MUMBAI: The FICCI-KPMG report 2010 has identified 10 key drivers for the growth of the Indian media and entertainment industry.
These are as follows:
1. Digitization to help in spreading the reach and impact of M&E industry: Availability and penetration of newer distribution platforms like Digital Cable, DTH and IPTV, digitization of newspapers, magazines, films and sale of online and mobile music are some of the ways in which the M&E industry has benefited from digitization and the growth is likely to continue in years to come.
The digitization of TV platforms has given way to better technology and picture and sound quality for viewers, more transparent distribution of revenues for stakeholders in the value chain and more band width becoming available to broadcasters giving them opportunity to provide value add services. This will enable niche content being available in future.
Digital production in films has reduced film processing and storage costs and digital distribution and exhibition has led to enhanced picture quality, reduced costs, shortened release window and a wider reach.
Digital music distribution is mainly restricted to the telecom segment, through ring tones and caller ring back tunes. With increase in mobile and broadband penetration and expected 3G rollout, market for other digital distribution platforms such as full track downloads, streaming music and subscriptions etc might also open up.
2. Regionalization to aid in inclusion of untapped markets: 2009 was the year of providing content in regional languages across sectors like Print, TV, Music, Films and Radio. Going forward, it is expected that regionalization will be one of the significant factors driving growth with growing increase in literacy, consumption and disposable incomes in Tier 2 & 3 cities. Advertisers are also increasing focus on rural markets due to saturation of urban markets. Demand for regional content is emerging fast.
Ad spends on regional TV channels is increasing and national broadcasters are looking at adding regional channels to their portfolios. The share of local advertisers on radio and in print is increasing. Corporates involved in the filmed entertainment business are taking exposure in regional cinema in order to diversify.
Multiplexes, which were largely based in HSM, are now increasingly opening up properties in other regions. Over last few years, Hindi cinema has lost share to other languages in terms of total films certified. Tapping of regional markets is growing in importance in the India strategy of international film studios, which are releasing prints and doing dubbed language screenings in these markets. The untapped potential and latent demand in these markets is also leading to the roll out of Phase III radio licenses largely in Tier 2 and 3 towns and OOH space seeing increased investments in these cities.
3. Convergence and Impact of new media to benefit media players: Advertisers are looking at multiple delivery platforms for content to break through the clutter in existing platforms.
4. Consolidation leading to emergence of players with superior capabilities: The M&E industry is increasingly becoming fragmented in nature due to entry of newer players and newer customers and regions getting added. We have seen existing players expanding horizons by coming out of their traditional businesses and establishing presence in other domains.
5. Competition expanding the operating market: The entry of newer players in the market has had a positive impact on the overall market as it has helped in expanding the market size.
6. Talent development and management key to business success: The M&E industry relies heavily on its human capital for business success and differentiation, as it is talent driven to a great extent. The industry has dealt with a lack of supply of trained professionals in the sector for a long time. Investment in educational institutions providing specialized courses for skilled technicians is a step in the right direction to develop talent and meet the demand of the industry.
7. Innovation across product, process, marketing, distribution and business model by media players: Innovation is essential for players to adapt to the changing market scenario, technology and consumer behavior.
8. The growing importance of pay markets in media business models: Traditionally advertising revenues have had a strong hold in the M&E industry, but now even subscription revenues are becoming important with consumers paying for media services. The media business models in India are undergoing a change with audiences becoming more willing to pay for content and value added services. Technology has brought about convenience and offered superior quality to consumers who have responded positively. The growth in ticket prices of movies at multiplexes, increasing number of Pay TV subscribers, increasing penetration of DTH with its user friendly interface and technology, and introduction of VAS by media players are some examples of pay markets gaining importance.
Growth in this will be driven by research in consumption trends and better understanding the set of audiences who are likely to pay more for these value added services. This will ensure going beyond basic monetization of audience through ad sales.
9. Consumer research to ensure consumer-oriented media products and delivery: With increasing fragmentation of audiences and competition within and from outside media sectors, it is becoming difficult for players in the M&E industry to rely purely on past experience and creative expression. There is an increasing need for investments and focus on research in concept testing, new product development and delivery platforms. Companies are increasing spends on consumer research as the stakes have increased. Many players have a separate team within the organization to concentrate on research as an ongoing process, whereas others take help of outside research agencies for specific projects / concepts.
10. Focus on 360 degree connect with consumers: The players are looking beyond just the traditional mediums by reaching the consumers across multiple platforms in order to establish a stronger connect. They are taking the help of multiple touch points at the same time to communicate to the consumer across platforms like TV, Print, Radio, OOH, Films, Internet, Mobile and Retail.
Recent examples of two very successful 360 degree marketing campaigns of films are Avatar and 3 Idiots. Avatar was released globally with one of the most successful digital marketing campaigns. 3 Idiots repeated the success story in India with their innovative techniques and all inclusive marketing strategy. These films managed to explore multiple touch points and reach out effectively through digital media and experiential marketing techniques.