The Future Now Streaming

The Future: now streaming
KPMG - FICCI
Indian Media and Entertainment Industry Report 2016
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The year 2015 was a seminal year in many ways for the The cable industry too, awoke to the potential of
Media and Entertainment (M&E) industry. A year that broadband and the year saw several companies
sparked excitement and renewed hope but at the same restructure and raise funds from private equity or through
time a year in which reality came to roost. listings.
This was a year in which the global economy saw a big It was a year where radio performed exceptionally well.
drop in commodity prices, with crude oil dropping from a Phase III finall saw the light of da , altho gh some
high of near USD100 in October 2014 to below USD30 in regulatory challenges remain. Radio remains the only
January 20161. While this volatility rocked many economies mass medium that has restrictions of carrying news and
around the world, it was a blessing for India. Lower current affairs a fact that Industry hopes shall will change
commodit prices, lower in ation and lower borrowing soon. Overall, radio in India remains an industry with a very
costs are likely to drive consumerism in the country bright future, with double digit growth rates forecast at
benefitting the media ind str . he Indian econom least for the ne t fi e ears.
continued to outperform its large peers with FY 2015-16
growth estimated to be 7.3 per cent by the International ome sectors did face challenges tho gh. In film, indi
Monetary Fund (IMF), accelerating to 7.5 per cent in FY oll wood was at while oll wood and regional
2016-172. performed well. oll wood s o tp t of franchise films and
expansion beyond DCI compliant screens helped it achieve
For the M&E industry, the year was a mixed bag. Coming nprecedented s ccess while regional films contin ed
off the heady days of 2014, when election spending and their s ccessf l r n. aah bali - a bi-ling al film, created
renewed hope dro e a significant le el of media spend, bo -office histor and set a new standard for filmmakers in
2015 was a year of settling in, rolling up ones sleeves and India. Despite these successes, long- term growth for the
getting down to task. This was one of those years in which film ind str will remain challenging. gain, it s a stor of
the small town and rural economy did not grow as much underlying infrastructure driving sector performance. As
as anticipated, depressing media spends for some players long as India remains under screened, the pace of growth
especially in Hindi and other regional prints. of the film ind str will shall be m ted.
A healthy advertising environment, with close to 15 per Print too, continued to face some headwinds, especially
cent growth3 propelled several parts of the industry with critical categories like real estate and education
to unprecedented growth. However, some parts of the limiting ad spends. The boom in e-commerce spending,
ind str like film and print contin e to see challenges. which continued in 2015, did not translate into revenue for
regional publications and this created some challenges for
Television, again performed very well, led by the General some in a historically strong segment. Again, technology
Entertainment Channels (GEC). The year 2015 saw several disruption is likely to come to this industry, albeit slowly, as
new channel launches and the industrys adoption of a social media and mobile applications (apps) expand their
brand new ratings system Broadcast Audience Research language offerings. This year, the Indian print sector saw
Council (BARC). Digitisation of cable continued with cover prices being raised across several publications still
its implementation challenges but it was encouraging remaining among the lowest in the world but at the same
that progress is being made, with Phase III substantially time, overcoming its historical aversion to increases. This
complete. Addressability still remains a key a challenge helped sustain some growth in revenue overall.
even after digitissation but the industry is hopeful that
those challenges too, will get addressed in time.
1. http://www.nasdaq.com/markets/crude-oil.aspx accessed on 19/3/2016

2. IMF cuts Indias growth forecast for FY16 to 7.3%, Business Standard,
7 October 2015
2. http://www.business-standard.com/article/economy-policy/imf-cuts-india-s-
growth-forecast-for-fy16-to-7-3-115100601223_1.html
3. Based on KPMG in Analysis see introduction chapter
2016 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International ooperati e KPMG International , a wiss entit . ll rights reser ed.
In 201 , we finall began on a jo rne that is e pected to
change the M&E industry in India. A host of changes
many of them already transforming the industry in
other countries are gaining traction in India. In addition
to broadband, payment technologies and platforms,
increased capacity of mobile phones and tablets,
disruptive pricing by new entrants and large scale use
of analytics are all coming together. This new wave of
change is likely to fundamentally alter the way content is
created, distributed, consumed and monetised in India.
While India continued to become a telecom superpower

in terms of the number of users and connections with
over a billion connections, it is still in its infancy as far as
digital infrastructure goes. In many ways, 2015 was a
year in which the promise of the M&E industry began
to unfold. The much anticipated wide roll-out of 4G
services began in 2015 and promises to gather pace in
2016. The increased availability of broadband is critical to
f lfilling the hopes of man , incl ding a host of start ps
and consumers.
The year 2015 did see a host of new services being

launched and expanding, including OTT (Over The
Top), Hindi and regional feeds on social media as well
as significant original programming. here is a lot of
excitement and activity in the digital space and many
business models being experimented with. As seen
before in many industries and parts of the M&E industry
as well, India may develop its own unique business
models rather than adopt global ones.
For M&E, 2015 was the dawn of a new age. Change will
come over the next few years sometimes quickly and
at times slowly, but disruption is no longer in question.
UDAY SHANKAR RAMESH SIPPY JEHIL THAKKAR

CHAIRMAN CO-CHAIRMAN HEAD
FICCI Media and FICCI Media and Media and Entertainment
Entertainment Committee Entertainment Committee KPMG in India
01
Tomorrow 11
begins... The Great
Disruption
143
Radio Digital 125
Phased growth
consumption
The second screen soars
161
Animation VFX
Out of Home and post-production
199
Driven by transit Rendering success
Sports
Looking beyond cricket
205
287
Revenue assurance for
cable and satellite television
Introduction 23
Television 29
bk
ob
p`
Awaiting the digital dawn
55
Films
Screened out
Print
Stays in circulation
89
Theme parks
Get ready for the ride
Live events 243

Ready to perform
227
257
Deal volume
and value
Tax and 267
regulatory
Issues and developments
Radio
Tomorrow
begins . . .
Phased growth
Media content creation, access and cons mption ha e gone thro gh enormo s
changes in this second decade of the twent -first cent r , globall as well as in
India. e e pect the shifts to be more dramatic o er the ne t fi e ears, thro gh
the end of 2020.
2020
ri ing these changes are a coll sion of factors s ch as

echnolog and internet access especiall fast mobile data and broadband,
Gadgets, especiall smartphones and streaming media de ices, and
he app ecos stem
hile most of the changes and the technologies are global, man factors,
challenges and dri ers are local, especiall in markets s ch as India.
he mobile phone has j st taken two decades to reach a billion connections co ering
well o er 00 million ni e s bscribers01.
India is now characterised b e tremel high mobile penetration, and er high

Voice + Data
mobile se for oice as well as data. Mobile internet sers ha e crossed 200
million sers or o er 60 per cent of the total internet ser base.
`
all , it s a price-sensiti e market with among the lowest telecom tariffs and
per-capita sage in the world, translating into an RP a erage re en e per
ser of I R12 per month.02
hro gh this chapter, we ha e o tlined some of the ke trends that are alread shaping the cons mption of
media which are a prel de of things to come.
02
01. G M Mobile conom India Report 201

02. R I
A decade of mobility: Mobile media consumption today
his has been a decade of e plosi e mobile internet growth in India, in the second of two decades of
oice telephon .
The Future: now streaming | Tomorrow begins . . .
01 02 03
20 ears of mobile, b t lose to a billion mobile 1 0 million smartphones
serio s data se onl in past s bscribers , o er 00 million now, to reach 6 0 million b
ears unique users02 202002. t low price points
ke to adoption
04 05 06
on-smart feat re-phones Most media cons med b Indian needs ha e ni e
too support data, basic apps mobile sers ia shares on challenges, opport nities
b t will get phased o t social media and chat apps. e.g. ideo on memor card,
t memor and data light downloads rather than j st
models critical for s ccess streaming
Mobile will continue to be the primary medium of internet access

his has been a decade of e plosi e mobile internet growth in India, in the second of two decades of
oice telephon .
Mobile telephon is 20 ears old in India, compared with o er 1 0 ears of the

wire-line telephone and it is estimated that there are alread aro nd million
mobile connections in India02. owe er, the ni e mobile sers are estimated
at o er 00 million after factoring in d plication on acco nt of d al IMs, internet
dongles and M2M IMs inside electricit meters, poll tion and weather sensors
etc02
he n mber of ni e sers is important beca se not onl does it gi e s

the real ntapped market for telecom, b t, more importantl here, beca se
it gi es s the c rrent addressable market for mobile data or internet
access. t a penetration le el of appro imatel per cent of the Indian
pop lation, the mobile ser base has eno gh headroom to grow0 .
f the total internet base of 1 million s bscribers, it is estimated that
there are o er 200 million mobile internet sers02. rom the iewpoint of
media, globall , the most interesting fig re wo ld s all be the n mber
of broadband s bscribers, where we are incl ding wireline broadband
alongwith G and G sers. his ser base is estimated to be o er 1 0
million in India0 .
03
02. G M Mobile conom India Report 201 G M Mobile conom India Report
201
0 . http //telecom.economictimes.indiatimes.com/news/ g- g/ g-connections-in-india-
to-reach-100-million-b -2020-ericsson/ 6
t in markets s ch as India, marked b low data speeds, the narrowband or 2G
sers are important for media too. speciall if o see the apps responsible for
the b lk of India s mobile internet se ie hats pp and acebook. or the latter,
the pop lar ariants in India are acebook ite, a smaller, lighter ersion that ses
far less data, and acebook for er Phone, which works on feat re phones
sing the a a lang age.
oda s o er 00 million ni e sers are likel to to ch aro nd 1. billion

act al, h man sers b 2020, o er 0 per cent of India s total pop lation
at that point0 . ith nearl half of them with an alwa s-on cell lar mobile
data connection, it is e pected that the dominance of mobile as the primar
medi m for data access will onl contin e to increase.
Smartphones: The handsets get smart and connected, but Light apps will
still rule
India s mobile market, with It is estimated that in 201 owe er, a ast majorit of
o er 00 million acti e there are abo t 1 0 million Indians se low-cost feat re-
subscribers, has been smartphones in India0 , phones, mostl costing
dominated b low-end phones, predominantl ndroid-based. between I R1,000 and
s all called feat re-phones picall , a smartphone lets I R ,000. hese too, mostl
to disting ish them from the ser add and remo e apps, ha e cameras, d al- IM slots
smartphones. t the di iding s pports G and increasingl , and micro memor cards,
0
line is f . G and i i, has a camera, s pport data and r dimentar
and other feat res. email, and ha e a few apps
here s m ch price o erlap at least hats pp and
between feat re-phones in owe er pace of smartphone acebook, and a few games.
the I R2000 to I R 000 and penetration is growing and he often ha e M radio b ilt
low-end smartphones, which it is e pected that b 2020, in, a highl al ed feat re on
are t picall I R ,000 pward. all mobile handsets being entr -le el phones.
sold in India will be G-read
smartphones0 . he s ccess of apps and
ser ices in India depend
significantl on their abilit
to r n on feat re-phones.
en with the shift to mostl
cheap ndroid smartphones,
s ccessf l apps and ser ices
will need the abilit to r n er
light sing little memor
and er little cell lar data.
his r n light and small are
the big reason for acebook
and hats pp s s ccess in
India.
04
0 . G M Mobile conom India Report 201

0 . ielsen estimates
hose tr ing to sell media ser ices to phone sers ha e a challenge. n one hand, a dio and ideo
cons mption is high while on the other hand a large portion of mobile sers will be low RP sers,
sitting in the lower half of the socio-economic p ramid.
s s al, Indian jugaad has fo nd its own sol tions to this challenge.
treet kids spend some n G called igital nother G called

of their earnings renting Green creates h per-local G et wara lets tribals
o t ideo on smartphone learning ideo content in hattisgarh and
memor cards ideo that for farmers, and makes elsewhere become citi en
is often almost alwa s it a ailable online ia jo rnalists, reporting on
pirated. ld shops smartphone with G their e periences and
ha e e ol ed into selling connections. t for those listening to others, in their
or swapping memor with 2G smartphones, own lang age b t in the
cards. there are a dio-onl absence of comm nit
ersions which are radio licenses, it ses a
accessed ia a oice call dial-in ser er. ribals call
and I R or e en more sing their mobile phones.
cheapl , ia a callback after
he missed call is a a missed call.
ni el Indian application
for s bscription or s pport
for a ca se, and missed-
call ser ers were sed to heap or free i i hotspots will be another
originall gather s pport answer, e en the do not pro ide alwa s-on
for the I India gainst data connecti it . In offices, retail ones,
orr ption mo ement. railwa and metro stations, and other p blic
i i ones, some smartphone sers will
download ideo and other content shared
o er social apps onto their phones. ch i i
ones are also planned for illages where
fiber from the national fiber-optic network
will terminate, s ch as s citi en
ser ice centres which can se i i.
ll this means that India will operate differentl from global models with streaming and downloads
coe isting and media companies will need to adopt their b siness models to be able to access the
different t pes of cons mers.
05
Indias killer apps are messenger and social appsnot Media Apps
01 02 03
hats pp, acebook ndreds of branded media/ Media companies need
dominate Indian entertainment apps in India, strateg for tapping
smartphones cr cial, er few in op 100 ndroid, mainstream apps like
nderle eraged channel for India hats pp, acebook,
media Instagram, napchat
04 05
e t-gen platforms s ch as Messaging, chat apps
Instagram, ine, napchat transition to f ll ecos stems,
big among o th, mostl led b hina s e hat
ignored b media ho ses
What drives mobile-phone users to mobile data for the first time?
or man low-income prepaid mobile sers who per cent of Internet sers in India se
spend less than I R100 a month on recharging hats pp e er da , per cent se acebook.06
their mobile s bscriptions R I reports RP
at I R120 , their first e perience of mobile data acebook incl des its ariants or deri ati es
isn t email or web browsing, b t hats pp to acebook for er Phone , a ersion that r ns
connect to friends and famil , or to a peer gro p. on feat re-phones, created for India and similar
markets acebook ite, a small less than 1
or st dents, that first app is more likel to be M , light-on-data ndroid ersion for markets
acebook, and man start b sing it o er free with slow mobile data Messenger, the instant-
i i in their instit te or ni ersit . ollege messaging app that integrates with acebook s
st dents make p a low- RP gro p that s chat.
act all sing data-hea apps on camp s i i.
What are Indias top apps?
1 WhatsApp 2 UC Browser 3 Hotstar
4 Facebook 5 SHAREit 6 Messenger
7 Cricbuzz 22 Wynk 30 Gaana

75 Twitter Source: App Annie Store Stats (https://www.appannie.com/apps/google-play/top-chart/india/overall/?date=2016-03-22)
Rank by Google Play downloads on a single day in March 2016).
or man media organisations, witter has high al e, be ond the n mbers, for a dience
engagement rather than a dience ac isition or traffic. he n mbers ma be small compared with 06
their primar a dience, b t it s a high-engagement gro p that lets media firms do interesting things,
s ch as create content thro gh ser engagement, li e feedback and spot s r e s.
06. ielsen estimates
How about branded media apps?
ome of the more pop lar media apps are imes of India, , ind stan imes, , b t the onl
news app in the op 100 is ail nt.0
owe er, the media apps space is cl ttered, with h ndreds of media apps in India. Most major media
ho ses ha e their own apps and do their best to dri e sers there. Man ha e m ltiple apps
has si f rther fragmenting their ser base. ome force online isitors who click a link to a stor to
download the app. his is co nter-prod cti e, as the ma lose readers, and it hasn t helped bring an
mainstream news-media app an where near the op 100.
far better strateg co ld be to maintain an optimal, consistent ser e perience across both mobile
app and mobile web, s ch as the has done er effecti el , and more recentl Indian news
organisations s ch as the imes of India. dding compelling additional feat res s ch as alerts,
c stomisabilit or interacti it e.g. adds a dience engagement, li e streaming, etc, in its
app is a good wa to bring in sers, b t it s a long ha l.
owe er, gi en the dominant sage of social apps, it is critical that media organisations place an e al
emphasis on sing social apps to engage with cons mers rather than p tting disproportionate effort
into dri ing sers to their own apps.
Organisations not yet

ready for emerging
platforms
Globall , o th ha e mo ed
on in their choice of platforms
with Instagram, napchat
and ine gaining pop larit .
India is behind this partic lar
c r e, largel d e to the cost
of mobile data as these apps
are data hea . owe er, as
data speeds impro e and data
costs red ce, we e pect that
similar platforms will gain
prominence in the ne t few
ears. his is a challenge for
media companies and brands
as the ha e limited presence
on these emerging platforms.
07
0. pp nnie India rankings
Community to ecosystem: Social medias next wave
he sharing of media in a hats pp gro p is a

powerf l dri er of media cons mption, as well
as of mobile data traffic for telcos. Interestingl ,
while an a erage ser ma be hesitant to
download and forward large ideos from and
to indi id al friends, he is far more amenable
to sharing them with gro ps especiall as
WhatsApp makes it easier to share media with
minimal bandwidth cons mption, in one shot,
to 0 or 100 people in a gro p.
he most fascinating thing abo t these online
platforms is that the are transitioning into
complete comm nities or e en ecos stems.
his is partic larl tr e for chat apps s ch
as hats pp and e hat where sers can
perform a ariet of dail tasks within the app
ecos stem.
or e ample, in hats pp b siness is
transacted, product images are sent, estate
brokers send ideos of apartments, politicians
and police ask citi ens to hats pp pict res of
garbage or traffic iolations, c stomer ser ice
and s pport is offered ia hats pp-onl
n mbers, bank details are shared and pa ment
receipts sent o er the app.
e hat on the other hand is looking to de elop
a f ll blown ecos stem aro nd it with integrated
pa ment s stems, ta i ser ice apps, shopping
apps, news and entertainment apps etc.
e belie e this ecos stem model is a powerf l
iew of the shape of things to come.
08
Breaking the access frontier for M&E
ireless access is Entertainment, Pro iding free or cheap access

the last frontier to be m ltimedia, big dri ers, to the digitall - nderser ed is a
crossed but bump into access ke challenge. ario s models
cost for free or cheap access are
being e al ated incl ding
ero rating platforms s ch
igher demand for ree i i, aggressi e as irtel or ree asics on
ideo and a dio in promotional G Reliance which wo ld gi e
lower-spend ser b ndles likel disr pti e access free of data charges
groups for telecom as well as to specific ser ices. his
media has been c rrentl r led o t
b R I on the gro nds of
iolating net ne tralit .
Mobile data is e pensi e, so most sers in India get b on ree data sage as part of
cheap and small packs for hats pp or acebook. t oice plans, or
when the need to click a o be link, the need either
i i, broadband or a lot more G or G mobile data than pps that allow sponsors to
most of them are willing to pa for. top p data for sing their
app that top- p can be
he problem gets worse as o e pand the internet base sed for an other ser ice
down the socio-economic p ramid. he lower the RP of e ample Gigato .
a ser segment, the lower the literac and th s the lower
the chances of their being interested in te t messaging or
browsing. he wo ld want to se m ltimedia, especiall
ideo, if the co ld access it.
09
here are two big disr pti e possibilities, tho gh, which co ld potentiall resol e the access iss e.
Broadband rollout and Public WiFi as part p content from its media interests s ch as
of the governments Digital India campaign etwork 1 , and others. hile no details of
primarily on the back of NOFN. plans are a ailable at this stage, it is generall
e pected to follow an aggressi e data pricing
iber-based broadband co ld indeed power plan aimed at capt ring market share
go ernment offices, schools, hospitals and
citi en ser ice centres directl . t for most widespread G rollo t with most telcos
indi id als, in towns or illages, mobile looking to b ild a dio and ideo libraries for
phones will be their access de ice and the potential sers will res lt in disr ption not
will look to access the internet thro gh j st to telecom b t to media, opening p a
cell lar data and i i. h ge, new channel tho gh wo ld be diffic lt
to co nter with j st ick content tie- ps.
Google s project to install i i at 100 railwa
stations b end-2016 starting with M mbai nce alit digital infrastr ct re at cheap data
earlier this ear in conj nction with Railtel costs reaches the masses, it s clear that the
as I P has got significant potential. Google o erwhelming majorit of media cons med b
projects p to 10 million sers accessing mobile sers wo ld be ideo and a dio in the
that i i, b ear end, and sing it for a ne t few ears, a fact that is alread tr e for parts
range of apps incl ding streaming ideo. of the world. hether that wo ld be streaming
he possibilities for media and content media or, as toda , wo ld contin e to be
partnerships are immense.0 predominantl download oriented wo ld depend
on the access options and models that emerge.
4G rollout n the back of this access, entertainment apps
will grow significantl and will be a big dri er for
nother ke game changer is likel to be bandwidth se, for operators, across wireless
G rollo t accompanied b aggressi e and wireline. cross both, the challenge will be
promotional pricing of G packs, with access models and cost, and the opport nities
Reliance io likel to lead the wa with its for media and content immense.
la nch this ear. io is working on b ilding
06. http //articles.economictimes.indiatimes.com/2016-01-22/news/6 6 1

indian-railwa s-railwa -stations-internet-ser ices
Conclusion
Media and entertainment firms will face enormo s challenges and disr ptions, as well as
opport nities, from technolog in the half-decade ahead.
imbler tech-dri en firms, from search to social media, who control the traffic, own the
social platforms drawing the ne t generation of sers, and b o t the tech that will disr pt
media, are too often a step ahead. arge media firms tend to change more slowl .
Man traditional media firms don t get tech, which mo es so fast that b the time the e
fig red o t the web, it s changed b the time the e b ilt an app, it s obsolete.
ne answer is to ha e in senior management someone who will dri e the technolog
direction of the media gro p a , or chief technolog officer, role that is common in tech
firms, and rare in media e en if the designation ma e ist in some firms . lternati el , the
chief editor, b siness head or p blisher wo ld need to be tech sa eno gh, which has
been n s al in the past, tho gh we see that changing.
he role of the or the ech sa b siness leader needs to be to look at f t re platform
directions, technologies to se, emerging opport nities. or e ample, he wo ld look at
irt al realit and sa e sho ld be doing this . r at geo-location, which so man digital
firms se, and ask ow can we impro e o r prod cts, or c stomisation, or re en e, with
geo-location 10
strategic foc s on technolog directions will be cr cial for media and entertainment firms
to s r i e and thri e in the connected, social, digital age.
The Great
Disruption
Technology disruption
e are going thro gh a phase of rapid and s stained hro gh this chapter, we ha e set o t some of the
technological inno ation which will permanentl change emerging technological changes that will likel impact
the wa people will access and cons me content. he the M sector.
theme of this ear s I I conference hange or
Perish - he ear of the igital aptl capt res the pitfalls In India, se eral challenges contin e to e ist aro nd
that M organisations face. hanging ser habits will ph sical infrastr ct re, digital access, content
disr pt e isting b siness models as content pro iders a ailabilit , ser beha io r, monetisation etc which are
and brands will need to match cons mer e pectations. c rrentl inhibiting the de elopment of a s stainable
hile this will pose m ltiple challenges, we belie e that digital ecos stem. owe er, we belie e, contin ing
there are significant opport nities for M companies to technological ad ances co pled with go ernment and
le erage the new digital ecos stem. pri ate initiati es can resol e these challenges.
Some key innovations impacting the M&E sector
Film Music
K, K, , Predictive analytics,
GI, R/ R Audience analytics
OOH Print
nal tics, Interacti e R/ R, ocial platform
platforms
integrations
Animation/VFX/
TV Gaming
R/ R, printing for
, R/ R, de eloping protot pes,
argeted ad ertising, non-photorealistic
Interacti e rendering PR
Advertising
Radio ross Platform, Interacti e/
argeted ad ertising,
Programmatic b ing
nline platform
12
e belie e digital disr ption can be e al ated in fo r
primar dimensions ontent, digital infrastr ct re, Major 4G rollouts6
mobilit and cons mer anal tics.
Reliance Jio 29 states, 18,000 cities, optical fiber network
of 250,000 route kilometers
Idea Cellular Five south Indian states and plans to launch

in 12 circles and over 700 cities7
The Future: now streaming | The Great Disruption
Vodafone Five circles of Kerala, Karnataka, Mumbai,

Delhi, NCR and Kolkata8
Tikona Digital Planned rollout in 5 circles and 30 cities
Airtel 15 major cities and is expected to expand

further9
Infrastructure 4G Devices
alit internet access contin es to be a challenge for ased on the I 201 report there were o er . million
majorit of the cons mers with appro imatel 0 per G smartphones shipped in 201 , which is a growth
cent of the pop lation still accessing the internet on of 21 per cent compared to last ear9. ams ng has
2G connections1. rther, the a erage internet speed emerged as the biggest G smartphone pla er in India
in India is aro nd 2. Mbps as compared 20. Mbps in with a 62 per cent share8. he growth in G de ices is a
2
o th Korea, . Mbps in hina and 12.6 Mbps in . ke enabler for growth in data access.
owe er, a combination of go ernment and pri ate
initiati es is e pected to resol e this constraint in the
medi m term and enable digital access and cons mption
to become tr l mass in India.
Rollout of 4G will be a key enabler in providing

mass quality internet access
he n mber of wireless internet sers in India are likel
to cross 0 million b 2020 with more than 60 per cent
of sers accessing the internet thro gh their mobile
phones4. It is e pected that o er the ne t co ple of ears,
G and G s bscribers wo ld constit te o er 0 per cent
of the wireless internet s bscriber base .
Internet users (million)
Source: KPMG in India anal sis and disc ssions
13
01. risil elecom er ices nal sis PP 2016 0. http //www.ideacell lar.com/ g/wh - g/know- g
02. K M I tate of Internet Report 201 0 . http //indiane press.com/article/technolog /tech-news-technolog / odafone- g-m mbai-sim-how-
0 . KPMG nal sis to-acti ate/
0 . I M I Internet in India Report, 201 http //gadgets.ndt .com/mobiles/news/sams ng-sa s-leads-indian-smartphone-market-with- 6-
per cent-share- 026
0 . risil elecom er ices nal sis PP 2016
0 . http //www.airtel.in/personal/internet/ g/check-co erage
06. http //www.medianama.com/2016/01/22 -reliance-jio-march-la nch/
Evolution and acceptance of online payment Structure for Machine to Machine
models is likely to strengthen the monetisation communications (M2M)14
potential o has formed two committees Polic Reg lator
raditionall , besides telcos, online pa ment models were ommittee and Ind str e el ons lting ommittee
restricted to credit cards, debit cards and net banking. for addressing the policies and reg lation for machine
er the past two ears m ltiple other models are to machine comm nications, respecti el . M2M
e ol ing and gaining widespread acceptance s ch as comm nication rollo t is critical for spread of Io in India.
Mobile wallets including offline recharge and
withdrawals. For example Paytm, Mobikwik,
Payumoney etc.
Banking applications are evolving to integrate wallets,
social media integration, sms based payments, offline
to online models etc. Key players include ICICI Bank,
HDFC Bank, Kotak Mahindra Bank etc.
Telcos are restablishing their presence through
increasing integration with apps for payments and
also are looking to push their own wallets.
Cash on delivery (CoD) was a key game changer in
driving acceptability of ecommerce transactions and
content apps are evaluating CoD options.
Government initiatives around making banking
widespread through small banks and payment banks
is also expected to widen the banked population.
Government initiatives can supplement

internet penetration and digital adoption
Digital India Initiative
he initiati e s goal is to ha e broadband in 2. lakh
illages, fo r lakh p blic internet access points and
i- i in 2. lakh schools and p blic i- i for citi ens b
201910. he estimated cost for the igital India initiati e
is at I R11 0 billion and is going to attract potential
in estments of I R 00 billion11. he go ernment has
also b dgeted I R billion for the ational R ral Internet
echnolog Mission, I R 0 billion has been set
aside for mart ities which is e pected to create the
infrastr ct re to pro ide content to the end ser12.
Progress in IPv6 Implementation13

