The Indian entertainment and media industry is expected to grow at an annual average rate of 13.2% in the next five years to reach R1.19 trillion in 2015, according to the latest report by consulting firm PricewaterhouseCoopers. According to the report titled ?India Entertainment and Media Outlook 2011?, the industry grew by 11.2% in 2010 on the back of improved economic conditions and rebound in advertising spend. The report reveals that the sector will continue its double digit growth trajectory in 2011 as well. The industry grew a little slower than expected in 2010 largely due to the downturn in the film segment. All the other segments grew as predicted. The reports also says that the industry is poised for a greater growth in the foreseeable future though some key regulatory hurdles might remain.
Timmy S Kandhari, leader ? entertainment and media practice, PwC India said, ?The buoyant advertisement spend will have to be supplemented with subscription growth for sustainable profitable growth in entertainment and media revenues. Addressable digitisation in the broadcast space and focus on good content across sectors will go a long way in achieving this objective.?
The report says that growth will be driven by traditional media such as television, print and films, which will continue to dominate the entertainment and media industry, with significant revenue from non-digital. The report also forecasts good growth in digital spends, but maintains that infrastructure continues to be the biggest challenge to the growth of consumption and revenue in this segment. The next five years will see digital technologies increase their influence across the industry and rapid change in technologies and consumer behaviour will continue across all E&M segments. However, the pace of change will continue to be slower in India as compared to other territories.
Marcel Fenez, global leader, entertainment and media practice, PwC said, ?The Indian consumer is yet to reap the benefits of the enhanced digital experience seen in other markets where smart devices and enhanced bandwidth speed prevail. This is an issue highlighting the need for future infrastructure investment and the overall affordability of devices.?
India, like the rest of the world, will have to contend with rising demand from consumers for digital experience, says the report. This is adding new complexities for the E&M industry in terms of delivery and monetisation. Many of these will need to be addressed by collaboration across the digital value chain.
Television is projected to command half of the entertainment pie by 2015 as it is estimated to grow at a robust 14.5% cumulatively over the next five years, from an estimated R306.5 billion in 2010 to R 602.5 billion by 2015. Print media, the second biggest segment in the industry, is expected to grow by 9.6% over the period 2011-15, reaching R 282 billion in 2015 from Rs 178.7 billion in 2010. In the case of films, the sector is projected to grow at a CAGR of 9.3% over the next five years, reaching R136.5 billion in 2015 from R87.5 billion in 2010. Due to the tremendous uptake of the mobile VAS (value-added-services) market, revenues from the music segment is projected to grow at a CAGR of 17.6% over 2011-15, reaching R 21.4 billion in 2015 from R9.5 billion in 2010. For radio, the report predicts a compounded annual growth rate (CAGR) of 19.2% over 2011-15, reaching Rs 26.0 billion in 2015 from R 10.8 billion in 2010. With rebound in overall advertising, internet advertising too is projected to grow by 25.5% over the next five years and reach an estimated R 24.0 billion in 2015 from R 7.7 billion in 2010.
The estimated size of Out of home (OOH) advertising spend was R14.0 billion in 2010, which is projected to reach R 24.0 billion in 2015. Animation, gaming and VFX industry will continue to maintain its growth pace and is projected to grow at a CAGR (compounded annual growth rate) of 21.4% to R 82.6 billion in 2015 from its current size of R31.3 billion.
The advertisement spend registered high growth of 14.3% in 2010 as compared to negligible growth in 2009. Internet advertising, with 28% growth, remained the fastest growing segment as an increasing number of advertisers are using online platform to connect with the youth, reveals the report.
Talking about the challenges faced by the Indian entertainment and media industry, Kandhari said, ?While there is good revenue growth, the challenge for the Indian industry would be how to make the growth profitable in all its constituents. Favourable government policies will help but the industry does need to look at their own operating model such that sustained investment in the E&M sector becomes possible?.