The Indian media and entertainment industry stood at Rs 584 billion in 2008, a growth of 12.4 per cent over the previous year. Over the next five years, the industry is projected to grow at a CAGR of 12.5 per cent to reach the size of Rs 1,052 billion by 2013, says a FICCI-KPMG report on the sector release on the first day of FICCI Frames 2009 that got underway in Mumbai on February 17.
Commenting on the highlights of the report, Rajesh Jain, Head Information, Communication & Entertainment, KPMG India, said, “Media companies are under pressure to change, innovate and re-examine their existing business models. Players need to draw upon new capabilities to survive in this environment. In the immediate future, media corporates are likely to focus more on operating margins, and assess opportunities for consolidation, while building on core strengths.”
The projected 12.5 per cent growth for the sector would be driven on the back of factors like favourable demographics, strong long term fundamentals of the Indian economy, expected rise in advertising to GDP ratio compared to developed economies and increasing media penetration.
According to the FICCI-KPMG report, the television industry is estimated to have reached a size of Rs 241 billion in, a growth of 14.2 per cent over 2007. The industry is projected to grow at the rate of 14.5 per cent over 2009-13 and reach a size of Rs 473 billion.
The Indian print media industry is estimated to have grown by 7.6 per cent in 2008 and reached around Rs 172.6 billion in size. The industry is projected to grow at a CAGR of 9 per cent over the next five years and reach around Rs 266 billion in size by 2013.
The filmed entertainment sector is estimated to have grown at a CAGR of 17.7 per cent over the past three years. The industry is clocked revenues of around Rs 109.3 billion in size in 2008, a growth of 13.4 per cent over 2007. Over the next five years, the industry is projected to grow at the CAGR of 9.1 per cent and reach the size of Rs 168.6 billion by 2013.
Radio ad spends account for about 4 per cent of the total advertising spends in India today, having grown from just 2 per cent in 2004. Consequently, the radio industry is estimated to have grown at an impressive CAGR of 19.7 per cent over 2006-08. It is estimated to have reached a size of Rs 8.4 billion by end of 2008, a growth rate of 13.5 per cent over the previous year. It is expected to grow at a CAGR of 14.2 per cent over 2009-13 and reach a size of Rs 16.3 billion by 2013.
The size of the Indian music industry was estimated at around Rs 7.3 billion in 2008, down from Rs 8.3 billion in 2005, implying a degrowth of 4.8 per cent during the period. One of the primary reasons for this degrowth has been the erosion of sales of physical formats, a trend which is expected to continue well into the future.
OOH media has grown at a CAGR of 17.3 per cent over the past three years, and is estimated to have reached Rs 16 billion in size in 2008, a growth of 14 per cent over 2007. The sector’s performance was affected in the second half of the year owing to the overall economic slowdown. It is projected to grow at a compounded rate of 12.8 per cent over the next five years and reach a size of around Rs 29.3 billion by 2013. Currently, the growth is centred largely in Tier 1 towns, with metros accounting for more than half of the total OOH market. Sectors spending the most on this medium include telecom, media & entertainment and financial services companies.
At an estimated size of Rs 17.4 billion in 2008, the Indian animation industry is miniscule as compared to the global animation industry with estimated revenues in excess of Rs 1,530 billion by 2010. However, the Indian animation industry has been growing rapidly with an estimated CAGR of 20.1 per cent in 2006-08. It is estimated to reach a size of about Rs 39 billion by 2013.
Console gaming is the largest money churner in the global market and is gaining prominence in India too. In 2008, the Indian console gaming segment registered total revenues of Rs 4.1 billion, which is expected to go up to Rs 9.4 billion in 2013. Plagued by a number of issues such as content discovery and revenue leakages, the Indian mobile gaming segment has not lived up to the potential and is estimated at Rs 1.4 billion in 2008 in terms of end user revenues. The PC gaming market has, however, grown to Rs 978.6 million and expected to grow at a CAGR of over 36 per cent through 2013.