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Indian entertainment and media industry to reach Rs1040.8bn
India’s Entertainment & Media industry is poised to return to double digit growth predicts PricewaterhouseCoopers in its latest report titled ‘Indian Entertainment & Media Outlook 2010’. The industry is expected to touch Rs 1040bn growing cumulatively at a 12.4% CAGR to 2014.

The industry registered one of its slowest growth rates in 2009, growing at a rate of 2.2%. This was largely due to lower than expected uptake in the advertisement spend which registered no growth and hence affected sectors like print, OOH, radio as well as Internet advertising. Negative growth in filmed entertainment also affected growth in 2009.

On the road ahead, Timmy S Kandhari, Leader – Entertainment & Media Practice, PricewaterhouseCoopers India said:

“Many of the factors which caused the slowdown in 2009 are not likely to persist. With confidence returning alongside a likely increase in consumer and advertisement spends, the E&M industry is looking to get back to its high growth trajectory.”

Outlook for major segments of the Indian Entertainment & Media Industry 2010-2014:

Television: The industry is projected to continue to be the major contributor to the overall industry revenue pie and is estimated to grow at a stable rate of 12.9% cumulatively over the next five years, from an estimated Rs. 265.5bn in 2009 to Rs. 488.0bn by 2014.

Film: The industry is projected to grow at a CAGR of 12.4% over the next five years, reaching

Rs.170.5bn in 2014 from the present Rs. 95.0bn in 2009.

Print media: The industry is projected to grow by 7.4% over the period 2010-14, reaching to Rs. 230.5bn in 2014 from the present Rs. 161.5bn in 2009.

Radio advertising: The industry is projected to grow at a CAGR of 12.2% over 2010-14, reaching Rs. 16.0bn in 2014 from the present Rs. 9.0bn in 2009.

Music: Due to the tremendous uptake of the mobile VAS market, the industry is projected to grow at a CAGR of 28.6% over 2010-14, reaching Rs. 26.5bn in 2014. The key growth driver for the music industry over the next five years will be digital music, and its share is expected to move from 29% in 2009 to 75% in 2014.

Internet advertising: Given the trends of increased internet usage, internet advertising is projected to grow by 20.1% over the next five years and reach an estimated Rs. 15bn in 2014 from the present Rs 6bn in 2009.

Out of home (OOH): The estimated size of Out of home (OOH) advertising spend is Rs 12.5bn in 2009, which is projected to reach Rs 21.0bn in 2014. Its share in the total ad pie is expected to go down marginally to 5.6% in 2014 from a current level of 5.8% in 2009.

Animation, gaming and VFX industry will continue to maintain its growth pace and is projected to grow at a CAGR of 25.2% to Rs. 73.4bn in 2014 from its current size of Rs 23.8bn.

Other Factors in the Outlook:

Advertisement Spend

The advertisement spend which registered no growth in 2009 is showing a rebound with increasing business confidence returning to the market as well as with innovative structuring. The spend will grow at 11.4% CAGR for the period 2010-2014.

Digital vs. Non-Digital Spend

Globally, consumer experience is driving change very rapidly. Consumers are embracing new media experiences with staggering speed resulting in increased spend on digital media. However, India is a very different case in point.

On the migration to digital spending, Marcel Fenez, Global Leader, Entertainment & Media practice, PricewaterhouseCoopers said:

“Although there is consistency in inevitable migration to digital, the change continues to vary by market. Uptake in digital media could be different in a country like India due to local factors around infrastructure as well as affordability.”

Spend on digital media in India is not significant at present and is not likely to be significant in the forecast period. This means the industry needs to ensure that it embraces digital not as a competitor to traditional analog services but as a complement. This will ensure sustainable growth in the foreseeable future.

On the drivers of growth for this sector, Timmy concludes:

“Addressability of distribution platforms, digital transmission, regional as well as differentiated content and of course rational regulation will be key drivers of E&M market in the forseeable future”.

This year, PricewaterhouseCoopers in association with AIDEM also conducted the Indian Entertainment & Media CEO Survey in order to understand how E&M business leaders responded to the challenges brought about by the recession, the concerns they are facing today and their take on long-term growth prospects of the industry.

The findings of the survey suggest that even though CEO’s are under cost pressure, they continue to work to strengthen their organisations, while seeking opportunities emerging from structural shifts in their industry, economy and regulatory environment.

On the mood of the Indian media CEO’s, Ray Nayak, Managing Director AIDEM Ventures said:

“On the whole, Indian media CEO confidence is rising from where it was a year ago. They are now cautiously optimistic about generating revenue growth in the near term and decidedly more confident of their long term prospects.”

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