Friday, May 29, 2009
Tuesday, May 05, 2009
Media Facts & Figures, March 2009
The Indian media and entertainment (M&E) industry is one of the fastest growing industries in the country. Its various segments—film, television, advertising, print media and music among others—have witnesses tremendous growth in the last few years.
With A.R. Rahman and Resul Pokutty having won Oscars for their commendable work in Slumdog Millionnaire, the spotlight has shifted on India and the immense talent and potential it offers. Another Indian who has been in the news recently is Raju Narisetty, a prominent journalist, who has been appointed as the managing director of the Washington Post, a leading US daily.
According to a report jointly published by the Federation of Indian Chambers of Commerce and Industry (FICCI) and KPMG, the media and entertainment industry in India is likely to grow 12.5 per cent per annum over the next five years and touch US$ 20.09 billion by 2013.
Television
The television industry in India is currently at its prime, contributing the largest share in the total media and entertainment industry. While India is the third largest cable television market in the world, the penetration level of pay TV is still low, which promises a huge untapped potential for growth.
According to the study by FICCI and KPMG, the television industry, which is currently valued at about US$ 4.63 billion will expand by 14.5 percent between 2009 and 2013.
Digital distribution platforms such as direct-to-home (DTH) are transforming the industry. Direct-to-Home segment is gearing up for a new phase of TV viewing with digital video recorders (DVRs) or personal video recorders that will free consumers from having to watch television at broadcaster-ordained timetables.
Mobile TV- where content will stream in on mobile phones – which is currently at a nascent stage is poised to grow big with the advent of 3G, according to experts. This can lead to the growth of many business opportunities in the media and entertainment sector. And according to ABI Research, the mobile TV market worldwide is expected to attract over 50 crore viewers in the next five years.
Considering that video is the most popular medium of entertainment, it will not be limited to mobile phones but will be expanded to in-car television and personal media players among others, according to experts.
Viewership across various segments is increasing and marketers are launching new channels to meet this growing demand. Turner and Warner Bros Entertainment, Hollywood's leading studio have launched WB, a new Warner-branded channel in India that will showcase blockbuster motion pictures and acclaimed television series. The channel will be distributed by Zee-Turner and will be available on both DTH platforms and cable and satellite homes. Hindi general entertainment channel (HGEC) Star Plus is launching four new shows in March this year.
Music
The Indian music industry, which until recently was overwhelmingly dominated by film music, is now being driven by non-film music. However, piracy and advent of radio channels which constantly play hit music leading to loss of sales of music, has affected the industry.
Industry experts estimate that the current size of the industry is about US$ 149 million, calculated on the basis of legitimate unit sales of compact discs (cds) and music cassettes of around 15 crores. And according to a PwC study, the music industry is likely to grow by 2 per cent over the next five years and will be a US$ 164.56 million industry by 2012.
While cassettes and cds have traditionally accounted for most of the sales, future growth will come from non-physical formats such as digital downloads and ringtones, among others.
According to a joint study by Soundbuzz, a digital music company, PwC and International Federation of Phonographic Industries, India was poised to become the second country in the world, after South Korea, where digital music sales will surpass the sales of music in traditional formats.Digital music sales are expected to account for 88 per cent of the total music industry revenue in India by 2009.
Radio
The cheapest and oldest form of entertainment, reaching 99 per cent of the population, this segment is likely to see many dynamic changes.
According to the PwC study, revenues from radio are likely to grow at a compound annual growth rate (CAGR) of 24 per cent over the next five years and the industry will grow from US$ 150.52 million in 2007 to US$ 370. 22 million in 2012.
Private FM radio has emerged as the fastest growing segment in the media, notching up an average 30 per cent growth in advertising revenues, compared to the industry's average of 18 per cent, according to ACNielsen's Radio Audience Measurement (RAM) service. Moreover, it is expected to increase to US$ 218.49 million over the next two years from US$ 133.52 million today.
FM radio broadcasting has expanded at a rapid pace and India today has over 300 FM radio stations.
Advertising
Advertising trends showed a healthy growth in the last five years as marketers sought to woo customers for a wide range of products. According to an Economic Times survey of 100 large private sector companies, the aggregate spending on advertising by these companies grew by a huge 22.4 per cent last year over the previous year. More than four-fifths of the sample companies have witnessed a rise in sales turnover in 2007-08 following higher advertising spend.
With the economic slowdown, ad spends are slowing down as well. According to the FICCI-KPMG report, ad spends could grow by 12.4 per cent a year now, compared to the 17 per cent growth registered over the past three years.
However, as consumer spending slowly inches upwards – aided partly by the fiscal measures undertaken by the government to boost the economy – some companies, such as Dabur, Coca Cola India, the Emami group and the Future Group, are planning to raise ad spends by almost 10 per cent in some cases to boost sales this year.
Radio, internet and cinema have been the traditional mediums of advertising and according to a survey by Adlabs Cinemas and research firm IMRB, in cinema, the 30-second in-theatre advertising accounts for 95 per cent of cinema advertising. The remaining 5 per cent comprises activities in the lobby area such as new car or bike displays, etc. Of the overall advertising spend, currently only around 0.4 per cent (around US$ 15.42 million) is spent on cinema. Print and TV account for the majority of the ad spend.
Going forward, digital media advertising (internet, mobile and digital signage) is expected to emerge as the medium of choice for advertisers. Of the available media, it was the fastest growing segment in 2008. Analysts feel that its better return on investment and the comparative ease with which its efficacy can be measured will ensure that the trend continues. In fact in 2009, video ads will the most popular form of online advertising, according to Viraj Malik, MD, Percept Knorigin (digital advertising arm of Percept). According to a FICCI-PwC report, online advertising it is expected to touch US$ 212.03 million in 2011 from the current US$ 57.83 million.
To cash in on the opportunity, Malaysia-based media conglomerate Astro Group has acquired a 50 per cent stake in Indian online firm Mogae Digital for US$ 5 million. The joint venture has lined up a number of launches, which include a social networking portal for mobile phones this year. Mogae Digital is promoted by Sandeep Goyal and Tanya Goyal, who are the Indian JV partners of Japanese giant Dentsu, the single largest ad agency in the world.
Cinema
The Indian film industry is the largest in the world in terms of number of films produced per year. The FICCI-KPMG study values the Indian film industry at US$ 2.11 billion and projects its growth at 9.1 percent till 2013.
Bucking the global slowdown – and in the aftermath of the Slumdog Millionnaire win – the box office collections in the first two months of this year have jumped 32 per cent over 2008. Box office collections from over eight movies, which accounted for the bulk of the revenues, hit US$ 36.62 million in January-February compared to US$ 27.95 million crore from over 12 movies in 2008 during the same months, according to data with trade analysts.
The opening of the film industry to foreign investment coupled with the granting of industry status to this segment has had a favourable impact, leading to many global production units entering the country. For example, Walt Disney has partnered with Yash Raj Films to make animated movies, the Warner Group is funding the Sippys' film projects, Viacom has a joint venture with the TV 18 group to form Viacom-18, and Sony Pictures Entertainment has co-produced Saawariya with SLB Films (Sanjay Leela Bansali Films).
Buoyed by the success of its maiden production in India—Chandni Chowk to China (which garnered US$ 8.67 million globally in the first three days of its release)—Warner Brothers Pictures India is set to invest US$ 38.6 million in film production this year.
Fox Star Studios, a joint venture between Twentieth Century Fox and Star, has entered into a multiple-film deal with producer Vipul Amrutlal Shah, marking its foray into the Indian film industry.
R-ADAG-owned Adlabs Films is betting on its integrated film service business and movie exhibitions to drive its growth. The company is spending US$ 41.13 million to expand the two businesses.
The cinema-viewing experience is also undergoing major changes. One perceptible change has been the rapid growth of multiplexes, which meets consumer demand for quality entertainment and has also helped boost production of niche films targeted at niche audiences.
