Media space sees depressed deal volumes in 2013, outlook bright

PTI Posted online: Thursday, Sep 12, 2013 at 0000 hrs
New Delhi : The Indian media and entertainment sector witnessed comparatively depressed deal volumes in the first half of this year, says a report by Grant Thornton.

The deal volume, however, is expected to pick up 2014 onwards, the report said.

The overall deal volume in the media and entertainment sector increased during 2010 to 2012. However, amid economic uncertainty, most players and PE investors are adopting a cautious approach resulting in comparatively depressed deal volumes in 2013, it said.

In the first half of this calender year, there were a total of 20 merger and acquisitions as well as private equity deals, out of which the deal values of only 4 were disclosed which amounted to USD 173 million.

"Overall deal volumes in Indian media and entertainment sector grew consistently during 2010- 2012 from 27 deals in 2010 to 51 deals in 2012, on the back of key deal themes like market consolidation, portfolio diversification, strengthening presence in regional markets and digital media," Grant Thornton India Leader Media & Entertainment Girish Menon said.

"However overall growth drivers for the M&E sector continue to be valid and it is expected that 2014 onwards there should be renewed interest in the M&E sector," he said.

According to Grant Thornton, domestic M&A continued to be a major component of M&A deals as players look to diversify into new genres, languages or expand digital offerings. The largest deal in M&E segment during this period was TV18's acquisition of Eenadu's regional channel portfolio.

Moreover, there were renewed interest by global players to consolidate their position in India. This trend was particularly noted in the Advertising segment where global players such as Publicis, Dentsu, JWT looked to strengthen their portfolio in India, the report said.

On TV broadcasting, the report said though digitisation of cable is expected to give a boost to broadcasters. Implementation delays and operational challenges have dampened deal activity as players are adopting a 'Wait & Watch' policy.

Deal activity in the film industry is expected to continue in a similar subdued vein as before and is expected to continue to revolve around the exhibition and the production services space.

In the print space deal activity slowed down considerably in 2013 and is unlikely to pick up over the next few months given the continuing economic slowdown.