Media by factica


•     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.


•     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

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