Mumbai: India will emerge as the third largest television advertising market by 2016 behind Japan and China, said a report.

With a compounded annual growth rate (CAGR) of 15%, television ad revenue in India will overtake Australia and Korea to touch $5.4 billion (Rs 26,325 crore), said the report titled The India TV Industry—Act Two, released on Wednesday by Media Partners Asia Ltd, a Hong Kong-based company that provides analyses of media and telecom industries.

By Sandeep Bhatnagar/Mint

Indian television executives said the medium is boosting revenue by constantly reaching new viewers.

“You have new platforms like DTH (direct-to-home) adding 8-9 million homes every year. Naturally advertising will follow," said Rohit Gupta, president (network sales, licensing & telephony), Multiscreen Media Pvt Ltd, which runs the Sony network of channels.

Also See | Increasing Share (PDF)

Sanjay Gupta, chief operating officer of Star India Pvt. Ltd, said DTH and cable television together add nearly 40 million viewers annually.

“Investment in building of brands and advertising will continue unabated (in India). The rate of growth is projected in the region of 12-16% a year. This is one of the fastest growing media vehicles," he said.

Star India tops the report’s rating of Indian television networks, followed by Sun TV Network Ltd, Zee Entertainment Enterprises Ltd and Multi Screen Media Pvt Ltd.

The rating was done on parameters including flagship channels, bouquet strengths, scale, content sourcing—Intellectual Property Right and syndication, distribution leverage, financial strength and future readiness.

“Each of these parameters was assigned weight to the degree of its relevance over the next five years," Media Partners Asia executive director Vivek Couto said.

Television networks will focus on ramping up subscription revenue to boost growth in coming years, the report said.