Multiplexes
The nation's multiplex industry is all set for an unprecedented boom buoyed by positive regulatory changes and booming consumerism. According to an estimate, the number of multiplex screens in India is expected to touch 5,000 by 2012, constituting around 40 per cent of the total cinema screens.
In fact, currently the Indian market is highly underserved when compared to the West, India has less than 13 screens per million of the population, against 117 in the US, 52 in Italy and 30 in the UK.
PVR, Inox Leisure, Big Cinemas and other multiplexes plan to maintain their investment tempo in the year ahead betting on big Bollywood releases, lower rentals, a cut in entertainment tax and the drop in equipment prices. Multiplexes including Fun Multiplex, Cinemax and others plan to invest more than US$ 2.89 billion in 2009 almost the similar amount as last year, according to industry experts.
Fame India (formerly Shringar Cinemas), the company that owns and runs the Fame Cinemas chain of multiplexes, is expanding its footprint in North India. The company owns about 73 screens across India, including the three screens it added to its portfolio at the Fame multiplex in the Panchkula district of Haryana. Another multiplex with five screens in Chandigarh (at the City Emporio mall) is in the pipeline.
Multiplexes /megaplexes have been instrumental in contributing 28 per cent of the total theatrical sales for the film industry according to a report by Systematix Institutional Research.
• Entertainment conglomerate Adlabs Cinemas has drawn up a plan to build 12 megaplexes in cities like Mohali, Lucknow, Hyderabad and Delhi.
• Multiplex chain PVR Cinemas, is also planning to add over 250 screens across India, staggered over a period of three years from 2008-2010, with a total investment outlay of around US$ 82. 27 million.
• Cinemax India, the multiplex chain which currently has 55 screens over 17 properties across the country is planning to scale up its presence to 299 screens across about 100 properties by fiscal 2010.
• Inox, which has 26 multiplexes and 90 screens in 18 cities across India, will open nine multiplexes in Bangalore, Mangalore, Hubli and Belgaum by the end of 2010.
• Leading global multiplex player, Cinepolis, has earmarked US$ 350 million for its Indian operations. The company plans to have 500 screens across 40 cities in the next 5 to 7 years.
Others
Segments like print media, animation and gaming are also likely to see interesting growth rates. The country's growing literacy and new technologies have resulted in India emerging as the second largest newspaper market in the world, according to latest research by the World Association of Newspapers (WAN). Indian newspaper sales increased 11.2 per cent in 2007 and 35.51 per cent in the five year period. Newspaper advertising revenues in India were up 64.8 per cent over the previous 5 years.
According to the FICCI- KPMG study, the gaming segment, which is currently estimated at US$ 125.29 million, is expected to grow at 33.30 percent till 2013, while the US$ 119.51 million Internet is seen growing at 27.9 percent.
The Indian animation industry, currently estimated at US$ 460 million, is expected to grow at a CAGR of 27 per cent to touch US$ 1,163 million by 2012 according to a report titled ‘Indian Animation and Gaming 2008', jointly prepared by NASSCOM and Ernst & young.
Government Initiatives
The Government has initiated major reform measures, which have had a cascading effect on the growth of the industry.
• Permitting 100 per cent foreign direct investment (FDI) through the automatic route for film industry and advertising.
• Allowing 49 per cent foreign holding in cable TV and DTH.
• Allowing 100 per cent FDI in non-news publications and 26 per cent FDI in news publications.
• The government has allowed 100 per cent FDI in fax editions of magazines and newspapers.
• Recently, the government has allowed companies with core business in news segment but hived off non-news business, to raise funds from overseas beyond the stipulated FDI limit of 26 per cent. Such companies can raise and route funds from overseas through its non-news arm, which will not be calculated as foreign investment.
• The FM radio sector was opened for FDI with a 20 per cent cap.
• Permitting setting up of uplinking hubs for satellite uplinking by private TV broadcasters from Indian soil.
• Giving industry status to the films segment.
• Opening FM Radio operations to the private sector.
• The government has allotted US$ 50.13 million in the current Five-Year-Plan for various development projects of the film industry. The funds will be utilised to set up a centre for excellence in animation, gaming and visual effects among others.
Going Global
With the growing popularity of Indian content in the world market in general and South Asia in particular, the Indian entertainment industry players are venturing abroad to tap this booming segment.
In fact, according to a report by CII-AT Kearney, the share of international markets in total box office collections is estimated to increase from 8 per cent in 2006 to 15 per cent in 2010.
Consequently, many domestic players like Yash Raj Films, Reliance-Adlabs and UTV, among others, have set up distribution arms overseas. Not only films, other entertainment content areas like music and television also have a huge potential international market. One recent estimate puts the total value of Indian content sold overseas at over US$ 200 million. Further, this number is expected to grow over 20 per cent every year.
Technology has influenced the entertainment industry in a big way, and transformed content delivery as well as viewership experience. Experts feel that in 2009-10, the media and entertainment sector will see many new applications and ways of building the business.
With A.R. Rahman and Resul Pokutty having won Oscars for their commendable work in Slumdog Millionnaire, the spotlight has shifted on India and the immense talent and potential it offers. Another Indian who has been in the news recently is Raju Narisetty, a prominent journalist, who has been appointed as the managing director of the Washington Post, a leading US daily.
According to a report jointly published by the Federation of Indian Chambers of Commerce and Industry (FICCI) and KPMG, the media and entertainment industry in India is likely to grow 12.5 per cent per annum over the next five years and touch US$ 20.09 billion by 2013.
Television
The television industry in India is currently at its prime, contributing the largest share in the total media and entertainment industry. While India is the third largest cable television market in the world, the penetration level of pay TV is still low, which promises a huge untapped potential for growth.
According to the study by FICCI and KPMG, the television industry, which is currently valued at about US$ 4.63 billion will expand by 14.5 percent between 2009 and 2013.
Digital distribution platforms such as direct-to-home (DTH) are transforming the industry. Direct-to-Home segment is gearing up for a new phase of TV viewing with digital video recorders (DVRs) or personal video recorders that will free consumers from having to watch television at broadcaster-ordained timetables.
Mobile TV- where content will stream in on mobile phones – which is currently at a nascent stage is poised to grow big with the advent of 3G, according to experts. This can lead to the growth of many business opportunities in the media and entertainment sector. And according to ABI Research, the mobile TV market worldwide is expected to attract over 50 crore viewers in the next five years.
Considering that video is the most popular medium of entertainment, it will not be limited to mobile phones but will be expanded to in-car television and personal media players among others, according to experts.
Viewership across various segments is increasing and marketers are launching new channels to meet this growing demand. Turner and Warner Bros Entertainment, Hollywood's leading studio have launched WB, a new Warner-branded channel in India that will showcase blockbuster motion pictures and acclaimed television series. The channel will be distributed by Zee-Turner and will be available on both DTH platforms and cable and satellite homes. Hindi general entertainment channel (HGEC) Star Plus is launching four new shows in March this year.
Music
The Indian music industry, which until recently was overwhelmingly dominated by film music, is now being driven by non-film music. However, piracy and advent of radio channels which constantly play hit music leading to loss of sales of music, has affected the industry.
Industry experts estimate that the current size of the industry is about US$ 149 million, calculated on the basis of legitimate unit sales of compact discs (cds) and music cassettes of around 15 crores. And according to a PwC study, the music industry is likely to grow by 2 per cent over the next five years and will be a US$ 164.56 million industry by 2012.
While cassettes and cds have traditionally accounted for most of the sales, future growth will come from non-physical formats such as digital downloads and ringtones, among others.
According to a joint study by Soundbuzz, a digital music company, PwC and International Federation of Phonographic Industries, India was poised to become the second country in the world, after South Korea, where digital music sales will surpass the sales of music in traditional formats.Digital music sales are expected to account for 88 per cent of the total music industry revenue in India by 2009.
Radio
The cheapest and oldest form of entertainment, reaching 99 per cent of the population, this segment is likely to see many dynamic changes.