Implementation of Internet Protocol ersion 6 IP 6 will
address - scalabilit need of the internet, interoperabilit
and mobilit , sec rit and will pro ide the infrastr ct re
for the ne t ro nd of inno ation, which the c rrent
protocol IP is not able to s pport. o fast track this
implementation, the go ernment circ lated a proforma
named IP 6 doption Milestone and epartment
of elecomm nication o is facilitating this
implementation b cond cting co ntr wide workshops.
14
10. http //deit .go .in/sites/ pload files/dit/files/ igitalPer cent20India.pdf 1 . o nn al Report 201
11. http //www.ibnli e.com/news/india/digital-india-will-ens re-jobs-for-1 -lakh-people-sa s-pm- 1 . o nn al Report 201
modi-101 60.html
12. http //digitalindia.go .in/
The impact of the governments Digital India and Smart City initiatives on increasing the penetration
of internet to tier II and III cities
The governments Digital India and Smart City initiatives are set to exponentially increase the internet penetration in tier II and tier
III cities, revolutionising businesses and our way of life.
Indias estimated internet current user-base of more than 300 million (as of December 2015)15, enabled through comparatively
inexpensive internet access and extensive mobile connectivity. One of the critical issues for such limited coverage is the poor
broadband coverage in the tier II and III cities.
Thus the governments leading initiatives are expected to help extend connectivity to the broadband have-nots. One of the
pillars of Digital India is to create broadband highways. This covers urban broadband, rural broadband and National Information
Infrastructure (NII). It envisions to provide urban connectivity through virtual network operators which could be leveraged for
service delivery and communication infrastructure in new urban developments and buildings. This is expected to be extended to
tier II and tier III cities. This can clearly be a game changer for enabling digital broadband connectivity in these neglected cities.
The connectivity would be linked to the National Information Infrastructure (NII). NII would integrate the network and cloud
infrastructure in the country to provide high speed connectivity and cloud platform to various government departments up to
the panchayat level. These infrastructure components include networks such as State Wide Area Network (SWAN), National
Knowledge Network (NKN), National Optical Fibre Network (NOFN), Government User Network (GUN) and the MeghRaj Cloud.
NII aims at integrating all ICT infrastructure components such as SWANs, NKN, NOFN, GUN and GI Cloud. It will have a provision
for horizontal connectivity to 100, 50, 20 and 5 government offices/ service outlets at state, district, block and panchayat levels
respectively.
However, rolling out of Digital India is facing its own challenges, especially in crafting a last mile model. It is not economically
feasible to provide fiber connectivity in all places. Thus alternatives such as satellite and High Throughput Satellite (HTS) as well as
alternate technologies such as WhiteSpace on free spectrum needs to be adopted to increase the broadband penetration. Mobile
telephony network is obviously a good mechanism for providing the last mile broadband, however, the mobile telephony network
would also require the backhaul connectivity to be able to provide the required connectivity.
Digital India has to be rolled out in lock-step with the Smart Cities Mission. The mission envisions city administration to use
concavity to provide better city services that encompass safety, security, sustainability, ease of living, ease of doing business
and resilience. Each of these components require significant spread of connectivity. Even Sewage Treatment Plants (STP), which
are considered to be low-tech, are being envisioned to be Smart STPs, with analytics and sensors built in. Schools are being
envisioned to be smart schools, with large amount of e-content for schools being developed. Similarly healthcare is envisioned to
get smarter with centralised health records. All these initiatives require significant and omnipresent connectivity.
The city and government usage of broadband can also help create a larger market for broadband, thus enabling sustainable
business models to support broadband in tier II and tier III cities. These initiatives of the government are set to completely
transform how we run cities, how we do business in cities, how people interact with each other, how social setups transform,
leading to complete revolutionising of our way of life in these cities. It could also open up hitherto non-existent businesses, riding
on top of technologies such as 3-D printing, drones, virtual reality etc. We are indeed quickly moving into a bold new world in the
tier II and III cities in India.
Jaijit Bhattacharya
Partner IGS - Innovation
KPMG in India
15
1 . KPMG India nal sis 2016
Analytics Impact on the M&E industrys business model
ons mers are constantl gi ing signals to content Targeting and consumer insights: dience interest
pla ers on what the like, what the will/will not pa and cons mer cons mption trends s ch as iewing
for, who the like to see and what the like to do with c stomer histor , searches, re iews can be created
the de ice when the ha e time. ll of this generates thro gh data anal tic platforms. his data in t rn can
significant le els of data which companies are starting to be sed to target specific c stomers with offers or
anal se, deri e collecti e insights and se to impro e the promos.
alit of engagement with cons mers.
Time based content optimisation: sing insights
owe er, while ser beha io r generates data, a concern from big data, companies in media and entertainment
for the creati it dri en M ind str co ld be whether can nderstand when c stomers are more likel to
going forward, data co ld determine content and iew a specific genre of content and on what de ice
creati it . can marketing campaigns be more effecti e.
Location based optimisation: sing the c rrent
Driving actionable insights from analysis to location of cons mers, rele ant and personalised
predictive to the next best action messaging can be p shed.
Customer journey: sing big data to nderstand
Analytics Platform Function wh cons mers s bscribe and ns bscribe to
Audience analytics16 Analyse and visualise multi- different t pes of content, media and entertainment
platform measurements to best companies can de elop effecti e strategies to engage
understand how the content is with cons mers.
being viewed on various channels. Discovery engine: ased on data insights, new
This can help brands to better target trends can be disco ered and combined with
and engage with consumers. monetisation techni es which can int rn gi e rise to
new forms of b siness.
Operations analytics17 Generate insight on operations like
managing human capital resources,
sales operations etc for making
Mobility
productivity decisions. Gi en a primaril mobile dri en internet base, India has
alwa s been a mobile first ecos stem. he ongoing G
Event driven analytics The next action is trigerred by an rollo t will o tweigh the growth in wireline connections
event. For example, triggering and i-fi access. ata costs ma red ce on the back
a buying decision when a of highl competiti e telco market and go ernment
maintenance contract period initiati es.
expires or suggesting relevant rther, smartphone a ailabilit and affordabilit has been
information based on download, key growing as the a erage selling price of mobile phones
strokes, etc. has decreased from I R 0,000 in 2011 to less than
I R1 ,000 in 201 19. Introd ction of smart phones that
Predictive analytics18 Extract patterns out of complex, big are less than I R 000 and the a ailabilit of ref rbished
and varied data to forecast future smart phones wo ld f rther increase the smartphone
behaviour. For example Flipkart/ penetration.
Amazon recommend products based
on purchase history and search he n mber of smartphone sers is likel to cross from
preferences. an estimate of 1 0 million in 201 to 6 0 million b 202020
and will be a ke enabler dri ing data cons mption.
Campaign analytics To measure effectiveness of brand his contin ing growth in mobile phone and internet
campaigns. base will likel res lt in cons mer beha io r habit ated
to cons ming content on the mobile de ice. s a res lt,
b siness models wo ld need to e ol e to foc s on
engaging and monetising sers ia their mobile phones.
16
16. http //www.ibm.com/anal tics/ s/en/ind str /media-and-entertainment/a dience-insight.html 1 . G M Mobile conom India 201 report
1. http //asmarterplanet.com/blog/2011/06/smarter media trends.html 20. G M Mobile conom Report 201
1 . http //www.ibmbigdatah b.com/podcast/where-magic-happens-predicti e-anal tics-media-and-
entertainment
Mobile subscriber growth21 Mobility can fuel the disruption caused by IoT
ith o er 00 million ni e mobile s bscribers in India, mart phone mobile de ices can be the ke technolog
this market is alread the second largest in the world. to enable the concept of Io b connecting de ices.
his also means that c rrentl aro nd 6 per cent of the
Indian pop lation has a mobile connection, indicating India is the third biggest market in Io in sia Pacific and
significant headroom for growth22. is e pected to grow at a GR of 0 per cent for the
period of 201 -2026.
In addition, mobile internet connections are e pected to

cross 00 million in India b 2020, representing 0 per s per a s r e done, the top areas where Io is sed in
cent of the total mobile connections2 . It is also e pected media and entertainment is - prod ction and distrib tion
that G and G connections will also grow and comprise operations to track prod ct ow . per cent , the se
aro nd 0 per cent of the mobile internet ser base o er of digital sensors in prod cts 12. per cent , tracking
the ne t co ple of ears. de ices in b siness locations . per cent and c stomer
wearables .2 per cent 27. or e ample, smartphones
connected to the Io ecos stem will be able to both
Mobile Apps generate news thro gh data and deli er news rele ant
sia Pacific witnessed a 10 per cent ear on ear growth to indi id als based on pre io s cons mption and
in app installs and India stood fifth in terms of percentage preferences28.
of application downloads at 6 per cent compared to 1 per
cent in hina24. Mobile app shopping contrib ted 1 per
cent of all app downloads in India behind gaming at 2
per cent, which clearl indicates the rise of m-commerce
in India2 . elow is the global categor wise break p of
mobile app.
Apps install category Q2-2015
Source: InMobi he tate of Mobile pp ownloads 201
17
21. G M Mobile conom India 201 report 2 . InMobi he tate of Mobile ownloads, 201
22. G M Mobile conom India 201 report 26. http //economictimes.indiatimes.com/tech/software/india-is-the-fastest-growing-mobile-app-
2 . http //articles.economictimes.indiatimes.com/201 -02-0 /news/ 1662 1 networking-inde - market- ahoo/articleshow/ .cms
mobile- sers-pop lation, 201 n mbers are e tra polated 2. G M Mobile conom India 201 report
2 . G M Mobile report India 201 2 . http //sites.tcs.com/internet-of-things/ind stries/media-and-entertainment/
Unlocking the potential of smartphones as a truly disruptive force
Consumers today are savvy, empowered and knowledgeable, Smile for the camera: Consumers are not only smiling
resulting in a native adoption of technology-enabled for the camera, but also giving it a big thumbs-up. Social
conveniences. This trend translates into them embracing networking apps like Instagram and Snapchat, which focus
smartphones at a dizzying pace in India. According to Nielsen, on taking and sharing photographs, are rapidly gaining favour,
there are over 180 million have connected smartphones. To particularly among the youth and metro city dwellers. Their
my mind, this makes that little device one of the most potent growing popularity leads us to believe that the rest of India
forces of disruption in modern history. may well follow.
In a future which will likely be driven by the Internet of Things
and the cloud, it is safe to predict that the smartphone will
continue to play a central role in consumers professional
and personal lives. On cue, marketers will need to focus
all their attention on gaining access to the consumer via
their smartphones. There are several trends that lead to this
hypothesis.
Source: ielsen Mobile Panel, India
Entertainment on the go: As smartphones become

more versatile, they are beginning to edge portable music
players like the iPod off the shelves. Music and video
streaming are extremely popular with numbers showing
Source: ielsen estimates YouTube to be the most popular destination. Users also prefer
consuming live event telecasts or even pre-programmed
Not just voice: Today, traditional voice calling accounts content on demand on their mobile devices. Statistically, the
for a mere 9 per cent of the total time spent on smartphones consumption of video content online has risen from 49 66
as users begin replacing phone calls as we knew them, with per cent over the last year. In fact, even small town users are
Voice over Internet Protocol (VoIP) and other internet-based showing a propensity to consume video on their smartphones,
communication methods, including chat. though with higher engagement on native media players,
ow cons mers spend time on their de ices indicating offline video consumption.
hat are cons mers watching
18
Dial C for convenience: Most activities, be it work or
play, which would have earlier required an unwieldy desktop
or laptop, can now be effectively carried out in the palm of your
hand. Not only does this make life a whole lot more convenient
for the on-the-go consumer, but it also gives access to those
who find it easier to own a smartphone than a computer.
According to Nielsen Mobile panel, 99 per cent of consumers

access browsers and chat / VoIP on their smartphones. Other
popular engagements include email, social networking,
shopping, browsing the news, gaming and lately, taxi booking
and mobile payments.
Smartphone as the mobile wallet: Finally, the surest

sign of a maturing smartphone market is the willingness of
consumers to transact on their mobile devices. A growth in
mobile payment apps from 43 59 per cent over the last year
according to Nielsen figures, and banking apps from 18 - 31
per cent over the same period suggests a growing comfort with
transacting on smartphones.
These trends will get amplified as every device in the world

gets smart, much like the mid-2000s, when almost every
mobile acquired a camera. The lesson in these trends for us
all, is that the consumer is changing her habits at a much
faster pace than the businesses that serve them. This will lead
to a change in the pecking order, unless todays businesses
transform themselves to stay ahead.
While manufacturers, app developers and marketers continue
Source: ielsen Mobile Panel, India to add functionality and robustness to devices and apps, the
real differentiator may well be effective and unique positioning.
From window to screen shopping: Shopping on the Moreover, as smartphones revolutionise and transform how
smartphone has seen a meteoric rise from 39 per cent in Q4 we engage in our everyday lives, what assumes utmost
2014 to 69 per cent in Q4 2015. The charge is led by giants significance, is the need to measure this space where, when
like Flipkart, Amazon and Snapdeal. Such is the extent of the and how people are using their devices. Thats what will open
success of shopping apps that Myntra had chosen to do away new areas of opportunity and more importantly, innovation.
with their website altogether and sell only through their app.
Prashant Singh
Managing Director
19 Nielsen India
Unless otherwise noted, all information included in this column/ article was provided by
Prashant Singh. The views and opinions expressed herein are those of the authors and do not
necessarily represent the views and opinions of KPMG in India
Content consumption High resolution content is expected to drive
Proliferation of smartphones, significant ad ances in future consumption
cons mption de ices and technolog s ch as wearables, he content resol tion for films is going thro gh
R/ R etc s pplemented b growing digital content a de elopment where higher resol tions s ch as
s ppl and distrib tion is changing cons mer beha io r K, K and immersi e content like , R, R and
in fa o r of digital content cons mption. hile c rrentl GI comp ter generated imaging are technicall
monetisation remains a challenge, once digital content act alising. echnolog is making it possible for deli ering
is widel a ailable, we e pect content economics to a differentiated e perience to the end sers where
achie e e ilibri m and monetisation models to e ol e the can cons me content which is closest to real
and become more fa o rable. e periences.
Devices and technology The use of digital assistants can impact how
e elopments in hardware and de ices will contin e to content is consumed
dri e trends in content cons mption. he digital person assistants like iri, Google ow and
ortina earlier percei ed as no elties are slowl gaining
prominence. ased on a global s r e for reg lar sers
Smartphone & Tablets
of personal assistants 0 per cent sa the se iri most
martphones and tablets ha e contin ed to become often, 2 per cent Google ow and 2 per cent tilised
more pop lar in India. martphones are e pected to Microsoft s ortana .
cross 1 0 million in 201 to 6 0 million b 2020 and will
contin e to dri e mobile cons mption29. apt ring the Indian accent is still a challenge for these
digital personal assistants and the ne t phase can be to
incorporate regional lang ages.
Wearables
he smart wearables market in India d ring the first
arter of 201 was 0.0 million nits with smart watches Consuming content
contrib ting to 0 per cent of shipments and smart bands Consumption on Video on Demand (VoD)
contrib ting to 60 per cent 0. ccording to I Report, Platforms
wearables grew 1 per cent this ear. earl 2 million
igital o platforms are increasingl becoming pop lar
wearable de ices shipped globall this ear, p from j st
and s bscription ideo on demand is gaining
26 million nits in 201 1.
traction with m ltiple domestic and international
pla ers e panding in this space. ith the increase in
Virtual Reality and Augmented Reality devices penetration of smart phones and data speeds, this form
ith pcoming pgrades and new de ices like c l s of cons mption is e pected to increase.
Rift, i e, on Pla tation R, Ra er R, o e
R mo ie st dios, game p blishers, sports are sing Second screen content consumption
irt al realit technolog for ario s applications in
ccording to a global s r e b ielsen
gaming and entertainment. he worldwide irt al realit
gaming market is e pected to reach .1 billion b 6 per cent sers switch to another channel when
the end of 2016 and with an installed base of . million commercial ad ertising comes on.
sers 2.
per cent engage with social media and per cent
R technolog has been introd ced ia earl platforms browse the Internet while watching li e shows
and apps s ch as Google Glass, Magic eap and per cent watch ideo programmes more if the ha e
Microsoft s olo ens. It is estimated that the R related social tie-in.
global re en es can to ch pwards of 120 billion b
as earl as 2020 .
tor telling wo ld need to change to le erage on the
ad antages of these technologies or e ample, glance
optimised content for wearables s ch as smart watches,
immersi e and reacti e content for R/ R de ices like a
news stor or a ideo.
20
2 . G M Mobile India Report 201 . http //www.digi-capital.com/news/201 /0 /a gmented irt al-realit -to-hit-1 0-billion-disr pting-
0. http //articles.economictimes.indiatimes.com/201 -0 -0 /news/61 6 1 1 time -gro p-india- mobile-b -2020/ . s gnph I
smart-watches-fitness-bands . https //a tm.com/blog/dail -s r e -res lts/ oice-assistant-s r e /
1. http //www.hind stantimes.com/tech/was-201 -reall -the- ear-of-the-wearable/stor - . http //popsop.com/201 /0 /how-global-cons mption-of- ideo-content-has-e ol ed-the-nielsen-
R ks f p ts a k h .html global-digital-landscape-s r e -201 /
2. https //www.s perdataresearch.com/blog/ irt al-realit -market-brief/
ons ming content across m ltiple channels at the Increasing smartphone penetration and growing internet
same time is a trend gaining traction. or e ample, while access will res lt insignificant growth in demand for
watching a cricket match one wo ld want to see the regional content.
latest statistics of pla ers or games. he ser opens
p his/her tab or mobile app and gets that information Short duration content consumption on mobile
while watching . ow, with the new ersion of pple It is estimated that 6 per cent of Indians showed
la nched, M .t lets o see game sched les, preferences for ideo downloads with per cent
iewers cons ming short form ideo content nder
statistics, and latest standings while o are watching li e

sports. his de elopment of apps for smart s ma also 10 min tes on smartphones as against 1 per cent
slowl impact the wa this second screen phenomena on laptops44. his trend is going to be important for
shapes p. marketers to be able to reach these c stomers thro gh
smart and concise messaging.
Increase in mobile video based consumption36
It is estimated that mobile ideo will grow at a GR Conclusion
of 62 per cent between 201 and 2020. Mobile ideo It took the radio ears to reach a ser base of 0
represented more than half of global data traffic million. In 201 , the trailer for tar ars took a mere 2
beginning 2012 indicating the growth has alread kick ho rs to crack a iewership of more than 100 million .
started and is here to sta with G de elopment and his e emplifies the role that technolog has pla ed
Go ernment of India s igital India p sh . o er the ears to change the landscape of the media and
entertainment M sector aro nd the world. India is
no e ception, as nearl all the M s b-sectors in the
Mobile gaming content consumption co ntr ha e witnessed the penetration of technolog
n an a erage Indians spend 1 6 min tes per da on with different degrees.
their de ices of which 0 min tes were spent pla ing
mobile games . ith an increase in smart phone he impact of technolog inno ations can o er the ne t
penetration in India, free to pla a ailable games thro gh few ears, res lt in changes to cons mption habits
mobile carriers and app stores and game apps de eloped and patterns of iewers. rrent b siness models ma
in ernac lar lang age is likel to dri e the ne t phase of not be able to ser ice the cons mers in this changed
growth for this ind str . en ironment and ma need to e ol e. hile this can pose
m ltiple challenges to M companies, we belie e that
there are significant opport nities to tap into. owe er,
Regional content for Indias rural it is critical that companies look to integrate these
per cent Indians are non- nglish speakers and local opport nities into their b siness models earl , to ens re
lang age sers are growing at a faster rate than the that the don t miss o t on the potential of a digital
addition of new internet sers in India . In r ral India ecos stem.
there are 1 million sers of which 6 million sers se
the internet in local lang ages and this ser base has
grown per cent ear on ear40. per cent Indians
prefer watching ideo content in local lang ages of
which indi acco nts for 0 per cent, amil at per cent,
el g at 6 per cent, engali and Marathi at per cent
each41. Google is in talks with the go ernment and news
media prod cers in India to set p the Indian ang ages
Internet lliance so that regional sers can adopt the
internet faster42.
21
6. I I Report 2016 1. http //www.medianama.com/201 /0 /22 -r ral-internet- sers-local-content-to-dri e-growth-in-
. http //www.b sinesswire.com/news/home/2016022100 0 2/en/ itri -Impro es- conomics- ser-base-iamai/
Managing-Mobile- raffic 2. agran ew Media In estor Presentation an 2016
. ielsen s r e . http //www.medianama.com/2016/01/22 - ideo-content-statistics- clip/
. agran ew Media In estor Presentation an 2016 . http //www.medianama.com/2016/01/22 - ideo-content-statistics- clip/
0. I M I 201 report . http //www.dail mail.co. k/t showbi /article- 2 66 / tar- ars- orce- wakens-trailer-racks-112-
million-online- iews- -da .html
22
Our report this year, is on Inspite of these factors,
the back of a number of the Indian economy
macroeconomic upheavals remained resilient and
globally and headwinds to grew at 7.3 per cent over
economic reform in India. 20141 and outgrew most
major economies on the
The pace of global GDP
back of strong domestic
growth declined to 2.4
demand coupled with drop
per cent in 2015 from 2.6
in crude and commodity
per cent in 20141 driven
prices. This resilience
by a collusion of multiple
is also re ected in the
factors such as volatility
performance of the M&E
and rebalancing in the
sector which grew by 12.8
Chinese economy, drop in
per cent from INR1026
oil and other commodity
billion in 2014 to INR1157
prices, slowdown in
billion in 2015, while
emerging economies
overall advertising grew by
and slow pickup in major
14.7 per cent from INR414
developed economies
billion in 2014 to INR475
The Indian economy billion in 20152.
also saw a fair share of
turbulence during this
period. Factors such
as a weak monsoon,
rising NPAs, gridlocked
parliament meant that
investment sentiment
remained subdued.
1. Global Economic Prospects, A World Bank

Group Flagship Report, January 2016
2. KPMG in India analysis
23
The Indian media and entertainment industry: Size
Overall industry 2010 2011 2012 2013 2014 2015 Growth

size (INR billion) in 2015
(For calendar years) over
2014
TV 297.0 329.0 370.1 417.2 474.9 542.2 14.2%
Print 192.9 208.8 224.1 243.1 263.4 283.4 7.6%
Films 83.3 92.9 112.4 125.3 126.4 138.2 9.3%
Radio 10.0 11.5 12.7 14.6 17.2 19.8 15.3%
Music 8.6 9.0 10.6 9.6 9.8 10.8 10.2%
OOH 16.5 17.8 18.2 19.3 22.0 24.4 10.9%
Animation and VFX 23.7 31.0 35.3 39.7 44.9 51.1 13.8%
p
Gaming 10.0 13.0 15.3 19.2 23.5 26.5 12.8%` o b
bk
Digital Advertising 10.0 15.4 21.7 30.1 43.5 60.1 38.2%
Total 652 728 821 918 1,026 1,157 12.8%

Source: KPMG in India analysis, 2016
Advertising revenues: Size
Overall industry 2010 2011 2012 2013 2014 2015 Growth

size (INR billion) in 2015
(For calendar over
years) 2014
TV 103.0 116.0 124.8 135.9 154.9 181.3 17.0%
Print 126.0 139.4 149.6 162.6 176.4 189.3 7.3%
Radio 10.0 11.5 12.7 14.6 17.2 19.8 15.3%

OOH 16.5 17.8 18.2 19.3 22.0 24.4 10.9%
Digital Advertising 10.0 15.4 21.7 30.1 43.5 60.1 38.2%
Total 266 300 327 363 414 475 14.7%

Television registered a 14.2 per cent growth Films grew at 9.3 per cent but the underlying
led by strong growth in advertising at 17 per fundamentals were mixed with Hollywood
cent on the back of increased Ecommerce and Regional releases contributing to growth
spends and renewed spending by other while oll wood had a at ear.
sectors such as Auto, Telecom, Mobile
handsets, etc. bscription re en e growth
Digital Advertising continued its strong run
with a 38.2 per cent growth over 2014 as a
at 12.8 per cent was slower due to delays
growing internet user base and usage was
in Phase 3 digitisation and further delays in
supplemented by increased spend allocation
a ailing the on gro nd benefits of Phase 1 and
by marketeers. Increasing share of mobile
2 digitisation.
and video advertising is a prelude of things to
Print saw a slower growth at 7.6 per cent, come.
coming off an election year though increased
cover prices partially contributed to growth.
24
The Indian media and entertainment industry: Projections
Overall industry size 2016P 2017P 2018P 2019P 2020P CAGR (2015-
(INR billion) (For 2020)
calendar years)
TV 617.0 709.6 823.3 956.8 1097.6 15.1%
Print 305.2 329.6 355.9 383.6 412.5 7.8%
Films 158.7 174.1 190.0 207.8 227.3 10.5%
Radio 23.4 28.4 32.7 37.8 43.3 16.9%
Music 12.1 14.0 16.1 18.4 20.6 13.8%
OOH 28.3 31.6 35.4 40.0 45.2 13.1%
Animation and VFX 58.3 67.1 78.1 91.3 108.0 16.1%
Gaming 30.8 34.4 39.0 45.4 50.7 13.9%
p`
o
Digital Advertising 81.1 113.6 153.3 199.3 255.2 33.5% b b k
Total 1,315 1,502 1,724 1,980 2,260 14.3%

Advertising revenues: Projections

Overall industry size 2016P 2017P 2018P 2019P 2020P CAGR (2015-
(INR billion) (For 2020)
calendar years)
TV 210.3 241.8 275.7 319.8 364.5 15.0%
Print 204.0 221.7 241.6 263.3 285.8 8.6%
Radio 23.4 28.4 32.7 37.8 43.3 16.9%
OOH 28.3 31.6 35.4 40.0 45.2 13.1%
Digital Advertising 81.1 113.6 153.3 199.3 255.2 33.5%
Total 547 637 739 860 994 15.9%

The Indian M&E industry is expected to grow at a Films are expected to grow at 10.5 per cent
CAGR of 14.3 per cent to INR2260 billion by 2020 CAGR though largely on the back of growing
with advertising revenues expected to grow to acceptance of Regional and Hollywood content.
INR994 billion at a CAGR of 15.9 per cent. Lack of screen density is a key constraint to
sustained growth especially for Bollywood
Television is expected to grow at a CAGR of 15.1 content.
per cent as advertising revenues will continue to
show robust growth though delays in digitisation Radio at CAGR of 16.9 per cent is expected
would mean that subscription growth would be to show the strongest growth among the
slower than anticipated earlier. traditional sectors due to conversion to a reach
medium in the long term supplemented by
Print growth, expected at 7.8 per cent CAGR
increased ad inventory.
continues to be driven by growing regional
markets with rural demand expected to be Digital advertising will continue to grow at a
strong on the back of multiple government high CAGR of 33.5 per cent with a shift towards
initiatives supplemented by headroom for mobile and video advertising on the back of
circulation growth. increase in mobile users and improved digital
infrastructure. By 2020 it is expected that digital
25 advertising will be INR255 billion and contribute
to 25.7 per cent of total advertising revenues.
Underlying themes and growth drivers
The digitisation process continues to face Growing prominence of ecommerce
delays advertising
Phase 3 digitisation failed to meet its deadline The ecommerce segment continued
with around 76 per cent of boxes seeded to aggressively chase market share by
by December 2015. While the government continuing to spend on customer acquisition.
has not officiall e tended the timelines, the A slowdown in investment sentiment meant
process has slowed down due to multiple that while there was a reduction in spend
court cases challenging the process. Further, by the smaller ecommerce companies, the
benefits of Phase 1 and 2, partic larl on growing spends by large players such as
ARPU have failed to materialise due to a ma on, lipkart, napdeal, Pa tm, l and
number of on ground challenges across the Quikr more than offset this reduction.
distribution value chain. This resulted in a
slowdown in subscription revenue growth Ecommerce ad spends initially focused on
in 201 . r e pectations o er the ne t fi e digital platforms, but over the last couple of
ears ha e also been toned down to re ect ears, there has been significant increase in
this delay. ad spends across Television, Print and Radio.
However, most of these spends have been
During 2015, the various stakeholders played largely concentrated on national networks
out a waiting game, by entering into long and have not percolated down to regional
term fi ed fee deals for content and carriage markets. It is expected that ecommerce will
primarily from a perspective of ensuring continue to be an active advertiser across
visibility of revenues and costs thus leaving platforms with spends being concentrated
the M s free to foc s on completing among the large ecommerce players and
seeding of set top boxes for Phase 3 and 4. increasing focus on regional markets.
We expect that once the seeding is complete,
the various stakeholders will be back on the Regional continues to drive Print growth
table to negotiate roll out of other aspects
of digitisation such as addressability, gross Print witnessed a marginal slowdown in 2015
billing, per subscriber billing, roll out of coming off an election year with both Hindi
packaging etc. and Vernacular markets surprisingly growing
at a slower pace, though increased spends by
Ecommerce, Telecom and Mobile handsets
Rollout of BARC was a landmark event did help in partially arresting the slowdown.
The implementation of the viewership
measurement system by BARC, was a
major theme in 2015. While inclusion of rural
markets and increase in sample size led
to a resh f e in the rankings of channels,
particularly highlighting the viewership of
free-to-air channels, there was no immediate
impact on ad ertising ad b dget allocations
among channels or genres. Going forward,
sustained trends in ratings could lead to
advertisers re-thinking their ad spend mix and
broadcasters their content strategy.
26
However, as English and National markets Radio is becoming a Reach platform
saturate, the Regional story continues to Radio continued its strong run with a 15.3
dominate strategies of Print players and per cent growth in 2015. Following the new
will continue to be the key growth driver. stations licensed in Phase 3 and consolidation
As companies are increasing their focus in the industry, Radio is transforming from
on tier-II and tier-III cities, and rural areas, a coverage media to a reach platform.
hyperlocalisation is emerging as an effective Major radio stations have been operating at
theme among print players and advertisers. high ad inventory utilisation levels and this
Government initiatives designed to increase coupled with the growing advertiser interest
rural incomes will also increase long term has enabled increase in ad rates. Release
spending power and contribute to the of additional inventory from launch of new
advertising potential of these markets. stations will stabilise rates but result in
Further, in 2015, while most companies in continued advertisement inventory pick up.
Hindi and Vernacular markets increased he first batch of Phase a ctions raises
co er prices, there contin es to be s fficient some concerns given that while major cities
headroom for continued growth in cover witnessed a bidding frenzy, a number of
prices. smaller cities were not picked up in the
auction amid fears of high reserve prices and
mer in shift in films in favor of Holl wood weak market potential. This raises concerns
and Regional content on not only the economics of the new
Coming off a poor year in 2014, the Films channels but also could potentially dilute the
segment grew by 9.3 per cent during 2015 interest levels on the second batch of the
hiding a key theme which could be a portent Phase 3 auctions. The government has not
for the future. The growth was primarily yet announced the dates for these auctions.
driven by strong performance by Hollywood
and Regional content which offset another OTT building for the future
weak year for Bollywood.
hile there is a significant le el of interest
Bollywood, particularly, is constrained by in building out OTT platforms, viability in
slow pace of screen growth and inconsistent the short term remains a concern given
quality and has been facing increasing bandwidth constraints, high cost of customer
competition from Hollywood and Regional acquisition, dependence on advertisement
content. Enhanced distribution reach, tent led models and high cost of data access.
pole franchise movies, supported by allowing
content to play in non DCI compliant screens However, all of this is set to change, starting
has opened up a substantial portion of Indian with expansion of the digital infrastructure
audiences for Hollywood content. Regional with 4G rollout, governments Digital India
content on the other hand has seen growing campaign and multiple private initiatives
budgets, increased distribution and marketing aro nd broadband and p blic wifi. he G
spend allowing wider audiences to access the market is expected to be highly competitive
content. and will likely result in lowering of data
costs. Coupled with increased penetration
of smartphones, we expect that consumers
will become used to viewing content beyond
the Television screen, paving the way for
digital dedicated content and innovative
monetisation models.
27
Sports is looking beyond cricket for growth In conclusion, the underlying fundamentals
Cricket continues to be the primary driver of of the M&E industry have not changed with
viewership, with marquee properties such continuing robust domestic demand and
as IPL and World Cup, witnessing growth in strong advertiser interest. There are also a
both ad rates and sponsorships. However, the number of systemic matters that need to be
last couple of years has seen the launch of addressed and resolved such as completion
various sporting leagues across varied sports of cable digitisation, increasing access to
such as Kabaddi, Football, Tennis etc. Kabaddi content for film audiences, Phase III auctions
in particular has seen strong audience and for Radio etc, which could have a significant
brand response prompting the league owners positive impact on the long term growth
to make the tournament a bi-annual affair to potential of the M&E sector.
leverage on its popularity. While we remain bullish on the growth of the
As ownership of cricket as a platform becomes sector, it should also be noted that we are on
more expensive, we expect brands in India the cusp of a technological revolution which
to start investing into other sports. However, could dramatically change consumption
building out non cricket sporting leagues will patterns in the long run. Though this will
require long term vision and investing strategy present significant challenges to existing
to first dri e s stained iewer interest before business models, there are also significant
they become attractive to brands opportunities which could far outweigh
the risks. However, to leverage these
opportunities, the M&E industry needs to
invest for the future and be willing to look
dispassionately at the changes that will be
required in both mindset and approach.
b bk
p `o
28
Television
Awaiting the digital dawn
Introduction
he ind str contin ed its good r n in 201 , with 2015 has been another pivotal year for
ad ertising re en es growing faster than e pected. n the Indian television industry. or the first
the distrib tion side, howe er 201 pro ed to be a mi ed time our measurement systems offered a
bag for the ind str , with s bscription re en es glimpse of our rural consumers viewership
growing slower than e pected as monetisation remains a preferences. On the advertising front, the
challenge. industry has witnessed strong growth aided
by new entrants and a stable economic
ad ertising was b o ed b s rging ad spends from environment. In fact, I expect the buoyancy
e-commerce companies and strong performance of in the ad-market to continue in 2016, driven
sports properties s ch as Indian Premier eag e IP by growth in regional genres, FTA channels
and International ricket o ncil I ricket orld and HD offerings. On the distribution side,
p. he la nch of the iewership meas rement s stem hopefully our partners will learn from the
b roadcast dience Research o ncil R India lessons of the earlier phases of digitisation
was a landmark e ent in 201 ,1 b t the phased rollo t and ensure smoother monetisation of
meant that ad ertisers and broadcasters were waiting our offerings in Phase III & Phase IV. Our
for stabilit in the ratings before starting to depend sector might even receive an added fillip in
completel on the meas rement data from R 2016 from externalities such as favourable
India. he incl sion of r ral markets and increase in monsoons (La Nina effect), softening
the sample si e led to a resh f e in the rankings of interest rates and the trickle-down effects
channels, howe er there was no immediate impact of a pro-agriculture 2016 Budget.
on ad b dget allocations among channels or genres.
Sudhanshu Vats
Going forward, s stained change in ratings trends co ld
lead to ad ertisers re-thinking their ad spend mi and
broadcasters their content strateg .
Group Chief Executive Officer
n the s bscription side, disp tes among the
stakeholders in the distrib tion al e chain contin ed. Viacom18 Media Private Limited
Post the r ling from he elecom isp tes ettlement
and ppellate rib nal s that Reference
Interconnect ffer RI has to be the starting point for
all content deals between broadcasters and distrib tion
platforms commencing pril 1 2016, the elecom
Reg lator thorit of India R I has initiated a
cons ltation process to decide on iss es related to
pricing of channels between broadcasters, distrib tors
and s bscribers.2 It remains to be seen what impact this
cons ltation process is likel to ha e on s bscription
arrangements in the ind str . part from the reg lator
impact, ke things to watch for in 2016 incl de the
M lti stem perators M s abilit to dri e the
s bscription of tiered channel packages in Phase I II
cities, completion of set-top-bo rollo t in Phase III
areas and seeding in Phase I areas.
er-the-top platforms and growing content
cons mption on digital platforms contin es to be a big
theme that is likel to dri e d namics of this ind str o er
the ne t decade. Man broadcasters are iewing
ser ices as an opport nit to pro ide their content on an
additional platform rather than as a threat to their e isting
b siness. o far at least, this has pro en tr e with
ad ertisers sing online ideo ad ertising to complement
and reinforce their brand comm nication rather than
shifting ad re en es from to digital.
30
01. milestone ear for media, he Mint, 1 ecember 201

