Advertising Industry in India

Television

Current size: Rs 148 billion

Projected size by 2010: Rs 427 billion; CAGR: 24%

Subscription revenues are projected to be the key growth driver for the Indian television industry over the next five years.

Subscription revenues will increase both from the number of pay TV homes as well as increased subscription rates. The buoyancy of the Indian economy will drive the homes, both in rural and urban (second TV set homes) areas to buy televisions and subscribe for the pay services.

New distribution platforms like DTH and IPTV will only increase the subscriber base and push up the subscription revenues.


Filmed entertainment

Current size: Rs 68 billion

Projected size by 2010: Rs 153 billion; CAGR: 18%

Advancements in technology are helping the Indian film industry in all the spheres – film production, film exhibition and marketing. The industry is increasingly getting more corporatised.

Several film production, distribution and exhibition companies are coming out with public issues. 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.

This will not only improve the quality of prints and thereby make film viewing a more pleasurable experience, but also reduce piracy of prints.

Print Media

Current size: Rs 109 billion

Projected size by 2010: Rs 195 billion; CAGR: 12%

A booming Indian economy, growing need for content and government initiatives that have opened up the sector to foreign investment are driving growth in the print media. With the literate population on the rise, more people in rural and urban areas are reading newspapers and magazines today.

Also, there is more interest in India amongst the global investor community. This leads to demand for more content from India. Foreign media too is evincing interest in investing in Indian publications. And the internet today offers a new avenue to generate more advertising revenue.


Radio

Current size: Rs 3 billion

Projected size by 2010: Rs 12 billion; CAGR: 32%.

The cheapest and oldest form of entertainment in the country, which was hitherto dominated by the All India Radio (AIR), is going to witness a sea-change very shortly.

In 2005, the government announced three key policy initiatives which will drive growth in this sector - migration to a revenue share regime, allowing foreign investment into the segment and opening of licenses to private players.

As many as 338 licenses are being given out by the Indian government for FM radio channels in 91 big and small towns and cities. This deluge of radio stations will result in rising need for content and professionals. New concepts like satellite, internet and community radio have also begun to hit the market. Increasingly, radio is making a comeback in the lifestyles of Indians.

Music

Current size: Rs 7,000 million crore

Projected size by 2010: Rs 7,400 million; CAGR: 1%.

The 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 to boost average revenue per user.
Presently, ring tones (for cellular phone subscribers) constitute the dominant component of the mobile music market. Licensed digital distribution services are also contributing significantly to growth in all regions.


Live entertainment

Current size: Rs 8,000 million

Projected size by 2010: Rs 18,000 million; CAGR: 18%

This segment of the entertainment industry, also known as event management, is growing at a fast and steady rate.

While this industry is still evolving, Indian event managers have clearly demonstrated their capabilities in successfully managing several mega national and international events over the past few years.

In fact, event managers are also developing properties around events. The growing number of corporate awards, television and sports events is helping this sector.

With rising incomes, people are also spending more on wedding, parties and other personal functions. However, issues like high entertainment taxes in certain states, lack of world-class infrastructure and the unorganized nature of most event management companies continue to hinder growth of this industry.


Out-of-home Advertising

Current size: 9000 million

Projected size by 2010: 17,500 million; CAGR: 14%.

Outdoor media sites in India are predominantly owned or operated by small, local players and are typically, directly marketed by them to advertisers and advertising agencies.

However, this segment too is witnessing a sea-change with technological innovations. Growing billboard advertising is fuelled by technologies such as light-emitting diode (LED) video billboard.

This is a segment that is seeing interesting technological innovations across the world and is likely to evolve in India too in the short-term.


Internet Advertising

Current size: Rs 1.6 billion

Projected size by 2010: Rs 7.5 billion; CAGR: 50%.

An estimated 38.5 million Indians are currently hooked on to the Internet. And this rising number is leading to the growth of internet advertising, which today stands at approximately Rs 1.6 billion.

The internet is being used for a variety of reasons, besides work, such as chatting, leisure, doing transactions and writing blogs.

This offers a huge opportunity to marketers to sell their products. And, with broadband becoming increasingly popular, this segment is expected to grow by leaps and bounds.