According to the PwC study, revenues from radio are likely to grow at a compound annual growth rate (CAGR) of 24 per cent over the next five years and the industry will grow from US$ 150.52 million in 2007 to US$ 370. 22 million in 2012.
Private FM radio has emerged as the fastest growing segment in the media, notching up an average 30 per cent growth in advertising revenues, compared to the industry's average of 18 per cent, according to ACNielsen's Radio Audience Measurement (RAM) service. Moreover, it is expected to increase to US$ 218.49 million over the next two years from US$ 133.52 million today.
FM radio broadcasting has expanded at a rapid pace and India today has over 300 FM radio stations.
Advertising
Advertising trends showed a healthy growth in the last five years as marketers sought to woo customers for a wide range of products. According to an Economic Times survey of 100 large private sector companies, the aggregate spending on advertising by these companies grew by a huge 22.4 per cent last year over the previous year. More than four-fifths of the sample companies have witnessed a rise in sales turnover in 2007-08 following higher advertising spend.
With the economic slowdown, ad spends are slowing down as well. According to the FICCI-KPMG report, ad spends could grow by 12.4 per cent a year now, compared to the 17 per cent growth registered over the past three years.
However, as consumer spending slowly inches upwards – aided partly by the fiscal measures undertaken by the government to boost the economy – some companies, such as Dabur, Coca Cola India, the Emami group and the Future Group, are planning to raise ad spends by almost 10 per cent in some cases to boost sales this year.
Radio, internet and cinema have been the traditional mediums of advertising and according to a survey by Adlabs Cinemas and research firm IMRB, in cinema, the 30-second in-theatre advertising accounts for 95 per cent of cinema advertising. The remaining 5 per cent comprises activities in the lobby area such as new car or bike displays, etc. Of the overall advertising spend, currently only around 0.4 per cent (around US$ 15.42 million) is spent on cinema. Print and TV account for the majority of the ad spend.
Going forward, digital media advertising (internet, mobile and digital signage) is expected to emerge as the medium of choice for advertisers. Of the available media, it was the fastest growing segment in 2008. Analysts feel that its better return on investment and the comparative ease with which its efficacy can be measured will ensure that the trend continues. In fact in 2009, video ads will the most popular form of online advertising, according to Viraj Malik, MD, Percept Knorigin (digital advertising arm of Percept). According to a FICCI-PwC report, online advertising it is expected to touch US$ 212.03 million in 2011 from the current US$ 57.83 million.
To cash in on the opportunity, Malaysia-based media conglomerate Astro Group has acquired a 50 per cent stake in Indian online firm Mogae Digital for US$ 5 million. The joint venture has lined up a number of launches, which include a social networking portal for mobile phones this year. Mogae Digital is promoted by Sandeep Goyal and Tanya Goyal, who are the Indian JV partners of Japanese giant Dentsu, the single largest ad agency in the world.
Cinema
The Indian film industry is the largest in the world in terms of number of films produced per year. The FICCI-KPMG study values the Indian film industry at US$ 2.11 billion and projects its growth at 9.1 percent till 2013.
Bucking the global slowdown – and in the aftermath of the Slumdog Millionnaire win – the box office collections in the first two months of this year have jumped 32 per cent over 2008. Box office collections from over eight movies, which accounted for the bulk of the revenues, hit US$ 36.62 million in January-February compared to US$ 27.95 million crore from over 12 movies in 2008 during the same months, according to data with trade analysts.
The opening of the film industry to foreign investment coupled with the granting of industry status to this segment has had a favourable impact, leading to many global production units entering the country. For example, Walt Disney has partnered with Yash Raj Films to make animated movies, the Warner Group is funding the Sippys' film projects, Viacom has a joint venture with the TV 18 group to form Viacom-18, and Sony Pictures Entertainment has co-produced Saawariya with SLB Films (Sanjay Leela Bansali Films).
Buoyed by the success of its maiden production in India—Chandni Chowk to China (which garnered US$ 8.67 million globally in the first three days of its release)—Warner Brothers Pictures India is set to invest US$ 38.6 million in film production this year.
Fox Star Studios, a joint venture between Twentieth Century Fox and Star, has entered into a multiple-film deal with producer Vipul Amrutlal Shah, marking its foray into the Indian film industry.
R-ADAG-owned Adlabs Films is betting on its integrated film service business and movie exhibitions to drive its growth. The company is spending US$ 41.13 million to expand the two businesses.
The cinema-viewing experience is also undergoing major changes. One perceptible change has been the rapid growth of multiplexes, which meets consumer demand for quality entertainment and has also helped boost production of niche films targeted at niche audiences.
Multiplexes
The nation's multiplex industry is all set for an unprecedented boom buoyed by positive regulatory changes and booming consumerism. According to an estimate, the number of multiplex screens in India is expected to touch 5,000 by 2012, constituting around 40 per cent of the total cinema screens.
In fact, currently the Indian market is highly underserved when compared to the West, India has less than 13 screens per million of the population, against 117 in the US, 52 in Italy and 30 in the UK.
PVR, Inox Leisure, Big Cinemas and other multiplexes plan to maintain their investment tempo in the year ahead betting on big Bollywood releases, lower rentals, a cut in entertainment tax and the drop in equipment prices. Multiplexes including Fun Multiplex, Cinemax and others plan to invest more than US$ 2.89 billion in 2009 almost the similar amount as last year, according to industry experts.
Fame India (formerly Shringar Cinemas), the company that owns and runs the Fame Cinemas chain of multiplexes, is expanding its footprint in North India. The company owns about 73 screens across India, including the three screens it added to its portfolio at the Fame multiplex in the Panchkula district of Haryana. Another multiplex with five screens in Chandigarh (at the City Emporio mall) is in the pipeline.
Multiplexes /megaplexes have been instrumental in contributing 28 per cent of the total theatrical sales for the film industry according to a report by Systematix Institutional Research.
• Entertainment conglomerate Adlabs Cinemas has drawn up a plan to build 12 megaplexes in cities like Mohali, Lucknow, Hyderabad and Delhi.
• Multiplex chain PVR Cinemas, is also planning to add over 250 screens across India, staggered over a period of three years from 2008-2010, with a total investment outlay of around US$ 82. 27 million.
• Cinemax India, the multiplex chain which currently has 55 screens over 17 properties across the country is planning to scale up its presence to 299 screens across about 100 properties by fiscal 2010.
• Inox, which has 26 multiplexes and 90 screens in 18 cities across India, will open nine multiplexes in Bangalore, Mangalore, Hubli and Belgaum by the end of 2010.
• Leading global multiplex player, Cinepolis, has earmarked US$ 350 million for its Indian operations. The company plans to have 500 screens across 40 cities in the next 5 to 7 years.
Others
Segments like print media, animation and gaming are also likely to see interesting growth rates. The country's growing literacy and new technologies have resulted in India emerging as the second largest newspaper market in the world, according to latest research by the World Association of Newspapers (WAN). Indian newspaper sales increased 11.2 per cent in 2007 and 35.51 per cent in the five year period. Newspaper advertising revenues in India were up 64.8 per cent over the previous 5 years.
According to the FICCI- KPMG study, the gaming segment, which is currently estimated at US$ 125.29 million, is expected to grow at 33.30 percent till 2013, while the US$ 119.51 million Internet is seen growing at 27.9 percent.
The Indian animation industry, currently estimated at US$ 460 million, is expected to grow at a CAGR of 27 per cent to touch US$ 1,163 million by 2012 according to a report titled ‘Indian Animation and Gaming 2008', jointly prepared by NASSCOM and Ernst & young.
Government Initiatives
The Government has initiated major reform measures, which have had a cascading effect on the growth of the industry.
• Permitting 100 per cent foreign direct investment (FDI) through the automatic route for film industry and advertising.
• Allowing 49 per cent foreign holding in cable TV and DTH.
• Allowing 100 per cent FDI in non-news publications and 26 per cent FDI in news publications.
• The government has allowed 100 per cent FDI in fax editions of magazines and newspapers.