02. RI to form starting point for negotiations between broadcasters and platforms , ele ision
Post, http //www.tele isionpost.com/trai-tdsat/rio-to-form-the-starting-point-for-negotiations-
between-broadcasters-and-platforms-tdsat/accessed on 1 March 2016
Size of the TV industry Distribution
he tele ision ind str in India is estimated at I R 2 ith 1 million ho seholds, India is the world s
billion in 201 , and is e pected to grow at a GR of 1 second largest tele ision market after hina.4 At the
per cent to reach I R1,0 billion in 2020. bscription end of 201 , the digitisation of ho seholds in
re en e is estimated to grow at a GR of 1 per cent on terms of s rolled o t stood at 60 per cent incl ding
acco nt of the increased monetisation while ad ertising ree ish s bscribers. owe er, challenges in
The Future: now streaming | Television
re en e growth is also estimated to remain strong, impro ing addressabilit and increasing monetisation
growing at a GR of 1 per cent. contin e to tro ble the ind str . In 201 as well, there
was no significant impact of digitisation on sharing of
TV Industry size s bscription re en es among stakeholders or carriage
fees. bscription re en es for the ind str is
estimated to ha e grown at 1 per cent in 201 to reach
I R 61 billion.
In 201 , d ring the first half, M s contin ed to foc s
on impro ing their operating models in Phase I II cities,
while changing foc s in the latter half of the ear to
rolling o t s in Phase III areas.6 M s are contin ing
to b ild internal processes to re ect the change in
b siness model from 2 to 2 ser ice pro iders b t
different pla ers ha e had ar ing degrees of s ccess in
achie ing this
The delay in the completion of the 3rd

Source: KPMG in India s anal sis 2016 based on data collected from ind str disc ssions
ote ig res are ro nded to nearest integers and ma not add p e actl to col mn totals. Phase of Digitisation, is only pertaining
r new estimates re ect f rther dela in completion of digitisation and higher s bscribers for
ree ish, re ecting its performance in Phase III areas in 201
to few states across the nation. Based on
our previous experience from the roll out
of Phase 1 and 2, we had expected a few
he n mber of ho seholds in India increased to hurdles in the time of the completion and
1 million in 201 , impl ing a penetration of 62 per hence we are factoring the initial benefits
cent. he n mber of able atellite s bscribers of Phase 3, only in the FY17. Having said
is estimated to ha e reached 160 million. cl ding that, considering the progress on the roll
ree ish, the n mber of paid s bscribers is out expected in the following financial year,
estimated at 1 million in 201 , impl ing a paid we are certain on the growth front. The
penetration of per cent. ho seholds are e pected deals which will be proposed in FY17, will
to increase to 200 million b 2020, with paid certainly be based on the Phase 3 markets.
s bscriber base e pected to grow to 1 million b 2020, The key expectation from digitisation, is
representing per cent of ho seholds. of-course to bring in the crystalised level of
transparency in the market, leading to an
optimised revenue generation/distribution
TV households and paid C&S penetration of TV to all stakeholders in the value chain.
households
Punit Goenka
Managing Director and
Chief Executive Officer
ZEE Entertainment Enterprises Limited
and Chairman, BARC India
31
Source: KPMG in India s anal sis 2016 based on data collected from ind str disc ssions 0 . ased on ind str disc ssions
ote Paid refers to s bscribers e cl ding ree ish s bscribers r new 0 . conomic r e igitisation of cable s stem led to increase in ta collection, India, 26
estimates re ect f rther dela in completion of digitisation and higher s bscribers for ebr ar 2016
ree ish, re ecting its performance in Phase III areas in 201 0 . ased on ind str disc ssions
06. ased on ind str disc ssions
ontin ing dela s in rollo t of packaging and challenges
in collection along with deadlines getting p shed
back has res lted in se eral ind str participants 7 DTH platforms and a cable operator or
lowering their e pectations from the digitisation two in every geography, will ensure fair
process. he distrib tion ind str appears to be split play with respect to commercials, both on
abo t the role of the reg lator going forward. hile the B2B & B2C fronts. Making too many
man ind str participants belie e that de-reg lation rules could make it difficult for the
and price forbearance are the need of the ho r, there platforms to deliver.
are se eral who now belie e that stronger reg lations
are imperati e to dri e the ind str towards better
pricing and re en e sharing models. Going forward, the Harit Nagpal
implementation of s order that all content deals Managing Director and
between broadcasters and distrib tors ha e to be non- Chief Executive Officer
discriminator in nat re and based on RI is likel to
significantl impact the distrib tion economics. Tata Sky Limited
Meanwhile, competition in distrib tion co ld

intensif with the entr of Reliance io into the cable
b siness. he la nch has been dela ed m ltiple times,
b t the compan has been t ing p with h ndreds of
s to get access to the last mile. he compan has We whole heartedly welcome the move of
plans to pro ide a b ndled package which pro ides the regulator to bring in transparency and
channels, ideo streaming ser ices io Pla , commercial parity. There is certain amount
broadband, landline phone along with additional ser ices of exasperation from current eco-system as
s ch as home s r eillance. M s and operators also seen by a recent landmark Supreme
are also likel to see an increase in competition from Court judgment. DTH industry has been
new-age ser ice pro iders s ch as k p Media, which overpaying as against other distribution
pro ides con erged , internet access and ideo-on- technologies for far too long for serving the
demand ser ices thro gh a single connection and has same content to same consumer.
la nched ser ices in select areas in M mbai, derabad,
P ne and engal r .
Rohit Jain
Deputy Chief Executive Officer
Videocon D2H
Broadcaster, LCO and MSO value chain will

be disrupted not just because of 4G coming
but also on the basis of change
in the behaviour of the consumers towards
consuming media. The media consumption
pattern of the consumer is changing and
everyone in the value chain have to think
through their model to survive the change.
Sujit Vaidya
Chief Financial Officer
Disney India
32
0. ele ision broadcasters m ll approaching to dela content order, he conomic imes, 10

March 2016
0 . RI m scles into cable in media and telecoms offensi e, he Mint, March 2016
0 . k p Media la nches d al-pla ser ices, conomic imes, 1 ebr ar 2016
Status of digitisation10 December 2015
Phase Regulatory date for shutdown No. of C&S subs* (million) Non-digitised subs (million) Digitisation including DTH *
Phase I Jun-12 13 1.2 100% excl Chennai
Phase II Mar-13 25 1.2 >95%

Phase III Dec-15 41 10 ~75%
Phase IV Dec-16 81 52 ~35%
Total 160 65 ~60%
Incl ding ree ish
ote r new estimates re ect f rther dela in completion of digitisation and higher s bscribers for ree ish, re ecting its performance in Phase III areas in 201
ig res are ro nded to nearest integers and ma not add p e actl to col mn totals
In 201 , the Ministr of Information roadcasting Pause in the progress of

MI e tended the deadlines for Phase III and I of
implementation from the earlier combined deadline monetisation of Phase I and Phase II
of ecember 201 to ecember 201 and ecember hile the rollo t of igital cable s in Phases I and II
2016, respecti el . e contin e to e pect a dela of 12 cities was largel completed b ecember 201 , in 201
months in the rollo t of s in Phases III I each and as well, the cable ind str contin ed to face challenges in
e pect the rollo t in Phase I to be largel complete rolling o t tiered channel packages and impro ement in
b ecember 201 . he benefits of digitisation in these pstreaming of re en es from s to M s. he large
phases in terms of impro ed addressabilit and erage M s had initiated gross billing in elhi and Kolkata in
Re en e Per ser RP are e pected to take m ch 201 . t man of them ha e shifted back to net billing.
longer. t the end of 2020, we e pect igital cable et billing contin es in M mbai and Phase II cities. s
s bscribers and s bscribers to be in the ratio of part of net billing, M s pa ser ice ta on the amo nt
, with 0 million igital cable s bscribers and the are collecting from s, while s pa ser ice ta
million s bscribers b 2020.11 on the remaining amo nt. ne of the goals of digitisation
was to impro e ta collections from the cable ind str 12,
No. of subscribers b t this goal has not been achie ed so far. his sit ation is
nlikel to change an time soon, b t the introd ction of
G is e pected to simplif the ta str ct re.
en tho gh channel packages ha e been rolled o t
in Phase I cities and some Phase II cities and billing is
based on channel packages, M s contin e to collect
from based on a fi ed amo nt per s bscriber and
the collection is not linked to the channel package chosen
b the s bscriber. hile the re en es collected b
M s from s has impro ed from the pre-digitisation
stage, o r research indicates that it has not met ind str
e pectations. n an a erage, net realisations for the
leading M s post pa ment of ser ice ta es in Phase
I stood at appro imatel I R 0-100 and appro imatel
I R 0- 0 in Phase II areas.1 nless the ind str is able
to ens re collection on the basis of channel packages
from s bscribers, s bscription re en es are nlikel to
increase significantl f rther.
ote
1 fig res are net of ch rn
2 ree is ree ish
r new estimates re ect f rther dela in completion of digitisation and higher s bscribers
for ree ish, re ecting its performance in Phase III areas in 201
ig res are ro nded to the nearest integer and ma not add p e actl to col mn totals
33
10. ote on digitisation phases In 2011, the go ernment anno nced mandator digitisation of 12. entre and states ha e gained from digitisation, iewers to get better iewing e perience
distrib tion o er phases thro gh its igital ddressable stem polic i Phase I conomic r e , Indian ele ision, http //www.indiantele ision.com/cable-t /das/centre-and-
metropolitan cities elhi, M mbai, Kolkata, hennai ii cities with a pop lation of more than states-ha e-gained-from-t -digitisation- iewers-to-get-better- iewing-e perience-economic-
1 million iii Phase III ll other rban areas M nicipal orp./M nicipalities i Phase I Rest of s r e -160 0 accessed on 1 March 2016
India R ral areas 1 . ased on ind str disc ssions
11. ased on ind str disc ssions
Monitoring t d , appro imatel 60 per cent contin ed
Industry ARPUs can be increased using to be analog headends in an 2016.20 s per o r
a combination of strategies such as estimates based on ind str disc ssions, seeding
ensuring implementation of proper and in Phase III areas as of ecember 201 was 0 per
transparent systems to minimise leakages, cent complete, e cl ding ree ish, with the n mber
implementation of channel packages and going p to per cent incl ding ree ish.21
the subsequent upselling of these packages
to consumers. ARPU will only increase as
a result of collaborated efforts by MSOs For DAS Phase III and IV to be implemented
and LCOs to make the consumer move successfully, the Government needs to bring
to a higher level package. Also, premium in faster and perhaps more decentralised
channels such as HD channels can lead to licensing processes, make it easier to
an increase in ARPU. receive financing for new igital Platform
Operators, provide tax benefits and improve
Jagdish Kumar
indigenous availability of set top boxes at
competitive prices.
Hathway Cable & Datacom Limited
Subhashish
Status in Phase III
Mazumdar
Senior Vice President- Operations
he 1 ecember, 201 deadline for Phase III areas, was & Head Joint Ventures,
not achie ed as f ll seeding of s did not happen. IndusInd Media & Communications
his was similar to the sit ation seen in Phases I II, Limited-Hinduja Group
where the seeding contin ed post the deadlines
set b the MI . hile analog e cable signals were
switched off for a while in some areas, in man of the ccording to hrome ata nal tics Media report on
areas the are back, as per ind str disc ssions. In able ark areas, there is also a significant difference
se eral states, M s and M s ha e challenged the in the stat s of seeding in different states d e to
MI s deadline in the co rts. igh o rts in se eral states se eral factors 22
Maharashtra, ndhra Pradesh, elangana, amil ad , Punjab, Kerala and Gujarat are leading states in
rissa and ikkim among others ha e granted sta s on terms of digitisation so far. Gujarat and Punjab are
MI s deadline mostl d e to the shortage of s.14 experiencing a more structured approach because
part from this, certain cable operators in Karnataka and they have leading players including Fastway, KCCL
Kerala ha e also indi id all got interim reliefs from the and GTPL.
respecti e high co rts against coerci e action b the
go ernment. he MI has stated that it is not going to III cities in Maharashtra lag compared to the top
press for implementation of in Phase III cities across states beca se the state does not ha e one defined
the co ntr till the pending cases are decided, since the strong cable operator and at the same time operators
sta on a central notification b the high co rt of an state ha e been facing a shortage of s.
is applicable across the co ntr .1 In ebr ar 2016, the est engal, rissa, harkhand and Madh a Pradesh
MI and the Indian roadcasting o ndation I filed still had a significant n mber of analog headends
different petitions in the preme o rt for transfer of all
indi id al cases to the and no f rther contin ation of P had the ma im m n mber of cable dark towns
the sta on Phase III, respecti el .16 followed b ihar. majorit of the cities in P and
ihar se , and d e to the lack of a dominant
s per the MI , as of 0 ec 201 , seeding of s was M , cable penetration is low in this state.
6 per cent complete in Phase III areas, and e cl ding
amil ad , the proportion was e en higher at 6.2 per nalog cable contin es in amil ad in all phases
cent.1 he MI has also reported that seeding of s d e to the stand-off between state go ernment-
f rther increased to 0. per cent as on 1 ebr ar owned ras able and the MI .
2016.1 s per treet Maps1 , of the ,0 ni e III towns of north-eastern states contin ed to
headends in III towns monitored b the III own ha e 100 per cent analog headends.
1 . Phase III sta ed in states incl ding Maharashtra as omba iss es restraining order, 1 . III completed in 1 states and s, nearing completion in other Rathore, ele isionPost,
Indian ele ison, http //www.indiantele ision.com/cable-t /das/das-phase-iii-sta ed-in- -states- http //www.tele isionpost.com/cable/das-iii-completed-in-1 -states-and- ts-nearing-completion-in-
incl ding-maharashtra-as-bomba -hc-iss es-restraining-order-16010 accessed on 1 ebr ar 2016 -other-rathore/accessed on 10 March 2016 34
1 . MI will not press for Phase III implementation till igh o rts decide on the pending 1 . treet Maps is the channel distrib tion monitoring arm of Gracenote, a global entertainment
cases, ele isionPost, http //www.tele isionpost.com/cable/mib-will-not-press-for-das-phase-iii- data and technolog compan
implementation-till-high-co rts-decide-on-the-pending-cases/accessed on 1 ebr ar 2016 20. ata from III own Monitoring t d cond cted b treet Maps o er the last two weeks
16. I challenges Phase III sta orders in MI files separate petition to cl b the cases, of an 2016 co ering ,6 0 III towns across 26 states e cept elangana, ndhra Pradesh
ele isionPost, http //www.tele isionpost.com/tele ision/ibf-challenges-das-phase-iii-sta -orders- amil ad
in-sc-mib-files-separate-petition-to-cl b-the-cases/accessed on 1 ebr ar 2016 21. ased on ind str disc ssions
1. Phase III Go t. insists 6 seeding stakeholders claim h ge shortage, Indian ele ison, 22. hrome M report on able ark areas, Indian ele ision, http //www.indiantele ision.com/cable-
http //www.indiantele ision.com/cable-t /das/das-phase-iii-go t-insists- 6-stb-seeding- t /das/chrome-dm-report-on-cable-dark-areas-160 02 accessed on 10 March 2016
stakeholders-claim-h ge-shortage-16010 accessed on 1 ebr ar 2016
Gi en contin ing challenges with the cable ind str ,
We expect Phase III and Phase IV to operators were e pected to take the larger share
be implemented in the financial year of analog s bscribers in Phases III areas than the
16-17. Even though Phase III has been did in Phase I and II. hile operators did take
delayed in some parts of the country, appro imatel 0 per cent share of s bscribers getting
we hope that there would be resolution con erted from analog cable in Phase III areas, higher
of the issues and that digitisation will than the 20 to 0 per cent obser ed in Phase I and II,
be again on track. The DTH industry is it was lower than the ind str e pectations. his was
ready to service these areas and the attrib ted to higher price points for and preference
infrastructure is already established in for local cable channels in Phase III areas. he
many geographies. The customers should ind str is e pecting to contin e to see significant
be availing the full benefit of digitisation traction in phase III and I , gi en their abilit to deplo
in terms of improved quality of viewing ickl in diffic lt terrain and sparsel pop lated areas.
and better service standards.
G Sambasivan In a diverse country like India, platforms

will need to develop customised strategies
Tata Sky Limited for different price points & geographies.
While Phases I & II were relatively higher
ARPU markets, subscriber number growth
opportunity was limited. So the revenue
increase opportunity came more from
organic ARPU and the 25 per cent increase
that happened as a result of digitisation.
Phases III & IV present the Industry with
a tremendous Digitisation penetration
opportunity in terms of sheer numbers.
While ARPU here is lower, content costs
are also lower because the customers
there watch lesser number of channels;
hence there is an opportunity for content
customisation to build a business model
with very decent gross margins. Over a
period of time, as these markets evolve,
ARPUs will go up and so will margins. It
has to happen. It happened in Phase I
& II markets and it will happen here. As
this business expands & penetrates
further into the rural heartland; instead of
being fixated on A PU, we should start
evaluation businesses based on Revenue,
Revenue Growth, Incremental Revenue
Share, Subscriber Growth, New Subscriber
Acquisition Market Share. All these
parameters assume significance when there
is such a big push on such scale.
Arun Kapoor
Dish TV Limited
35
Monetisation from TV digitisation Broadcasters perspective
Industry ARPUs can be increased using
There was extreme enthusiasm
a combination and excitement
of strategies such aswhen the benefits of packaging need to be popularised by MSOs and
digitisation rollensuring
out started in 2012. The dialog
implementation between the
of proper LCOs amongst viewers. Heavy encouragement needs to be
broadcasters andandMSOs had overtones
transparent systems of to developing
minimize effective done at the subscriber level. The broadcasting industry has
subscription fee models and
leakages, bringing theofcarriage
implementation channelfee to effectively spread the benefits of packaging by investing
negligible levels. Over the
packages past
and the3subsequent
years, the excitement
upselling has heavily on the air-time
faded away. MSOs dependence
of these packageson to carriage
consumers. fee ARPU
is still high
especially for new channels whoasare facingofhigh entry barriers. In the analog regime the subscribers have become habitual of
will only increase a result colated paying subscription fee after consumption of content and the
It is high time for course
efforts correction
by MSOs in cable
and LCOs industry as we
to make
stand at the doorstep of turning completely digital industry was lax not to change the unhealthy practice. This
the consumer move to a higher level across India. has to change and DTH industry is worthy of praise to have put
There are enough learning
package. experiences
Also, available such
premium channels within India
and global markets the pre-paid regime from the start. I would recommend cable
as HDtochannels
put the cable
can leadindustry
to an on the path of
increase industry to imbibe technology and a resolve so that the viewers
extracting fair in
value from the ground. The challenge is to get all
ARPU.
stakeholders working together! to develop a habit of pre-paid models. This shall be a big boon
in bringing healthy payment cycles across the chain.
Jagdish Kumar
My belief has been that once digitisation had kick started, it
will engulf various markets by process of osmosis, irrespective Looking at the recent developments in various Courts today in
the short term in the industry parity and transparency will be
Chiefmandate.
of any Government Executive
ThereOfficer
is talk of digitisation across
various sectorsHathway
of variousCable & Datacom
industries. Tuning inLimited
to digital is not the centre-stage of every deal. I still believe that our industry
only related to entertainment business but the way we live our is over-regulated and such principles should be left to the
lives today. take holders to discuss. In any case the dispute settlement
mechanism is robust in India and right to mutual negotiation
As a broadcaster, I would say that interim stay orders by and contracting should not be taken away. Inter connection
various Honorable Courts has been a setback I am hopeful should be left between parties to be negotiated.
things will be back on course soon. The temporary delay may
have a short term impact on monetisation on the stake holders Another evolution that I see in interconnection agreements is
but we will all cover up in the long term. the grant of rights to platforms. We are going the Western way
wherein traditional delivery platforms are bundling rights other
Broadcasters still dont have subscriber reports to provide than linear transmission as part of interconnect agreements to
an accurate figure on total ST s seeded in AS III areas but compete with emerging next generation networks
market estimates put this number between 22 million to 25
million (between DTH and MSOs) out of a total potential of The current landscape of Regulations provide a framework for
approximately 34 million a very encouraging trend. effective monetisation except the fact that the Regulations
have to be implemented in full spirit till the last mile level.
The most intriguing fact shall be to watch how DAS IV Implementation of packaging, billing, audits are sluggish
areas respond to explosion of channels and content when which can be an effective tool for the entire value chain to
digitisation rolls out completely in such sectors. These markets get a fair share on investments. We should start building a
will suddenly have plethora of channels to view with more road to de-regulate certain areas in distribution for creating a
regional mix as well something the viewers in DAS IV areas spirit of higher innovation and investments. There is enough
were devoid off. A large part of the market place has been competition in the marketplace and progressive de-regulation
cable dark but now consolidation provides an opportunity for will build an ecosystem of better monetisation models.
various delivery platforms to bring pay content to the fingertips
of viewers in rural markets.
Rollout of channel packaging should be the prime focus of
the industry. It has taken painstaking two to three years to get
packaging completed in DAS 1 areas and markets like Kolkata
have led by example that simple determination can prove most
effective. Mumbai and Delhi have also completed the task and
MSOs have to be congratulated on their efforts.
Yet again DAS II areas are still struggling with implementation
of packaging on ground. It will require push from all quarters
Anuj Gandhi
Group Chief Executive Officer
for the completion of packaging on ground. I believe the Indiacast Media Distribution Private Limited
nless otherwise noted, all information incl ded in this col mn/article was pro ided b n j Gandhi. he iews and opinions e pressed herein are those of the a thors and do not necessaril
represent the iews and opinions of KPMG in India.
36
Re-emergence of DD FreeDish re en es, some news channels co ld choose to opt for
the potential of higher ad ertising re en es b being
ree ish, Prasar harati s free-to-air ser ice a ailable as channels on ree ish, rather than
gained prominence d ring the ear d e to two reasons pinning hopes on higher s bscription re en es b
i Rollo t of in Phase III areas where there is remaining paid.
high proportion of cable dark areas and cons mers
affordabilit for paid packages is low and ii Incl sion
of r ral market data b R India in its iewership

meas rement which has led broadcasters and While there is no denying the importance
ad ertisers to realise that there is a large a dience being of FreeDish in the growth plans of
catered to b ree ish. hile there are estimates Broadcasters, there is a completely
of an where between 20- 0 million ree ish s separate, exclusive and more premium
being sold so far, there is no reliable data on the n mber Pay TV business model, which will
of acti e ree ish sers, since does not ha e continue to be the prudent focus for the
a thorised dealers for s and once the s are major broadcasters and is imperative for
p rchased there is no tracking of their sage as the the industry to grow consistently at a
ser ice is free.2 higher rate so as to invest back in quality
programming.
ree ish on its part has taken se eral initiati es to
Narayan Ranjan
f ll tap this opport nit . he operator recentl added
0 new channels on the new MP G technolog after
mo ing its transponders to G -1 satellite.24 Earlier,
ree ish was operating sing onl si transponders Chief Financial Officer
on I - sing the old MP G-2 format. ence, Viacom 18 Media Private Limited
the operator was able to pro ide onl 6 channels
earlier, since each transponder co ld transmit onl 12-20
channels, depending on the alit of the feed and other
technical factors.2 owe er, e isting sers cannot
recei e these channels sing their e isting as those DTH revenue growth remains
wo ld be based on MP G-2 technolog and the
wo ld need to be pgraded to MP G- . healthy; Digital cable still struggling
he operator is looking to tap non- indi markets and
to raise consumer pricing
plans to add regional channels as well on its platform b operators contin ed to ha e a health re en e
reser ing special slots for regional channels in its a ction growth on the back of RP and s bscriber additions.
of channel slots. rrentl , man of ree ish s ccording to ind str disc ssions, operators ha e
sers are located in indi speaking markets with hardl seen an RP increase of 10 per cent in 201 . he RP
an regional content a ailable.26 o enco rage regional increase was dri en b price hikes there was a price
channels to be part of the platform, in the most recent increase of appro imatel -10 per cent b ideocon 2 ,
a ctions cond cted in ebr ar 2016, the operator had ata k and irtel in eptember 201 2 and increasing
set a reser e price of I R20 million per slot for regional high-definition penetration. ccording to o r
channels, while the reser e price for general channels disc ssion with ind str participants, there are 6- million
remained the same at I R million.2 owe er, there s bscribers, acco nting for appro imatel 1 per cent
was not m ch interest generated from regional channels of all s bscribers. adoption contin es to dri e
d ring the a ctions. RP growth for pla ers with the a erage RP of
a s bscriber at appro imatel 1. -2 the RP of a
ree ish f rther plans to add transponders on non- s bscriber. 0 Going forward, adoption of K s
G -1 satellite to pgrade channel a ailabilit to 2 0.2 is e pected to pick p in India, tho gh lack of K content
he biggest demand for space on ree ish co ld can be a hindrance. 1
come from news channels. large n mber of news
channels are alread , and those which are paid, also
do not generate significant s bscription re en es. ith
contin ing dela in better monetisation from s bscription
2 . he r ral rating disr ption, he Mint , ecember 201 2. oordarshan cond cting 2 th online e-a ction on 1 an ar 2016, ddfreedish.net, http //www.
2 . oordarshan ree ish adds 0 new channels, total 11 encr ption ma h rt ish s, Rtn. ddfreedish.net/doordarshan-cond cting-2 th-online-e-a ction-on-1 -jan ar -2016/accessed on 1
sia, http //rtn.asia/t-t/1 /doordarshan-free-dish- 0-new-channels-added-total-11 -incl ding-dd March 2016
37 accessed on 10 March 2016 2 . reedish set to beam p to 2 0 channels nder 12th Plan, Indian ele ision, http //www.
2 . reedish on wa to carr ing 112 channels as e ipment for capacit pgrade is installed, sa s indiantele ision.com/dth/dth-operator/dd-freedish-set-to-beam- p-to-2 0-channels- nder-12th-
Rathore, ele isionPost, http //www.tele isionpost.com/dth/freedish-on-wa -to-carr ing-112- plan-1 1212 accessed on 16 ebr ar 2016
channels-as-e ipment-for-capacit - pgrade-is-installed-sa s-rathore/accessed on 10 March 2016 2 . ollowing ata k ideocon, irtel hikes packs across India, elecom alk, http //
26. Inter iew K ain, ep t irector, oordarshan India reedish , shares that still o er telecomtalk.info/tata-sk - ideocon-airtel-hikes-dth-packs-across-india/1 2 10/accessed on 26
2 0 million people in the co ntr ha e no access to s and the target is to tap them with ebr ar 2016
reedish, elecom alk.info, http //telecomtalk.info/inter iew-ck-jain-dep t -director-doordarshan- 0. ased on ind str disc ssions
india/1 62 0/accessed on 1 March 2016 1. ideocon d2h e pects demand for K s to pick p, ele ision Post, http //www.tele isionpost.
com/dth/ ideocon-d2h-e pects-demand-for- k-stbs-to-pick- p/accessed on 1 March 2016
n the other hand, igital cable operators contin e to
face iss es in increasing cons mer le el s bscription Though HD penetration is still small, it is
RP s, as the ha e not been s ccessf l in rolling o t growing very fast. HD is already playing
tiered channel packages and ens ring collection as per a significant role in driving TH A PUs.
channel packages. 2 igher collection per s bscriber for Digital cable operators also need to focus
the M s and hence broadcasters, is possible onl after on seeding of HD-enabled STB boxes to be
the end-c stomers start pa ing for what the watch, able to grow consumer-level ARPUs.
instead of pa ing for the base pack and recei ing all
Rajesh Kaul
channels. M s will also need to psell packages with
channels to enable s bscribers to mo e to higher fee
packs. owe er, M s ha e foc sed on rolling o t
s and ind cing s bscribers to pgrade to s President
ma pro e to be an additional h rdle for M s, gi en MSM Media Distribution Private
their lack on end-cons mer marketing e perience. Limited
DTH industry is growing strength to

strength in terms of operating profitability.
Industry is still little far in terms of meeting
its capital requirements and huge content
bills. With growing subscriber base and
more transparency in content deals through
recent initiative by the regulator, the overall
industry should look profitable hopefully in
another 12-18 months time.
Anil Khera
Videocon D2H
dditionall , broadband pro ides a great opport nit for

