India set for media boom

23 March 2011

NEW DELHI: The Indian media and entertainment sector is set for rapid growth during the period to 2015, a forecast has predicted.

According to a study from the Federation of Indian Chambers of Commerce and Industry and consultancy KPMG, the category grew by 11% last year, reaching 652bn rupees ($14.5bn; €10.2bn; £8,9bn).

It suggested revenue levels would continue to climb between 2011 and 2015, when the industry will generate 1.28bn rupees.

Advertising spend climbed 17%, to 266bn rupees or 41% of all returns, last year, as competition among brand owners intensified.

Digital recorded the fastest expansion, leaping 33%, radio secured a 24% improvement, outdoor logged a 21% jump, television surged by 17%, and print enjoyed a 14% uptick.

In value terms, television remains the dominant medium, and the report anticipated there would be 156m TV households in India by 2015, when ad sales hit 214bn rupees, and subscriptions deliver 416bn rupees.

"Television is expected to account for almost half of the Indian M&E industry revenues, and more than twice the size of print, the second largest media sector," the study argued.

One factor fuelling TV's strength will be the rising number of direct-to-home viewers, following a 75% lift, to 28m residences, in 2010.

In contrast with the challenges faced in many markets, print should witness an improvement averaging out at 10% per year, receiving 310bn rupees by 2015.

Outdoor is likely to build on the momentum gained last year, as expenditure increased by around 21%, and should come in at 29.6bn rupees in 2015.

Digital advertising and gaming outlay is due to attain 73.8bn by the same date, registering the most impressive performance of any channel.

FICCI and KPMG identified "3Cs" prompting the ascension of new media, in the form of consumer demand, enhanced connectivity and convergence across devices.

Rajesh Jain, KPMG's head of media and entertainment, argued that several beneficial trends are supporting these processes, but also pose challenges.

"The resurgence in advertising, growth in subscription revenues, thrust on digitisation, and emerging avenues for content monetization were the key growth drivers for the Indian media and entertainment industry in 2010," he said.

"However going forward, it will become imperative for media companies to reset their business models and build greater focus on profitability and changing consumer preferences."

This could be achieved by leveraging regional opportunities, assuming an early-adopter status regarding tablets, m-commerce and apps, creating more niche content, and prioritising audience insights.

Elsewhere, consolidation may reshape the landscape, as technological evolution encourages new partnerships and foreign corporations seek to progress.

"Inorganic growth is likely to be a preferred route for many of these players," the report said.

"With increased digitisation and accountability, Indian media companies are also expected to generate greater interest from private equity players."

Data sourced from KPMG; additional content by Warc staff