Entertainment
India has the largest film industry in the world.
Entertainment Industry
The media and entertainment (M&E) industry is expected to be one of the prime beneficiaries of the continued growth in India's GDP and the rise in discretionary spending by increasingly wealthy Indian consumers. With the projected growth rate of 19 per cent a year, the entertainment industry set to outperform the high growing Indian economy as a whole.
The Indian entertainment industry is among the fastest growing sectors in the country. In the past two decades entertainment industry in India has witnessed explosive growth. In television alone, from a single state owned television network, Doordarshan in 1991, today there are over 300 national, regional and local channels being beamed across the country.
The Times of India reports that the media and entertainment industry "is poised to grow at an annual compounding rate of 19% per annum to reach at Rs 83,740 crore by 2010, from the present (2006)size of Rs 43,700 crore."
Growth drivers for Entertainment & Media:
Continued GDP growth
Increased consumer spending
Youth power -50% of the population is below 25
The Indian Entertainment and media Industry can be catogorised as
· Filmed Entertainment
· Television
· Music
· Radio
· Print (Primarily Newspapers & Magazines)
Distribution across the different entertainment segments:
Segment |
Current Size(2006) |
Projected Size(2011) |
Television |
191 billion |
519 billion |
Filmed entertainment: |
85 billion |
175 billion |
Print media |
128 billion |
232 billion |
Radio |
5 billion |
17 billion |
Music |
7.2 billion |
8.7 billion |
Live entertainment |
9 billion |
19 billion |
Out-of-home advertising |
10 billion |
21.5 billion |
Internet advertising |
1.6 billion |
9.5 billion |
Present and projected growth in E&M industry (in Rs crore) |
|||||||
|
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
CAGR |
Television |
19,100 |
21,900 |
26,600 |
33,100 |
43,100 |
51,900 |
22% |
Print Media |
12,700 |
14,400 |
16,200 |
18,200 |
20,600 |
23,200 |
13% |
Film Entertainment |
8,400 |
9,600 |
11,200 |
12,600 |
14,600 |
17,500 |
16% |
Radio |
500 |
600 |
800 |
1,100 |
1,400 |
1,700 |
28% |
Music |
700 |
740 |
750 |
760 |
800 |
870 |
4% |
OHH Advertising |
1,000 |
1,200 |
1,400 |
1,600 |
1,900 |
2,100 |
17% |
Live Entertainment |
900 |
1,100 |
1,300 |
1,600 |
1,800 |
1,900 |
16% |
Internet |
160 |
270 |
420 |
600 |
820 |
950 |
43.00% |
Total* |
43,600 |
50,000 |
58,800 |
69,700 |
85,000 |
100,100 |
18% |
Sources: Industry estimates & PwC analysis |
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Media and Entertainment Companies
Zee Telefilms
Balaji Telefilms
Future outlook
Convergence is the mantra for the Indian entertainment industry during the next five years. Technology will drive the entertainment industry into the next decade, and its boundaries will be merged with those of the telecommunications and information technology segments, giving rise to a host of value-added features for consumers and new revenue streams for players in each segment. Mobile entertainment, with its ability to dissect the boundaries of time and space, will be the biggest growth driver.
And finally, content is -- and will continue to be -- the king of entertainment in the future.
Entertainment Industry in India comprises of Film Industry and Television Industry. Indian film industry is the largest film industry in the world, producing on an average, close to a thousand films a year in all languages. In terms of film production India exceeds Hollywood's production volume by over three times. Some of the fastest growing segments in the Indian entertainment industry include music, cable and satellite television, animation and FM.
According to an estimate by FICCI and Ernst and Young Indian entertainment industry would worth more than Rs. 400,000 million in 2008. Several positive developments like the accordance of the 'industry' status to the film industry, satellite channel penetration, the retail boom in the channels for music sales (Music World & Planet M), the use of digital technology in all spheres of entertainment and the growth of multiplexes have contributed to the growth of this sector.
Entertainment industry in India is presently in a consolidation phase as boundary lines between films, music and television are fast disappearing. Skills and resources are being pooled extensively. Besides adaptation to high-end digital technology, the entertainment industry is also witnessing rapid development of state-of-the-art studios and post production facilities.
Entertainment industry in India is projected to be one of the major economic driving forces of the country. In India, television is the major segment of entertainment industry. Presently, India has the third largest television market in the world behind only china and the USA. Today, television reaches about hundred million Indian households. India has the world's biggest movie industry in terms of the number of movies produced. Presently, the technology of film-making in India is perhaps the best among all developing countries. Indian film industry is now increasingly getting professional and a lot of production houses such as Yash Raj Productions, Dharma Productions, Mukta Arts etc. are now working on corporate lines.
The popularity of Indian entertainment industry goes well beyond the geographical frontiers of the country. Indian television channels and films are viewed and enjoyed across the entire South Asia. Across the Middle East, parts of South East Asia and Africa, large expatriate populations ensure that Indian TV channels and films are a regular part of their entertainment bouquet. In UK and North America (USA and Canada), Indian TV channels and films are increasingly finding a foothold beyond the expatriate pockets as the audience there has started to enjoy and identify with the contemporary Indian culture. Quite a few of Indian filmstars are also getting good offers from Hollywood.