• Recently, the government has allowed companies with core business in news segment but hived off non-news business, to raise funds from overseas beyond the stipulated FDI limit of 26 per cent. Such companies can raise and route funds from overseas through its non-news arm, which will not be calculated as foreign investment.
• The FM radio sector was opened for FDI with a 20 per cent cap.
• Permitting setting up of uplinking hubs for satellite uplinking by private TV broadcasters from Indian soil.
• Giving industry status to the films segment.
• Opening FM Radio operations to the private sector.
• The government has allotted US$ 50.13 million in the current Five-Year-Plan for various development projects of the film industry. The funds will be utilised to set up a centre for excellence in animation, gaming and visual effects among others.
Going Global
With the growing popularity of Indian content in the world market in general and South Asia in particular, the Indian entertainment industry players are venturing abroad to tap this booming segment.
In fact, according to a report by CII-AT Kearney, the share of international markets in total box office collections is estimated to increase from 8 per cent in 2006 to 15 per cent in 2010.
Consequently, many domestic players like Yash Raj Films, Reliance-Adlabs and UTV, among others, have set up distribution arms overseas. Not only films, other entertainment content areas like music and television also have a huge potential international market. One recent estimate puts the total value of Indian content sold overseas at over US$ 200 million. Further, this number is expected to grow over 20 per cent every year.
Technology has influenced the entertainment industry in a big way, and transformed content delivery as well as viewership experience. Experts feel that in 2009-10, the media and entertainment sector will see many new applications and ways of building the business.
Monday, October 27, 2008
Monday, September 15, 2008
Indian Magazine Industry, May 2008
India Magazine Industry...
Monday, 12 May 2008
PUBLISHING
India Magazine Industry Thriving, Big Players Moving In
When Conde Nast launched its premium lifestyle magazine Vogue in India last year, it carried a whopping 168 pages of advertisements of a total 400 pages.
Now, the publisher is preparing to launch its luxury men's magazine GQ and expects a similar rush of advertisers in Asia's third-largest economy, where rising incomes and growing literacy are boosting readership and revenues of magazines and newspapers.
From specialist magazines on whiskey, golf and parenting, to regional-language newspapers and financial dailies, new titles are coming thick and fast in one of the few markets in the world where advertising and readership for print media are expanding.
"It's a fast growing economy and with consumption so robust and with incomes rising, it's a fertile ground for the print media," says Vivek Couto, executive director of Hong Kong-based research firm Media Partners Asia. "There is also a buoyancy in print advertising that is encouraging new launches and niche publications in particular."
Print publication advertising revenues in India generated Rs 9,400 crore ($2.4 billion) in 2007, or 48 per cent of all of the country's media advertising revenues, PriceWaterhouseCoopers (PWC) said in a recent report. TV ads generated 41 per
cent.
With the economy having grown at an average rate of 8.75 per cent in the last four years, middle class incomes have risen, boosting demand for niche magazines on health, leisure and finances.
Growing prosperity in rural areas is also encouraging demand for publications in India's more than 20 official regional languages.
Revenue for newspapers and magazines in India, where reading at least one newspaper in the morning is sacrosanct, grew at an average rate of 15 percent in the last four years, higher than anywhere in the world, PWC said. The growth is helped by a young demographic, more working women, rapid urbanisation and smaller households, the report added.
The print publication boom in India contrasts sharply with more mature markets in the West where circulation figures and advertising revenues are down as readers move to the Internet.
Businessworld : Number one Indian business portal with incisive analysis and surveys
http://www.businessworld.in Powered by Joomla! Generated: 17 June, 2008, 13:33 Boom.
India in 2005 allowed 100 per cent foreign investment in non-news publications, keeping the cap for news at 26 per cent.
Early investments included Independent News and Media's 26 per cent stake in newspaper publisher Dainik Jagran, Pearson Plc's 14 per cent in Business Standard newspaper, Henderson Ventures' investment in HT Media and BBC Worldwide's magazine venture with Bennett, Coleman & Co.
More recently, private equity firm Blackstone Group put $150 million in regional publisher Ushodaya Enterprises, Warburg Pincus moved $33 million into the Dainik Group and DE Shaw invested $39 million in Amar Ujala Publications,according to research firm Venture Intelligence.
News Corp, which has a content alliance for The Wall Street Journal with HT Media's business daily, is keen on more launches. Pearson, which has sold its Business Standard stake, is reported to be in talks for a new venture.
"There's huge investor interest in the growth potential, because the segment is still quite under-penetrated," said Atul Phadnis, chief executive of consultancy Media e2e.
Local firms are also seizing the opportunity: Business Standard and Bennett, Coleman's Economic Times have launched Hindi and Gujarati-language editions of their financial dailies. Deccan Chronicle Holdings has launched a business daily to compete with five others, and new regional-language and city papers are hitting the stands nearly every day.
The boom in advertising revenue is not limited just to print. As new media grows and controls are eased in television, these will attract greater investments and advertising revenues. Specialist publications have a better chance of scoring
with advertisers and readers in the increasing clutter, says Phadnis. "Niche publications are almost immediately profitable: Advertising more than makes up for lower subscriptions, and there are easy synergies with other verticals, like
radio or internet."
Glut
But it's not all good news. The large number of players jostling in the market place could lead to a drop off in advertising revenues in the coming years, analysts say. "One of the worries is that publishers are taking ad revenues for granted,"
points out Phadnis.
"Everyone thinks it will keep rising, but as early as 2009 we are going to see a glut in inventory in TV, print and the internet because of so many players. We will see intense price competition, and smaller firms may be forced out," he says.
Investors are also chasing only a handful of large media firms, he adds, nudging up already high valuations: Deccan Chronicle shares trade at 10.3 times forecast earnings, while Jagran Prakashan trades at 19.3 times and Mid-Day Multimedia quotes at 19.7 times forecast earnings. Rising newsprint prices are also bumping up production costs.
Still, Conde Nast expects Vogue will break even in its first or second year of operation compared to an average breakeven period of five or six years in more mature markets, says Alex Kuruvilla, managing director in India, referring to
Europe and the US. "We are optimistic and bullish," he says of the potential. "But also cautious: In this market, you have Businessworld : Number one Indian business portal with incisive analysis and surveys http://www.businessworld.in Powered by Joomla! Generated: 17 June, 2008, 13:33 to be smart."
Attracting the attention of vendors who hawk magazines at traffic lights and getting space on shelves in overcrowded news stands across Mumbai is not easy for new entrants.
"I am already running out of space," says K.B. Singh, pointing to a low wooden bench on a busy sidewalk piled high with dozens of glossy magazines and newspapers. "Where will I put the new ones?"
Report from Reuters
Dushyant Chauhan
Monday, 12 May 2008
PUBLISHING
India Magazine Industry Thriving, Big Players Moving In
When Conde Nast launched its premium lifestyle magazine Vogue in India last year, it carried a whopping 168 pages of advertisements of a total 400 pages.
Now, the publisher is preparing to launch its luxury men's magazine GQ and expects a similar rush of advertisers in Asia's third-largest economy, where rising incomes and growing literacy are boosting readership and revenues of magazines and newspapers.
From specialist magazines on whiskey, golf and parenting, to regional-language newspapers and financial dailies, new titles are coming thick and fast in one of the few markets in the world where advertising and readership for print media are expanding.
"It's a fast growing economy and with consumption so robust and with incomes rising, it's a fertile ground for the print media," says Vivek Couto, executive director of Hong Kong-based research firm Media Partners Asia. "There is also a buoyancy in print advertising that is encouraging new launches and niche publications in particular."
Print publication advertising revenues in India generated Rs 9,400 crore ($2.4 billion) in 2007, or 48 per cent of all of the country's media advertising revenues, PriceWaterhouseCoopers (PWC) said in a recent report. TV ads generated 41 per
cent.
With the economy having grown at an average rate of 8.75 per cent in the last four years, middle class incomes have risen, boosting demand for niche magazines on health, leisure and finances.