M s to increase re en e collections per cons mer
b making some incremental in estments in their
e isting infrastr ct re. ho gh man of the large M s
ha e la nched broadband ser ices and gained some
traction, the ha e not scaled p to an meaningf l si e
et. M s need to le erage the broadband opport nit
to help ens re re en e growth and ade ate ret rns
on their e isting in estments. arger M s s ch as
athwa , en and iti able ha e been in esting on
b ilding their broadband infrastr ct re o er the past
co ple of ears. ollowing their c e, the smaller
regional M s ha e also realised the importance of
broadband for re en e growth and beginning to foc s on
broadband ser ices.
38
2. tat s Report -2016 Phase III deadline no great shakes for ind str , Indian ele ision,
http //www.indiantele ision.com/dth/dth-operator/stat s-report- -2016-das-phase-iii-deadline-no-
great-shakes-for-dth-ind str -16021 accessed 1 March 2016
. India will be a h ge broadband market o er the ne t ears Raji Kap r, Indian ele ision, http //
www.indiantele ision.com/iworld/broadband/india-will-be-a-h ge-broadband-market-o er-the-ne t-
- ears-raji -kap r-1 062 accessed on 1 March 2016
DTH and Digital cable ARPU
ARPU (INR per month) 2015P 2016P 2017P 2018P 2019P 2020P - ear GR
DTH 248 258 266 299 334 367 8%
Digital cable 214 219 230 261 298 343 10%

ote r new estimates re ect f rther dela in completion of digitisation and higher s bscribers for ree ish, re ecting its performance in Phase III areas in 201
Content deals and carriage fees

owards the end of 201 , based on a directi e b , We believe that the Indian Television
tar India had initiated a plan to pro ide all its channels Distribution Industry is at the cusp of an
on a transparent and non-discriminator RI basis and important phase, where customer needs
offered incenti es to M s based on the a ailabilit and demands will guide overall growth.
and placement of its channels . he new RI approach Customer needs will play an important role
enabled tiering of cons mers thro gh a str ct re that in deciding not just the quality of content
did not p sh all channels in the base pack and instead but also the platform on which they want
enco raged M s to create packages based on to consume the content. Most broadcasters
cons mer re irements. his had the potential to p sh have started developing their content
M s to introd ce tiered packages and s bse entl for non-linear viewing. Considering the
increase collections from s bscribers, which co ld ha e shift, MSOs have started leveraging their
benefited m ltiple pla ers in the ind str . t according existing cable infrastructure to provide
to ind str disc ssions, this did not pan o t as e pected broadband services.
and tar India has mo ed awa from sing RI for its
content deals after the earlier RI agreements e pired in
o ember 201 . V D Wadhwa
Executive Director and Chief
n the whole, in the ind str content deals between Executive Officer
M s and broadcasters contin e to be fi ed in
nat re or based on ost per s bscriber P , with Siti Cable Network Limited
man deals lasting onl a ear. lso, man of the large
broadcasters ha e net content deals with carriage
fees and s bscription re en e share being part of the
same deal. hile some of the large broadcasters ha e
managed to monetise increasing channel penetration
b ha ing separate content costs for channels, some
of the smaller broadcasters recei e similar amo nts Contrary to expectations of carriage fees
for and channels. Going forward, increasing coming down with the implementation of
penetration can be a s bscription re en e growth dri er DAS Phase I and II, there has actually been
for broadcasters. an increase in carriage fees during the last
year. The two main drivers for this are - first,
fter rollo t of s in Phase I and II markets, there most small and new channels in any genre
was a decline of 2 to 0 per cent in carriage fees b t want to be in the neighbourhood of the
there has not been an significant decline after 201 . s top channels in that genre and second,
per ind str disc ssions, there was an increase in the channels continue to be dependent on ad
o erall carriage fees paid to distrib tors in 201 d e to revenues given that subscription revenues
the la nch of new channels and channels contin ing to are not growing as expected and carriage
increase distrib tion in smaller towns and cities 1 fees help improve ratings which ultimately
areas less than class I towns with nder 0.1 million help increase ad revenues.
pop lation . s per ind str disc ssions, carriage fees
Nitin Nadkarni
remained broadl stable for e isting deals b t new deals
saw a hike of to 10 per cent in carriage fees. ooking
into 2016, carriage fees for e isting deals is e pected to
remain stable b t M s are e pected to see 10 to 1 Chief Financial Officer
per cent increase in carriage fees d e to the increasing Sony Pictures Networks India
n mber of channels being carried b each M . igher Private Limited
39 s bscription re en es for M s will ha e to start owing
thro gh before the ind str witnesses an f rther
reasonable decline in carriage fees per channel.
. e will offer all o r channels onl on RI da hankar, , tar India, fa s.com, http //www.
afa s.com/news/stor / 22 e-will-offer-all-o r-channels-onl -on-RI - da - hankar- - tar-
India accessed on 2 ebr ar 2016
Broadcasting ompanies in the e-commerce space are said to
ha e spent appro imatel I R1,200 - 1, 00 billion on
ad ertising re en e growth for broadcasters across ad ertising on in 201 , mostl on acco nt of spends
genres in 201 better than e pected, in spite of a high b pop lar sites s ch as lipkart, napdeal, abong, l ,
base in 201 d e to the general elections. he total and ikr. 6 e eral e-commerce companies la nched
ad ertising market is estimated to ha e grown at 1 per commercials for the first time in 201 and se eral
cent in 201 to I R1 1 billion, higher than the 1 per more contin e to do so in 201 , with tier II e-commerce
cent projected in o r report last ear. n the other hand companies also stepping p their mainstream media
s bscription re en e growth for broadcasters contin ed ad spends. he benefit of ad spend growth from
to nderwhelm, growing at an estimated 1 per cent to e-commerce companies was largel seen b channels,
I R billion, lower than o r e pectations of 20 per cent since the print ind str did not witness a significant
in the pre io s ear s report. increase in ad spends from the sector. s per ind str
Going forward, tele ision ad ertising in India is e pected disc ssions, the ad ertising spend b e-commerce
to grow at a GR of 1 per cent between 201 -20, companies is e pected to ha e grown at 0 per cent
to reach I R 6 billion. bscription re en e for in 201 , as the contin e to in est hea il in c stomer
broadcasters is e pected to grow at a GR of 1 per ac isition and brand b ilding. s a share of total
cent between 201 -20 to I R20 billion. his is e pected ad spends, e-tailing categor spends in ad ertising
to be dri en b i increase in the declared s bscriber base increased from appro imatel per cent in 201 to
in Phase III and I , ii increase in s bscription re en es appro imatel per cent in 201 , while total e-commerce
collected on the gro nd d e to channel packaging and spend on contrib ted to appro imatel per cent in
increasing penetration, and iii increase in re en e 201 .
share of broadcasters in the s bscription pie. he share of ports contin es to be a big dri er of ad re en es on
broadcasters in the s bscription re en e pie is e pected . he I ricket orld p is e pected to ha e
to grow from 2 per cent in 201 to 2 per cent in 2020. propped p ad spends, contrib ting I R6 billion in
ad ertising in 201 . nd tho gh IP 201 was e pected
Broadcaster industry size to s ffer from cricket iewership fatig e post the ricket
orld p, both iewership and ad re en es were
better than e pected, with IP estimated to ha e earned
appro imatel I R . billion in 201 . In 2016, as well,
cricket e ents are e pected to contrib te significantl
to ad re en e growth with IP e pected to see growth
of ad re en es to I R10 billion and I 20 world c p
e pected to earn I R billion in ad re en es.
2015 saw strong growth in advertising

backed by increased brand building in
the e-commerce and mobile handset
space. Sports was another big driver for ad
revenue growth with IPL 2015 seeing very
good revenues. The outlook for IPL 2016 is
Source: KPMG in India s anal sis 2016 based on data collected from ind str disc ssions also very positive.
ote r new estimates re ect f rther dela in completion of digitisation
ig res are ro nded to nearest integers and ma not add p e actl to col mn totals
Rohit Gupta
TV advertising revenues in 2015 President
Sony Pictures Network India Private
he tele ision ad ertising ind str witnessed a 1 per Limited
cent growth on the back of a strong econom , growing
ad spends b e-commerce companies, contrib tion from
cricket e ents and two important state elections elhi
and ihar . his is higher than o r e pectations of 1 per
cent for 201 in last ear s report.
40
. ased on ind str disc ssions . IP signs on more sponsors, e es more re en e, he Mint, March 201
6. ased on ind str disc ssions . tar India e es o er Rs 00 crore as ad re en e from orld 20, he Mint, March 2016
. ith orld p iewership worse than 2011 edition, tar misses Rs 0-crore ad target, conomic
imes, 6 pril 201
channels are also contrib ting significantl to ad The roll out of BARC India ratings
re en e growth for some broadcasters. Initiall ,
channels were offered as premi m ad-free channels
was a landmark event for the TV
and were completel dependent on s bscription industry
re en es. owe er, this has changed with broadcasters
beginning to monetise channel feeds separatel for he a dience meas rement s stem from R India
ad re en es. picall channel rates are higher d e to was la nched in pril 201 , as the sole go ernment
registered ratings ser ice in India, and as a
the premi m nat re of channel iewers.

replacement of the s stem operated b M India. R
s per ind str disc ssions, he M G categor India rolled o t its ratings in a phased manner o er the
incl ding ood and e erages, Personal and o sehold ear in 201 42
prod cts , contin ed to contrib te appro imatel 0
per cent of the ad spends on in 201 . aba Ramde - R India rolled o t its first set of data with the
promoted Patanjali r ed td also emerged as one release of the ho sehold data for all homes and
of the biggest spenders on as it seeks to establish separatel in rban areas with the pop lation of 0.1
itself as a serio s contender in the Indian M G market. million in pril 201 . his was based on the ew
Patanjali is e pected to ha e spent I R billion on ons mer lassification stem and with
ad ertising on different media between o ember 201 the following age c ts Kids - rs. , weens
and March 2016, of which a significant portion wo ld choolers -1 rs. , o th 1 -21 rs. , o ng d lts
ha e been dedicated to ad ertising.40 Patanjali started 22- 0 rs. , d lts 1- 0 rs. , Peak 1- 0 rs. ,
its ad ertising in o ember 201 when the compan Mat re 1-60 rs. , eniors 61 rs. .
la nched atta noodles. ince then Patanjali has e panded R India released Indi id al iewer ratings in ne
its ad campaigns to se en prod ct categories, o t of 201 .
the 0 prod ct categories that it sells.41
In ctober 201 , R India la nched an ind str
first ll India rban R ral iewership data.
R India c rrentl has a reach of 1 . million
Though there are other emerging sectors ho seholds with . million rban and 6 million
which are driving TV revenue growth, the r ral, spanning megacities, 1- . million towns, less
FMCG sector continues to be the mainstay than 1 million rban areas and r ral areas.
of TV advertising. In fact, the FMCG space
is getting more vibrant with the entry of
local brands such as Patanjali. Older players
such as Nestle are also trying to build their
brand image back which is all expected to
increase media ad spends. Additionally,
with the inclusion of BARC ratings, the
FMCG sector which is one of the largest
spenders in the rural markets, will be able to
allocate spends more efficiently.
Nikhil Gandhi
Vice President and Head Revenues,
Media Networks,
Disney India
In 2016, the la nch of G networks b Reliance io and

the large inc mbent mobile operators harti irtel,
odafone and Idea is e pected to boost ad spends on
. he G la nch is also e pected to res lt in higher ad
spends b mobile handset companies.
41
0. Ramde s Patanjali e es a bigger bite of cons mer goods pie with ad blit , he Mint, ecember
201
1. aba Ramde s Patanjali r ed td becomes India s biggest M G ad ertiser this week
o tn mbers adb r , Parle, he conomic imes, 6 ebr ar 2016
2. R ratings e pected to roll o t on pril 2 , siness tandard, 2 pril 201
Differences between the TAM and BARC India viewership measurement system:
Criteria TAM BARC India
Sample size 12,200 installed meters Started with a sample size of 22,000 homes with plans of to increase to 50,000 over the next
three to four years.
Coverage Urban focus Urban and rural coverage; approximately 30 per cent all samples rural
ustomer classification Uses SE classification Uses N S (New SE ) where households are classified on the basis of the education of
the chief wage earner (CWE) and ownership of a number of consumer durables from a
fixed list (like electricity connection, cars, 2-wheelers, A s etc.) which is a more accurate
reflection of their purchasing power
Technology Frequency-based peoplemeter Uses audio watermarking to track content through its broadcast cycle, which increases
integrity and reliability of the data generated. This is a code inserted into the audio
channel of the television signal which transmits through the distribution platforms and
cannot be, either deleted or overwritten in the cryptographic family it adopts.
ustomer classification Uses SE classification Uses N S (New SE ) where households are classified on the basis of the education of
the chief wage earner (CWE) and ownership of a number of consumer durables from a
fixed list (like electricity connection, cars, 2-wheelers, A s etc.) which is a more accurate
reflection of their purchasing power
Partners Research conducted by Appointed multiple partners to install meters, conduct surveys, produce sample design
Nielsen and for quality checks
Ownership Owned by AC Nielsen, Kantar Promoted by Indian Broadcasting Federation, The Indian Society of Advertisers and
Media Research and Indian Advertising Agencies Association in the ratio 60:20:20
Market Research Bureau
Source: ews articles, ompan data, KPMG in India s anal sis 2016 based on data collected from ind str disc ssions
Incl sion of new markets s ch as r ral India, orth ast far allocating media b dgets to target r ral a dience
and amm and Kashmir in the meas rement for the first witho t an concrete data to take data-backed decisions.
time and increase in n mber of ho seholds meas red, or instance, prime time in the r ral market has been
led to significant changes in the ratings in some genres. identified as the ho rs between . 0 to 10. 0pm ers s
channels from pri ate broadcasters which r n librar 6. 0 to 11. 0pm in rban markets. It has also opened
content s ch as ee nmol, tar tsa and Rishte and new a en es for ad ertising for se eral brands who ha e
p blic broadcaster ational feat red among the in the past allocated their media b dgets to oordarshan
op 10 channels consistentl . Impro ement in ratings to reach the r ral a dience.
for regional channels was also obser ed, especiall
since there was better representation of ho seholds in Incl sion of r ral ratings becomes all the more significant
o th India in the sample si e. n was a top-ranked at a time when some rban markets are tending to
channel at the all India le el for se eral weeks while become sat rated for some prod ct categories. ith
other regional channels s ch as el g , Maa , the e-commerce sector also t rning its e es towards
and sianet, etc. also entered into top 10 at different capt ring nder-penetrated r ral markets, r ral ratings
times d ring the ear. igher cons mption of indi gain e en more significance. here are also some
ews channels ers s nglish ews channels was also skeptics in the ind str who belie e that the r ral ratings
obser ed.44 are not easil monetisable d e to low le el of affordabilit
b r ral cons mers. owe er, all the stakeholders in
s per ind str disc ssions, channels mo ing to the ind str are in a disco er phase c rrentl and no
top 10 R India rankings d e to the incl sion of r ral immediate impact has been obser ed. ince most
data is nlikel to impact ad spend allocations among the ad ertising deals from large ad ertisers are long term
indi G s, since ad ertisers look at iewership trends and based on consistenc in ratings, there has been no
within specific target markets for making their ad spend effect on ad rates or re-allocation of ad spends among
decisions and not at the o erall ratings. Instead, incl sion different channels so far. Going forward, ad rates and ad
of r ral markets can enable ad ertisers who were so spend allocation co ld change e ent all , if similar trends
s stain. 42
. Ranking Pa and channels together It h rts perception of agship channels, . ews ahead of P t. nglish news channels in prime-time R , siness tandard, 1
estMediaInfo,http //www.bestmediainfo.com/201 /12/ranking-pa -and-fta-channels-together-it- ecember 201
h rts-perception-of- agship-channels/accessed on 1 ebr ar 2016 . he r ral rating disr ption, ecember 201
While the industry has already recognised Monetisation of rural markets will be one
BARC as the only television viewership of the key growth drivers for the TV news
rating system, advertisers as well as industry in the coming years. While the rural
broadcasters are careful in reading the markets currently comprise only 7 to 10 per
data and are looking at urban and rural cent of the total TVs news advertising pie,
viewership in different lights. It is still they are expected to grow at rapid rate.
early to see any significant movement in

ad rates but it is likely that going forward
channels which are more urban-focused
will command a premium.
Gulab Makhija
Independent News Service
N P Singh Private Limited (India TV)
Sony Pictures Networks India Private
Limited
M, ia an agreement with R India e ited the
a dience meas rement space and all meters of
R India and M will be transferred into a 1
joint ent re known as Meteorolog ata imited
n the content side as well, the combined r ral and M . his will ens re that there is onl one c rrenc
rban ratings will be gi en time to settle down before for iewership meas rement and strengthen R
broadcasters start making changes. he top-ranked India s ratings b increasing its reach. s part of the
pa indi G s and highl -ranked pa channels in other ,M will manage the panel ho seholds and f rther
genres are nlikel to t rn as their s bscription panel e pansions while data will be comp ted and
re en es are s bstantial, with e pectation for f rther disseminated thro gh the R India ratings data
impro ement. t some broadcasters ma la nch software R India Media orkstation M .
film channels or a few of the laggard channels in
other genres ma t rn . Incl sion of r ral markets
in ratings and Phase III digitisation together ha e
led to higher importance on ree ish and more
broadcasters co ld consider becoming a ailable on Both BARC Indias BAR-O-Meters and
ree ish s platform. roadcasters are also likel TAMs Peoplemeters will now be a part
to re iew their programming to accommodate the of Meterology Data Pvt Ltd. (MDL), the
content cons mption patterns in r ral markets as well. company formed post the JV. TAMs
peoplemeters will now be de-installed in
phases and will be re-deployed in BARC
India selected panel homes. The industry
Over the past few years, TV viewership is was looking for a single TV viewership
fragmenting across genres and regions measurement currency to avoid confusion.
including rural. As a result, the investment The move will also ensure that industry
in content is on the rise. However, scaling benefits from this single currency which is
up content investments for rural market is created and owned by them.
unlikely to be economically feasible if the
channels continue to be FTA and are not
supported by subscription revenues. Partho Dasgupta
Mihir Modi BARC India
Chief Finance and
Strategy Officer
ZEE Entertainment Enterprises Limited
43
R India plans to start pro iding digital a dience India has iss ed a Re est for Proposal in ecember
meas rement b meas ring nd plicated a diences 201 , which elicited a positi e response from 11
thro gh a single so rce panel, across all de ices and global agencies incl ding ielsen, Kantar Media and
platforms, meas ring combined programme impressions com core. R India also intends to collaborate with
or ad ertisements regardless of where and how the content creators in order to maintain the acc rac of the
content/ad is being cons med. s part of this, R findings.46
Impact of BARC India ratings on advertising revenues
Industry ARPUs can be increased using

Half the money I spend on advertising
a combination is wasted;
of strategies such as the trouble of a differentiated rural offering. Therefore giving the TV
is, I dont knowensuring
which half. Thus said John
implementation Wanamaker,
of proper medium an edge where the FTA channels are able to provide
200 years ago.andThetransparent
scenario wasnt verytodifferent
systems minimieuntil customised offering to viewers.
a few months ago, until BARC
leakages, India started
implementation reporting
of channel
India viewership numbers.
packages andWith 75 per cent growth
the subsequent upsellingin TV Future perfect
households over the last
of these decade,toTelevision
packages consumers. has always
featured as a very important With the governments push on rural banking and employment
ARPU will onlycomponent
increase asacross
a resultmarketing
of schemes, the sector focus will improve on financial service,
plans. But withcollaborated
no metric toefforts
gaugeby theMSOs
Indiaandviewership
LCOs
numbers, the medium Auto and Real estate. FMCG will continue to rule the roost
to make has been undervalued
the consumer move to for long.
a higher as mature categories of urban areas are in their growth phase
level package. Also, premium channels in rural India. We will witness a new impetus in spends from
Increased reach such asand high potential
HD channels can lead to an these categories.
TV penetrationincrease in ARPU.
in rural stands at 40 per cent and a huge chunk
still remains untapped, indicating huge growth potential
Jagdish Kumar
Content connect
for the medium. The true potential of the ROI generated by
the medium will now be realised as the entire India is being Within the Television content space, news is not the only genre
monitored. TheChief Executive
absolute Officer and the CPT
eyeballs delivered in demand. The rise of Hindi general entertainment channels,
Hathway
generated vis--vis otherCable
mediums& Datacom
will comeLimited
back in focus. notably Zee Anmol, Movie and Music channels only indicates
the appetite of this audience for more content.
Quality audience In line with the demand, content availability too has increased
With 2/3rd of the consuming population residing in Rural manifold. Recently, DD Free Dish has increased its capacity
India and accounting for 50 per cent of the GDP, the rural from 64 to 80 channels and is planning to take it up to 112
consumer is responsible for changing the Rural India image channels. The OTT platforms through increasing smartphone
to Emerging India. This Consumer is evolving, with a 45 per penetration will only serve as an extension of the TV growth
cent of viewers belonging to the consuming NCCS AB class story in these markets. With regional channels added in the
and younger age group. As per a study carried out by Nielsen FTA basket, the economic dynamics are set to change from a
amongst Rural Superconsumer, 90 per cent of the respondents market prioritisation level as well.
reported Television to be the most effective channel All developments have only charted a new chapter in the TV Ad
influencing their recent purchases. Until now, multiple routes story of the country.
such as BTL and Outdoor was used extensively by Marketers
to reach this audience, but now with visibility and delivery
efficiency TV will garner the most.
Scale and ROI vs other mediums

Television offers scalability, ROI and communicate in a
sustained manner through simple messaging in an audio-
visual manner. The same cant be said of OOH or BTL where
the medium is struggling with scalability, ROI and a relevant
measurement metric. Advertisers will now have a choice
to shift their budgets and streamline their communication.
In terms of the Ad pie, this will be a shift to watch out
Ashish Sehgal
Chief Sales Officer
for. Other mediums like Print and Radio suffer from lack ZEE Entertainment Enterprises Limited
44
nless otherwise noted, all information incl ded in this col mn/article was pro ided b shish ehgal. he iews and opinions e pressed herein are those of the a thors and do not necessaril
01. XXX represent the iews and opinions of KPMG in India.
6. op research firms line p to partner R for digital meas rement, he Mint, 16 ebr ar 2016
Geo targeting of ads on TV targeting ads on can also res lt in e isting ad ertisers
on print and radio di erting a part of their f nding to
Geo-targeting is the method of determining the location from other media s ch as print. 1
of a ser and deli ering different content or ad ertising
to that isitor based on his or her location. his has here is considerable scope for geo-targeting, considering
largel been sed for internet ad ertising b t is now that the Indian market is nderpenetrated and India
being le eraged for ad ertising as well in order to is a heterogeneo s market. rrentl , geo-targeting
contrib tes to a er small portion of the ad ertising
foc s ad ertising efforts on a partic lar target gro p

in an area. In the Indian space, geo-targeting has pie b t ind str participants e pect its share to increase
notabl been emplo ed in a significant wa b ee and significantl . It wo ld be possible to accelerate growth
tar. In 201 , ee adopted the bespoke sol tion for ee b adopting certain practices followed b international
inema, ha ing tasted s ccess pre io sl with some of markets. irst, ideo programming companies can share
its channels s ch as ee ews, ee , ee Marathi, ee their s bscriber data with data research companies, who
Kannada and ee angla. In 201 , tar India la nched in t rn can ad ise media companies and ad ertisers as
dsharp , a platform for broadcasting localised ads. to which spots to target. econdl , apart from linear
tele ision, on-demand iewership sho ld also be looked
Geo-targeting, also known as programmatic or at. s migrates to the internet platform, higher growth
addressable , is an inno ati e method to enhance the in digital geo-targeted ad ertising is also e pected. his
se of a ailable ad in entor . d ertisers can choose can be achie ed ia modern processes like Interacti e
to air different ads on the same channel in different ele ision which is offered b omcast, a m ltinational
regions to ma imise the impact and red ce costs. This mass media pla er, where clients can e pand the reach of
is especiall important in a fragmented, price sensiti e tele ision thro gh web interacti it and also b engaging
market like India. 0 Geo-targeting can help attract new with c stomers directl . 2 dditionall , in the long term,
ad ertisers, especiall small b sinesses and regional geo-targeting can be sed to not onl to target a diences
pla ers, who are facilitated to la nch ad ertisements for effecti e ad ertising, b t to also c stomise the
e cl si el in their concerned region of operation. Geo- message con e ed ia methods like single sign-in and
a tomated content recognition.
TV Ad-tech the unfolding revolution
TV business is going through a fundamental metamorphosis Targeting on pan-regional TV

worldwide. The art of story telling in video continues to be and Amagi which pioneered geo-targeting by partnering with multiple
will be a dominant form of entertainment. It is the underlying TV networks in India, has also helped TV networks to geo-target
business models, technology and operating methods that advertising in Russia, Brazil, Singapore and Middle East as well.
are changing to adapt to the new world of globalised content STAR India also runs its own geo-targeting network enabling
distribution and our changing behaviour of watching video on regional buys on their TV channels.
our mobile devices. All media other than TV have always been
targeted, be it local editions on print, city-specific M radio, Given its cultural diversity and regional differences, there is a
area-specific billboards and personalised media consumptions pressing need in India for regional targeting of advertisements
in Internet enabled devices. TV, although being one of the on TV. The country is currently split across 17 markets where
largest advertising mediums, sorely lacked targeted advertising advertisers can buy inventory on premium TV channels for each
options. With the advent of Internet devices and IP connected of the regions. These regions are mapped to BARC measured
set-top boxes, advertisers have woken up to the idea of targeted markets, which enable advertisers to be able to plan holistically
advertising on TV. across geo-targeted ad spends and their national media spends.
TV ad tech is expanding in three dimensions i) Geographic and Across India, large advertisers to regional SME brands have
demographic targeting on pan-regional TV, ii) Personalised leveraged targeted TV advertising, and are growing at a dramatic
targeting on live and on-demand TV content on connected pace in leveraging this media option.
devices, iii) Data-driven programmatic buying.
Demographic targeting on TV is one of the biggest trends in the
U.S. Given tens of millions of set-top-boxes with IP connectivity,
data collected from viewership is driving targeting across rich
demographic segmentation.
. magi and ee e pand partnership for geo-targeted ads, Indian ele ision, http //www. 1. ee to offer geographic targeting of ads, fa s, http //www.afa s.com/news/stor / ee-
indiantele ision.com/tele ision/t -channels/mo ie-channels/amagi-and- ee-e pand-partnership-for- -to-offer-geographic-targeting-of-ads accessed on 1 March 2016
45 geo-targeted-ads-1 0 16 accessed on 1 March 2016 2. omcast, https //www.comcastspotlight.com/ad-sol tions/o er iew/ad-sol tions-geographic-
. tar India a nches d harp Re ol tionar oncept hat llows d ertisers o Geo-target targeting accessed on 1 March 2016
ds, rak.in, http //trak.in/tags/b siness/201 /0 /1 /star-india-adsharp/accessed on 1 March 2016 . hat brands need to know abo t programmatic , igida , http //digida .com/agencies/need-to-
. ere s how channels are geo-targeting ads, Mone control, http //www.mone control.com/ know-programmatic-t -dont-call-programmatic-t /accessed on 1 March 2016
news/special- ideos/heres-how-t -channelsgeo-targeting-t -ads 160.html accessed on 1
March 2016
0. e elp hannels o M ltipl heir d In entor K rini asan, magi Media, d ertising
ge India, http //www.adageindia.in/media/we-help-t -channels-to-m ltipl -their-ad-in entor -ka-
srini asan-amagi-media/articleshow/ 66 .cms accessed on 1 March 2016
Personalised targeting on live and on-demand Future exciting
TV Over the next few years I envision an all-encompassing
2015 was the year TV content worldwide started to come on demand-side platform that allows advertisers to express
online platforms in a big way. TV networks are starting to build their objectives. These platforms would then connect with
direct-to-consumer strategies for reaching their audience. multiple supply-side platforms across different media options,
analyse large amounts of data from multiple data sources and
As TV content in both live and on-demand move to IP come with the most optimal media plan for the objective the
connected devices, TV networks are building TV-like content advertiser is looking to meet.
experiences with personally-targeted advertising on connected
devices. This has been the holy grail of advertising; to target Lines will be blurred across traditional and online medium.
individuals and serve the most apt advertising. Machines will integrate them into a seamless media planning
and buying experience for all big and small advertisers.
In India, there are multiple TV networks bringing their linear
and on-demand content online. With the expected increase I am excited and looking forward to this new world order. Are
in 3G and 4G penetration, TV content owners are preparing you ready for this change?
to monetise their content online, and advertising is the most
dominant commercialisation option available at this point of
time.
There are multiple initiatives worldwide to enhance video
advertising with interactivity and context to enhance audience
connect. In the next few years lot of these would come to our
mobile devices as content owners and advertisers are looking
to make the video experience as personalised as possible.
Data-driven programmatic buying

