India’s media and entertainment industry grew 17% to reach Rs50,000 cr in 2007

India’s media and entertainment industry grew 17% to reach Rs50,000 cr in 2007
Comment E-mail Print Share
First Published: Mon, Mar 17 2008. 12 27 AM IST
Updated: Mon, Mar 17 2008. 12 27 AM IST
New Delhi: Last year, which saw the biggest global players testing waters in the Indian media and entertainment sector, the industry grew 17% over the previous year, reaching the Rs50,000 crore mark, according to a joint report by industry body the Federation of Indian Chambers of Commerce and Industry (Ficci) and audit firm PricewaterhouseCoopers.
While the mainstream sectors such as print, television and filmed entertainment continued to grow robustly, emerging segments such as animation, gaming and visual effects, radio, out-of-home advertising and online advertising grew faster, although on a much lower base. The report forecasts sustained growth for the next five years, estimating that the industry will grow to an overall size of Rs1.16 trillion by 2012. The report predicts a cumulative growth of 18% for the sector during the period.
“The industry has posted robust growth, in fact,?a couple of percentage points higher than what we projected last year, which is a great thing,” said Timmy Kandhari, executive director and leader of technology, infocomm and entertainment and media practice at PricewaterhouseCoopers.
Advertising, which contributed Rs19,600 crore or 38% to the revenues generated by the media and entertainment industry, grew 22% year-on-year in 2007, the report says.
Foreign direct investment (FDI) into the sector surged to $211 million (Rs854.55 crore), against $89.18 million in 2006. “FDI will continue to go up in the coming years,” Kandhari said. The year 2007-08 was marked by the entry of media and entertainment conglomerates—Viacom Inc., NBC Universal Inc. and Walt Disney Co.—into India through partnerships with Network 18 Group, NDTV Networks Plc. and UTV Software Communications Ltd, respectively.
The television industry grew 18%, the only big sector to grow at a rate above the industry average. The report notes that digital distribution platforms such as direct-to-home (DTH) are transforming the industry as such addressable technologies ensure more transparency and higher revenues from subscription. The study said the number of DTH subscribers would grow cumulatively by 44% every year over the next five years. The high growth in advertising revenues and emergence of new revenue streams such as from SMS (short message service) are driving the launch of new channels, the report says.
Print media’s growth in 2007 at 16% was lower than the industry average and the report indicates it will continue to grow below the average over the next five years, as well. The report predicts the sector’s cumulative annual growth rate, (CAGR), for 2008-12 at 14%, four percentage points below the industry average. The report, specifically notes the increase in regional language publications and the action in the magazines space, with a slew of niche launches.
Filmed entertainment grew 14% on which the CAGR for 2008-12 is predicted at 13%. The report notes several trends that are changing the nature of the industry. Emergence of revenue streams such as mobile phones, Internet, home video, merchandise, re-make rights and branded entertainment as well as the advent of the studio model of production will continue to grow de-risking the business, the report says. FM radio will grow to a Rs1,800 crore industry by 2012, up from Rs620 crore now. When asked if the possibility of an economic slowdown dampened the overall outlook, Kandhari said: “We have factored that in (the report).”
‘TV market to grow at 16%’
A Hong Kong-based independent research firm focusing on Asia’s media and telecommunications industry has made a slightly different projection for the Indian television industry. The market will grow at an average annual rate of 16% to reach $11.6 billion (Rs46,922 crore) by 2012, Media Partners Asia said in its annual report, ‘Asia Pacific Pay-TV and Broadband Markets 2008’. It said the sector will grow to $19 billion by 2017.
According to its study, the increasing footprint of digitized distribution systems such as DTH will see subscription revenues climbing from $3.8 billion currently to $7.8 billion by 2012 and $12.3 billion by 2017. The number of digital pay-TV subscribers including cable, DTH and Internet protocol TV, could grow to 28 million by 2012 and 15 million by 2017, it added.
While steady economic growth and increasing cable TV penetration continue to boost the growth of TV advertising, the study says TV’s share of the ad pie, which in 2007 was 42%, will come under threat in the long run from the growth of out-of-home media, radio and online advertising. It said advertising on TV will grow at an average annual rate of 19% between 2007 and 2012 to reach $3.5 billion and further to $6.3 billion by 2017.
Comment E-mail Print Share
First Published: Mon, Mar 17 2008. 12 27 AM IST
More Topics: Media | Entertainment | TV Market | Internet | Radio |