MUMBAI: Fuelled by rising income levels and consumerism bred by the countryÃƒÂ¢Ã¢â€šÂ¬Ã¢â€žÂ¢s robust economic growth, the Indian entertainment and media (E&M) industry is poised to grow at 18 per cent compound annual growth rate (CAGR) to reach Rs 1 trillion by 2011. The present size of the industry is Rs 437 billion, according to the 2007 annual edition of the FICCI – PricewaterhouseCoopers (PWC) report: Indian Entertainment and Media Industry – A Growth Story Unfolds.
The report, to be released at FICCI-FRAMES on 26 March in Mumbai by the Union Information & Broadcasting minister Priya Ranjan Dasmunshi, points out that the growing demand coupled with technological advancements, policy initiatives taken by the Indian Government to encourage the inflow of investment and initiative by private media companies, will be the key drivers for the E&M industry. The industry has been forecast to outperform the economic growth in each year, till 2011.
The FICCI-PWC Report states that 2006, which witnessed a growth of 20 per cent over the previous year was also the year that marked the start of convergence for the media industry.
Sectorally, the Internet advertising industry is set to post the highest CAGR of 43 per cent, rising from its current size of Rs 1.6 billion to Rs 9.5 billion in 2010.
The television industry is projected to grow by 22 per cent from Rs 191 billion to Rs 519 billion by 2011; filmed entertainment by 16 per cent from Rs 85 billion to Rs 175 billion; print media by 13 per cent from Rs 128 billion to Rs 232 billion; radio by 28 per cent from Rs 5 billion to Rs 17 billion; music by four per cent from Rs 7.2 billion to Rs 8.7 billion; live entertainment by 16 per cent from Rs 9 billion to Rs 19 billion; and out-of-home advertising by 17 per cent from Rs 10 billion to Rs 21.5 billion.
As far as the Indian filmed entertainment sector is concerned, advancements in technology are helping the industry in all the spheres namely film production, film exhibition and marketing. The industry is increasingly getting more corporatised, highlighted by public issues of several film production, distribution and exhibition companies. Production companies are now also entering into long term contracts with directors and actors. Additionally, more than half the releases in 2006 were by corporate rather than individual.
More theatres across the country are getting upgraded to multiplexes and initiatives to set up more digital cinema halls in the country are already underway.
The home video section of the industry is also poised for steady cumulative growth of 31 per cent.
The music industry has been plagued by piracy and had been showing very sluggish growth in the physical format over the last few years, both in India and globally. However, mobile music and licensed digital distribution services are projected to fuel the recovery of the music industry the world-over.
The pace of growth in mobile music reflects the fact that consumers increasingly view their wireless device as an entertainment medium, using those devices to play games and listen to music, while carriers are actively promoting ancillary services such as ring tones and caller tunes to boost average revenue per user.
Ring tones currently constitute the dominant component of the mobile music market. Licensed digital distribution services are also contributing significantly to growth in all regions. The boom in the radio industry is also expected to have a positive impact on the music industry.
An estimated 32 million Indians have been exposed to the internet till 2006, with 21 regular users. A total of 59 million Indians are PC literate and thus potential targets for internet advertising. The number of regular internet users is expected to increase to 35 million+ by 2008 and this will drive growth of internet advertising, which today stands at approximately Rs 1600 million.
Commenting on the future of the industry, Timmy Kandhari said, ÃƒÂ¢Ã¢â€šÂ¬Ã…â€œConvergence will continue to play a crucial role in the development of the Indian entertainment and media industry where consumers will increasingly be calling the shots in a converged media world. With more favorable policy initiatives expected to be introduced by the government in the near future, a move towards a better intellectual property rights regime, growing investment from big Indian as well as foreign companies and the deluge of technological advancements, there is only direction for the Indian Entertainment and Media industry to go. UP!”