TV has been historically bought in a traditional brick-n-mortar
model. That is about to change. Media buyers are starting
to leverage online programmatic buying platforms to buy TV
inventory. Internet-media buying practices of leveraging data
and real-time bidding are starting to come into the TV buying
market.
Given TV on traditional and connected platforms are nothing
but video, media buyers are looking to integrate their buys
across online video and TV. There are initiatives worldwide to
create an integrated GRP metric and identifying unduplicated
reach across all viewing platforms.
Democratising advertising
The availability of targeting across devices and online
buying models is democratising advertising and bringing
new advertisers. At Amagi we get close to 000 first time
advertisers asking for advertising options on a monthly basis.
These are largely SME brands across different regions in the
country and span businesses ranging from education, FMCG,
Baskar Subramanian
Co-founder
real estate to consumer goods and local services. Amagi Media Labs
nless otherwise noted, all information incl ded in this col mn/article was pro ided b askar bramanian. he iews and opinions e pressed herein are those of the a thors and do not
necessaril represent the iews and opinions of KPMG in India.
46
Genres tar tsa and Rishte started appearing in the top 10
channels list, with ee nmol sta ing in top for some
ele ision iewership contin ed to be dri en b indi time. his was a prod ct of the higher reach of the
and Regional G s, which acco nted for majorit of the channels in r ral areas and their presence on
total iewership, contrib ting per cent to the total ree ish.
iewership o er the period eek 1, 201 to eek ,
2016, based on data from R India G ll , Market n the content side, indi G s contin ed to e periment,
b t with mi ed res lts. ictional shows saw a shift
ll India, Period k 1, 201 to k , 2016 . indi

mo ies genre acco nted for 1 . per cent iewership from the t pical famil dramas to themes s ch as the
o er the same period, followed b Regional mo ies genre s pernat ral, m tholog and histor . ith the s ccess
which acco nted for 6.6 per cent of iewership. ews of aagin , a new s pernat ral show which has climbed
channels incl ding Regional ews acco nted for 6. per to the top of the R India ratings ladder, 6 man
cent iewership. e isting shows s ch as as ral imar Ka and eh ai
Mohabbatein ha e also started incl ding s pernat ral
themes in their stories. Incidentall , roadcasting
Viewership share by genre in 2015 ontent omplaints o ncil , the independent
self-reg lator bod formed b the broadcasters, has
iss ed an ad isor for s ch shows to emplo the
necessar restraint and ma im m discretion while
portra ing occ lt, s perstition, black magic, e orcism and
witchcraft. owe er, long r nning shows s ch as eh
ai Mohabbatein , aath ibhana aathi a , K mk m
hag a , i a r aati m and as ral imar Ka
contin ed to be pop lar as man new la nches in the
ear failed to make a mark. Man new la nches, while not
lacking in inno ation or alit of content, were p lled off
the air after onl a few months d e to poor performance.
e to the intense competition in this genre, man new
shows were j st not able to garner eno gh e eballs to be
iable. or instance, adtamee il , a romantic m sical
series on tar Pl s was p lled off the channel in j st two
months and was instead shifted to otstar, while ab
stopped airing fo r of its new shows on the same da
within fo r months of their la nch.
Source: R India, G ll , Market ll India, Period k 1, 201 to k , 2016 op right 2016
roadcast dience Research o ncil India. ll rights reser ed. Reprod ction of an matter
p blished in this report, in part or whole, in an lang age or format, or deri ati e work, witho t hile the pre io s few ears had seen onl the
the e press written permission of
action.
R India is strictl prohibited and will be liable for legal contin ation of old non-fiction shows, this ear there
ote nglish ews incl des nglish General ews and nglish siness ews indi ews was significant e perimentation in the non-fiction space.
incl des indi General ews and indi siness ews nglish ntertainment incl des
nglish G s and nglish Mo ies. owe er, similar to their fiction co nter-parts, none of
them were able to make a major breakthro gh. n air
with I on tar Pl s and tar orld along with otstar,
a new initiati e b the o nger generation of content
Hindi GECs prod cers, was an attempt to bridge a gap in the market
indi G s remained the clear fa o rite on the and met with moderate s ccess.60 daptation of new
ad ertising front, witnessing a growth of 1 to 16 per international formats was seen in this space as well. tar
cent in ad re en es in 201 . ho gh the introd ction of Pl s e perimented with aj Ki Raat ai indagi with
new iewership meas rement s stem b R India mitabh achchan which is based on the ritish show
led to ambig it in ratings, the top performing shows onight is he ight and new dance realit show ance
saw increased ad spends based on past performances Pl s while ee which had t picall sta ed awa from
and internal assessments b ad ertisers. he incl sion international format shows, tried its hand with I an
of r ral data in the sample si e led to a scale p in the o hat as well as the hah R kh Khan-hosted India
rankings of channels. channels s ch as ee nmol, Poochhega abse haana Ka n and later he oice India
on .
. mi ed bag for G s, ele isionPost, http //www.tele isionpost.com/special-reports/201 -a- . eni, idi, non ici hows that didn t last on in 201 , Indian ele ision http //www.
mi ed-bag-for-hindi-gecs/accessed on 20 ebr ar 2016 indiantele ision.com/tele ision/t -channels/gecs/ eni- idi-non- ici-shows-that-didnt-last-on-t -
. ear of nip and t cks for indi G s, Indian ele ision, http //www.indiantele ision.com/specials/ in-201 -1 101 accessed on 21 ebr ar 2016
47 ear-enders/201 -1 122 accessed on 20 ebr ar 2016 . Phir hi a Maane adtamee il to Go ff ir beer-Meher s how to be Replaced b K ch oh
6. R Ratings, eek 10 aagin, eh ai Mohabbatein, K mk m hag a ere are the top-rated ai ere Mere armi aan , International siness imes, http //www.ibtimes.co.in/phir-bhi-na-
shows of the week , boll woodlife.com, http //www.boll woodlife.com/news-gossip/barc-ratings- maane-badtamee -dil-go-off-air-abeer-mehers-show-be-replaced-b -k ch-toh-hai-6 26 accessed
week-10-naagin- eh-hai-mohabbatein-k mk m-bhag a-here-are-the-top-rated-shows-of-the-week/ on 1 March 2016
accessed 1 March 2016 60. ith n ir with I , tar India laims to a e it the ll s- e nline ere s ow, d ertising
. asks channels to e ercise restraint when showing occ lt shows, ele isionPost, http // ge India, http //www.adageindia.in/digital/with-on-air-with-aib-star-india-claims-to-ha e-hit-the-
www.tele isionpost.com/tele ision/bccc-asks-t -channels-to-e ercise-restraint-when-showing- b lls-e e-online-heres-how/articleshow/ 6 661 .cms accessed on 1 March 2016
occ lt-shows/accessed on 20 ebr ar 2016
ome of the leading channels also saw higher slot with the la nch of a new comed show with Kapil
in estments in content and e panded the n mber harma.6
of original content ho rs aired. hile tar Pl s had
e tended their weekda fiction shows to weekends last worrisome trend of the ear was the fre ent threats
ear, ee followed s it this ear.61 olors la nched of strike from workers and different crafts nions.
two new shows for the weekend prime time slots, roadcasters and prod cers were forced to ndertake
aagin and omed ights i e 62. on too has drastic meas res s ch as shifting the prod ction of
planned a new la nch for the weekend prime time shows o tside M mbai.64
op fi tion hara ters on Hindi s

Rank Character Show Channel
1 Ishita Ye Hai Mohabatein Star Plus
2 Jethalal Tarak Mehta Ka Ulta Chashma Sab TV

3 Ashok Chakravarti Ashok Samrat Colors
4 Sandhya Diya aur baati hum Star Plus
5 Akshara Ye Rishta kya kehlata hai Star Plus
Source: haracters India o e, an- ec 201 , rma Media
op non-fi tion hara ters on Hindi s

Rank Character Show Channel
1 Kapil Sharma Comedy nights with Kapil Colors
2 Prince Narula Big Boss Colors

3 Sanlman Khan Big Boss Colors
4 Mandana Karimi Big Boss Colors
5 Anoop Soni Crime Patrol Sony
Source: haracters India o e, an- ec 201 , rma Media
Hindi movies alread crowded market, ind str participants e pect

the la nch to lead to onl marginal increase in prices of
Prices for rights of indi mo ies declined rights. he indi mo ies genre is mostl sed for
significantl in 201 , b t ha e stabilised since then.6 The fre enc b ilding and in the past, the genre has largel
steep increase in prices of rights in the past was grown on the back of increase in ad in entor thro gh the
d e to the entr of a n mber of channels that dro e the addition of channels. ence, it is e pected that addition of
prices p. owe er, the past co ple of ears ha e seen a a indi mo ie channel from one of the large broadcasters
rationalisation in prices of rights of mo ies. will help in getting increased ad b dgets from the
Mi of pre-release and post-release deals for rights ad ertisers on this genre.
contin ed in 201 , with the big banners insisting on
signing pre-release deals. In the case of pre-release
deals, man of the deals are being linked to the bo office Regional entertainment
performance of films, e cept for a few -lister mo ies. s per data from R India meas rement s stem,
n an a erage, e er ear, each of the large broadcasters Regional ntertainment channels comprising of Regional
p rchase rights for 2 to categor films, to 6 G s, Regional Mo ies and Regional M sic acco nted
categor films and to 10 categor films, depending for . per cent iewership share o er the period
on the b ndled deals with the prod ction ho ses.66 The eek 1, 201 to eek , 2016 G ll , Market ll
cost of ac isition c rrentl aries from I R100-200 India, Period k 1, 201 to k , 2016 . imilar to indi
million for a mid-b dget mo ie to I R 0-600 million for peaking Markets M , G s are the leading genre in
a blockb ster.6 regional markets as well with 2 .6 per cent iewership
iacom1 la nched its indi mo ie channel Rishte share followed b Regional Mo ies with 6.6 per cent in
ineple in ebr ar 2016, which sho ld help the 201 . mong the regional markets, amil channels occ p
broadcaster in better monetising its rights. ho gh the biggest share with 2 . per cent share in iewership
this will add to the competition in iewership in an and el g market is the second largest with 2 . per cent
iewership share.
61. ee e tends programming to 6 da s with new show, ele isionPost, http //www.tele isionpost. 6 . mi ed bag for G s, ele isionPost, http //www.tele isionpost.com/special-reports/201 -a-
48
com/tele ision/ ee-t -e tends-weekda -programming-to-6-da s-with-new-show/accessed on 21 mi ed-bag-for-hindi-gecs/accessed on 10 March 2016
ebr ar 2016 6 . atellite rights rates for indi films drop 0 , he Mint, 1 an ar 2016
62. olors beefs p weekend programming line- p with two new shows, change media, http // 66. ased on ind str disc ssions
www.e change media.com/t /colors-t -beefs- p-weekend-programming-line-- p-with-two-new-
shows 6 1 .html accessed on 21 ebr ar 2016 6. Game of content, inancial press, 22 eptember 201
6 . ill on be able to climb the ratings chart with the Kapil harma how, change media, http //
www.e change media.com/t /will-son -be-able-to-climb-the-ratings-chart-with- 2 0 the-
kapil-sharma-show 2 0 6 .html accessed on 10 March 2016
Viewership share of regional channels
Broadcasters in the regional markets
are looking at improving the quality of
content on their channels. The entry of
big production houses in the South Indian
markets as well as the declining popularity
of dubbed programmes has led to a shift
in programming from dubbed content to

remakes of Hindi content both in fiction
and non-fiction.
K Madhavan
Managing Director
Asianet Communications
Limited (Star-Asianet)
Source: R India, G ll , Market ll India, Period k 1, 201 to k , 2016 op right 2016
roadcast dience Research o ncil India. ll rights reser ed. Reprod ction of an matter
p blished in this report, in part or whole, in an lang age or format, or deri ati e work, witho t
the e press written permission of R India is strictl prohibited and will be liable for legal
action.
Regional markets are e pected to grow largel in-line

with the national ad markets, contrar to what was seen
o er the past few ears. Regional markets are et to see Regional is a misnomer for other
the benefits of ad spends from -commerce pla ers and language markets and the sheer scale
this ma res lt in some pside in ad ertising re en e and reach of these non-Hindi GECs and
growth for regional channels. language markets is much greater than
many other national genres. And even
e to the increasing competition intensit , regional within HSM, markets such as Marathi and
channels now are looking at in esting in original content engali are redefining content benchmarks
in addition to d bbed content which has increased and even beating the Hindi GECs.
their content costs. riginal content prod ctions Advertisers are thus increasing their
costs between I R ,000 to I R1 0,000 per episode spends on these local language GECs.
compared to d bbed content which costs onl aro nd
I R2 ,000 per episode.6
ational broadcasters contin e to aggressi el e pand
Anuj Poddar
and consolidate their positions in regional markets owing Executive Vice President
to the growth potential. In 201 , iacom1 rebranded Viacom18 Media Private Limited
their regional G s ac ired from in fi e lang ages
nder the olors mbrella in order to better monetise
from the entire bo et of channels across platforms.6
In the f t re, if competition contin es to be high, smaller
pla ers ma not be able to compete with the big pockets
and higher reach of larger pla ers leading to f rther
consolidation in the market. 0
49
6 . Regional In asion, siness oda , 26 pril 201 0. tandalone regional channels face heat from national networks ac ire-e pand strateg ,
6 . iacom1 completes Kannada re-branding nder olors mbrella, Indian ele ision http //www. change media, http //www.e change media.com/t /standalone-regional-channels-face-heat-
indiantele ision.com/tele ision/t -channels/regional/ iacom1 -completes-et -kannada-re-branding- from-national-networks 2 0 -ac ire-e pand-strateg 60 .html accessed on 21
nder-colors- mbrella-1 0 22 accessed on 22 ebr ar 2016 ebr ar 2016
News
d re en e growth for ews channels was m ted The News genre has benefitted from the
in 201 , coming on the back of an election ear. s introduction of BARC ratings. The news
per ind str disc ssions, the news ind str grew industry has been making investments
at mid-single digit rates of - per cent. M ch of the in TAM dark areas even before BARC.
growth came from increased spending of non-traditional The hard work of these investments will
pla ers s ch as e-commerce and a to while spending b now finally pay off as the channels can
traditional pla ers s ch as M G and financial ser ices start monetising from these regions.
was lower than e pected. owe er, according to ind str
disc ssions, Patanjali, a cons mer prod cts brand led b
aba Ramde emerged as one of the biggest spenders
with ad spends mainl in the news genre.
Ashok Venkatramani
er the past two ears, man of the top news ABP News Network Private Limited
broadcasters ha e red ced their ad in entor b
showcasing abo t 1 -20 min tes of ads on indi news
channels. his red ction in ad in entor has howe er, not
been matched b an e al increase in ad rates which
grew in the low single digits. ome of the indi and
regional news broadcasters ha e tried to balance this b Kids
targeting smaller and niche brands, which do not ha e
access to the negotiating power of the larger media he Kids genre, which has long been nder-inde ed
b ing agencies. hile c rrentl these smaller brands in terms of ad re en es, is seeing health ad ertising
contrib te to onl 0 per cent of the news ad ertising pie, re en e growth dri en mainl b non-traditional
o er the ne t few ears this is co ld increase to as m ch categories which are not normall targeted at kids,
as 60- 0 per cent for the indi and regional news genre. 1 s ch as e-commerce and a tos, ad ertising on Kids
genre. cross ario s channels, on an a erage the
he ear 201 was not a good ear e en from the non-kids brands contrib te to to 6 per cent of the
perspecti e of costs, as the benefits of digitisation in entor , with 0 per cent of ho seholds owning onl
ha e not f ll set in and news channels contin ed to a single a lot of defa lt iewing occ rs. Gi en this
see an increase in emplo ee and talent costs. arriage scenario, broadcasters decided that the needed to tap
fee which was s pposed to contin o sl decline with the ad ertising potential of non-kid prod cts as well,
digitisation, in fact increased for new deals. ews especiall those foc sing on mothers.
channels still do not see m ch potential in s bscription-
based re en es.
ew la nches in the news genre contin e. ee ews is
la nching an nglish news channel, adding to its bo et Kids today are making their own choices
of 10 indi and regional news channels, and will lead to regarding what to see and when to see.
increased competition in the alread highl competiti e uring a fixed part of the day, kids have
nglish ews space. 2 hile consolidation in the news uncensored viewing of the TV which they
space makes sense d e to lack of financial iabilit of consider as their Me time. Kids have also
so man news channels, it is nlikel to happen o er started taking great pride in their brand
the short-term d e low cost of entr and e it as well as associations with content and products.
imbalance in al ation e pectations. This has created a whole new primetime
for the Kids genre.
ith increasing penetration of internet and smartphones,
Vijay Subramaniam
cons mption of news on digital platforms contin es
to gain traction, incl ding li e streaming of news
channels. Going forward, ind str participants e pect
that digital will act as a complementar so rce of Vice President and Head Content
re en es for news broadcasters. ews broadcasters and Communications,
are also tr ing to le erage the digital opport nit b Media Networks
increasing iewer engagement on social media. Disney India
50
1. ased on ind str disc ssions . on-traditional ad ertisers ock to rner s kids channels, Indian ele ision, http //www.
2. M targets pril - ne la nch of nglish news channel, Indian ele ision, http //www. indiantele ision.com/tele ision/t -channels/kids/non-traditional-ad ertisers- ock-to-t rner-s-kids-
indiantele ision.com/tele ision/t -channels/news-broadcasting/ mcl-targets-april-j ne-la nch-of- channels-16012 accessed on 22 ebr ar 2016
english-news-channel-160226 accessed on 10 March 2016
ith an increase in locall prod ced shows, with pro iding app based ser ices s ch as atch and
broadcasters are now looking at opport nities be ond Pla and n thing to enable kids to pla games and
con entional free commercial time deals to brand watch ideos at the same time while shifting Pogo to a
association and integration to increase their re en e more responsi e website that can be accessed thro gh
potential. ickelodeon entered into ario s in-show m ltiple de ices.
prod ct placement deals with G K s orlicks while Pogo
incorporated brands s ch as entre r it and ngle
English entertainment
Magic in its animated film hola d ent res . hese

deals are still at a nascent stage, contrib ting he nglish entertainment genre, consisting of nglish
appro imatel 10 per cent of re en es, but are mo ie channels and nglish G s, has been seeing
e pected to dri e growth going forward. a positi e growth in ad re en es o er the past ears,
he third part ac isition model still remains a er growing b 1 to 20 per cent ann all . 6 mong the two,
common model of ac iring content. owe er, co- nglish G s grew faster than nglish mo ies channels.
prod ction of content with an animation st dio as well as owe er, the genre contin es to be b rdened with rising
wholl -owned models also e ist. hile the proportion of content costs d e to the increase in prod ction cost in
local and international content aries from channel to international markets witnessing almost a threefold rise
channel, there is an increasing shift towards local content in the past few ears. owe er, large broadcasters
and is e pected to to ch 0 0 o er the ne t fi e ears. contin e to in est in their nglish bo et in anticipation
etter economies of scale, consistenc and alit has of it dri ing s bscription re en e growth, owing to the
dri en most of the b siness to international markets. premi m positioning of the channels.
owe er, Indian firms that foc s on cost-effecti eness iacom1 la nched a new channel, olors Infinit , in
and alit are set to emerge in the f t re. l 201 to showcase new international shows to the
roadcasters looked at ario s e perimentations and mass. his took the n mber of channels fighting for a
inno ations to increase the genre s iewership and small re en e share in the nglish entertainment genre
similar to the past few ears local content contin es to 20. n the other hand, tar sh t down o rime and
to work with the a dience. a nch of a home-grown rner sh t down its premi m s bscription channel
animated series based on a pop lar indi tele ision efined 1 its will be re-branded to , as
character called hhoti nandi for kids as well as t ing the did not gain eno gh traction.
p with pop lar indi mo ies to prod ce kid-foc ssed roadcasters are now also looking at localisation
content were some of the ke de elopments. of content to bring down costs as well as pro ide
Another upcoming opportunity is the potential in differentiated content. hese range from shows s ch
regional Kids channels. As per industry experts, kids do as he tage on olors Infinit , the first-of-its-kind
not really require hyper-local associations with Indian nglish m sic realit shows 2 to n ir with I
characters with them but instead connect better with that p t a h moro s spin on societal iss es. nother
content that is available in local languages. Sun TV trend that has been er s ccessf l is that of channels
Network currently leads this space with one channel in showing back-to-back episodes of shows in order to
each of the four South Indian languages Tamil, take ad antage of binge-watching, leading to better
Telugu, Malayalam and Kannada. Many leading engagement with the a dience.
channels in the genre such as Pogo, Cartoon Network, Gi en that pirac is most rampant for nglish
Disney and Hungama provide their Kids channels with entertainment content, nglish channels are tr ing to
Tamil and Telugu audio feeds. bridge the time gap between . . and India show timings,
owe er, this genre is among the most digitall adapted with tar orld Premiere taking the lead on this.
segments with a plethora of kid foc sed mo ies and
shows a ailable on platforms s ch as o be and
etfli . In order to o ercome this threat Kids channels
are integrating digital strategies with TV and engaging
kids thro gh m ltiple media. rner is e perimenting
. rand integration contrib tes 10 to kids genre re en es, change media, http //www. 0. tar India to p ll c rtains on o rime, ele isionPost, http //www.tele isionpost.com/tele ision/
e change media.com/t /brand-integration-contrib tes-10-to-kids-genre-re en es -e pected- star-india-to-p ll-c rtains-on-fo -crime/accessed on 1 an ar 2016
togrow-f rther 602 .html accessed on 22 ebr ar 2016 1. its to be rebranded , he ind siness ine, 20 o ember 201
. ased on ind str disc ssions 2. ith n ir with I , tar India laims to a e it the ll s- e nline ere s ow, d ertising
6. nglish channels see health ad re en e growth in 201 , ele isionPost, http //www. ge India, http //www.adageindia.in/digital/with-on-air-with-aib-star-india-claims-to-ha e-hit-the-
tele isionpost.com/special-reports/english-channels-see-health -ad-re en e-growth-in-201 / b lls-e e-online-heres-how/articleshow/ 6 661 .cms accessed on 1 March 2016
51 accessed on 22 ebr ar 2016 . olors Infinit to air new show he tage , he Indian press, 1 eptember 201
. Pirac notwithstanding, nglish ntertainment genre charts growth stor , Indian ele ision, http // . tar orld Premiere to sim lcast 2 shows in India with . ., Indian ele ision, http //www.
www.indiantele ision.com/tele ision/t -channels/english-entertainment/pirac -notwithstanding- indiantele ision.com/tele ision/t -channels/english-entertainment/star-world-premiere-hd-to-
english-entertainment-genre-charts-growth-stor -1 0 2 accessed on 22 ebr ar 2016 sim lcast-2 -shows-in-india-with- s-1 0 22 accessed on 2 ebr ar 2016
. i e shows to watch o t for on olors Infinit , India oda , 1 l 201
. emand for shows, mo ies in english dri es entertainment, mo ie channels, conomic imes, 11
l 201
leag es need to p t in place better infrastr ct re, consistenc of
English broadcasting needs to be formats and plan for a better and longer engagement with fans in
re-evaluated by the industry. 4 years of order to make mone . Regional cricket leag es s ch as the KP
Digitisation has increased the penetration are also an pcoming trend to reach o t to a newer a dience and
of this category tremendously. At 80 million has the potential to emerge as a pop lar ad ertising medi m for
viewers nationally, English broadcasting regional brands. 0
is not niche anymore. It is a reach medium. ompetition in the sports genre is e pected to intensif
And we are talking about reaching the most with on Pict res etworks India P la nching two new
influential segment of Indian society. In channels, P re-branded from on Ki and
fact, it is actually the only truly pan-Indian P , in an ar 2016 in collaboration with P . 1 P
homogenous national audience that we now offers a bo et of fo r sports channels on P , on
have. As subscribers and audiences this P , on I and on i , widening its footprint in
group is a lot more valuable than what it is sports entertainment. 2
being paid for.
Going forward as well, the ports genre is e pected to add
M K Anand significantl to ad ertising re en es in 201 dri en b

re en es from the I 20 ricket orld p and IP and the
growing pop larit of new sporting properties. Post channel
Chief Executive Officer &
disaggregation, the importance of the sports genre as a part of
Managing Director the channel bo et has grown since sports content can dri e
Times Network Limited s bscription re en es on acco nt of its e cl si e nat re. s a
res lt, broadcasters are e pected to increase their foc s and
in estment on sports, in spite of ad ertising re en es not being
eno gh to j stif the content costs.
Sports
201 was a good ear for the ports genre in terms of
ad re en es dri en the I ricket orld p and IP Regulations impacting the TV sector
earning I R6 billion and I R . billion 6 respecti el .
2016 is also e pected to contin e on a strong note with TDSAT judgment on RIO rates and TRAIs
both IP and I 20 world c p e pected to boost ad consultation process on pricing models
re en es for their respecti e channels. In the P case relating to disp tes with broadcasters, he
he ricket orld p in 201 was one of the highlights , had on ecember, 201 ordered that the RI has the
for the ports genre in 201 . tar ports, the official starting point for tariff negotiations between broadcasters and
broadcaster of I orld p, introd ced two new distrib tion platforms, starting 1 pril, 2016. had also
sports channels tar ports and . In absol te r led that i RI m st re ect the rates of channels and bo ets
n mbers, total iewers for the world c p rose 1 per along with an b lk disco nt schemes, ii the a la carte rate and
cent to 20 million in 201 from 1 0 million in 2011. t bo et rates m st be in accordance with the ratio mandated
considering that the total tele ision iewing ni erse b R I, iii broadcasters ha e to iss e fresh RI s in compliance
in India has become bigger in the past fo r ears, the with the interconnection reg lations within one month from the
orld p was seen b aro nd 6 per cent compared operationalisation of the order.
with per cent in 2011. tar India on its part tried a few rrentl , e en if broadcasters ha e p blished RI rates, the
inno ati e ideas to boost its ad re en es from the e ent. end p gi ing 0 to 0 per cent disco nts on their bo et and
It opened p more opport nities for smaller ad ertisers this tends to be on based on m t al negotiations. s per the
this ear b selling spots on regional feeds amil, r ling, all rates and disco nts ha e to be made p blic,
Mala alam, Kannada and engali, apart from indi and remo ing an kind of discriminator pricing. tar India, ee
nglish. indi and regional feeds contrib ted per cent ntertainment and the I had mo ed the preme o rt
of the o erall iewership of the I ricket orld p in against the r ling, b t the co rt dismissed the petition.
201 . tar India also sold ad spots for packaging match he j dgment will come into force from 1 pril, 2016.
highlights and India matches as stand-alone properties. owe er, if R I iss es an new reg lations before that date,
Pop larit of non-cricket sports and sports leag es those reg lations will be binding on the broadcasters.
contin es b t monetisation is still not significant. he
. ith orld p iewership worse than 2011 edition, tar misses Rs 0-crore ad target, conomic 1. P re-enters India in collaboration with on Pict res etwork, siness tandard, 11 an ar
imes, 6 pril 201 2016
6. ased on ind str disc ssions 2. on partners P to la nch 2 sports channels, Mone control, http //www.mone control.com/
. 6 . rore iewership orld p ets ew Records on Indian , he int, http //www.the int. news/b siness/son -partners-espn-to-la nch-2-sports-channels 21.html accessed on 1
com/sports/201 /0 /02/with-6 -million- iewers-the-world-c p-broke-all-record-in-india accessed March 2016 52
on 1 March 2016 . s RI angle in P case makes broadcasters approach preme o rt http //www.
. I orld p is biggest e er on Indian tele ision, he ind , 2 pril 201 tele isionpost.com/tele ision/tdsats-rio-angle-in-nstpl-case-makes-broadcasters-approach-
s preme-co rt/accessed on 1 ebr ar 2016
. ace off o er tar ports re en e anja G pta s arsha oshi, he inancial press, 10 March
2016 . RI to form starting point for negotiations between broadcasters and platforms , ele ision
Post, http //www.tele isionpost.com/trai-tdsat/rio-to-form-the-starting-point-for-negotiations-
0. as KP opened a new door for cricket cra broadcasters , Indian ele ision, http //www. between-broadcasters-and-platforms-tdsat/accessed on 1 March 2016
indiantele ision.com/tele ision/t -channels/sports/has-kpl-opened-a-new-door-for-cricket-cra -
broadcasters-1 121 accessed on 26 ebr ar 2016 . dismisses broadcasters plea against order in P case relating to RI ,
ele isionPost, http //www.tele isionpost.com/tele ision/sc-dismisses-broadcasters-plea-against-
tdsat-order-in-nstpl-case-relating-to-rio/accessed on 26 ebr ar 2016
Meanwhile, R I has started a comprehensi e within 1 da s of e pir , the M wo ld be obliged
cons ltation process on the tariff iss es related to the to inform the c stomer the e pir date of the e isting
ind str , in which it has proposed different models agreement. his reg lation is e pected to help streamline
for the pricing of channels and so ght comments the process of entering into interconnection agreements
from different stakeholders in the ind str . part from between M s and broadcasters, bringing m ch needed
the pricing models at the wholesale and retail le el, the str ct re to the ind str , which is largel nstr ct red
cons ltation paper is e pected to e amine a range of otherwise.
tariff-related matters, from the iss e of carriage fees

which broadcasters ha e to pa to distrib tion platforms
to concerns related to pro iding cons mers with wider Increase in FDI limit in TV distribution and
iewing choice at a reasonable price. he objecti e of news channels
the cons ltation paper is to simplif and rationalise the
tariff str ct re and red ce the incidence of disp tes he ear 201 ended on a positi e note with respect
amongst stakeholders across the al e chain, while to foreign in estment norms, with the go ernment
ens ring that s bscribers are protected against irrational increasing the I limits in broadcasting and
tariff str ct res and price hikes. 6 roadcasters are distrib tion.
planning to approach again re esting it to In igital cable, ser ices and I , 100 per cent
dela the implementation of the RI order ntil R I ownership per cent ia direct ro te and 100 per cent
completes the ongoing cons ltation on the re iew of ia IP appro al was permitted for foreign in estors, an
tariff s stems. increase from per cent pre io sl . hile the increase
Gi en that ario s stakeholders in the distrib tion in distrib tion sector is a welcome mo e, according
al e chain ha e been nable to resol e their to the ind str participants we inter iewed, this ma not
m t al iss es to ens re the right pricing models are immediatel lead to an increase in foreign in estments
implemented, we belie e that the reg lator stepping in distrib tion. In the past, foreign in ol ement in
in to g ide the ind str towards the right model is a distrib tion has elicited a mi ed response. pla ers
welcome mo e. his reg lation if implemented correctl ha e managed to recei e significant foreign in estment
has the potential to radicall change the ind str d e to the higher transparenc in operations. owe er, in
distrib tion economics. the able distrib tion b siness, the earlier I limits
also remain nder- tilised largel d e to str ct ral iss es
res lting in low foreign in estor interest. Global cable
TRAI regulation on interconnection ind str majors s ch as omcast and ibert Global ha e
agreements between broadcasters and sta ed awa from making in estments in the Indian cable
ind str largel d e to lack of clarit on ownership of last
MSOs mile infrastr ct re and lack of addressabilit . owe er,
In light of the ongoing disp tes between the M s with digitisation in its final phases, ind str participants
and broadcasters o er re en e collection and sharing, e pect these challenges to be o ercome, making the
in an 2016 R I amended its reg lation regarding igital cable b siness a al able proposition to foreign
inter-connect agreements for the retransmission of in estors in the f t re.
pa channels. R I has now made it mandator for In broadcasting, the I limit was increased from
broadcaster to enter into written interconnection 26 per cent to per cent in news channels ia the
agreements with M s for retransmission of pa IP appro al ro te. hile the increase in the news
channels incl ding those pa channels for which no broadcasting sector is a welcome mo e, the sector
s bscription fee is to be paid b the M s to the ma be nattracti e to foreign in estors c rrentl , gi en
broadcaster. his amendment r les o t the scope of that minorit holding co ld interfere with decision
m t al negotiation between broadcasters and M s enforcement. oreign in estors are likel to e ate s ch
after the e pir of the agreement. R I has also stake-holding to an illi id in estment.100 dditionall ,
prescribed a s fficient time window at least 60 da s bleak growth prospects, poor profitabilit and corporate
prior to contract e pir for gi ing notice for renewal. In go ernance iss es are f rther bottlenecks.
the e ent of the non-e ec tion of a written agreement
53
6. ons ltation Paper on ariff Iss es related to er ices, R I, 2 an 2016 . ill 100 I l re omcast and ibert to enter India , ele ision Post, http //www.tele isionpost.
. ele ision broadcasters m ll approaching to dela content order, he conomic imes, com/special-reports/will-100-fdi-l re-comcast-and-libert -to-enter-india/accessed on 10 March 2016
March 10, 2016 100. I limit raised for channels, he Mint, 1 March 2016
. he elecomm nication roadcasting nd able er ices Interconnection igital ddressable
able ele ision stems i th mendment Reg lations, 2016
Sector Earlier Limit New limit
DTH, cable networks (MSOs operating at national 74% (Up to 49% - direct route, beyond 49% 100% (Up to 49% - direct route, beyond 49% - FIPB
and district level and undertaking up-gradation of - FIPB approval) approval)
networks towards digitisation and addressability,
mobile TV, HITS)
Cable networks (Other MSOs not undertaking 49% (direct route) 49% (direct route)
up-gradation of networks towards digitisation and
addressability and LCOs)
Up-linking of News and current affairs TV channels 26% (FIPB route) 49% on FIPB approval
Up-linking of Non news and current affairs TV 100% direct route No change
channels
Down-linking of TV channels 100% direct route No change