Growing prosperity in rural areas is also encouraging demand for publications in India's more than 20 official regional languages.
Revenue for newspapers and magazines in India, where reading at least one newspaper in the morning is sacrosanct, grew at an average rate of 15 percent in the last four years, higher than anywhere in the world, PWC said. The growth is helped by a young demographic, more working women, rapid urbanisation and smaller households, the report added.
The print publication boom in India contrasts sharply with more mature markets in the West where circulation figures and advertising revenues are down as readers move to the Internet.
Businessworld : Number one Indian business portal with incisive analysis and surveys
http://www.businessworld.in Powered by Joomla! Generated: 17 June, 2008, 13:33 Boom.
India in 2005 allowed 100 per cent foreign investment in non-news publications, keeping the cap for news at 26 per cent.
Early investments included Independent News and Media's 26 per cent stake in newspaper publisher Dainik Jagran, Pearson Plc's 14 per cent in Business Standard newspaper, Henderson Ventures' investment in HT Media and BBC Worldwide's magazine venture with Bennett, Coleman & Co.
More recently, private equity firm Blackstone Group put $150 million in regional publisher Ushodaya Enterprises, Warburg Pincus moved $33 million into the Dainik Group and DE Shaw invested $39 million in Amar Ujala Publications,according to research firm Venture Intelligence.
News Corp, which has a content alliance for The Wall Street Journal with HT Media's business daily, is keen on more launches. Pearson, which has sold its Business Standard stake, is reported to be in talks for a new venture.
"There's huge investor interest in the growth potential, because the segment is still quite under-penetrated," said Atul Phadnis, chief executive of consultancy Media e2e.
Local firms are also seizing the opportunity: Business Standard and Bennett, Coleman's Economic Times have launched Hindi and Gujarati-language editions of their financial dailies. Deccan Chronicle Holdings has launched a business daily to compete with five others, and new regional-language and city papers are hitting the stands nearly every day.
The boom in advertising revenue is not limited just to print. As new media grows and controls are eased in television, these will attract greater investments and advertising revenues. Specialist publications have a better chance of scoring
with advertisers and readers in the increasing clutter, says Phadnis. "Niche publications are almost immediately profitable: Advertising more than makes up for lower subscriptions, and there are easy synergies with other verticals, like
radio or internet."
Glut
But it's not all good news. The large number of players jostling in the market place could lead to a drop off in advertising revenues in the coming years, analysts say. "One of the worries is that publishers are taking ad revenues for granted,"
points out Phadnis.
"Everyone thinks it will keep rising, but as early as 2009 we are going to see a glut in inventory in TV, print and the internet because of so many players. We will see intense price competition, and smaller firms may be forced out," he says.
Investors are also chasing only a handful of large media firms, he adds, nudging up already high valuations: Deccan Chronicle shares trade at 10.3 times forecast earnings, while Jagran Prakashan trades at 19.3 times and Mid-Day Multimedia quotes at 19.7 times forecast earnings. Rising newsprint prices are also bumping up production costs.
Still, Conde Nast expects Vogue will break even in its first or second year of operation compared to an average breakeven period of five or six years in more mature markets, says Alex Kuruvilla, managing director in India, referring to
Europe and the US. "We are optimistic and bullish," he says of the potential. "But also cautious: In this market, you have Businessworld : Number one Indian business portal with incisive analysis and surveys http://www.businessworld.in Powered by Joomla! Generated: 17 June, 2008, 13:33 to be smart."
Attracting the attention of vendors who hawk magazines at traffic lights and getting space on shelves in overcrowded news stands across Mumbai is not easy for new entrants.
"I am already running out of space," says K.B. Singh, pointing to a low wooden bench on a busy sidewalk piled high with dozens of glossy magazines and newspapers. "Where will I put the new ones?"
Report from Reuters
Dushyant Chauhan
Indian Film Industry
To know about Indian Film Industry, Just log on to:
http://www.indianmotionpictures.com/
Official Portal of Film Industry in India
It'll give you information related to new releases. There box office ratings and much more to look at.
Happy surfing :-)
Dushyant Chauhan
http://www.indianmotionpictures.com/
Official Portal of Film Industry in India
It'll give you information related to new releases. There box office ratings and much more to look at.
Happy surfing :-)
Dushyant Chauhan
Indian Entertainment and Media Industry, 15th Mar'08
New Delhi, 15 MARCH, 2008 – The Indian Entertainment and Media (E&M) industry has been experiencing a steady growth supported by the robust performance of the country’s economy, according to the 2008 annual edition of the FICCI –PricewaterhouseCoopers’ Indian Entertainment and Media Industry - Sustaining Growth.
In 2007, the performance of the Indian E&M industry surpassed most other domestic industries. The industry achieved a 17% growth, higher than the projected 15% growth, according to the Report. Its size is estimated at Rs 513 billion in 2007, up from Rs 438 billion in 2006. The sector also attracted record foreign investments at Rs 8.5 billion during the period.
The FICCI-PwC Report has projected an 18% cumulative growth for the industry over the next five years. It is expected to touch Rs 1.157 trillion by 2012. In the last four years, the industry recorded a cumulative growth of 19%.The advertising industry spearheaded the overall performance of the E&M industry with a 38% share. It recorded a 22% growth over the previous year and contributed an estimated Rs 196 billion in 2007 as against Rs 161 billion in 2006.
In the last four years, from 2004 to 2007, the advertising industry recorded a cumulative growth of 20% on an overall basis.In 2007, the E&M industry saw the entry of new players and existing players expanding by diversifying into new segments, spreading their presence across value chains, broadening their horizons by increasing the geographic presence.Globally, the migration to digital formats is gaining momentum, which will soon be a reality in India. Distribution of E&M content over digital and mobile platforms will gain popularity.“Digitalization is the future for most segments and companies have to adopt this revolution with appropriate infrastructure, relevant business models, and technology upgrades along with associated costs. The pace of adoption will determine industry dynamics.” said Timmy Kandhari, Executive Director and Leader, TICE (Technology, Infocomm and Entertainment & Media) Practice, PricewaterhouseCoopers in India, while commenting on the future outlook for the industry.
Key findings of the report –
- OverallCurrent size in 2007 – Rs 513 billion; Rs 1,157 billion projected for 2012Growth in 2007 over 2006 – 17%; 18% CAGR projected for 2008-12 Continuing with the trend of the previous years, the emergence of media conglomerates further intensified in 2007. Several media groups expanded beyond their traditional domains to leverage on the synergies in advertising, thus, aiming to have a presence across all segments of the Indian E&M industry.
- In 2007, foreign investments in the E&M sector reached a record high of $211 million, approximately Rs 8.5 billion. This was a result of a clutch of investment deals announced in 2006 and before.
- The advertising industry is experiencing a paradigm shift with digitally interactive mediums gaining popularity among the consumers. Internet and mobile are the two keys enablers for the digitally interactive mediums. Internet advertising is estimated at Rs 4.2 billion in 2008, growing at 32% CAGR. It is expected to touch Rs 11 billion in 2012.
- The E&M industry saw several deals in 2007 across various segments. During the period, television segment generated the most interest among investors.
- In 2007, the trend continued towards increased convergence between E&M and telecom industries. The most notable of these trends were witnessed in the mobile music segment. Other initiatives included newspaper industry going online with ‘e-papers’ and mobile with ‘m-papers’. Digital cinema continued to make significant progress in the film industry. There was a sizeable increase in the sales of online and mobile tickets. Most television broadcasters today have forayed into online and mobile portals.
Television Industry
Current size in 2007 – Rs 226 billion; Rs 600 billion projected for 2012Growth in 2007 over 2006 – 18%; 12.22% CAGR projected for 2008-12
Television industry is undergoing a transformation with digital distribution networks. More and more, customers are lapping up the DTH network. The DTH subscription is projected to grow at 44% CAGR over the next five years.
CAS was made mandatory from January 1, 2007. However, there was a lukewarm response to this from customers during the year.
