MUMBAI: The Indian film industry is projected to touch Rs 136.5 billion in 2015 from Rs 87.5 billion in 2010, growing at a CAGR of 9.3 per cent over the next five years.
On the other hand, as per PwC’s latest report titled India Entertainment & Media Outlook 2011, the Indian entertainment and media (E&M) industry is slated to continue its double-digit growth trajectory in 2011. The industry is expected to touch Rs 1199 billion growing cumulatively at 13.2 per cent CAGR to 2015.
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.
PwC India leader – entertainment & media practice Timmy S Kandhari 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.”
On the other hand, the television 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.
The print media 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.
The radio sector is projected to grow at a CAGR of 19.2 per cent over 2011-15, reaching Rs 26 billion in 2015 from the present Rs 10.8 billion in 2010.
Due to the tremendous uptake of the mobile VAS market, the music 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.
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 billion in 2015 from the present Rs 7.7 billion in 2010.
On the other hand, the estimated size of Out of home (OOH) advertising spend is Rs 14.0 billion in 2010, which is projected to reach Rs 24 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.
Other Factors in the Outlook:
The advertisement spends 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, PwC global leader – entertainment & media practice Marcel Fenez 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.
Kandhari added, “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.”