Source: shootingforthestars, KPMG- I I report 201 , I limit raised for channels, he Mint, 1 March 2016
The 12-minute ad cap regulation Conclusion

In 201 , R I had prohibited broadcasters from he operating en ironment of the ind str contin ed
airing o er 12 min tes of ad ertisements per ho r, in to e ol e in 201 , with se eral changes thro gho t
accordance with similar norms for pa channels imposed the ear. ho gh the deadline for implementation
internationall . he legal proceedings on implementation in Phase III was not met, there has been relati e
of the 12-min te ad cap contin e, with the case s ccess in seeding in phase III areas. owe er,
c rrentl nderwa in the elhi igh o rt against a transformation in the operating model of the cable
R I b m ltiple parties incl ding ews roadcasters ecos stem and impro ement in the economics of
ssociation and leading broadcasters like , distrib tion contin ed to e ade the ind str in 201 .
Media, ision, n etwork, 2 and Kalaignar
. owe er, the Information and roadcasting I ne of the most significant de elopments in the
minister s statement in an 201 that the go ernment ear was the establishment of a new iewership
is not keen on implementing the ad cap came as a meas rement s stem b R India. ltho gh the
welcome mo e for broadcasters.101 mo e enabled the meas rement of r ral iewership for
the first time,10 it did not impact ad b dget allocations
roadcasters are re ired to keep a record of all the or the content strateg of broadcasters immediatel . d
ad ertisements pla ed on their channels, as per a re en e growth also o tperformed as compared to last
re est from R I. s per a recent R I report released ear, in spite of the high base effect of an election ear
in March 2016, 121 non-news pa channels and 2 news in 201 . he ad re en e growth was propped p b the
channels iolated the 12-min ad cap d ring peak ho rs e-commerce sector ad ertising growth and the sporting
to 10 pm between 2 eptember and 2 ecember e ents incl ding IP 201 and the I ricket orld p.
201 . owe er, R I cannot take an coerci e action
against the r le breakers ntil the resol tion of the case, In 2016, the ke things to watch for will be the
as per the r ling of the elhi igh o rt.102 contin ation of e-commerce ad spend growth on and
R India ratings leading to an impact on ad spends
across genres and ad rates among channels within
genres. he ind str is also likel to be keenl awaiting
. the o tcome of R I s cons ltation paper on content
pricing models, since it is likel to ha e a significant
impact on s bscription re en e growth and more
e itable sharing of re en es within the al e chain.
54
101. r n aitle opposes cap on ads in , print media, he imes of India, 1 an ar 201 10 . R r ral ratings hat some ind str professionals had to sa , Indian ele ision, http //www.
102. R I sa s 1 paid channels iolated ad cap r le, change media, http //www.e change media. indiantele ision.com/tele ision/t -channels/ iewership/barc-r ral-ratings-what-some-ind str -
com/t /trai-sa s-1 -paid-channels- iolated-ad-cap-r le 6 .html accessed on 10 March 2016 professionals-had-to-sa -1 1026 accessed 1 March 2016
Print
Stays in circulation
Introduction
The print industry experienced a dynamic operating e al efforts are being made to increase interacti it
en ironment in 201 . hile ind str pla ers witnessed on the traditional medi m of disseminating news.
significant growth d ring the first half of the ear, the his ma not stand tr e for smaller pla ers, which are
growth in the second half remained largel m ted. primarily emphasising on strengthening their presence
Ind str disc ssions indicate that the trend was m ch in the e isting markets and consolidating their e isting
more prono nced in case of ernac lar dailies, primaril operations.
d e to a red ction in spends b a few sectors. he
real estate sector faced a slowdown and with 201 ne of the reasons for the prominence of print media in
being a non-election ear, go ernment spends too fell the face of technolog disr ptions is the rob st growth
considerabl . elecom and e-commerce companies of the Indian econom and the o erall positi e macro
also preferred ad ertising on tele ision, and in nglish en ironment. ollowing the c rrent go ernment coming
newspapers o er indi and other regional newspapers. into power in 201 , India has kept a strong e e on its
Gross omestic Prod ct G P growth, being a 2.2
a ing said that, the traditional newspaper b siness trillion economy1 at c rrent prices. ring 1 , India s
contin es to grow at a stead rate of aro nd per domestic cons mption and in estment contrib ted
cent on the back of s stained ad ertiser interest and per cent and .1 per cent, respecti el , to the G P2. his
e isting reader base, while the Indian print ind str pla ed a significant role in boosting in estors confidence
makes inroads into new technological opport nities to and keeping India s economic sentiments charged p.
enhance its content alit , ser ice deli er and reader ccording to the International Monetar nd IM
engagement. Recognising the potential of digital media in forecast, India s G P grew at a rate of . per cent in 201 .
India, leading print pla ers ha e redirected a part of their It is e pected to s rpass . per cent in 20163, making
effort and in estment towards making ser ices s ch as India the fastest growing large econom in the world.
news deli er possible ia mobile applications and web
portals. he foc s is not j st limited to digital media, and
GDP growth (in per cent)
Source: orld conomic tp t pdate , IM , an ar 2016.
56
01. India s econom is on the rise , e tsche elle , http //www.dw.com/en/indias-econom -is-
on-the-rise/a-1 0 , accessed on ebr ar 2016.
02. India soars high , KPMG in India, ebr ar 2016.
0 . orld conomic tp t pdate , IM , an ar 2016.
he growth of the co ntr is isible thro gh m riad New publications registered
infrastr ct re projects, increasing cons mer
Number of new Number of new
cons mption, the rising scope of ed cation, better health
Language publications publications Change
and h giene, increased le el of emplo ment, etc., which
registered in FY14 registered in FY15
res lt in increased spend on ad ertising from both p blic
and pri ate sectors. he print media will contin e to Hindi 2,295 2,349
benefit from this positi e macro en ironment b ffered
The Future: now streaming | Print
from the threat of digital media for the moment.

Marathi 584 666
It is partic larl interesting to note that while the
increasing spread of news thro gh ario s media English 509 533
has res lted in the decreasing share of media spends
on print ind str , the growing n mber of registered Gujarati 352 435
publications belies the logical assessment that print
media is heading for a slowdown. en toda , print media Kannada 325 302
remains highl fragmented and an increase in the n mber
of registered pla ers who are still attracted to this Telugu 327 289
con entional medi m contin es. s of 1 March 201 ,
the total n mber of registered p blications was 10 , ,
Urdu 301 270
comprising 1 , newspapers dailies, bi/tri weekl and
0, periodicals.
Tamil 171 211
Number of registered newspapers and periodicals Others 778 762

(in 000)
Total 5,642 5,817
Source: he Registrar of ewspaper in India, nn al Report 1 ended on 1 March 201 .
f the total registered print p blications in India, o er

0 per cent are p blished in indi and appro imatel
per cent address the ernac lar readership incl ding
biling al and m ltiling al p blications .
ewspapers contin e to acco nt for a major proportion
of the o erall re en e generated b the print media
ind str in India. hile niche maga ines registered
an incremental growth, maga ines of general interest
witnessed a dip in circ lation. e eral new content and
deli er formats ha e emerged in the ind str , and both
newspapers and maga ines are le eraging new media
channels for additional distrib tion a en es to s stain
Source: he Registrar of ewspaper in India, nn al Report 1 ended on 1 March 201 . a long-term growth. en tho gh the circ lation and
ad ertising market re en es ha e e perienced a drop
in their growth rate, the scope for print media is still
formidable in the present-da conte t.
he Indian print ind str contin es to witness the
introd ction of o er ,000 registered newspapers/
periodicals each ear. he total n mber of new registered
p blications showcased an increase of .1 per cent,
growing from ,6 2 in 1 to , 1 in 1 . he n mber
of new registered p blications in G jarati and amil
witnessed the highest percentage change between
1 and 1 , clocking 2 .6 per cent and 2 . per cent
growth, respecti el . on ersel , new registered el g
and rd p blications declined 11.6 per cent and 10. per
cent, respecti el , for the corresponding period.
57
0 . he Registrar of ewspaper in India, nn al Report 1 ended on 1 March 201 .

0 . KPMG in India s anal sis, 2016.
Performance of the Indian print industry
Print media market
CAGR
Growth
INR billion 2011 2012 2013 2014 2015 2016P 2017P 2018P 2019P 2020P (2015-
in 2015
2020P)
Total 139 150 163 176 189 7.3% 204 222 242 263 286 8.6%
advertising
Total
69 75 81 87 94 8.2% 101 108 114 121 127 6.1%
circulation
Total print 209 224 243 263 283 7.6% 305 330 356 384 412 7.8%
market
Newspaper 197 211 230 249 269 8.0% 291 316 343 371 399 8.2%
revenue
Magazine 12 13 14 14 14 1.6% 14 13 13 13 13 -1.8%

revenue
Total print 209 224 243 263 283 7.6% 305 330 356 384 412 7.8%
market
Source: KPMG in India s anal sis, 2016 Ind str disc ssions cond cted b KPMG in India.
he Indian print ind str grew at a rate of .6 per he increasing si e of the middle class that speaks
cent from I R26 billion in 201 to I R2 billion in different lang ages has led companies e eing for smaller
201 . a ing grown b . per cent in 201 , the print towns as prospecti e growth markets to increase their
ad ertisement re en e reached I R1 billion. he foc s on localised messaging in regional lang ages.
ad ertisement re en es ha e grown at a GR of . he print ind str in India is relati el less dependent
per cent between 2010 and 201 , whereas the circ lation on circ lation re en e, with the trend being more
re en es ha e displa ed a GR of .1 per cent d ring prono nced among the leading pla ers. he ad ertising
the corresponding period. d ertising contin ed to be the to circ lation re en e ratio, which was considered a
backbone of the print ind str , acco nting for more than challenging factor b man , co pled with meagre co er
66 per cent of the total re en es, whereas circ lation prices compared to western co nterparts, has in fact
re en e made p for the rest. owe er, a slight decline fa o red the ind str in s staining growth as against the
in -o- ad growth was witnessed compared to per cent growing pop larit of digital media in the co ntr .
in 201 , primaril d e to a red ction in spends b a few
sectors.6
ith the readership being largel limited to the co ntr s
metro and tier-I cities, the trend of nglish lang age
newspapers dominating the ad ertising b dgets of
companies is slowl waning. d ertisers ha e started
increasingl been factoring in the indi and ernac lar
print media segment, as they directly reach customers in
prospering tier-II and tier-III cities/regions of the co ntr .
58
06. KPMG in India s anal sis, 2016.

0. Ind str disc ssions cond cted b KPMG in India.
Circulation of registered newspaper publications he ind str witnessed an .2 per cent rise in circ lation
(in million) re en e in 201 , on the back of increased co er prices
and rise in circ lation fig res . or instance, while
Rajasthan Patrika increased its co er prices b more
than 2 per cent in 201 , orp increased its co er
price b 1 per cent between an ar 201 and March
201 10. In 201 , orp witnessed an increase of 16.
per cent in its circ lation re en e, of which abo t 12 per

cent contrib tion came from increase in co er prices and
appro imatel per cent occ rred owing to introd ction
of new editions.11
en tho gh circ lation has showcased a stead
growth, there lies a significant scope for e pansion,
since a noteworth gap between can read and do read
categories still e ists.
ewspaper circ lation is likel to contin e its growth

trajector and this e pected growth co ld largel come
from tier-II and tier-III cities, which are also the major
cons mption markets for sectors s ch as M G, retail,
e-commerce res lting in a commens rate growth in
ad ertising.
Tier II and III cities - Focus consumption centres
Source: 1 napdeal now shifts foc s to r ral areas , he inancial press, http //www.
financiale press.com/article/ind str /companies/snapdeal-now-shifts-foc s-to-r ral-
areas/1011 /, accessed on 1 ebr ar 2016
2 R ral India embraces lipkart, ma on, napdeal this festi e season , India, http //
www.dnaindia.com/mone /report-r ral-india-embraces- ipkart-ama on-snapdeal-this-festi e-
season-21 , accessed on 1 ebr ar 2016
ow smartphones are penetrating deeper in r ral India , he R ral Marketing o rnal,
http //www.rmai.in/ejo rnal/national-international-trend/ -how-smartphones-are-penetrating-
deeper-in-r ral-india, accessed on 16 ebr ar 2016
esktop, otebook see more demand in r ral areas , he ind , http //www.thehind .
com/b siness/Ind str /desktop-notebook-see-more-demand-in-r ral-areas/article .
ece2, accessed on 11 ebr ar 2016
ritannia to ramp p r ral distrib tion, man fact ring , he siness tandard, http //
www.b siness-standard.com/article/companies/britannia-to-ramp- p-r ral-distrib tion-
man fact ring-11 0 0 01 1.htm, accessed on 11 ebr ar 2016
6 Godrej ppliances foc s on tier II III cities, 00 stores in the pipeline , ranchise India,
http //news.franchiseindia.com/Godrej- ppliances-foc s-on-tier-II-III-cities- 00-stores-in-the-
pipeline- 2, accessed on 11 ebr ar 2016
ew models, dealer foc s re p ata Motors, imes of India, http //timesofindia.
indiatimes.com/b siness/india-b siness/ ew-models-dealer-foc s-re - p- ata-Motors/
articleshow/ 0 11.cms, accessed on 11 ebr ar 2016
R ral stress thwarts a tomobile ind str s growth, siness tandard, http //www.
b siness-standard.com/article/companies/r ral-stress-thwarts-a tomobile-ind str -s-
growth-11 111 010 1.html, accessed on 11 ebr ar 2016
59
0 . KPMG in India s anal sis, 2016 Ind str disc ssions cond cted b KPMG in India.
0 . Ind str disc ssions cond cted b KPMG in India.
10. orp Making headlines , he ind siness ine, http //www.thehind b sinessline.com/
portfolio/firm-calls/db-corp-making-headlines/article 2 26 .ece, accessed on ebr ar 2016.
Newspaper and magazines
mid the mo nting trend of a m ltit de of newspapers to dominate the print ind str in 201 , contrib ting
aro nd the world downsi ing or transitioning towards per cent of total print re en e. iametricall opposite,
digital media, the newspaper space in India is still holding the maga ine space is tr ing to o ercome the challenges
strong. he thri ing newspaper market, in parts, is being posed b digital and dropping demand. er the past
dri en b the increasing readership in smaller towns, few ears, man p blication ho ses ha e discontin ed
where we ha e seen a noteworth growth in the o ng the ph sical ersions of their prod cts. In 201 , India
and aspiring pop lation. he growing impet s towards oda sh t down print editions of its maga ine in three
ed cation has led to a stark increase in the national south Indian languages Telugu, Tamil and Malayalam13.
literac rates o er the past se eral ears, propelling lso, new pla ers in this space target lesser re en e b
newspaper readership in the co ntr . decreasing the re en e margin per maga ine iss e is- -
is e isting competition, which imbalances the b siness
he readership of print media is likel to increase f rther proposition of the mat re pla er.
as the Indian go ernment is targeting to achie e the
ni ersal literac goal b 2060.12 ewspapers contin ed
Revenue contribution from newspapers and magazines
Revenue contribution 2013 2014 2015 2016P 2017P 2018P 2019P 2020P
Newspaper industry 94.4% 94.6% 94.9% 95.5% 96.0% 96.3% 96.6% 96.8%
Magazine industry 5.6% 5.4% 5.1% 4.5% 4.0% 3.7% 3.4% 3.2%
Source: KPMG in India s anal sis, 2016.
Internet penetration In contrast to the estern co ntries, where the internet

has embedded itself ac tel into the newspaper domain,
India still lags far behind, abo t 0 per cent of the co ntr
does not ha e internet access.1
ltho gh internet penetration is increasing rapidl ,
newspapers, which cost not more than I R200 per
month, are still the medi m with deep reach and
credibilit . ews channels, partic larl those airing news
in regional lang ages, ha e also had a positi e impact on
newspaper circ lation, as people who watch tele ision
news often t rn to the newspapers to alidate the facts
and for anal sis. ence, newspapers ha e contin ed to
hold their gro nd for being more reliable when compared
to news channels.
Source: India on the Go Mobile Internet ision 201 , KPMG I M I report, l 201 KPMG in
India s anal sis, 2016.
60
12. hange literac s definition , i e Mint, http //www.li emint.com/ pinion/

dm I bp i jP ep R / hange-literac 21 s-definition.html, accessed on 1 March 2016.
1 . India oda to close print editions of maga ine in three so th Indian lang ages , he ews Min te,
http //www.thenewsmin te.com/socials/ 2, , accessed on ebr ar 2016.
1 . KPMG in India anal sis.
Contribution of language markets
Print media language market mix
CAGR
Growth
INR billion 2011 2012 2013 2014 2015 2016P 2017P 2018P 2019P 2020P (2015-
in 2015
2020)
English 83 86 91 96 101 4.9% 105 109 113 117 121 3.8%

market
Advertising 57 59 62 65 69 4.7% 72 75 79 82 86 4.6%
Circulation 26 27 29 31 32 5.2% 33 34 34 35 36 2.0%
Hindi market 62 68 75 83 91 9.4% 101 111 122 133 145 9.6%
Advertising 41 45 50 54 59 8.2% 64 71 79 87 95 10.2%
Circulation 22 24 26 29 32 11.7% 36 40 43 46 49 8.7%
Vernacular 63 69 76 84 91 9.0% 100 110 121 133 146 9.9%

market
Advertising 42 46 51 57 62 9.5% 68 76 85 94 105 11.1%
Circulation 21 24 26 27 29 8.0% 32 34 37 39 42 7.3%
Total print 209 224 243 263 283 7.6% 305 330 356 384 412 7.8%
market
Source: KPMG in India anal sis, Ind str disc ssions cond cted b KPMG in India.
indi and ernac lar segments together contrib ted Proportion of digital advertising in local languages
appro imatel 6 per cent of the total print re en e. he
readership of nglish print is sliding compared to indi
and ernac lar media, which ha e showcased contin o s
growth o er the last co ple of ears. he indi print
media market increased to I R 1 billion in 201 , from
I R billion in 201 . ernac lar print media grew at .0
per cent o er the same period, reaching I R 1 billion
in 201 . n the contrar , nglish print media witnessed
a slowdown in growth, declining to . per cent in
201 from .2 per cent in 201 . hile digital media has
contin ed to penetrate the nglish newspaper s bscriber
market, regional print markets are still at earl stages to
witness a radical impact.
ith the increasing competition in metro cities, se eral
companies ha e been consolidating their presence in
regional markets b means of la nching new prod cts Source: 2020, 0 of total digital ad ertising spend will be on local lang ages , he siness
tandard, http //www.b siness-standard.com/article/management/b -2020- 0-of-total-digital-
and ac iring smaller companies. wing to the ad ertising-spend-will-be-on-local-lang ages-st d -11 0 0600 0 1.html, accessed on 11
ebr ar 2016.
significant si e and di ersit of the Indian print space,
brands ha e grad all started integrating a regional
component to their ad ertising spending. n mber
of companies ha e la nched their campaigns in local
lang ages that ha e gi en them m ch more resonance
61 compared to the ones la nched in nglish.
he growing income le els and transforming -commerce companies ha e also spent a significant
demographics ha e also sp rred the spending power amo nt of their ad b dgets on print ad ertisements b
in tier-II and tier-III cities. ith the rising literac le el, taking p premi m ad in entor in major newspapers1 .
increasing pop lation and rising demand for region- en tho gh e-commerce ad spends ha e seen an
specific content, the print media is acclimatising and escalated growth in nglish print media, their penetration
foc ssing on deli ering content in the readers nati e in regional print media remains er low. owe er, as
lang age. new p blications and editions contin e to foc s on
regional markets, e-commerce companies are likel to
nother major factor that has dri en the growth of indi start e ploring this as an opport nit .
and ernac lar print p blications is the high G P growth
rate of indi speaking states as against the national
growth rates. Most of the states s ch as ihar, Madh a
Pradesh, Rajasthan, and ttar Pradesh ha e been Indian print media continues to occupy
consistentl o tpacing the national a erage.1 centre-stage in the advertising plans
of traditional sector advertisers (FMCG,
automotive, durables, financial services,
GDP growth rates of major Hindi speaking states etc.). This stickiness towards print, despite
vs national GDP growth rates a plethora of new age format options, can
be attributed to superior value proposition
offered through:
Deeper engagement with reader, aided
by deft packaging of advertisements
with credible, well curated editorial
content
Invitation pricing and convenience
of home delivery, ensuring wide and
regular access to an advertisers target
audience.
Mohit Jain
Executive President
The Times of India Group
Note: 200 -0 has been taken as base ear.
Source: Go ernment of India, Growth opport nities intact t, we remain selecti e , mka Research,
ebr ar 2016.
s the Reser e ank of India R I red ced the repo rate

Trends b bps in 201 , the lending rate to corporates also fell
and correspondingl sp rred some credit growth. to
Traditional print ad categories continue to and d rables saw some growth and the contrib tions
spend on the medium b these sectors to ad ol mes is e pected to f rther
increase in 2016.20 hile I contrib tion fell slightl ,
Print ad ertising grew at a rate of . per cent in 201 16, the introd ction of 21 new banks, incl ding 10 small
primaril dri en b growth in ad spends b M G and finance banks21 and 11 pa ment banks22, along with
e-commerce pla ers. M G s contrib tion contin ed growth is projected to propel the ad spends in
to grow in 201 , maintaining the categor s leadership 2016.
position in the print ad ertising pie. s se eral p blishing
ho ses followed a differential pricing for M G, the he efforts from a n mber of a tomoti e companies
latter s share in the print ad ertising pie grew to 1 .6 to boost re en e pro ided the re ired impet s to
per cent in 201 from 1 . per cent in 201 .1 The promote higher print ad e pendit res in 201 , with major
cons mption of M G prod cts grew in 201 and this, contrib tion coming from companies operating in the
co pled with the lowering of raw material prices, created passenger ehicle segment, s ch as Mar ti ki and
more scope for the companies to spend on ad ertising1 . ero Moto orp. fter witnessing a decline in the last
1 . Growth opport nities intact t, we remain selecti e , mka Research, accessed on 11 ebr ar 20. Ind str disc ssions held b KPMG in India. 62
2016. 21. R I iss es 10 small bank licences , i emint, http //www.li emint.com/
16. KPMG in India s anal sis, 2016. Ind str /1 0f R pI e s t mK/R I-grants-small-banks-licence-to-10-applicants.html,
1. oom ime for Media , Pitch Madison d ertising Report, ebr ar 2016. accessed on 1 March 2016.
1 . M G ad spends increase b 16.1 to acco nt for an estimated Rs.26 crore in 1 , 22. 11 entities get pa ments bank licences hat it means for Indian banking sector , irstpost, http //
change media, http //www.e change media.com/marketing/fmcg-ad-spends-increase-b -16.1- www.firstpost.com/b siness/ril-adit a-birla-et-al-getting-pa ment-bank-licences-what-it-means-for-
to-acco nt-for-an-estimated-rs.26 -crore-in- 1 612 .html, accessed on ebr ar 2016. the-indias-banking-sector-2 0.html, accessed on 1 March 2016.
1 . Pitch Madison report estimates .6 per cent growth in ad spends in 201 , ampaign India, http //
www.campaignindia.in/ rticle/ ,pitch-madison-report-estimates- 6-per-cent-growth-in-ad-
spends-in-201 .asp , accessed on ebr ar 2016.
two ears, ehicle sales inclined pward in 201 res lting aro nd campaigns, s ch as Make in India , wachh
in significant spending on ad ertising and promotions. harat bhi an and igital India .2 dditionall , the
he contrib tion of the a to sector in the print ad space state elections in elhi and ihar contrib ted a major
to ched 12. per cent in 201 , p from 11. per cent in proportion to the total ad ertising spends d ring the last
201 .23 ear. ith est engal, amil ad , Kerala and ssam
going to polls in 2016, ad spending b state go ernments
elecom pla ers contrib ted per cent to the total ad is anticipated to pla a significant role in the ind str
spends in the print sector. irtel acco nted for the largest
growth in 2016.
ad ol mes, followed b Idea.2 ith G ser ices being
la nched b major telecom pla ers, incl ding irtel and d spends from the real estate sector in 201 ha e not
odafone,2 and the e pected roll o t of Reliance io and kept pace with the pre io s ears. his has largel been
Idea G in 2016, the ad ertising ind str as a whole is d e to the radical slowdown witnessed in the sector.
e pected to grow 10 to 1 per cent in 2016.26 ales ha e declined considerabl and the n mber of
nsold properties ha e gone p. Propert prices in a
he go ernment at the centre and in ario s states are n mber of cities ha e mo nted at a slow rate, while the
foc ssed strongl on media, incl ding newspapers, cost of capital for companies has contin ed to remain
to communicate its concepts, priorities and ongoing high. his has forced man companies to red ce their ad
work in the co ntr . he ad spends primaril re ol ed spends.2
Big spenders on print advertising

Categories 2010 2011 2012 2013 2014 2015 Change in 2014
FMCG 7.4% 8.9% 10.3% 12.3% 13.5% 14.6%
Auto 7.1% 9.8% 11.4% 11.7% 11.9% 12.8%
Education 14.6% 10.6% 10.6% 9.7% 9.4% 9.8%
Real estate and home improvement 8.0% 8.4% 8.6% 8.7% 8.0% 7.0%
Clothing/fashion/jewellery 5.3% 6.5% 7.1% 6.1% 6.1% 6.0%
E-commerce 1.0% 2.2% 4.3%
Telecom/internet/DTH 6.3% 4.7% 4.1% 3.6% 3.7% 3.8%
Retail 5.8% 5.6% 5.8% 5.7% 5.3% 5.6%
BFSI 8.7% 6.7% 5.7% 6.0% 4.8% 4.7%
Election/political ads 0.6% 1.7%
HH durables 5.3% 5.7% 4.9% 3.9% 4.2% 4.6%
Travel and tourism 2.5% 2.8% 2.3% 1.9% 1.7% 1.9%
Corporate 3.0% 2.8% 2.2% 1.7% 1.4% 1.3%
Media 2.2% 1.5% 1.4% 1.4% 1.1% 1.0%
Alcoholic beverages 0.2% 0.2% 0.1% 0.1% 0.1% 0.1%
Others 23.6% 25.7% 25.3% 25.4% 24.9% 22.4%