High growth in advertising revenues and emergence of alternate revenue streams, especially SMS, is driving the launch of several channels, especially in the ‘general entertainment’ genre.
Print Media
Current size in 2007 – Rs 149 billion; Rs 281 billion projected for 2012 Growth in 2007 over 2006 – 16%; 14% CAGR for 2008-12 Launch of magazines dominated the print industry in 2007 due to favorable FDI policies and manifested growth potential, especially in the high-end niche genres.Newspaper publishing was dominated with increased number of regional publications.
Filmed Entertainment
Current size in 2007 – Rs 96 billion; Rs. 176 billion projected for 2012 Growth in 2007 over 2006 – 14%; 13%CAGR for 2008-12
Emergence of various revenue streams beyond the traditional box office is changing the face of the Indian filmed entertainment industry, such as television, mobile, Internet, home video, merchandise, music, re-make rights, and several branded entertainment opportunities.
Advent of ‘Studio Model’ is further de-risking the business; Hollywood studios, such as, Sony Pictures, Viacom and Fox have evinced interests in India during 2007.
Entry of players like Moser Baer is changing the Indian model for Home Video from rental to a sell-through.
Talent is becoming ‘commoditized’. There was a huge rush in 2007 to lock-in talent for a long-term period.
Radio
Current size in 2007 – Rs 6.2 billion; Rs 18 billion projected for 2012 Growth in 2007 over 2006 – 24%; 24% CAGR for 2008-12
Over 150 radio channels became operational in 2007; thus, increasing the spread of radio.
Phase-III plans have been drawn up which recommended additional 560 radio stations in the next five years. The Telecom Regulatory Authority of India has recommended to the Government for allowing news on radio and increasing the FDI limit, among other provisions; these recommendations are expected to make radio more favorable with advertisers.
Key Data
Outlook for the next 5 years
In the next five years, there will be a significant rise in online digital streaming, digital movie/TV downloads, video-on-demand, music downloads from the Internet, music downloads to wireless phones, online advertising, online video games, and wireless video games. Digitization will help reduce costs for content and delivery in the long run, and thereby, shift the emphasis to quality, said Mr Kandhari.
In 2007, the performance of the Indian E&M industry surpassed most other domestic industries. The industry achieved a 17% growth, higher than the projected 15% growth, according to the Report. Its size is estimated at Rs 513 billion in 2007, up from Rs 438 billion in 2006. The sector also attracted record foreign investments at Rs 8.5 billion during the period.
The FICCI-PwC Report has projected an 18% cumulative growth for the industry over the next five years. It is expected to touch Rs 1.157 trillion by 2012. In the last four years, the industry recorded a cumulative growth of 19%.The advertising industry spearheaded the overall performance of the E&M industry with a 38% share. It recorded a 22% growth over the previous year and contributed an estimated Rs 196 billion in 2007 as against Rs 161 billion in 2006.
In the last four years, from 2004 to 2007, the advertising industry recorded a cumulative growth of 20% on an overall basis.In 2007, the E&M industry saw the entry of new players and existing players expanding by diversifying into new segments, spreading their presence across value chains, broadening their horizons by increasing the geographic presence.Globally, the migration to digital formats is gaining momentum, which will soon be a reality in India. Distribution of E&M content over digital and mobile platforms will gain popularity.“Digitalization is the future for most segments and companies have to adopt this revolution with appropriate infrastructure, relevant business models, and technology upgrades along with associated costs. The pace of adoption will determine industry dynamics.” said Timmy Kandhari, Executive Director and Leader, TICE (Technology, Infocomm and Entertainment & Media) Practice, PricewaterhouseCoopers in India, while commenting on the future outlook for the industry.
Key findings of the report –
- OverallCurrent size in 2007 – Rs 513 billion; Rs 1,157 billion projected for 2012Growth in 2007 over 2006 – 17%; 18% CAGR projected for 2008-12 Continuing with the trend of the previous years, the emergence of media conglomerates further intensified in 2007. Several media groups expanded beyond their traditional domains to leverage on the synergies in advertising, thus, aiming to have a presence across all segments of the Indian E&M industry.
- In 2007, foreign investments in the E&M sector reached a record high of $211 million, approximately Rs 8.5 billion. This was a result of a clutch of investment deals announced in 2006 and before.
- The advertising industry is experiencing a paradigm shift with digitally interactive mediums gaining popularity among the consumers. Internet and mobile are the two keys enablers for the digitally interactive mediums. Internet advertising is estimated at Rs 4.2 billion in 2008, growing at 32% CAGR. It is expected to touch Rs 11 billion in 2012.
- The E&M industry saw several deals in 2007 across various segments. During the period, television segment generated the most interest among investors.
- In 2007, the trend continued towards increased convergence between E&M and telecom industries. The most notable of these trends were witnessed in the mobile music segment. Other initiatives included newspaper industry going online with ‘e-papers’ and mobile with ‘m-papers’. Digital cinema continued to make significant progress in the film industry. There was a sizeable increase in the sales of online and mobile tickets. Most television broadcasters today have forayed into online and mobile portals.
Television Industry
Current size in 2007 – Rs 226 billion; Rs 600 billion projected for 2012Growth in 2007 over 2006 – 18%; 12.22% CAGR projected for 2008-12
Television industry is undergoing a transformation with digital distribution networks. More and more, customers are lapping up the DTH network. The DTH subscription is projected to grow at 44% CAGR over the next five years.
CAS was made mandatory from January 1, 2007. However, there was a lukewarm response to this from customers during the year.
High growth in advertising revenues and emergence of alternate revenue streams, especially SMS, is driving the launch of several channels, especially in the ‘general entertainment’ genre.
Print Media
Current size in 2007 – Rs 149 billion; Rs 281 billion projected for 2012 Growth in 2007 over 2006 – 16%; 14% CAGR for 2008-12 Launch of magazines dominated the print industry in 2007 due to favorable FDI policies and manifested growth potential, especially in the high-end niche genres.Newspaper publishing was dominated with increased number of regional publications.
Filmed Entertainment
Current size in 2007 – Rs 96 billion; Rs. 176 billion projected for 2012 Growth in 2007 over 2006 – 14%; 13%CAGR for 2008-12
Emergence of various revenue streams beyond the traditional box office is changing the face of the Indian filmed entertainment industry, such as television, mobile, Internet, home video, merchandise, music, re-make rights, and several branded entertainment opportunities.
Advent of ‘Studio Model’ is further de-risking the business; Hollywood studios, such as, Sony Pictures, Viacom and Fox have evinced interests in India during 2007.
Entry of players like Moser Baer is changing the Indian model for Home Video from rental to a sell-through.
Talent is becoming ‘commoditized’. There was a huge rush in 2007 to lock-in talent for a long-term period.
Radio
Current size in 2007 – Rs 6.2 billion; Rs 18 billion projected for 2012 Growth in 2007 over 2006 – 24%; 24% CAGR for 2008-12
Over 150 radio channels became operational in 2007; thus, increasing the spread of radio.
Phase-III plans have been drawn up which recommended additional 560 radio stations in the next five years. The Telecom Regulatory Authority of India has recommended to the Government for allowing news on radio and increasing the FDI limit, among other provisions; these recommendations are expected to make radio more favorable with advertisers.
Key Data
Outlook for the next 5 years
In the next five years, there will be a significant rise in online digital streaming, digital movie/TV downloads, video-on-demand, music downloads from the Internet, music downloads to wireless phones, online advertising, online video games, and wireless video games. Digitization will help reduce costs for content and delivery in the long run, and thereby, shift the emphasis to quality, said Mr Kandhari.
Thursday, September 21, 2006
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.
Friday, September 08, 2006
Facts on Mobile Industry in India July 2006
Mobile Voice calls: 3c/min (avg); SMS: 2c/message
GPRS-enabled phone costs: $80+
GPRS Tariff: $8+/month for 100 MB download (plans vary across operators)
Mobile VAS: Rs. 5 Billion; growing at 40%
Mobile ARPU: $8.50 [Split: Voice: 70%; Rentals: 20%; VAS: 10%]
Mobile VAS Split: Person-to-Person SMS, Caller Line Identification, Roaming: 70%; Content: 30%.
