sanjeev Kumar Bijli Ramesh Pathania / Mint
• We will see more and more new digital projections. Old formats will also get converted into digital platforms.
• As a result of the above technological advancement, we will see wider releases of films
• The last two years saw a flurry of new initiatives in the film production and exhibition business. Everybody was in a rush to grab market share, but next year, I see the market getting consolidated.
• We will also see a trend towards more co-productions to de-risk the film projects We will see partners with different competencies getting together to minimize risks and enhance results.
• There will be a price correction in all areas, be it rentals for multiplexes, or cost of production for films.
• Film stars and directors’ fee will also come down.
• The industry will see opening up of more large scale multiplexes with seven and more number of screens.
• Revenues from sources such as music, satellite and DVDs for films will stabilize.
• Hollywood studios will look at increasing investments and portfolio in the Hindi film industry.
Market statistics
Size of the industry:
Rs11,000 crore
Projected to reach:
Rs17,500 crore in 2012
Domestic box office collections: Rs8,250 crore
Overseas box office collections: Rs1,000 crore
Home video: Rs750 crore
Source: A report by the Federation of Indian Chambers of Commerce and Industry and PricewaterhouseCoopers
Sanjeev Kumar Bijli is joint managing director, PVR Ltd.
Enriching lives: Shailesh Rao Harikrishna Katragadda / Mint
Internet to turn local, become important advertising medium
• The Internet will continue to grow aggressively in 2009—both on the PC and the mobile. It will continue to be the fastest growing medium in India.
• The new wave of the Internet growth will come from the tier II and tier III cities. Here the Internet will take a whole new meaning, really adding value to people’s lives.
• People will use the Internet to look for more local information, whether it is finding a new shopping destination or a cab service.
• With the advent of the 3G network in India, users will be able to get more from their mobile web experience.
• This year, the Internet use went from those in major metros, in a certain education and income bracket, to more mainstream use. Next year, the Internet will go fully mainstream.
• On the advertising side, there will be significant investments, especially in using Internet for brand building.
• Social networking will become even more popular.
• Advertisers will leverage social networking sites to “interact and engage” with their audience. These networks will become the most meaningful way to reach the youth for every marketer.
• Advertising agencies will develop digital media practices, and big advertisers will demand integrated marketing campaigns recognizing the interplay between television, print, mobile and the Internet.
Market statistics
No. of Internet users: 49 million
Penetration: Total 4%, Urban India 9%
Advertising revenue: Around Rs500 crore
Source: Online research and consultancy firm Juxtconsult Pvt. Ltd
Shailesh Rao is India head of the US-based Internet search company Google Inc.
Advertising revenues of private FM radios to increase 20%
Good year: Apurva Purohit Ashesh Shah / Mint
• Advertising spending on FM radio will grow by 20%.
• We will see sports, current affairs and news being broadcast on private FM, albeit under tight government control.
• There will be a consolidation in the industry through mergers, besides strategic sales alliances to leverage network strengths and sales expertise across pockets of the country.
• There will be more niche offerings for the listeners with multiple frequency ownership, hopefully being allowed in phase III of private FM.
• Radio penetration will go up from the current average of 55% in each city to 70%.
• Radio has largely been a mass medium. We will see a trend of audience segmentation as the listenership evolves. The audiences are likely to develop affinity for specific stations.
• There will also be stability in people’s movement as stations build capabilities around their long-term talent.
• We hope to see the music industry work in conjunction with the radio industry.
• The advertiser will hopefully realize the fantastic return on investment that radio offers them today and that only focusing on reducing the effective rate is counterproductive to everyone concerned.
Market statistics
No. of radio stations: Around 400
No. of listeners: 190 million
Advertising revenue: Rs750 crore
Source: Indian Readership Survey 2008
Apurva Purohit is chief executive officer, Radio City 91.1FM, owned by Music Broadcast Pvt. Ltd, and president, Association of Radio Operators for India.
These are the last of a nine-part series.
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First Published: Tue, Dec 30 2008. 07 00 AM IST