Business of Media

Santosh K. Patra,
MICA, Ahmedabad

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Group Escapism Vs. Personal Escapism

VS.

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The Indian M&E industry is approx. INR 1200 bn in revenue

(Calendar 15), grew by 12% over last year
TV

542

Print

283

Films

138

Animation & VFX

51

Digital Advertising

60

Events

45

Gaming

27

OOH

24

Radio

20

Music

11
Expected to grow at a CAGR of 13.9%
from 2015-2019

Source: FICCI report

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We have a very small pie in business

Indian Oil Corporation
Reliance Industries
Tata Motors
State Bank of India
Bharat Petroleum
Hindustan Petroleum
ONGC
Tata Steel
Indan M&E industry
Hindalco Industries
Tata Consultancy Services
-

50,000

100,000

150,000

200,000

250,000

300,000

Source: Forbes 500 as of Dec 2015

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350,000

400,000

450,000

500,000

Growth prospects
Personal

Ad at 0.3%
of GDP

Smart
phones /
broadband

GDP growth
@ 7%

Infra

Digital STBs

Escapism

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Growth of advertising

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Growth of subscription income

TV
digitization:
20%

Online
music 25%

OTT 100%

Pay!
Film 22%

Event
tickets 40%

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Television
Viewership:
1. Hindi @ ~50%
2. Regional channels - 40%
2. English, etc <3%

0%0%
Subscription:
70% of total households
get TV
90% of them get C&S
Digitization 40 mn in
DAS Phase 4

Ad sales:
Freedish
DTT
Regional

Advertising
40%

Subscription
60%

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TV Distribution: 30 MSOs, 75000 LCOs

122

140

164

75

96

89

Analogue
cable
Digital
cable

25
1
32

DTH
50

40

18
0
0
Pre DAS DAS (Ph 1 & 2)DAS India
(2012)
2014
(2016)
TV households (C&S) in mn

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HITS

Print
Revenues:
* 8% CAGR to reach INR 387 bn in 2019 from 263 bn in 2014
* Cover price
* Delivered @ home
Language:
1. Regional is growing; English is flat
2. Jagran v/s Bhaskar

Magazines:
Struggling

On-line:
Poor broadband penetration;
yet growing @ 20%+

Key priorities:
* Digital strategy
* Supply chain

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Film in India
Growth:
* 1000 films / year, but only
52 weekends

Domestic box office:

* INR 204 billion by end of
2019
* 10% CAGR

Hollywood:
* 10% market share
* Dubbing works on TV
and in theaters
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Radio
Indias radio market revenues increased by about 10% to INR19 billion
and is expected to reach 25 billion by 2017

Phase III of FM radio

licensing - 227 new cities

Streaming music

Radio penetration is as high

as 70% to 80% of total
population

120+ operational
community radio stations

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M&E value chain

2. Sell
advertisements

3. Schedule /
arrange content

1. Create content

4a. Broadcast

5. Distribute

4b. Print
production

Profit

Revenue
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Reach /
audience

Advertising vs subscription (% to total)

Film

Events
TV

Print
Digital

Radio

96

50

50
70

30

90

10

95

100
Ad

0
Sub

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Advertising

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Ad sales value chain

2. Determine
availability

3. Negotiate

4. Finalise deal

5. Receive
Release Order
(RO)

6. Receive
artwork / ad film
/ ad audio

7. Standards &
process

8. Credit control

9. Schedule ads

10. Ingest ads /

artwork

11. Reconciliation

12. Invoicing

13. Collection

1. Set rate card

Effective Rate
(ER)

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Utilization
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of wallet

What drives ad rates?

Audience size
6 month lag

Audience
quality

Category

Ad rate
OTS:
-Position

Volume of
spend

-Time
-Date
Association
with a
property

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Subscription

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Basically, get the consumer to pay

TV

Cable / DTH
/ IPTV
Subscription

HD

Print

Cover price

Subscription

Film

Ticket

C&S & others

Digital

Subscription

Events

Tickets

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Others

Subscription value chain TV DTH

3. Satellite

1. Broadcaster

5. Satellite

6. customer

4. DTH

2. Distributor

ARPU
Reach

Revenue
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Average revenue per

user

Subscription value chain TV HITS

3. Satellite

1. Broadcaster

5. Satellite

4. HITS Co

6. LCO

2. Distributor

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7. customer

Subscription value chain TV Cable

3. Satellite

1. Broadcaster

4. MSO

5. LCO

2. Distributor

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6. customer

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Subscription value chain Film

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Subscription value chain - Theatrical

1. Producer

2. Distributor

3. Exhibitor

4. Customer

Week 1

Week 2

Week 3

Thereafter

Multiplex

50%

42%

37%

30%

Single
Screens

70-90%

70-90%

70-90%

70-90%

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Film territories

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Digital supply chain

1. Producer

AIB
Contiloe
USP
OMG
ChuChu

2. Aggregator

VuClip
YouTube
Hotstar
Ditto
Alt
Voot

3. Telco

Airtel
Jio
Vodafone
Idea
Aircel
Hathway
Tikona

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4. Customer

You
Me

Digital supply chain - USPs

1. Producer

Content

2. Aggregator

Variety
Customer
ownership
Analytics

3. Telco

Wallet
Analytics

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4. Device

App real
estate
Connect

Way forward

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Television distribution
Consolidation

Increase in cable pick-up from the ground

Broadband services
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Television broadcast
Regional bouquets (surround the customer)

HD

Freedish
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Print
Regional smile; English frown

Common news rooms

Events & activation

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Film
OTT play from Eros

Fragmentation +

Larger releases
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Radio
Phase 3.5 and 4 (a bit too late?)

Digital music black hole

Regional ad bouquets
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Digital India
India internet
subscribers (mn)

Device penetration in India (mn)

550

Smart
phones

354

165

2013

TV Sets

176

202
131
Tablets

55
20
2013

2014e 2015e 2016e 2017e

Year

251

2014

2017

Smartphone
penetration

2013

14%

2014e

21%

2015e

33%

2016e

48%

2017e

66%

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Increased personal escapism

Indians

Group Escapism

Individual Escapism

80%

20%

50%

50%

Small Screen
(Phone/Tablet)
90%

Large Screen
(Television)
10%

85%

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15%

Episodes

Films

News

Education

Shorts

Games

Social interaction

Vernacular driving digital India

Consumption of Vernacular Content Online (million users)
650
195

169
45%

455

70%

93
76

2013

Mobile Internet Users (million)

Hindi & Vernacular Content

2020

Rural Internet Users (million)

Woman Internet Users (million)

117
312
82%

65%

357

533

59
110

2013
2020
Mobile Internet Users

52%
29%

121
48

338

2013
2020
Rural Internet Users
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45%
25%

127
42

293

2013
2020
Woman Internet Users

Thank you!

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