Content: Ringtones, Ringback Tones, Games, Wallpapers, Interactive Voice Response, Person-to-App SMS Content Providers get about 10-30% of revenue for their content.
India has one of the lowest spectrum allocation per GSM operator in the world, about 6 Mhz against, over 25 in the UK or over 20 in China.
Just 15-20% of the phones in India have colour screens and/or cameras.
111.23 mn mobile subscribers as on 31st July 2006. (TRAI)
Statistics show the same - the proportion of the population accessing value-added-features (VAS) at least once a week - has grown from 1.1 percent last year to 2.7 percent — translating to nearly 22 million individuals.
VAS contributes 10% to the overall revenue generated by the mobile service providers.
The VAS market is estimated to grow at an annual rate of 30-40 percent. But, SMS still contributes a significant part of non-voice service revenue (around 65 percent -- the highest in the world), while caller-line identification (CLIP) accounts for 8 percent of VAS revenue. The remaining 27 percent are from services such as games, ring tones, mobile entertainment and multimedia messaging.
Out of the total GSM users, only 2 million are GPRS users.
GPRS-enabled phone costs: $80+
GPRS Tariff: $8+/month for 100 MB download (plans vary across operators)
Mobile VAS: Rs. 5 Billion; growing at 40%
Mobile ARPU: $8.50 [Split: Voice: 70%; Rentals: 20%; VAS: 10%]
Mobile VAS Split: Person-to-Person SMS, Caller Line Identification, Roaming: 70%; Content: 30%.
Content: Ringtones, Ringback Tones, Games, Wallpapers, Interactive Voice Response, Person-to-App SMS Content Providers get about 10-30% of revenue for their content.
India has one of the lowest spectrum allocation per GSM operator in the world, about 6 Mhz against, over 25 in the UK or over 20 in China.
Just 15-20% of the phones in India have colour screens and/or cameras.
111.23 mn mobile subscribers as on 31st July 2006. (TRAI)
Statistics show the same - the proportion of the population accessing value-added-features (VAS) at least once a week - has grown from 1.1 percent last year to 2.7 percent — translating to nearly 22 million individuals.
VAS contributes 10% to the overall revenue generated by the mobile service providers.
The VAS market is estimated to grow at an annual rate of 30-40 percent. But, SMS still contributes a significant part of non-voice service revenue (around 65 percent -- the highest in the world), while caller-line identification (CLIP) accounts for 8 percent of VAS revenue. The remaining 27 percent are from services such as games, ring tones, mobile entertainment and multimedia messaging.
Out of the total GSM users, only 2 million are GPRS users.
Internet in India 2006
INTERNET BUSINESS SURVEY
20th February 2006
Internet Industry Comes of Age
Forget dotcoms. The Internet today is about real business. And real companies.
The first steam engine, invented in 1705, was a simple vertical piston and cylinder at the end of the pump handle. In 1873, a dynamo was created to produce electricity, allowing steam engines to be ‘always on’. Soon, the railways emerged, allowing ‘communities’ to do ‘commerce’.
Just in case you were wondering why we took you through this ‘industrial revolution’ crash course, the point is that several inter-connected innovations had to happen for 300 years for you to sit at your desktop and click ‘buy’. The parallels between the industrial revolution and the Internet one are strong. The Internet began as an idea in research labs in the mid-1960s. The mainframe, PC, the Internet and then the browser all came within a span of 30 years. What started out as a US military experiment has been plugged in irrevocably into our daily lives. The dots connecting reality to sci-fi flicks (remember Minority Report?) are falling into place as we live digitally. Three hundred years down, the steam engine story sounds very similar to the search engine one.
Our last cover story on the Indian Internet saga was way back in 2001 (see ‘They Survived!’, BW, 14 May 2001) in the aftermath of the hysteria over the 5,000-odd Indian ‘dotcoms’ that got on and off the headlines just as quickly. While the bust was totally warranted, it was evident even then that there was nothing fundamentally wrong with the Internet. Its power transcended 5,000 failures. Fifty-six months later, we’ve put the Internet back on the cover once again. Our guess is that you are going to hear more about it from now on. And there is a difference this time: You are not hearing it as much as you’re living it.
The total Internet business is big — worth over Rs 2,200 crore. About Rs 500 crore comes from advertising, ecommerce (not including billings) and other revenues. Add in access charges at a minimum of Rs 200 per month, and multiply it with the 7 million-odd subscriber base. What you get is over Rs 1,700 crore being spent just to get on to the Internet. The revenues for the four big classified sites is Rs 200 crore. But nobody has an inkling about the numbers for several other categories such as mobile content or broking.
And it is even bigger if we add what the business-to-business (B2B) companies make. According to investors, they remain among the most profitable Internet companies. However, this survey will focus more on business-to-consumer (B2C) companies, since the numbers for B2B companies are almost impossible to access.
Second Coming
The 1995 Netscape IPO kicked off Web 1.0, creating billion-dollar startups in the West. It sowed the seeds of the madness that followed. In 1999, the madness reached India . Back then, Indian entrepreneurs were a bunch of get-rich-quick wannabes trying to join the bandwagon.
The same madness then created rock-star companies like Google, Yahoo!, Amazon and eBay, which have a collective market capitalisation of $227 billion (as on 8 February 2006). The 2004 listing of Google, six years after its launch, showed the pace at which one of the world’s most valuable ‘media’ companies could be created. That set the tone for Web 2.0. And now, Web 2.0 is showing its first traces in India.
In the next few pages, you will get a peek at the quiet revolution that has been brewing behind the scenes in India for the last 6-12 months. ‘Quiet’ is the operative word here. Notice that nobody uses the word ‘dotcom’ any more. These are online businesses or Internet companies. Several get a chunk of their revenues from a hybrid of online and offline products and services. Rediff, Indiatimes or Indiabulls are all referred to as matter-of-factly as ITC or HLL. They are just Indian companies that happen to be online. Even the approach of investors who did not touch Indian Internet companies earlier, such as Kleiner Perkins Caufield & Byers, has not created any frenzy or hype. Almost every major Internet company globally from Yahoo! to Google, has stated that China and India is where they will be making their next round of bets. Yet, sedate is what describes the Internet industry here even now.
Two things have changed. One, our size and look, and two, our connect with the rest of the world.
First, a look at the market. Five years ago, ISPs (Internet service providers) had just taken off. There was no usage, no broadband, no content. People were simply trying to re-create successful online businesses of the West. We were at 38.5 million users (54 per cent growth last year) in June 2005, according to IAMAI (Internet and Mobile Association of India). More importantly, the linkages of the Internet with the offline world are much clearer. It offers utilitarian services that people use in their everyday lives — mail, information, news, shopping, telephony, etc.
Global investors and Internet giants have India on their radar because they know that 65 per cent of Indians will be 15-35 years of age a decade from now. The youngest population translates into the largest Web space (research shows that younger people are more likely to be online). That India has the lowest broadband prices worldwide ($4-$5 monthly) and is seeing one of the world’s fastest growing mobile revolutions tells them that the ‘always on Indian’ is inevitable. They have seen that happening to China. Over the next 3-5 years, they expect to see it in India.
It’s not about just the Internet or India, though. It’s about every consumer-facing business in Asia. China, with 100 million Internet users, has been the biggest success story outside the US. The venture capital interest we see in India right now shadows what the Chinese Internet already saw 3-5 years back.
Two, Indians are innovating to keep pace with the digital wave that’s sweeping the world. For instance, there aren’t enough PCs (18 million). But that’s all right. We have enough mobile phones (80 million, increasing by 5 million monthly), so we will adapt to the mobile Internet as the Chinese have done so successfully. Then, there aren’t enough credit cards (12 million). No problem. We’ll create alternative digital payment systems like mobile micro-payments. Both mobile Internet and online payment systems are just two of the areas where the entrepreneurial attitude of not submitting to infrastructure bottlenecks is alive.
