Indian Media & Entertainment Industry: Brief Introduction The Indian media and entertainment (M&E) industry has massive reach. The industry is largely driven by increased digitisation, growth of regional media, robust film industry and emergence of new media for content delivery. The Indian M&E industry is projected to grow 11.8 per cent to clock revenues worth Rs 91, 700 crore (US$ 16 billion) in 2013, according to an industry report. While conventional media such as television (TV), print and radio continue to be dominant segments, animation, visual effects, films and music are also posting strong progress owing to content and the benefits of digitisation. Moreover, the Government's drive towards digitalisation and addressability for cable television by 2014 is expected to provide a boost to direct-to-home (DTH) and digital cable growth. In a nutshell, alignment of entertainment, information and telecommunication is increasingly affecting India's overall M&E industry. Launch of more advanced media devices over the last decade has facilitated access of the same content on a variety of media platforms. This is helping in emergence of new business models and revenue streams, not only for content providers, but for a variety of new players becoming a part of the new media ecosystem. With all these factors well-in-place, the M&E sector certainly is marching towards new horizons of growth. Market Dynamics - The Indian M&E industry grew from Rs 728 billion (US$ 13.6 billion) in 2011 to Rs 820 billion (US$ 14.18 billion) in 2012; marking a growth of 12.6 per cent. - Total advertising expenditure (AdEx) across media stood at Rs 327.4 billion (US$ 5.66 billion) in 2012 while advertising revenues increased by 9 per cent. - Print continued to be the largest beneficiary, accounting for 46 per cent of the advertising pie at Rs 150 billion (US$ 2.59 billion). - Furthermore, television continued to be a dominant segment in the M&E industry while new media sectors (like animation/VFX) and Films and Music segments recorded strong growth. Radio is expected to witness great emancipation, post the roll-out of Phase 3 licensing, at a compounded annual growth rate (CAGR) of 16.6 per cent over 2012-17. Advertising, Online and Mobile Entertainment Today, mobile phones and internet go hand-in-hand in a way such that hardware (mobile) is nothing without software (internet). People, especially the youth, largely use mobile phones to access net, not only for entertainment, but also to make payments, gather information and transfer content. The internet video consumption market in India is growing at a humongous pace, with nearly 80 per cent more videos viewed in 2012 than in 2011. Similarly, internet and online portals are largely being used by marketers for airing their advertisements and awareness campaigns. Even though traditional media like television and newspapers continue to be the preferred media for seeking information and entertainment (as they garner over 80 per cent of the advertising market in India), the internet has been steadily increasing its share of the advertising pie. Spends on digital media have substantially increased from just over 1 per cent of total Indian advertising spend in the year 2005 to nearly 7 per cent in 2012. Search advertising accounted for about 38 per cent of the total online advertising spend, translating to about Rs 850 crore (US$ 147.05 million) while display advertising formed a sizeable 29 per cent (Rs 662 crore [US$ 114.52 million]) by March 2013, according to the findings of Digital Advertising in India report, by the Internet and Mobile Association of India (IAMAI) and IMRB International. Meanwhile, advertisements on mobile phones and tablets have grown from a 7 per cent share in FY 2011-2012 to 10 per cent of the Indian online ad market in FY 2012-2013, amounting to spends of around Rs 230 crore (US$ 40 million). Social media, email and video advertising constitute 13 per cent, 3 per cent and 7 per cent of the online advertising market, respectively. Investments - Indian television industry is ripe enough to accept niche channels that could cater to a specific audience, with specific tastes and choice. The intense pace of digitisation of distribution systems has removed the artificial limit on the number of channels that could be carried on our old analogue networks. This, in-turn, allows broadcasters to target specific audience with niche channels that would otherwise have been inefficient to distribute. A report prepared by KPMG with an industry body says that Advertisers will only benefit from the trend (of niche channels) "as infotainment channels focussed on sub-genres would help them reach a targeted audience. Some of the developments in the same are enumerated below: - Mahesh Samat is making a re-entry into the Indian television space by launching a new, genre specific, high definition, Hindi entertainment channel namely EPIC. Samat, former managing director of Walt Disney India, calls his launch ‘segment television’. He had incorporated Epic Television Networks Private Limited (EPIC), an integrated media company in 2012, with an idea to build segmented offerings in television entertainment. If things move according to plan, the channel would come on-air by August 2013. - Another example of ‘segment channel’ is NDTV Good Times, which was launched in 2007 and covered the lifestyle ambit with shows on weddings, food, fashion and travel. Channels based on similar concept are FoodFood, Zee Khana Khazana, Shagun TV and the upcoming EPIC Indian history-based channel. - Mexican edutainment theme park brand KidZania is set to see the soft launch of its property in Mumbai in June 2013, wherein it would offer variety of activities to suit multiple interests of children. The facility would also have various set-ups with specific role-playing activities that kids can take up as jobs. KidZania’s Indian franchisee, ImagiNation Edutainment India, in which Bollywood actor Shah Rukh Khan holds 26 per cent stake, has entered into a partnership with Birla Sun Life Insurance for an employment centre at the park. The new facility is being built at a cost of Rs 100 crore (US$ 17.3 million). - Group M and Optimystix Entertainment promoted, O4 Digital Media have entered a strategic alliance to create India’s first digital video-led Brand Solutions Company – MashUp. With this new venture, Optimystix Entertainment, India’s leading TV Production Company is shifting its focus to the rapidly growing online video space while Group M, India’s leading media agency network is enhancing its online offering to include strategic content solutions backed with metric and measurement. MashUp would be a content-led Brand solutions company with a key focus on ‘video led sustained engagement’ for brands – a unique concept in the Indian digital industry. Mash Up Brand Solutions will work with brands to connect with consumers on digital and social media platforms using customised and differentiated content to create rich involvement. This new launch is all set to revolutionise the online brand promotion and engagement space using the digital expertise and understanding of online consumers of the partners involved. Government Initiatives Indian Government intends to glorify and magnify the heritage of Indian films and promote the country as a Film Tourism Destination. With a view to substantiate the same, a composite delegation from the Ministry of Information and Broadcasting (I&B) and Ministry of Tourism (MoT), Government of India (GoI) participated in Cannes Film Festival 2013. With such initiatives, the GoI wants to promote Indian cinema as a sub brand of the 'Incredible India' campaign at various international film festivals like IFFI Goa, European Film Market, and Cannes Film Festival, to develop synergy between the tourism and film industries, and to provide a platform for facilitating partnerships between the Indian and global film industry. I&B ministry has also launched a multi-media initiative that aims to highlight the impact of Government policies at grassroots level across multiple sectors. The drive namely ‘Glimpses of the India Story’ would capture the journey of development in the last nine years across various sectors through the programmes and policies of the Government in India. The multi-media initiative would be aired on television, radio, print and outdoor publicity with the objective of informing and appraising the public to encourage greater participation in such efforts. Road Ahead India’s M&E industry is expected to get double in size to Rs.1.66 trillion (US$ 28.72 billion) by 2017, from Rs.82, 000 crore (US$ 14.19 billion) in 2012, which would be a compounded annual growth rate (CAGR) of 15.2 per cent, according to the Indian Media and Entertainment Industry Report 2013 by KPMG with an industry body. Also, the FM radio sector is projected to touch the Rs 2,300-crore (US$ 397.93 million) mark within three years of the roll-out of the much-awaited Phase III licences, according to estimates by CII and Ernst & Young. The sector is anticipated to close FY13 at Rs 1,400 crore (US$ 242.22 million) with 245 private FM stations.