India’s entertainment and media industry will record revenues of around Rs1 lakh crore in 2011 on the back of new products, new technology, higher investments—both domestic and foreign—and convergence.
The estimate is part of a report released by audit firm PricewaterhouseCoopers (PwC).
The current size of the industry is around Rs43,700 crore. According to Timmy Kandhari, executive director, financial advisory services, PwC, the growth would be helped by a more favourable government policy and “a move towards a better intellectual property rights regime”.
The biggest gainer from this growth will be televison, which will account for Rs51,900 crore or 52% of the industry’s revenue in 2011, according to the study. The segment currently accounts for 43.7% of the industry’s revenue. That could explain why investors are scrambling to invest in the Indian television space.
Nimbus Communications, which owns television broadcast rights to all matches organized by India’s cricket board, BCCI, recently received equity funding of Rs552 crore from 3i Group Plc., Cisco Systems Inc., and Oman Investment Fund.
More recently, a television firm, INX Television, promoted by Indrani Mukerjea, wife of Star India’s former CEO Peter Mukerjea (he is bound by contractual obligations not to join another broadcaster immediately), received funding (or promises-to-fund) of $300 million. And Ronnie Screwvala, CEO, UTV Group, an entertainment firm, is launching an India Media Fund on London Stock Exchange’s Alternative Investment Market in a fortnight. Investors in the fund will own a part of media ventures back in India. Behind numbers such as these is an industry that is grappling with serious challenges, said Shashi Kalathil, chief executive of Neo Sports, a Nimbus-owned channel.
“There are issues in terms of revenue models, because people have begun avoiding ads,” he added.
Print media will see its share of the industry’s revenue decline from 29.9% to 23.2%, said the report, which also points out that companies in the space are yet to tap 369 million literate people who do not read newspapers and magazines.
Movies, print and television will account for 92% of the industry’s revenue by 2011, according to the study. And while Internet media will grow to just around Rs950 crore in revenue from Rs160 crore in 2006 it will register the fastest growth, of 44% a year.
The gradual shift in revenue across various segments is encouraging Indian media firms to diversify into areas where they are not present. The report said this marked the emergence of a new kind of media company in India, the media conglomerate.
While that should make the companies concerned wealthier, consumers can look forward to greater control over what they read or see. “Consumers will increasingly be calling the shots in a converged media world,” said Kandhari.