This entrepreneurial attitude will surely come in handy to deal with the challenges ahead.
The Challenges
One, there is no vernacular content, so all the 40 million users are English-speaking. That brings us dangerously close to saturating the universe of Indians speaking English. To add the next 40 million users, the Internet has to turn vernacular. “Until that happens, the industry will grow depending on the rate at which we learn English,” jokes Sanjeev Bikhchandani, Naukri’s founder-CEO. Last week, Jeevansaathi, a matrimony portal also owned by Bikhchandani, launched its Hindi version, hoping to work around precisely this.
Two, Indians still live in the all-information-is-free world. We log on for information and entertainment, but aren’t ready to pay for it. Converting information-seeking into monetisable revenues will be the key challenge. Part of the problem is that currently the Internet largely offers commodity services. So, there isn’t much difference between the mobile ringtones that you download from Indiatimes or Rediff. There may be some difference in the quality of information and news, but by and large the Internet is synonymous with free or cheap information. The magic will happen when people start going to the Net for premium content. That is when they will pay to access a website.
To be fair, the Internet business has blended very well with the mainstream economy. It is as much a part of everyday lives now as the PC. It is simply a matter of time before it capitalises on this. The Industrial Revolution took about a century before we realised how much it had changed our lives. This one is just over a decade old
20th February 2006
Internet Industry Comes of Age
Forget dotcoms. The Internet today is about real business. And real companies.
The first steam engine, invented in 1705, was a simple vertical piston and cylinder at the end of the pump handle. In 1873, a dynamo was created to produce electricity, allowing steam engines to be ‘always on’. Soon, the railways emerged, allowing ‘communities’ to do ‘commerce’.
Just in case you were wondering why we took you through this ‘industrial revolution’ crash course, the point is that several inter-connected innovations had to happen for 300 years for you to sit at your desktop and click ‘buy’. The parallels between the industrial revolution and the Internet one are strong. The Internet began as an idea in research labs in the mid-1960s. The mainframe, PC, the Internet and then the browser all came within a span of 30 years. What started out as a US military experiment has been plugged in irrevocably into our daily lives. The dots connecting reality to sci-fi flicks (remember Minority Report?) are falling into place as we live digitally. Three hundred years down, the steam engine story sounds very similar to the search engine one.
Our last cover story on the Indian Internet saga was way back in 2001 (see ‘They Survived!’, BW, 14 May 2001) in the aftermath of the hysteria over the 5,000-odd Indian ‘dotcoms’ that got on and off the headlines just as quickly. While the bust was totally warranted, it was evident even then that there was nothing fundamentally wrong with the Internet. Its power transcended 5,000 failures. Fifty-six months later, we’ve put the Internet back on the cover once again. Our guess is that you are going to hear more about it from now on. And there is a difference this time: You are not hearing it as much as you’re living it.
The total Internet business is big — worth over Rs 2,200 crore. About Rs 500 crore comes from advertising, ecommerce (not including billings) and other revenues. Add in access charges at a minimum of Rs 200 per month, and multiply it with the 7 million-odd subscriber base. What you get is over Rs 1,700 crore being spent just to get on to the Internet. The revenues for the four big classified sites is Rs 200 crore. But nobody has an inkling about the numbers for several other categories such as mobile content or broking.
And it is even bigger if we add what the business-to-business (B2B) companies make. According to investors, they remain among the most profitable Internet companies. However, this survey will focus more on business-to-consumer (B2C) companies, since the numbers for B2B companies are almost impossible to access.
Second Coming
The 1995 Netscape IPO kicked off Web 1.0, creating billion-dollar startups in the West. It sowed the seeds of the madness that followed. In 1999, the madness reached India . Back then, Indian entrepreneurs were a bunch of get-rich-quick wannabes trying to join the bandwagon.
The same madness then created rock-star companies like Google, Yahoo!, Amazon and eBay, which have a collective market capitalisation of $227 billion (as on 8 February 2006). The 2004 listing of Google, six years after its launch, showed the pace at which one of the world’s most valuable ‘media’ companies could be created. That set the tone for Web 2.0. And now, Web 2.0 is showing its first traces in India.
In the next few pages, you will get a peek at the quiet revolution that has been brewing behind the scenes in India for the last 6-12 months. ‘Quiet’ is the operative word here. Notice that nobody uses the word ‘dotcom’ any more. These are online businesses or Internet companies. Several get a chunk of their revenues from a hybrid of online and offline products and services. Rediff, Indiatimes or Indiabulls are all referred to as matter-of-factly as ITC or HLL. They are just Indian companies that happen to be online. Even the approach of investors who did not touch Indian Internet companies earlier, such as Kleiner Perkins Caufield & Byers, has not created any frenzy or hype. Almost every major Internet company globally from Yahoo! to Google, has stated that China and India is where they will be making their next round of bets. Yet, sedate is what describes the Internet industry here even now.
Two things have changed. One, our size and look, and two, our connect with the rest of the world.
First, a look at the market. Five years ago, ISPs (Internet service providers) had just taken off. There was no usage, no broadband, no content. People were simply trying to re-create successful online businesses of the West. We were at 38.5 million users (54 per cent growth last year) in June 2005, according to IAMAI (Internet and Mobile Association of India). More importantly, the linkages of the Internet with the offline world are much clearer. It offers utilitarian services that people use in their everyday lives — mail, information, news, shopping, telephony, etc.
Global investors and Internet giants have India on their radar because they know that 65 per cent of Indians will be 15-35 years of age a decade from now. The youngest population translates into the largest Web space (research shows that younger people are more likely to be online). That India has the lowest broadband prices worldwide ($4-$5 monthly) and is seeing one of the world’s fastest growing mobile revolutions tells them that the ‘always on Indian’ is inevitable. They have seen that happening to China. Over the next 3-5 years, they expect to see it in India.
It’s not about just the Internet or India, though. It’s about every consumer-facing business in Asia. China, with 100 million Internet users, has been the biggest success story outside the US. The venture capital interest we see in India right now shadows what the Chinese Internet already saw 3-5 years back.
Two, Indians are innovating to keep pace with the digital wave that’s sweeping the world. For instance, there aren’t enough PCs (18 million). But that’s all right. We have enough mobile phones (80 million, increasing by 5 million monthly), so we will adapt to the mobile Internet as the Chinese have done so successfully. Then, there aren’t enough credit cards (12 million). No problem. We’ll create alternative digital payment systems like mobile micro-payments. Both mobile Internet and online payment systems are just two of the areas where the entrepreneurial attitude of not submitting to infrastructure bottlenecks is alive.
This entrepreneurial attitude will surely come in handy to deal with the challenges ahead.
The Challenges
One, there is no vernacular content, so all the 40 million users are English-speaking. That brings us dangerously close to saturating the universe of Indians speaking English. To add the next 40 million users, the Internet has to turn vernacular. “Until that happens, the industry will grow depending on the rate at which we learn English,” jokes Sanjeev Bikhchandani, Naukri’s founder-CEO. Last week, Jeevansaathi, a matrimony portal also owned by Bikhchandani, launched its Hindi version, hoping to work around precisely this.
Two, Indians still live in the all-information-is-free world. We log on for information and entertainment, but aren’t ready to pay for it. Converting information-seeking into monetisable revenues will be the key challenge. Part of the problem is that currently the Internet largely offers commodity services. So, there isn’t much difference between the mobile ringtones that you download from Indiatimes or Rediff. There may be some difference in the quality of information and news, but by and large the Internet is synonymous with free or cheap information. The magic will happen when people start going to the Net for premium content. That is when they will pay to access a website.
To be fair, the Internet business has blended very well with the mainstream economy. It is as much a part of everyday lives now as the PC. It is simply a matter of time before it capitalises on this. The Industrial Revolution took about a century before we realised how much it had changed our lives. This one is just over a decade old
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