The Indian entertainment and media industry is slated to grow cumulatively at 13.2 per cent CAGR over 2011-15 to reach Rs 1,199 billion, as per PwC’s ‘India Entertainment & Media Outlook 2011’.
The Indian E&M industry recorded one of the highest growth rates in the world, growing at 11.2 per cent in 2010. This was largely due to rebound in consumer spend, advertising spend, and most importantly, in the E&M spend. The industry grew a little slower than expected largely due to the downturn in the film segment. All the other segments grew as predicted. The industry is poised for greater growth in the foreseeable future though some key regulatory hurdles remain.
TV, print and film will continue to dominate the E&M industry in the foreseeable future. Significant revenues in Indian E&M industry continue to be non-digital, though there is good growth in digital spends. Infrastructure in the country is the biggest challenge to the growth of digital consumption and revenues.
On the way forward, Timmy S Kandhari, Leader – Entertainment & Media Practice, PwC India, said, “The buoyant advertisement spend will have to be supplemented with subscription growth for sustainable profitable growth in E&M revenues. Addressable digitisation in the broadcast space and focus on good content across sectors will go a long way in achieving this objective.”
Outlook for major segments of the Indian Entertainment & Media Industry in 2011-2015 are as follows:
Television: The sector is projected to command half of the entertainment pie by 2015 as it is estimated to grow at a robust 14.5 per cent cumulatively over the next five years, from an estimated Rs 306.5 billion in 2010 to Rs 602.5 billion by 2015.
Film: The sector is projected to grow at a CAGR of 9.3 per cent over the next five years, reaching Rs 136.5 billion in 2015 from the present Rs 87.5 billion in 2010.
Print media: The sector is projected to grow by 9.6 per cent over the period 2011-15, reaching Rs 282 billion in 2015 from the present Rs 178.7 billion in 2010.
Radio: The sector is projected to grow at a CAGR of 19.2 per cent over 2011-15, reaching Rs 26.0 billion in 2015 from the present Rs 10.8 billion in 2010.
Music: Due to the tremendous uptake of the mobile VAS market, the sector is projected to grow at a CAGR of 17.6 per cent over 2011-15, reaching Rs 21.4 billion in 2015 from Rs 9.5 billion in 2010.
Internet advertising: With rebound in overall advertising, Internet advertising too is projected to grow by 25.5 per cent over the next five years and reach an estimated Rs 24.0 billion in 2015 from the present Rs 7.7 billion in 2010.
Out of home (OOH): The estimated size of Out of home (OOH) advertising spend is Rs 14.0 billion in 2010, which is projected to reach Rs 24.0 billion in 2015.
Animation, gaming and VFX industry will continue to maintain its growth pace and is projected to grow at a CAGR of 21.4 per cent to Rs 82.6 billion in 2015 from its current size of Rs 31.3 billion.
Advertisement Spend: The advertisement spend registered high growth of 14.3 per cent in 2010 as compared to negligible growth in 2009. Internet advertising, with 28 per cent growth, remained the fastest growing segment as an increasing number of advertisers are using online platform to connect with the youth.
Digital vs Non-Digital Spend: The next five years will see digital technologies increase their influence across the industry and rapid change in technologies and consumer behaviour will continue across all E&M segments. However, the pace of change will continue to be slower in India as compared to other territories.
On the migration to digital consumption, Marcel Fenez, Global Leader, Entertainment & Media Practice, PwC, said, “The Indian consumer is yet to reap the benefits of the enhanced digital experience seen in other markets where smart devices and enhanced bandwidth speed prevail. This is an issue highlighting the need for future infrastructure investment and the overall affordability of devices.”
India, like the rest of the world, will have to contend with rising demand from consumers for digital experience. This is adding new complexities for the E&M industry in terms of delivery and monetisation. Many of these will need to be addressed by collaboration across the digital value chain.
On the challenges facing the E&M industry, Kandhari concluded, “While there is good revenue growth, the challenge for the Indian industry would be how to make the growth profitable in all its constituents. Favourable government policies will help but the industry does need to look at their own operating model such that sustained investment in the E&M sector becomes possible.”