Source: Pitch Madison Reports.
2 . oom ime for Media , Pitch Madison d ertising Report, 2016. 2. irtel, odafone, Idea and Reliance io s G p sh to help ad ertising sector grow 1 in 2016 ,
63 2 . e pected to gain largest portion of telecom ad spends with G roll-o t , change media, http // conomic imes, http //telecom.economictimes.indiatimes.com/news/airtel- odafone-idea-and-
www.e change media.com/ad ertising/t -e pected-to-gain-largest-portion-of-telecom-ad-spends- reliance-jios- g-p sh-to-help-ad ertising-sector-grow-in-2016/ 0 2 26, accessed on ebr ar
with- g-roll-o t 62 20.html, accessed on 1 ebr ar 2016. 2016.
2 . irtel, odafone, Idea and Reliance io s G p sh to help ad ertising sector grow 1 in 2016 , 2 . ill the real estate b bble b rst d e to falling sales rising in entories , Realt , http //realt .
conomic imes, http //telecom.economictimes.indiatimes.com/news/airtel- odafone-idea-and- economictimes.indiatimes.com/news/ind str /will-the-real-estate-b bble-b rst-d e-to-falling-
reliance-jios- g-p sh-to-help-ad ertising-sector-grow-in-2016/ 0 2 26, accessed on ebr ar sales-rising-in entories/ 6 , accessed on ebr ar 2016.
2016.
26. elecom irms G P sh to elp d ertising ector Grow 1 in 2016 , , http //profit.ndt .
com/news/corporates/article-telecom-firms- g-p sh-to-help-ad ertising-sector-grow-1 -in-2016-
deloitte-1261 6, accessed on 12 ebr ar 2016.
here is growing foc s on tier-II and tier-III cities, which is Amid the growing popularity of digital
likel to dri e ad ertising spends in the coming few ears. media, print industry sustains growth
on-metro cities now contrib te as m ch as per cent
to the total sales of India s l r brands.2 ltho gh the digital space is growing at a noteworth
pace, the Indian print industry does not consider it a
FMCG product consumption in tier-II, tier-III and tier-IV threat in the near f t re. Internet penetration in the
cities is expected to account for approximately 45 per co ntr is lang ishing at 2 per cent, compared to
cent of the consumption in 2025, with e-commerce per cent in the . . and 6 per cent in hina. , 6 Its
firms accounting for greater than 10 per cent in some limited reach is too low to bring abo t a radical change
categories 30. For example, currently, about 55 per in the print sector. en in the . ., abo t 60 per cent
cent of Myntras revenues come from such cities.31 internet penetration ser ed as a tipping point for the
Similarly, Amazon is witnessing a 50 per cent growth newspaper companies. he digital Infrastr ct re in India
in tier-II cities.32 is still nderde eloped and fails to co er a major part of
the co ntr s geograph , restricting the scope of news
In the auto sector, an example is Tata Motors, which cons mption ia digital media.
is focussing on fortifying its presence in rural areas,
growing from 468 in FY15 to 1,500 sales touch points
in the next four to five years. The company is also Digital advertising: Still a small meteoroid for
focussing on a rural format for its outlets to sustain print industry
relations with customers in their local languages.33 ltho gh, digital ad e pendit re has been forecasted
Going forward, the print ad spends are e pected to grow to grow per cent to I R 1.1 billion in 2016 , it is
at . per cent in 2016. he increase in ad spend is likel not expected to pose an immediate threat to the print
to come from go ernment spending and traditional print ind str gi en its minisc le base, nlike in the . .,
hea sectors, s ch as M G, e-commerce, I and where digital ad e pendit res are estimated to hold .
a to. per cent of the total ad e pendit re in 2016 .
ontin ing de elopments across different sectors are
e pected to work in fa o r of the print sector. In 2016,
following e ents are e pected to dri e growth in print With smartphone and internet penetration
ad ertising increasing, India is experiencing a
transformation in pattern of news
Numerous launches in the automotive industry, consumption even in local languages,
including 30 new cars and 25 new two-wheelers although desired monetisation is still a bit
Entrance of a number of Chinese mobile handset away. The digital success story is expected
manufacturers, such as Xiaomi, Vivo and Le-Eco, in to continue as the current internet
India penetration in the country doesnt even
cover one-third of the population. There is
State assembly elections in Tamil Nadu, West Bengal, plenty of scope for growth for everyone.
Assam, Puducherry and Kerala that are scheduled to
R. K. Agarwal
take place in 2016
Continual growth in e-commerce, covering more new
product categories and services Chief Financial Officer
ICC Cricket T20 World Cup, which is scheduled to take Jagran Prakashan Ltd
place in India in 2016.
2 . India s l r brand market to be dri en b tier 2, cities , conomic imes, http //economictimes. . espite slowdown a to companies contin e on r ral march , he siness tandard, http //www.
indiatimes.com/news/econom /indicators/indias-l r -brand-market-to-be-dri en-b -tier-2- - b siness-standard.com/article/companies/despite-slowdown-a to-companies-contin e-on-r ral-
cities-report/articleshow/ 1 0.cms, , accessed on 2 ebr ar 2016. march-11 0 1 002 1 1.html, , accessed on ebr ar 2016.
0. Re-imagining M G in India , II, 201 . . KPMG in India s anal sis, 2016.
64
1. M ntra registered 00 Million GM R n Rate in an ar 2016 , itnhit, http //fitnhit.com/ . oom ime for Media , Pitch Madison d ertising Report, 2016.
technolog /m ntra-registered- 00-million-gm -r n-rate-jan ar -2016/ 26 /, , accessed on 2 6. India on the Go Mobile Internet ision 201 , KPMG I M I report, l 201 .
ebr ar 2016.
. KPMG in India s anal sis, 2016.
2. ma on.in witnesses tremendo s b siness growth from ier-II cities , ech Radar, http //www.
in.techradar.com/news/ ma on-in-witnesses-tremendo s-b siness-growth-from- ier-II-cities/ . igital to cco nt for 0 of t-of- ome d pending in 201 , marketer, http //www.
articleshow/ 2 0 .cms, , accessed on ebr ar 2016. emarketer.com/ rticle/ igital- cco nt- 0-of- t-of- ome- d- pending-201 /101 10 , , accessed
on 10 ebr ar 201 .
Growth of digital also presents a massi e opport nit to he o erall readership might ha e red ced b one or
Indian pla ers who can tweak their b siness models and two people in the ho sehold, howe er the newspaper
b ild a strong online presence nlike companies in the circ lation is witnessing growth, reinforcing the strong
. ., which did not ha e time to react to the changing foothold of print ind str . 1 as accessibilit , door-to-
readership patterns. owe er, a critical element co ld be door deli er , affordabilit , comfort, the habit of reading a
to determine that the re en es lost in print are con erted ph sical cop , etc., are some factors that ha e kept print
to re en es on the digital platform. pla ers a oat in this digital era.
ewspaper cons mption pattern in India showcases that

a major proportion of people read newspapers d ring
the earl ho rs in the morning. he cons mption is the
We are seeing strong growth of digital highest between a.m. and a.m., with an a erage
regional language content be it personal cons mption per ho r of 11. per cent compared to
blogs, short form videos or jokes on 2. per cent and 2. per cent in the . . and hina,
whatsapp. The growth is coming both in respecti el . 2
form of user generated content as well as
established publishers adopting digital
medium. We are also seeing early signs of
advertising dollars follow vernacular market
digitallya gap which is still very large Internet penetration is bound to grow
where in 85 per cent of advertising in TV or exponentially in the near future. The best
print happens in regional languages. thing is that Indian media had a better
learning curve in the digital space and
Virendra Gupta most companies are positioned well with

their digital strategies. Another aspect
about Indian media industry is its unique
Founder and CEO advantages like efficient news gathering,
Verse Innovation Pvt Ltd (Dailyhunt) cost-effective product distribution
mechanisms and highly innovative ad-sales
culture in their traditional media divisions.
That makes all media verticals in India
more robust than most other global media
It is interesting to note that e en in mat re markets markets. Therefore, traditional media and
like the .K., while on one hand he Independent has digital media are likely to co-exist for a
anno nced that it plans to completel shift to digital reasonably longer time in India.
media, on the other hand, Infinit Mirror contin es to
Shreyams Kumar
foc s on the print medi m, ha ing recentl la nched a
new newspaper he ew a .
Director - Marketing &

lassified ads ma not impa t the top line Electronic Media
In India, classifieds segment constit tes a small share of Mathrubhumi
to per cent of the total ad re en es, compared to 0
per cent in the . . before the digital era. 0 ith growing
internet penetration and a shift towards digital media, the
contrib tion of classified ads depleted to 1 per cent in
the . . 0 enceforth, it co ld be ascertained that low
contrib tion from classified re en es is likel to keep a
check on the impact of digital media on the Indian print
ind str .
Digital, yet to impact household readership

ewspapers ha e contin ed to find acceptance among
a majorit of the ho seholds in India. hile the o th
pop lation might ha e shifted to digital media, the age
gro p of ears and abo e still prefers a ph sical cop .
65
. It s he ew a - first look at rinit Mirror s new newspaper, he G ardian, http //www. 1. Ind str disc ssions cond cted b KPMG in India KPMG in India s anal sis, 2016.
theg ardian.com/media/greenslade/2016/feb/22/its-the-new-da -first-look-at-trinit -mirrors-new- 2. Print olding its Gro nd espite igital s nami, delweiss ec rities imited, eptember 201 .
newspaper, , accessed on 10 ebr ar 2016.
0. Print olding its Gro nd espite igital s nami, delweiss ec rities imited, eptember 201 .
Average consumption of newspaper by hour (%) Traditional player Digital brands
Business and politics: Livemint

Job portal: Shine
HT Media1
Entertainment: Desimartini
Education: HTCampus
Daily news: Dainik Bhaskar, Divya Bhaskar,

DivyaMarathi, DailyBhaskar
DB Corp2 Business news: Moneybhaskar
Cricket news: Dbcric
Entertainment: Bollywood Bhaskar
Daily news: Indiatimes

Cricket news: Cricbuzz
Matrimony portal: Simplemarry
The Times of India Real estate portal: Magicbricks
Group3 lassifieds portal T Next
Source: delweiss ec rities imited, Print olding its Gro nd espite igital s nami, eptember,
201 . Job portal: Timesjobs
Professional networking website: Peerpower
E-commerce platform: Indiatimes shopping
he introd ction of in-ho se websites allows companies
to grab more audience and monetise content through
digital platforms. ombined news s ppl is the new step Daily news: Jagran
being taken to enhance content and increase the reach Education: Jagranjosh
thro gh aried platforms. or instance, Rajasthan Patrika,
Jagran Health portal: Onlymyhealth
has la nched a website called atch to segregate its
cons mers, both on print and digital platforms. ther Prakashan4 Blogging platform: Jagranjunction
print pla ers, s ch as Media and Gro p, ha e also Reverse auction service website: Jeetle.in
segregated news on their digital platforms according to
the taste of a dience. Genre specific websites ha e been Shopping portal d2hshop.com
introd ced to cater to a specific set of a dience. ome of
the segregated genres include business, politics, general, Daily news: The Hindu
entertainment and ed cation. he aim is to increase the Current affairs magazine: Frontline
consolidated re en e of the firm and to get non-print Business news: The Hindu Business Line
readers on board by utilising the content that is already The Hindu5
Sports news: Sportstar
there.
lassifieds portal thehinduclassifieds.in
eal estate portal oofandfloor
Source: 1 http //www.htmedia.in/Right isting.asp page Page- Media-Internet, accessed as on

1 March 2016
2 http //www.bhaskar.com/, accessed as on 1 March 2016
KPMG in India s nal sis, 2016
http //jplcorp.in/new/ ertical.asp I 2, accessed on 1 March 2016
http //www.thehind .com/, accessed as on 1 March 2016
.
66
Regional markets, expected to remain buoyant Readership (000)
he growth in newspaper readership in India is being
led b the growth of indi and ernac lar p blications.
his has largel been seen in r ral and small towns with
e isting p blications la nching new editions and new
p blications entering the market. In 201 , an increase
in the readership of nglish p blications contrib ted
approximately 10 per cent to the total increase in

readership, with majorit of the increase in large towns.
The most penetrative medium in India

continues to be the newspaper. It has
differentiated itself from other sources of
media in terms of content creation and
trustworthiness. Be local is the secret
sauce of the newspaper business. There
are no other media that allow for such a
high level of local customisation both to Source: IR 201 .
the consumer and advertiser. While English
newspapers continue to be a force in the
metros, Hindi and vernacular publications
have gained a strong foothold in other Absolute change in readership (000)
cities. Their growth is likely to continue with
governments push on infrastructure, rural
income, pay commission hike and One Rank
One Pension scheme.
R. K. Agarwal
Jagran Prakashan Ltd
Source: IR 201 .
indi and ernac lar p blications dominate the

readership n mbers, which co ld be ga ged from the
fact that the imes of India is the onl nglish p blication
that made it to the list of top-ten most read p blications
in 201 .
67
. IR 201 .
Average readership of top 10 publications
Publication Language Readership (in 000) % change
2013 2014
Dainik Jagran Hindi 15,527 16,631 7%
Hindustan Hindi 14,246 14,746 4%
Dainik Bhaskar Hindi 12,857 13,830 8%
Malayala Manorama Malayalam 8,565 8,803 3%
Daily Thanthi Tamil 8,156 8,283 2%
Rajasthan Patrika Hindi 7,665 7,905 3%
Amar Ujala Hindi 7,071 7,808 10%
The Times of India English 7,254 7,590 5%
Mathrubhumi Malayalam 6,136 6,020 -2%
Lokmat Marathi 5,601 5,887 5%
Source: IR 201 .
In 201 , regional p blications increased their circ lation

and ad ertising re en es. he added foc s of the
ind str on regional markets is re ected in the circ lation
n mbers where nglish p blications contrib ted to onl
1 per cent of the total circ lation in 1 , a drop of 2 per
cent from 1 .
rd contin es to be a ernac lar lang age with the
highest circ lation, followed b el g and Marathi.
Circulation of registered publications in FY14* and FY15*
*excluding bilingual and multilingual publications
Source: he Registrar of ewspaper in India, nn al Report 1 ended on 1 March 201 nn al Report 1 ended on 1 March 201 .
68
. he Registrar of ewspaper in India, nn al Report 1 ended on 1 March 201 nn al Report

1 ended on 1 March 201 .
Circulation of registered publications in FY15 by Social media programmes: shaping localised
regional language offerings
In an effort to ensure a deeper connect between Amar

Ujala and its various pockets of readers, the company
has been running a product integrated social media
programme, which has been helping it drive circulations
by organically shaping the newspaper to their readers

tastes. This involves carrying newspaper content to
hyper local audiences on social media sites, measuring
their responses, capturing their voices and using this to
shape personalised and localised offerings. The mobile
app mirrors this exercise and so does their website.
Complimenting this, the company ran an extensive
covert study of user tastes in regions it intended to grow,
using popular social networks, which are destination
spots for the young, high-value user. This allowed the
company to map the psychographics of various audience
pockets and create a user-guided framework for their
product. These programmes have allowed the company
to extend its reach deep into competition readership,
and in existing regions, improve reader-connect with its
own readership significantly.
Probal Ghoshal
Whole Time Director
Amar Ujala
Disclaimer: nless otherwise noted, all information incl ded in this col mn/
article was pro ided b Probal Ghoshal. he iews and opinions e pressed herein
are those of the a thors and do not necessaril represent the iews and opinions
of KPMG in India ince otes will be present in m ltiple chapters, recommend
this disclaimer be mo ed to the end of the doc ment.
69
Hyperlocalisation on the radar
s companies are increasing their foc s on tier-II - tier-III
cities, and r ral areas, the ha e started deliberating on
their e isting b siness models. he b siness models that
were apt for metros and tier-I cities, might no longer hold
rele ance for the new emerging cons mption centres.
To this end, the print players are going hyperlocal too,
partic larl in the markets with lower internet penetration,
launching their leading properties that cater to audiences
in a restricted format. In 201 , ainik haskar
la nched the editions of its newspaper in hagalp r,
M affarp r and Ga a in ihar, ha ing la nched a Patna
edition in 201 . hese la nches took the total tall of
the newspaper to 0 editions in 1 states. 6 he ainik
haskar Gro p also la nched se en district editions in
ajip r, P rnea, iharsharif/ alanda, rrah, hhapra,
amastip r and arbhanga in 201 . ith rising demand
from smaller towns, other major p blication ho ses,
s ch as okmat and the ind , are also foc ssing on
h perlocal approach for their brands. he moti e of
national pla ers entering new markets with more local
editions is to pro ide targeted reach to ad ertisers. ocal
retail is taking the print ro te to reach local c stomers.
his has res lted in a positi e trend for the ind str as
ad ertisers are coming back to print from , after three
to fo r ears.
d ertisers intending to sa e their marketing
and ad ertising costs, earn a healthier R I, and
sim ltaneo sl , reach e er nook and corner of the
co ntr , ha ing e panded their efforts in the h perlocal
space.
Hyperlocal is not a viable option for major

digital news players, in content and revenue
terms. The content costs for such a product
will be high, quality of always suspect
and revenue from retail advertisers will
be of low yield. Unlike a print product you
cannot solve the problem by increasing your
inventory. Only in a newspaper the front
page can be relegated to page five (after
four full page cover ads). In digital, if your
website or app opens with a display ad, you
run the risk of losing your readers. Plus, in
print or broadcast, the reader has no kill
option. Digital readers are employing ad-
blockers for a uninterrupted read. It is not a
pretty picture.
B . V. Rao
Editor
Firstpost
70
. ho we are, ainik haskar, http //www.dainikbhaskargro p.com/who-we-are-histor .php,

accessed on 11 ebr ar 2016.
6. ainik haskar la nches hagalp r edition, its th , conomic imes, http //articles.
economictimes.indiatimes.com/201 -0 -2 /news/6 1 6 1 dainik-bhaskar-bhagalp r-db-corp,
Softness in newsprint prices
ewsprint prices red ced considerabl in 201 , falling in newsprint prices was one of the major reasons wh
from appro imatel I R 1,000 per metric tonne in the ainik haskar Gro p showcased an incline of abo t
201 ended on 1 ecember 201 to appro imatel per cent in its margins from the mat re editions
I R2 , 00 per metric tonne in 2 201 ended on 0 ne b siness in 1 . Going forward, a f rther correction
201 . correction of abo t per cent in the newsprint of 2 to per cent in newsprint prices is e pected in the
prices res lted in the n mber of firms witnessing growth Indian print ind str . 0
in the I margins in 1 . or instance, red ction
Newsprint prices: Cost per tonne (in INR)
Source: risil Research database. ccessed on 16 March 2016.
Consumption of newsprint in India (million MT)
Source: Indian ewsprint Man fact rers ssociation, http //inma.org.in/cons mption.html, accessed on 2 an ar 2016 KPMG in India s anal sis, 2016.
t 0 per cent of the total cost, newsprint forms a major

part of the e pense for a p blisher in the print ind str .
he total cons mption of newsprint stood at 2.6 million
M in 1 , ha ing witnessed a slender decline from
2. 1 million M in 1 . bo t per cent of the total
cons mption 1. million M was met b imports from
international newsprint prod cers. 1
71
. risil Research database. ccessed on 16 March 2016. 0. Print olding its Gro nd espite igital s nami , delweiss ec rities imited, eptember 201 .
. Print olding its Gro nd espite igital s nami , delweiss ec rities imited, eptember 201 . 1. Indian ewsprint Man fact rers ssociation, http //inma.org.in/cons mption.html, accessed on
. orp td. irector Report, conomic imes, http //economictimes.indiatimes.com/db-corp-ltd/ 2 an ar 2016.
directorsreport/compan id- 0 11.cms, accessed on 2 ebr ar 2016.
n mber of print companies, incl ding regional appreciated against the Ro ble in the last two ears and
pla ers, import newsprint from R ssia owing to lower towards the end of 201 the I R R e change rate
sea freight costs when compared to the . ., and the fell to 0. 1 as compared to 1. in an ar 201 . This
relati el ad antageo s Ro ble R pee e change rate 2. has led to a red ction in newsprint imports from the . .,
ith freight contrib ting appro imatel 1 per cent making anada and R ssia one of the top e porters to
of newsprint landed price, a decline in cr de oil prices India.
positi el impacted the newsprint prices. he R pee has
Fluctuation in Rouble as against the Indian rupee (INR/RUB)
Source: atabase Retrie al stem 2.1 , a der chool of siness, http //f .sa der. bc.ca/data.html, accessed on 2 ebr ar 2016.
In addition, the decline in o erall demand for newsprint

in some of the leading co ntries ha e placed India at
an ad antageo s position to negotiate with newsprint
s ppliers. he first half of 201 witnessed a 12 per cent
decline in the world s demand for newsprint owing to the
shift towards digital media. his is e pected to contin e
with hina s newsprint demand projected to decline b
.6 per cent per ear o er the ne t decade.
72
2. Ind str disc ssions cond cted b KPMG in India. . hina s newsprint demand e pected to decline b .6 percent per ear o er ne t decade , an-Infra,
. atabase Retrie al stem 2.1 , a der chool of siness, http //f .sa der. bc.ca/data.html, http //www.wan-ifra.org/articles/201 /12/01/china-s-newsprint-demand-e pected-to-decline-b - 6-
accessed on 2 ebr ar 2016. percent-per- ear-o er-ne t-de, accessed on 1 ebr ar 2016.
Managing costs through consolidating ad sales Advertisements, going beyond the visual appeal
he print and digital platforms are now being gi en er the last few ears, the newspaper and maga ine
e al importance. on entionall , digital ads were space has witnessed n mero s imaginati e and
belie ed to be completel different from print, with remarkable ad ertising campaigns that ha e reinforced
sales personnel ha ing to do twice the work to process print s capacit to bring abo t an engaging e perience.
ad ertisements across different media. owe er, Pla ers ha e been tr ing o t different si es, shapes,
the ad ent of consolidated ad selling proposition has technologies and placements for a significant cons mer
led to decrease in costs and increase in re en es for engagement. or instance,

companies. Media firms are now offering ad ertisers
bundled solutionsone such bundle could include print Kajaria Ceramics launched a print advertisement
power jacket co ers, ideo ads on digital platforms, in the form of a 3D rendered image. The ad had 3D
radio ads, etc. ompanies, s ch as G ardian ews and glasses attached to it that gave viewers a real-life 3D
Media, and ews International, ha e broken awa from experience.
the traditional ad selling approach and ha e merged print Motorola leveraged a magazine ad for its new
and online ad ertising offerings into a sing lar selling product Moto X to showcase its collection
platform . In India, too, eccan erald has adopted this of different coloured smartphones. The ad had
model to red ce their ad processing o erheads. 6 several keys at the bottom which, when pressed,
changed the colour of the phone displayed in the
advertisement. The ad was made possible with the
use of a polycarbonate paper that covered the LED
In 2015, among the many emerging trends light pipes, which illuminated through the circuit were
in print media, one stands out as most connected to the colour strips.
crucial to the monetisation process of media. Tata Motors advertisement for their Zest sedan was
The advertiser brands or institutions a four page advertorial supplement that included a
have now gone beyond the space-buying transparent packet pasted on the newspaper, bearing
mode, seeking a more holistic package as a distinctively bar-coded car key. Audience were
deliverable from media organisations. This given an opportunity to win the sedan by visiting a
has translated into the advertiser working dealer and matching the bar code. The ad aimed at
closely with their agencies and media communicating the ease of owing a car and resulted
groups and carving custom solutions, often in improved footfall at stores.
with a combination of branding, response
and market impact as deliverables. This may
well be a market response to the absence
of a credible third party index for readership,
a role that IRS once performed for the Year 2015 saw advertisers looking at print
newspaper-advertising ecosystem. to deliver impact more than frequency.
From the dominating jackets to half jackets,
Probal Ghoshal
front page innovations to perfumed papers,
advertisers were looking at print to deliver
the difference which TV could not do. If
Whole Time Director one combined this with the local reach
Amar Ujala and other consumer connect programmes
under which newspapers partnered with
brands, then surely over 25 per cent of the
business was generated through this. This
is a welcome change and possibly the way
forward.
Pradeep Dwivedi
Chief Corporate Sales & Marketing
Officer
Dainik Bhaskar Group
73
. P blishers are sol ing the print-digital ad ertising disconnection b t is it too late , he Media . Print ad ertising inno ations deli er when there is a deeper message to be con e ed , o r tor ,
riefing, http //www.themediabriefing.com/article/p blishers-are-sol ing-the-print-digital- http // o rstor .com/201 /0 /print-ad ertising-inno ations/, accessed on 1 ebr ar 2016.
ad ertising-disconnection-b t-is-it-too-late, , accessed on 1 ebr ar 2016.
6. Ind str inter iews cond cted b KPMG in India.
Technological disruptions
Increasing internet penetration and technology hile the print ind str contin es to witness increasing
ad ancement ha e led traditional print pla ers to acti it from man newspaper and maga ine pla ers,
e periment with technolog both in the ph sical non-print pla ers ha e also started to fora into the
and digital space. ith new emerging concepts and area of news dissemination. ith the growing base of
inno ati e approaches presented to both ad ertisers and generation in India, digital media has emerged as one of
readers, the landscape of print media is transforming. the fa o red destination for news and information, which
hile the pla ers are e panding their presence on digital in t rn has enticed pla ers from the fields of social media,
media, the are taking proacti e steps to s stain their search engine, handset man fact ring, app de elopment,
circ lation re en e and pre ent cannibalisation from content aggregation, etc. to e plore this space. he swift
the new a en es of news and information. he ph sical growth of news cons mption has established the mobile
newspaper copies still pro ide a critical mass, reach and phone and portable de ice spaces as the new battlefield
scale, and constit te a significant part of the re en e for se eral companies. irms are working harder than
pie for the print ind str . he a gmented and irt al e er to keep readers within their ecos stems b offering
reality concepts are being adopted across the industry to them more prod cts and ser ices.
increase the o erall engagement with readers.
Emergence of pure play content websites

like News in Short, Newshunt, ScoopWhoop
etc. could be the next game changer.
Pradeep Gupta
Chairman and Managing Director
Cybermedia
74
Digital developments in news and information
Source: 1 redit for the first Mala alam news app goes to Manorama , Manorama nline, http //english.manoramaonline.com/lifest le/gadgets/digital-india-week-mala ala-manorama-mobile-app-nokia.
html napdeal now shifts foc s to r ral areas , accessed on 1 March 2016
2 fficial witter pages
op est Indian ews pps for martphones , eebom, http //beebom.com/201 /0 /best-indian-news-apps-for-smartphones, accessed on 1 March 2016
imes of India brings the newspaper li e , fa s , http //www.afa s.com/news/stor / 62 1 imes-of-India-brings-the-newspaper- li e, accessed on 1 March 2016
he jo rne of India s highest rated news app , Inshorts, http //blog.inshorts.com/201 /12/indias-highest-rated-news-app-inshorts-in-201 -timeline/, accessed on 1 ebr ar 2016
6 Media ac ires social media agenc ebit de , fa s , http //www.afa s.com/news/stor / 0 -Media-ac ires-social-media-agenc - ebit de, accessed on 1 March 2016
Manorama la nches first pple watch app in Mala alam , Manorama nline, http //english.manoramaonline.com/lifest le/gadgets/manorama-la nches-first-apple-watch-app-in-mala alam.html,
accessed on 1 March 2016
acebook la nches Instant rticles in India , i emint, http //www.li emint.com/ ons mer/ n jrd6k lI r / acebook-la nches-Instant- rticles-in-India.html, accessed on 1 March 2016
Manoramaonline offers immersi e e perience to readers with 60 ideos , Manorama nline, http //english.manoramaonline.com/news/science-technolog / irt al-realit -mala alam-media-
manorama- 60.html, accessed on 1 March 2016
.
75
Engagements spanning multiple screens
Leveraging virtual reality Virtual Reality, or VR, is a frontier
technology that allows the user to take in
irt al realit is grad all instit ting itself as one of
life-like immersive imagery from all angles.
the most so ght after technologies in the print media.
VR helps us tell the stories better and to
Mala alam Manorama s irt al realit 60 degree app,
emotionally connect with our audience. We
la nched in 201 , helps iewers to get irt al realit
have started doing this with our travel and
e perience with the help of a cardboard iewer from
auto channels and are looking to expand
Google and other major online retailers.
this further.
Using augmented reality

In 201 , the imes Gro p la nched an gmented Jayant Mammen
Mathew
Realit R application known as li e in order to
e tend c stomer engagement be ond the ph sical cop .
ith more than one million downloads since its la nch,
the app has been s ccessf l in attracting a diences Director
attention with its interacti e and responsi e feat res. Malayala Manorama
er the ears, the app has attracted and cond cted
more than 200 brand campaigns across a n mber of
ind stries, crafting R enabled ad ertisements to
enhance c stomer e perience. ome of the major
campaigns la nched with the help of li e app incl de
M , ams ng, I I I, ed- , adb r , emina and
di, among others. he app is a ailable across ario s
platforms s ch as indows, ndroid, i , etc.
hile the li e app has been able to garner interest
among the readers, some of the ind str pla ers are of
the iew that the iewers who are interested in digital
medi ms will an wa s access them directl and hence
an app is of limited se to direct them from a traditional to
a digital medi m.
Image courtesy: Mala ala Manorama.

76
. Ind str disc ssions cond cted b KPMG in India.

