• India continues to be in the throes of an entertainment revolution as increasing digitalisation will radically alter the ways in
spawned by economic liberalisation. The industry comprises which consumers receive channels. Also, these distribution
of print, electronic, radio, internet and outdoor segments. The platforms will give broadcasters direct access to consumers
size of the print segment is about Rs 173 bn, while the radio providing not just routine content but also customized value
and internet segments are about Rs 8.4 bn and Rs 6.2 bn added services (like video on demand). As a result of this, the
respectively. Advertising revenue will continue to be the average revenue per user will increase significantly. Moreover,
industry's growth driver. broadcasters are also expected to rake in larger advertisement
• There are over 120 m television households, and over 80 m revenues, as ad spend is likely to go up on the back of the
cable and satellite connections in India. The DTH segment robust economic growth.
comprises of 12 m homes. It is expected that there will be 149
m television households in India by 2013, out of which 127 m KEY POINTS
are expected to have cable and satellite connections. The
players in the electronic media can be classified into a three- Supply: Indian has more than 600 English dailies and 7,400
link chain. First are the studios (including the animation studios), Indian language dailies. In the electronic media, the total
which comprise the hardware part of the industry, the second number of channels presently available to viewers in India
are the content providers and the third link comprises the stands at close to 500.
distribution trolleys, which include the cable and satellite Demand: The demand for regional print media is growing at
channels, multiplex theatres, MSOs and the DTH players. a faster pace than that of English language print media. In
• In India, the ratio of advertising expenditure to GDP is about the electronic media, the highly fragmented viewership has
0.4%. This is substantially lower in comparison to the developed led to an increasing preference for niche channels.
economies as well as developing economies. As the Indian Barriers to entry: In the electronic media, it is high for
economy continues to develop and the media reach increases, broadcasting since it is very capital-intensive. It involves the
the advertising expenditure to GDP ratio is expected to increase cost of leasing the transponder, setting up up-linking
over the next 5 years. facilities, setting up pre and post-production facilities. The
barriers to entry are far lower for content providers.
FY09 Besides, broadcasters themselves commission programmes
and finance their production. Hence margins are lower. The
• The Indian media and entertainment industry recorded a growth broadcasters are finding it increasingly difficult to retain their
of around 12% over the previous year. With this, the industry key personnel. Inspite of the high barriers to entry a slew of
in India reached an estimated size of Rs 584 bn, up from Rs channels across languages and genres have been launched
520 bn in 2007. The growth rates of the different segments of in the recent past.
the industry during the year were 8% for print advertising, Bargaining power of suppliers: In the print media, high
18% for TV advertising and 59% for online advertising. for newsprint suppliers. Medium to low for content providers
• As per the Pitch-Madison Survey, print accounted for the largest in the electronic media. Terrestrial broadcasters such as
share of ad-spend in calendar year 2008 with 47.4%, followed Doordarshan and regional broadcasters such as Sun TV
by television 40.2%, outdoor advertising 6.8%, radio 3.2%, actually commission time slots to content providers.
Internet 1.7% and cinema advertising 0.6%. The total ad-spend Bargaining power of customers: Relatively high in both
in calendar year 2008 was estimated to be Rs 207 bn, a 17% print and electronic media. The consumer finds a surfeit of
increase compared with 2007. Print media ad-spend increased players to choose from. The rollout of CAS and DTH services
by 16% as against 17% increase in television ad-spend in will enable the consumer to choose the channels that he
calendar year 2008. wishes to view increasing his bargaining power.
• The share of print media in the total advertisement pie has Competition: High in print media, especially in Hindi dailies.
fallen from 47.9% in calendar year 2007 to 47.4% in the The print sector includes listed entities like Jagran
calendar year 2008. Television has maintained its market share Prakashan, HT Media and Deccan Chronicle. Also high
at 40.2%. Hindi language newspapers increased their share amongst broadcasters especially for general entertainment
in total advertisement pie to 27% from 24.4% at the cost of channels. The space includes listed entities like Zee TV, TV
English and some other regional language publications. 18, UTV, NDTV and Sun TV.
CURRENT SCENARIO AND PROSPECTS
• The future of the entertainment industry will be decided on the
interplay of a number of reasons like consumerism, advertising
spend, content, pricing, technology and regulation. Internet
advertising is expected to be the fastest growing segment
over the next 5 years at compounded annual growth rate
(CAGR) of 28%, followed by radio advertising at 14.2%,
television advertising at 13.5% and print advertising by 10%.
Taken together, the Indian media industry is set to grow at a
CAGR of 12.5% per annum in the next 5 years.
• The demographic profile of India also favours higher spends
on entertainment, with the consuming class forming a sizeable
chunk of the country's total households. Thus, this could lead
to the emergence of a huge consumer base for the various
products and services (including entertainment).
• New distribution technologies like DTH, Conditional Access
System (CAS) and IPTV, hold the future of the media industry