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The Market

  • India is one of the largest media markets globally:

– Large print market – 62000 newspapers
– Highest number of films produced – over 1000 films produced and approximately 3.2 billion tickets sold annually
– Cable household network – 95 million cable and satellite households

  • In the past few years, regional media has been a key growth driver of the industry. Established national players are increasing their regional footprints. For e.g.: growth in regional channels, city specific channels, regional language newspapers, etc.
  • The Indian media industry has also witnessed growth of digital TV distribution platforms: digital cable, Direct-to-Home (DTH) and IPTV, digitization of Film, Prints and digitization of music libraries and sales of online and mobile music.
  • The industry has also witnessed emergence of niche content genres across sector: reality TV shows, niche TV channels, cross over content in music and films, niche genre magazine, etc.
  • Television and Print are the largest sectors of the industry contributing ~74 percent of the total revenues while Gaming and Internet are fastest growing segments.

– Gaming and Internet are expected to grow at a CAGR of 32 percent and 30 percent to reach USD 0.7 billion and USD 0.6 billion respectively over 2009-14.

Opportunities
Growth in Indian media and entertainment industry:

  • Indian media and entertainment industry is expected to grow from USD 12 billion in 2009 to USD 22 billion in 2014 at a CAGR of 13 percent.
  • Television and print with a market size of USD 5.3 billion and USD 3.6 billion in 2009 are projected to grow to USD 10.7 billion and USD 5.5 billion at a CAGR of 15 percent and 9 percent over 2009-14 respectively.
  • Films industry is valued at USD 1.8 billion in 2009 is projected to grow to USD 2.8 billion at a CAGR of 9 percent over 2009-14.
  • Radio and Music with a market size of USD 0.16 billion each in 2009 are projected to grow to USD 0.33 billion and USD 0.35 billion at a CAGR of 16 percent each over 2009-14 respectively.
  • Animation and VFX is valued at USD 0.41 billion in 2009 is projected to grow to USD 0.96 billion at a CAGR of 19 percent over 2009-14.
  • Advertising industry is expected to grow from USD 4.5 billion in
    2009 to USD 8.7 billion in 2014 at a CAGR of 14.1 percent.
  • The ad spend as a percentage of GDP is 0.41 percent in India compared to 1.08 percent in the US and world average of 0.8 percent, leaving immense potential for growth.

Favorable demographics

  • Vast majority of young population backed by increasing spending power, higher disposable incomes and rising consumerism.

– Share of the population in the deprived class is expected to reduce to 35 percent by 2015 from 54 percent in 2005.
– India’s per capita income has grown from USD 446 in FY2003 to USD 807 in FY2009.
– Increasing spends towards discretionary items (i) Discretionary spending is expected to increase to 61 percent by 2015 from 52 percent in 2005.

Liberal foreign investment regime
Foreign investment norms across media segments:

  • Television channels – 100 percent FDI permitted with exception to news and current affairs channel where 26 percent is permitted.
  • Films – 100 percent FDI permitted.
  • DTH and cable network – 49 percent (FDI + FII).
  • FM Radio broadcasting – 20 percent (FDI + FII).
  • News print media – 26 percent (FDI + FII); 100 percent FDI permitted for facsimile edition of newspapers.

Under-penetrated market

  • Low media penetration in rural areas and small towns
  • Overall media reach in rural areas is 56 percent
  • Only 38 percent of the literate population read any daily or magazine, reach in urban areas is 58 percent while 30 percent is in rural areas.
  • The need to capitalize this untapped market has been a key driver for the growth in regional markets.

Industry Snapshot

Industry size – 2009 USD 12 billion
y-o-y growth 1 percent
Industry Size – 2014 USD 22 billion
CAGR (2009-14) 13 percent
TV Household penetration 58 percent (129 million TV Households)
Pay TV subscribers 89 million
Television channels (2009) ~460
Number of multiplex screens (2009) 800+
Number of newspaper 62000 newspapers in 22 languages
Number of FM Radio stations (2009) 248 (as on Dec, 2009)

Source: FICCI-KPMG, Indian Media and Entertainment Industry Report, March 2010; TRAI

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