The future prospects of Indian entertainment industry look to be extremely good. As India's profile rises on the global stage outside interest in India's culture and entertainment industry is also bound to grow.
Entertainment and Media: A Growth Story Unfolds The domestic entertainment and media industry continues to outperform the surging Indian economy Monday, May 07, 2007
The Indian entertainment and media industry is one of the fastest growing sectors in India. The Indian economy has been growing at a fast clip over the last few years, and income levels and consumer spending is also on the rise. Besides these economic and personal income-linked factors, there are other, that are contributing to this high growth rate.
The Economic Impetus: Over the past 10 years, India has registered the fastest growth among major democracies, having grown at over 7% in four years in the 1990s. It represents the fourth largest economy in terms of ''purchasing power parity''. The E&M industry is expected to significantly benefit from this fast economic growth.
The Demographic Impetus: Over the years, spending power has steadily increased in India. The consumption expenditure is rising due to increasing disposable incomes on account of sustained growth in income levels and reduction in personal income tax over the last decade. Lifestyle changes brought about by changes in economic activity are also spurring growth of the Indian E&M industry. In urban areas of India, the consumer mindset is changing due to increased exposure to global influences via media, and other interactions leading to higher aspirations. The Indian rural market with its vast size of nearly three times of urban India, also offers a huge opportunity that has remained largely untapped due to reasons of accessibility and affordability.
Low Media Penetration in Lower SECs: Though media penetration is poor in lower socio-economic classes, the absolute numbers are much higher for these classes. Hence, efforts to increase the penetration even slightly in these lower socio-economic classes are likely to deliver much higher results, simply due to the higher base.
Low Ad Spends: Indian advertising spends 0.34% of GDP, which is abysmally low as compared to other developed and developing countries. Advertising revenues are vital for the growth of this industry. While today the low ad spends may seem like a challenge before the E&M industry, it also throws open immense potential for growth. This potential can be estimated by the fact that even if India was to reach the global average, advertising revenues would at least double the current revenues, estimated at about Rs 16,300 crore for 2006.
The size of E&M in India is currently estimated at Rs 43,700 crore and is expected to grow at a compounded annual growth rate of 18% over the next five years. In the last year, the industry has grown by 20%, according to FICCI PricewaterhouseCoopers' annual report.
Television Industry
Amongst the segments of the industry, the television industry will continue to contribute the largest share as in the last three years. The television industry revenues are expected to grow from the present size of Rs 19,100 crore to Rs 51,900 crore by 2011, implying a 22% cumulative annual growth over the next five years. Subscription revenues are projected to be the key growth driver over the next five years, and will increase both from the number of pay TV homes as well as increased subscription rates. New distribution platforms like DTH and IPTV will only increase the subscriber base and push up subscription revenues.
Print Media Industry
The print media industry, comprising of newspaper and magazine publishing, is projected to grow from the present size of Rs 12,800 crore to Rs 23,200 crore by 2011, implying a 13% cumulative annual growth over the next five years. A booming Indian economy, growing need for content and government initiatives that have opened up the sector to foreign investment are driving growth in print media. With the literate population on the rise, more people in rural and urban areas are reading newspapers and magazines today. Also, there is more interest in India amongst the global investor community. This leads to the demand for more Indian content from India.
Present and projected growth in E&M industry (in Rs crore) |
|||||||
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
CAGR |
|
Television |
19,100 |
21,900 |
26,600 |
33,100 |
43,100 |
51,900 |
22% |
Print Media |
12,700 |
14,400 |
16,200 |
18,200 |
20,600 |
23,200 |
13% |
Film Entertainment |
8,400 |
9,600 |
11,200 |
12,600 |
14,600 |
17,500 |
16% |
Radio |
500 |
600 |
800 |
1,100 |
1,400 |
1,700 |
28% |
Music |
700 |
740 |
750 |
760 |
800 |
870 |
4% |
OHH Advertising |
1,000 |
1,200 |
1,400 |
1,600 |
1,900 |
2,100 |
17% |
Live Entertainment |
900 |
1,100 |
1,300 |
1,600 |
1,800 |
1,900 |
16% |
Internet |
160 |
270 |
420 |
600 |
820 |
950 |
43.00% |
Total* |
43,600 |
50,000 |
58,800 |
69,700 |
8,500 |
100,100 |
18% |
Sources: Industry estimates & PwC analysis |
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Radio
The radio industry, fuelled by the positive FM-II Radio Policy, is projected to grow from the present size of Rs 500 crore to Rs 1,700 crore by 2011, implying a 28% cumulative annual growth over the next five years. In 2005, the government opened up the sector to foreign investment along with migration to a revenue-share scheme. These factors along with privatization of a large number of frequencies as part of the FM II Radio Policy will drive growth. As many as 338 licenses were given out by the Indian government for FM radio channels in 91 big and small towns and cities. This deluge of radio stations results in opportunities for content and trained talent. New concepts like satellite radio, visual radio and community radio have also begun to hit the market.