The increasing penetration of broadband Magazine brands evoke strong trust and
and smartphones is driving the engagement amongst its user communities.
consumption of digital video, with the This is far more than any other media
average time spent of viewing videos platform or offering. The challenge for the
increasing. Even though traditional print magazine media is to leverage this unique
players have incorporated elements such strength across various digital platforms as
as virtual reality, augmented reality and digital is an interactive any time anywhere
QR codes for driving video consumption to medium that offers several opportunities
complement their print properties, there are for unlocking more value from engaged
limited options available to integrate videos. consumers. Magazine publishers and
Hence, to capture more eyeballs, players are editors will have to think differently about
giving equal importance to both print and what they do on digital compared to fixed
digital. frequency print titles, for starters. Multi-
platform opportunities across mobile, social,
Additionally, print players are traditionally video, on-line, apps, programmatic, ecom
not geared to create multimedia content, across a magazine brand will open new
especially video. This challenge is being revenue and profit streams which did not
addressed by training internal resources exist earlier. Seamless engagement across
(essentially photographers), sourcing from various digital platforms with audiences will
third party providers as well as in some be the key.
cases, providing avenues for citizens to
Ashish Bagga
contribute pictures and videos.
Bijoy Sreedhar Group CEO

Vice President The India Today Group
Business Development
Lokmat
lippar , an R mobile app, was la nched in India in Via QR codes

201 . It has recorded more than 00,000 downloads e er For a multitude of businesses, predominantly education,
since. he compan behind the app has collaborated with food and beverages, packaged goods manufacturing and
a n mber of renowned ad ertisers incl ding Kellogg s, retail; the foremost channel of promotion continues to
I M, ipro and ero onda. In 201 , the compan remain the conventional print/publishing media. However,
partnered with mar hitra Katha to prod ce a digitall over the years, QR codes have emerged as one of the
interacti e iss e of their kid s maga ine inkle 60. In Ma lucrative options to bridge the gap between print and
201 , the maga ine n eiled feat res s ch as games, digital advertising. A QR code is a square-shaped barcode
bon s material, selfie with ppandi, etc., that le erages embedded in newspaper advertisements that links
mobile a gmented realit and image recognition platform people using a smartphone to webpages, photo galleries,
of lippar, and within a months time witnessed more videos, coupons, tickets, etc. Having garnered significant
than 0,000 interactions between the maga ine and popularity in the west, QR codes have made serious
app.61 e to the partnership, kids co ld now pla headway in India, with several leading brands embracing
games and e perience the stories coming to life on their the concept. For instance, LG, DHFL, Shoppers Stop,
smartphones.61 Intec, Cox & Kings, SimplyMarry, State Bank of India,
Spykar and Advanced Hair Studio have adopted QR codes
in their newspaper and magazine advertisements to drive
their readers to their online content.
77
. e wo ld rather become the ne t Microsoft or Google than sell , conomic imes http //articles. 61. lippar brings inkle to life, now pla darts with pandi , Indian press, http //indiane press.com/
economictimes.indiatimes.com/201 -11-11/news/6 1 2 6 1 a gmented-realit - alcomm- article/technolog /social/blippar-brings-tinkle-to-life-now-pla -darts-with-s pandi/, accessed on 1
ent res-app, accessed on 1 ebr ar 2016. ebr ar 2016.
60. inkle n eils a gmented realit enhanced maga ine for kids , est Media Info, http //www.
bestmediainfo.com/201 /0 /tinkle- n eils-a gmented-realit -enhanced-maga ine-for-kids/,
The New York Times app, named as is, sums up the
When you look at the consumer also, essence of stories in one sentence with photos and
whether it is shopping, entertainment or bullet-point summaries. The app delivers content
information, they seamlessly move back categorised in different genres such as politics,
and forth from physical experience to science, technology, business, politics and arts. Users
digital. Their culture now is phygital. So are given an assortment of reports written especially
at Mathrubhumi, we no longer approach for the app and readers can sift through these stories
our products in silo as traditional, physical in a few seconds. The app allows users to save the
or digital, but have a more embracing story for a later reference. The user can also transfer
outlook of considering these as phygital. the story to their smartphones.
We are building and delivering as much
digital engagement around all our physical The Guardian has an app called Moments that
products, so that they stay relevant. We consists of concise screens, bearing custom-made
use QR codes effectively in appropriate content for a particular time of the day, and a day of
contexts in our physical media products to the week
give instant digital connect and experience ith news p blishers foc ssing on de eloping
for the audience. We use it for editorial content for smartwatches, ad ertisers are looking
content as well as advertising. With Vignet, at smartwatches as the ne t ad ertising channel for
the digital publishing software from our targeted promotions. he ad ertising spend is e pected
technology venture, we are able to do most to increase from an estimated 1. million in 201 to
things digital much faster than ever and appro imatel 6 million in 201 .66
integrate them with physical media and
brand collaterals.
Foldable newspaper, a concept that blurs the
Shreyams Kumar line between physical and digital media

ontin o s research and de elopment in the displa
Director - Marketing & de ice arena has had a considerable impact on the print
Electronic Media ind str , making digital te t a staple across a n mber of
domains. Going forward, similar de elopments are likel
Mathrubhumi
to change the landscape of news deli er . or instance,
e-paper reader ma t rn o t to be a major breakthro gh
that mo lds the print space in the coming ears. If we
go b the protot pe, the e-paper reader is a light, e ible
and foldable electronic reader with a to chscreen that
Smartwatches, placing the world on wrists looks like a paper. hese foldable displa s co ld be sed
for applications s ch as e-books, newspapers, portable
earable de ices, partic larl smartwatches, ha e signs, etc.
started gaining traction in the de eloped markets and
a few de eloping nations, if not worldwide. Gi en this If launched commercially, the device has the potential to
backdrop, a n mber of third-part applications are being emulate and replace the traditional newspaper in the long
la nched for wearable de ices, and o er the ne t fo r run. However, with a number of apps that enable users to
ears, the n mber of third-part apps is e pected to read on smartphones and tablets currently, users would
increase from 2, 00 in 201 to ,000 in 201 .62 Keeping need a compelling reason to switch to e-paper reader,
pace with the technological ad ancements, a n mber which is less likely to happen in the short-term.
of print companies incl ding ews, the ew ork
imes, the G ardian, the all treet o rnal and
ha e de eloped apps s pporting tailor-made content for a
swift glimpse on the smaller screen of the watch.6 , 6
The CNN app for Apple Watch allows users to get
breaking news across 12 personalised categories.
Users can simply tap on the screen to open a story
and choose to save it or continue reading on their
phone. They can even launch live CNN TV on their
phone from their watch.6
78
62. pps for wearables set to s rge, Mobile orld i e , http //www.mobileworldli e.com/apps/news- 6 . pple atch 20 apps worth tr ing on la nch da in their de elopers words , heg ardian, http //
apps/app-wearable-de ices-grow-tremendo sl -ne t-fo r- ears/, , accessed on 1 ebr ar 2016. www.theg ardian.com/technolog /201 /apr/2 /20-apple-watch-apps-la nch-da , accessed on 2
6 . he best news apps for pple atch incl de imes, ashington Post and , pp d ice, ebr ar 2016.
http //appad ice.com/appnn/201 /0 /the-best-news-apps-for-apple-watch-incl de-n -times- 6 . is on pple atch , , http //cnnpressroom.blogs.cnn.com/201 /0 /0 /cnn-is-on-apple-
washington-post-and-wsj, accessed on 2 ebr ar 2016. watch/, accessed on 1 ebr ar 2016.
66. igital d ertising nline, Mobile and earables 201 -201 , niper Research, pril 201 .
Social media for news delivery Social media platforms
6
India has a reported 1 million social media sers , Facebook
Twitter Moments
forming abo t 6 per cent of India s internet ser base6 . Instant Articles
he sage of social media platforms in India is on the
rise, with a reported 100 per cent -o- growth in r ral Concept Twitter curates trending Facebook allows news
areas and per cent -o- growth in rban areas in news/tweets and publishers to publish their
1 .6 hanks to the growing pop larit of social media, showcases them in a content directly instead of
some media companies ha e started to calibrate their slideshow format. posting links.72
newsroom priorities. ews items that are likel to create The list is constantly India became the third
more impact on platforms s ch as acebook and witter updated as new stories country in the world to get
are gi en more importance.6 emerge during the this feature.
course of the day
To begin with, Facebook
News is available across launched the service with
varied topics ranging content from five publishers
Mature technology for every aspect of from entertainment, India Today, The Quint, Aaj
newspaper production has existed for quite politics, science, to Tak, Hindustan Times and
some time now. But the emergence of social sports, etc.71 The Indian Express in the
media is realigning newsroom priorities country.73
in a number of media houses, with editors
Developments While Twitter is currently In February 2016, Facebook
asking these two recurring questions;
generating the content announced its plans to open
1. This item is trending on Twitter/ by itself, the platform up the Instant Articles
Facebook should we give it more is expected to soon programme to all publishers
importance? let news organisations globally. Facebooks
generate content, other steps to push news
2. Should we give more importance to or which could then be distribution include
choose this item because it is likely to curated.74 Along with the introducing a Trending
create an impact on Twitter/Facebook Moments feature, Twitter sidebar77 and allowing
tomorrow. also introduced a news verified news ournalists to
tab in their mobile app75 stream live videos directly to
R. Lakshmipathy and acquired Periscope,

a live video streaming
users using the Mentions
app.
Business Head app.76
Dinamalar
In line with the rising popularity of social media, players delivering news
on the digital platform are adopting newer ways of presenting content
on these platforms. For instance, Firstpost, in order to reach out to its
younger audience, presents news items in the form of engaging videos.
Recently, the company published a candid video describing the Union
n mber of leading newspapers in India ha e adopted Budget 2016 in a funny manner, which the youth could easily relate to.69
a new st le of stor telling, deli ering news content
b means of interesting ideos on acebook, pict res
posted on Instagram, etc. 6. se of social media do bles in r ral India , he ind , http //www.thehind .com/sci-tech/
technolog /internet/social-media- se-do bles-in-r ral-india/article .ece, accessed on
The Indian Express, an English-language daily, 6 .
ebr ar 2016.
o o know how man Indians ha e access to Internet , India oda , http //indiatoda .intoda .in/
has registered more than 10,000 followers on stor /internet-access-india-facebook-twitter-social-media-smartphone/1/ 2 2 .html, accessed
its Instagram page, posting some of the best on ebr ar 2016.
6 . Ind str disc ssions cond cted b KPMG in India.
photographs from their news archive. 0. ow r ewspapers re ngaging Indian Millennials n Instagram , ightho se Insights, http //
lightho seinsights.in/indian-newspapers-on-instagram.html/, accessed on ebr ar 2016.
The Times of India leverages Instagram to share 1. witter la nches Moments to showcase best tweets , imes of India, http //timesofindia.
stories in the form of pictures and short videos. The indiatimes.com/tech/tech-news/ witter-la nches-Moments-to-showcase-best-tweets/
articleshow/ 2 0.cms, accessed on 11 ebr ar 2016.
newspaper has gained over 124,000 followers. 0 2. acebook M lls d hanges for Instant rticles fter P blisher P shback , , http //www.wsj.
com/articles/facebook-m lls-ad-changes-for-instant-articles-after-p blisher-p shback-1 2 1 ,
long with a pack of print pla ers, pla ers not belonging . Indian press.com among first p blishers to la nch acebook Instant rticles for ndroid, Indian
to the print domain ha e also taken se eral initiati es to press , http //indiane press.com/article/technolog /tech-news-technolog /indiane press-com-
among-first-to-la nch-facebooks-instant-articles-for-android/, accessed on 11 ebr ar 2016
become contenders in the news space. . witter la nches Moments, a rated ews ab , R K, http //trak.in/tags/b siness/201 /10/0 /
twitter-moments-c rated-news/, accessed on 11 ebr ar 2016.
. witter periments ith ews ab , eed, http //www.b feed.com/ale kantrowit /
79 twitter-adds-a-news-tab-in-new-e periment bftwnews tm term ld pgc .whe b G 0,
6. hat is witter s new Periscope app , elegraph , http //www.telegraph.co. k/
technolog /201 /12/010/what-is-twitters-new-periscope-app/, accessed on 11 ebr ar 2016.
. acebook Is perimenting ith ow o Read he ews , ffington Post, http //www.
h ffingtonpost.com/201 /06/ 0/facebook-trending-e periment n 6 2.html, accessed on
ebr ar 2016.
Mobile applications for news on-the-go
Mobile app sage in India is o tperforming the global larger share of the mobile- ser pie. In 201 , pple
growth rate, registering an a erage -o- growth of 1 1 la nched pple ews that comes pre-installed with
per cent, albeit on a smaller base. mong the app its i mobile operating s stem. he app primaril
categories, news and reading witnessed an a erage aggregates content from abo t 0 media companies,
ann al growth rate of 11 per cent, making it the second incl ding he ew ork imes and og e. eing made
fastest growing app categor after personalisation . a ailable in the . . and the .K., the app is likel to find
ith decreasing attention spans and the snowballing its wa to India soon. 0
trend of accessing news on-the-go, companies ha e
started to foc s on the news categor to grab a dditionall , n mero s third-part app de elopers ha e
also emerged in the news and information space.
Third-party apps in the news and information space

Service Founded in Source of revenue Features Performance
Inshorts81 2013 Focus, as of now, 60 word summaries of the days top national and global In 2015, emerged as Indias
is to drive the stories highest rated news app with more
engagement and Focusses on the essential facts and does not provide any than three million downloads and
the company is opinions more than half of a billion page
not emphasising Launched its Hindi interface recently and plans to launch views per month
on revenue others in Marathi, Kannada and Tamil
models TOSS feature allows users to share notifications to other
users of Inshorts in their contacts list.
dailyhunt82,93 2009 Native ads Focusses on 90 per cent of non-English speaking population Reported 90 million installations
(formerly Transactions by providing newspapers in regional languages with 2.3 billion pages being
known as for digital and Available for over 200 publications in more than 12 different consumed monthly
NewsHunt) physical books languages
Discovery and Provides magazines and e-books in vernacular languages.
distribution
Flipboard84 2010 Advertising Social-network aggregator About 300 million downloads on

Digital magazine platform where individuals are able to mobile devices and over 70 million
create magazines on different themes. active users around the world
Quartz85,86 2016 Advertising An iOS application that allows users to have a conversation Considering the app was launched
with the news, similar to texting in February 2016, there are no
A particular story is introduced through a text. The user statistics available
is then provided a couple of options to choose from, one
providing further details on the story and other allowing to
skip to the next story
The app provides bursts of important stories filled with emo is,
GIFs and occasional haikus.
. India a app sage o tpacing global growth ahoo nal tics , ahoo, https //in.finance. ahoo.com/ 2. ail h nt, http //www.dail h nt.in/, accessed on 1 ebr ar 2016.
news/indiaa-app- sage-o tpacing-global-1 6060 .html, accessed on ebr ar 2016. . ail h nt, http //www.dail h nt.in/abo t.php, accessed on 1 ebr ar 2016. 80
. India is the fastest growing mobile app market , conomic imes, http //economictimes. . lipboard as iled o Raise nother 0M, ech r nch, http //techcr nch.com/201 /0 /21/
indiatimes.com/tech/software/india-is-the-fastest-growing-mobile-app-market- ahoo/ ipboard-d/, accessed on 1 ebr ar 2016.
articleshow/ .cms, accessed on 1 ebr ar 2016.
. It s here art s first news app for iPhone, art , http // .com/61 00/its-here- art s-first-
0. pple s new wa to deli er the news to o , , http //mone .cnn.com/201 /06/0 /media/apple- news-app-for-iphone/, accessed on 1 ebr ar 2016.
news-app/, accessed on 1 March 2016.
6. art s new app wants to te t o the news, he erge, http //www.the erge.
1. he jo rne of India s highest rated news app, Inshorts, http //blog.inshorts.com/201 /12/indias- com/2016/2/11/10 6 / art -app-iphone-ios-the-atlantic-download, accessed on 1 ebr ar
highest-rated-news-app-inshorts-in-201 -timeline/, accessed on 1 ebr ar 2016. 2016.
Key trends in the content industry Television players
ele ision pla ers ha e also realised the importance
As per census data of the total literacy of 75%, the of ser engagement, and th s, ha e increased their
English literacy in India is only 10%. Majority of content presence across se eral digital platforms.
that gets consumed in India, be it TV channels or Print
Newspapers get consumed in local Indian languages. Apps by television players in the news and
Digital equivalent demand of this behavior hasnt information space
gotten enough support by technology providers and

content publishers yet. We see that changing in 2016 for Company Services Performance
following reasons.
87
NDTV Created multiple mobile NDTV News and NDTV
1. India will add 400M new internet users in coming few applications including Cricket have registered
years. These users will access Internet for the first NDTV News, NDTV India, more than one million
time through their mobile devices, and they will be GADGETS 360, NDTV downloads in android
local language users. Rapid addition of these users ricket, N TV Profit, N TV devices
to our Internet economy will force all companies with InCar, NDTV Good Times
online presence to provide local language variants of and NDTV Play
their products.
2. We will see explosion of Indian language digital India India Today Group Digital ITGs web presence
content. Just as we saw with English content Today (ITGD), the digital wing of has increased over the
people start contributing to the medium when they Group88 India Today Group offers years with more than
get comfortable consuming it. We expect the same for content from magazines 10 million distinct users,
Indian language content. We are already seeing initial (India Today, Business ranking it among the top
signs in form of personal blogs, short form videos and Today, and Cosmopolitan) and information websites
jokes on Whatsapp in local languages. and news channels (Aaj in India
Tak, Headlines Today)
3. Availability of new tools for content creation, through mobile apps and
including innovations around Indian language the Internet
keyboard. Indian language scripts are complex as
compared to English. Multiple characters come CNN-IBN Launched a drive in 2015 -
together to form one Akshar. As a result current and to engage users real-time
typing speed of an average typist for Hindi is around IBN789 via Twitters Periscope.
10% that of English. As users start sharing and The focus was to deliver
creating original content, we will see innovations in interactive content,
area of content creation for Indian languages. improving audience
engagement and enabling
4. Growth of digital advertising and in local languages.
people to watch live news
85% of advertising that happens in Print or TV
through the app
happens in local languages. Digital channels will start
seeing similar patterns in 2016. Note: At Dailyhunt we
have seen an almost 3x jump in click through rates for
local language ads.
Virendra Gupta
Founder and CEO
Verse Innovation Pvt Ltd (Dailyhunt)
Disclaimer: nless otherwise noted, all information incl ded in this col mn/article
was pro ided b irendra G pta. he iews and opinions e pressed herein are those
of the a thors and do not necessaril represent the iews and opinions of KPMG in
India ince otes will be present in m ltiple chapters, recommend this disclaimer
81 be mo ed to the end of the doc ment.
. econd creen he all new wa to connect with , , http //www.ndt .com/ ideo/pla er/ will-set-a-new-benchmark-and-compel-the-competition-to-la nch-inno ati e-content-ashish-bagga/,
news/second-screen-the-all-new-wa -to-connect-with-ndt /2 26 , accessed on 1 ebr ar 2016. accessed on 20 March 2016.
. aj ak s growth will set a new benchmark and compel the competition to la nch inno ati e . -I I se witter s Periscope , afa s , http //www.afa s.com/news/stor / 6 -
content shish agga , est Media Info, http //www.bestmediainfo.com/2016/02/aaj-taks-growth- I --I - se- witters-Periscope, accessed on 20 March 2016.
Challenges
New entrants and growing competition in news and information space expected to impact the print
industry, in the long run
raditionall , print and tele ision companies operated he opinion amongst traditional print pla ers, on whether
in different ecos stems, each ser ing a different set of to host news on platforms s ch as acebook, witter,
a dience. owe er, this has changed with the increasing Inshorts, ail h nt, etc. remains di ided. hile a n mber
reach of digital media. Gi en the increasing pop larit of of pla ers host their news content on c rated news
the digital medi m as a so rce for news cons mption, aggregation platforms to dri e their readership, others
print pla ers co ld essentiall be competing with belie e that this wo ld create nnecessar competition
tele ision companies, third part apps, technolog giants, and cannibalise their re en es in the long-term, as more
and social media platform for the same set of target and more people might switch to the aforementioned
a dience and mindspace. platforms for news cons mption as against the digital
properties of indi id al print pla ers.
Note: Pla er names are ill strati e for sample p rposes.
Source: KPMG in India anal sis.
82
eo-spe ifi advertisin on alternate platforms Mobile apps recognising the importance of
may hamper print ad growth engaging with the target audience in local
Print is one of the most so ght after medi ms for languages
localised ad ertisements. rands looking at reaching and The number of internet users in India is on the rise and is
engaging a dience in smaller cities and towns, do tend projected to be 825.2 million in 2020 from 331.5 million
to make significant se of the print medi m gi en its in 2015. At the same time, there has been a continual
abilit to deli er a local message, a significant ad antage shift of Indian consumers toward vernacular content
o er . Increasing foc s on regional ad ertising has with Hindi emerging as a major language for accessing
come to light owing to a n mber of de elopments, major internet and users accessing the internet in English
being content cons mption in nati e lang ages. accounting for small fraction of the total user base.94
owe er, with M radio phase III a ctions, the ad ent Thereby, smartphone companies are now focussing on
of geo-targeted ads in tele ision space, and mobile apps making their handsets support languages other than
recognising the importance of engaging with the target English as well. Furthermore, a number of app developers
a dience in local lang ages, ad ertising re en e of the have introduced applications specifically for regional
print ind str are likel to get ad ersel impacted in the audiences. For instance, a mobile messaging app Hike
medi m to long term. unveiled a number of features in 2015, including keyboard
support in Hindi, Marathi, Tamil, Gujarati, Bengali, etc.95 In
FM radio phase III auctions another instance, the creators of MyGov portal launched
a mobile app in 2015 in English and Hindi, and announced
In 2015, the Indian radio industry concluded the first leg that the app would soon be able to support several
of phase III auctions. The e-auction which was conducted regional languages.96
for 135 channels, concluded with 97 channels being
allocated across 56 cities90. The growing reach of radio is The aforementioned developments in the television, radio
expected to have a profound impact on smaller regional and digital space are could possibly expected to reduce
print players, which do not have the financial muscle the prints share in the overall ad pie.
to compete with large print players that have begun to
spread their wings in advertising avenues other than print.
For instance, HT Media, which operates the Fever FM
radio station, spent INR340 crore in total to acquire 10
licences91, and Jagran Prakashan acquired Radio City.92
Geo-targeted ads in the television space

In the TV sector, Star India set up an advertisement
platform, known as Adsharp, for broadcasting geo-
targeted ads in 2014. Using this, companies could
customise their ads as per the tastes of specific local
audiences. Furthermore, a significant number of
media companies in the country, such as Zee TV, IBN7
and Colors, have been using Amagis (a global media
technology company) services to geo-target their ad
campaigns. In 2015, Amagi and Zee Entertainment
extended their services to advertisers through the
inclusion of Zee Cinema to their list of channels that offer
geo-targeted TV ads.93
0. irst atch M Phase III ction Res lts, Ministr of Information and roadcasting, eptember 201 , . KPMG in India s anal sis, 2016 Ind str disc ssions held b KPMG in India.
http //mib.nic.in/linksthird.asp , accessed on 12 March 2016. . ike to la nch its messenger in eight Indian lang ages, inancial press, http //www.
1. M e-a ctions Radio operators spend big b cks on licences , i emint, http //www.li emint.com/ financiale press.com/article/ind str /tech/hike-to-la nch-its-messenger-in-eight-indian-
ompanies/ fG2w p w sh2eK d G /Go t-makes-Rs 000-cr-from-first-batch-of-Phase- - M- lang ages/1 26 /, accessed on 1 ebr ar 2016.
83 a ction.html, accessed on 1 March 2016. 6. M Go makers to introd ce apps in Indian lang ages, GR, http //www.bgr.in/news/m go -makers-
2. agran Prakashan completes ac isition of Radio it , he conomic imes, http //economictimes. to-introd ce-apps-in-indian-lang ages/, accessed on 1 ebr ar 2016.
indiatimes.com/ind str /media/entertainment/media/jagran-prakashan-completes-ac isition-of-
radio-cit /articleshow/ 6 201 .cms, accessed on 1 March 2016.
. M GI I M I R G - RG
R I I G , magi website, http //www.amagi.com/press-release/ eel-and-amagi-add- ee-
cinema-to-list-of-channels-that-offer-geo-targeted-ad ertising/, accessed on 12 ebr ar 2016
Lack of a credible measurement system
he print ind str has been facing perpet al iss es The main currency for print advertisers,
with the meas rement s stem sed in India. to choose publications to advertise, are
measurement system is a critical requisite that helps readership data and circulation. But the
dri e print ad ertising re en es. Rob st meas rement recent war over the IRS does not augur
s stems also help brands identif media cons mption well for the print media sector. In a
patterns across their target audience, and decide upon heterogeneous market such as India, you
the ad ertising mi . Indian Readership r e IR was cannot invest in a medium without research
introd ced b MR Media Research sers o ncil so a robust individual measurement
in 1 , aimed at establishing an ind str standard for systems is of paramount importance.
readership. owe er, the s r e s ffered a setback with Focus should be on the lines of creating
prominent print players in the industry raising questions a better validation system, and using a
on its credibilit . In 201 , the IR res lts were challenged larger sample size.
b 1 leading newspapers, which claimed that the res lts
R. Lakshmipathy
were awed. he new IR was released in 201 , with
multiple changes in the methodology to enhance its
acc rac . owe er, it contin ed to recei e criticism from
pla ers in the print fraternit , as onl a arter of the Business Head
s r e was deemed fresh and the rest of the content Dinamalar
being the one discredited in 201 . wing to this, the
industry has reached a consensus that a more robust and
pertinent meas rement s stem needs to be established.
Print pla ers ha e come together and are c rrentl
e al ating potential meas rement s stems sing
roadcast dience Research o ncil R as a
benchmark for design, technolog , ownership of
constr ct and deli er . he belie e their representation
in MR Media Research sers o ncil is re ired,
similar to how I India roadcasting o ndation is
represented in R . The industry intends to ensure
that there is a meas rement c rrenc that is backed b
all, whether it is IR or an other c rrenc .
In light of growing apprehensions in the print sector,
Media Research sers o ncil MR the bod
controlling Indian Readership r e IR and
ha e joined hands, with now owning 0 per cent
of IR . oth the bodies ha e anno nced their plans for
re i ing IR , with the field work for IR 2016 likel to
start in earl 2016. he sample si e wo ld be increased
to 0,000, or b abo t per cent o er the pre io s
n mber, and proper back-checks wo ld be performed.100
he renewal of IR is likel to act as a firm gro nd for
setting p of a rele ant meas rement standard, one
which intends to restore the faith of the print comm nit
in the coming ears.
84
. op newspapers it IR in protest, imes of India, http //timesofindia.indiatimes.com/india/ op- 100. e e recommended that the go ernment onl ad ertise in papers with certificates - hashi
newspapers- it-IR -in-protest/articleshow/2 6 6 .cms, accessed on 1 ebr ar 2016. inha, hairman, , fa s, http //www.afa s.com/inter iews/inde .html id 6 e e-
. hat s new ertainl not IR 201 , change Media, http //www.e change media.com/print/ recommended-that-the-go ernment-onl -ad ertise-in-papers-with- -certificates--- hashi- inha-
whats-new-certainl -not-irs-201 -sa s-times-of-india 6 .html, accessed on 1 ebr ar 2016. hairman- , accessed on 11 ebr ar 201 .
. Ind str disc ssions cond cted b KPMG in India.

Increasing digital ad spends
igital media as a categor grew the fastest in 201
at .2 per cent and is e pected to show a growth of
. per cent in 2016. It is e pected to reach a al e of
I R ,110 crore, acco nting for 1 per cent of the total
ad ertising e penses in 2016, making it the third largest
contrib tor after tele ision and print.101 This could largely
happen at the e pense of the print ind str , which is

likel to lose a significant share in the total ad pie o er the
ne t fi e ears.
Advertisement revenue composition
Source: KPMG in India s anal sis, 2016.
It is estimated that by 2020, more than 11 per cent of

the total advertising spend in India would be towards Over the past few years, advertising
digital media. Increasing mobile and internet penetration, revenue of digital media has galloped at
reducing data prices and introduction of 4G services more than twice the rate of Indian Media
are expected to further propel the growth of digital Industrys growth. This euphoric phase
advertising in India. Government initiatives such has firmly placed digital ahead of radio
as Digital India, digital literacy focussing on and OOH advertising, though print and TV
strengthening Indias technological infrastructure and still account for over two-thirds of industry
achieving a digitally enabled and inclusive future can pickings. All the same, bellwethers
provide the much required impetus. [print/TV] are pulling out all stops to
secure their fair share of the growing
Indian advertising pie. With the countrys
economy poised for a healthy 7 to 8 per
cent p.a. growth trajectory, the battle
between media platforms is not going to
ebb anytime soon!.
Mohit Jain
Executive President
The Times of India Group
85
101. d spend in India to grow at 1 . in 2016, sa s Gro pM , siness tandard, http //www.
b siness-standard.com/article/companies/ad-spend-in-india-to-grow-at-1 - -in-2016-sa s-
gro pm-11601200001 1.html, accessed on 16 ebr ar 2016.
wing to the growing digital opport nit , man of dditionall , the digital media ser es as a growing
the print pla ers ha e now started offering content prospect for ad ertisers as the are able to r n instant
thro gh mobile apps and web portals. he possibilit of s r e s, connect with target a dience, and get
cannibalisation between the print and digital media space antifiable statistics. er the ne t few ears, print
does not yet exist, as the latter merely complements the companies are likel to start distrib ting content to a
former. owe er, the digital media is slowl and steadil broader a dience. owe er, e panding across digital
distressing the readership fig res for the print space. platforms ma not be ade ate nless this is effecti el
his is largel being witnessed in the case of millennial monetised to recompense for an loss of re en e
generation who access content in nglish, and primaril thro gh traditional medi m.
rel on news feeds from different platforms, incl ding
social media.
Continued dependence on newsprint prices and
u tuations in e han e rates
he Indian print ind str contin es to be dri en b the
Currently, the revenue model for digital macroeconomic d namics in the co ntr , gi en the high
news publications is advertising. That is also dependence on imported newsprint. en tho gh the
the traditional print and to a large extent newsprint prices ha e e perienced a decline of late,
broadcast model where the advertiser firms e pect the newsprint prices to incline pward in
coughs up for subsidising the reader. News the f t re. he dwindling Indian R pee has historicall
still commands a certain premium in print taken a toll on the print space in India. ewsprint costs
and broadcast. For example, ad revenues of make p for abo t half of a p blisher s e penses and an
television news (as a percentage of the total ct ations in the prices or e change rates affect their
ad spend on television) will be in multiples bottom line. Gi en that a large ch nk of the newsprint in
of the television news viewership which is India - especiall for nglish newspapers - is imported,
only 6 or 7 per cent of the entire television the depreciation of r pee sends the prices spiralling p.
universe. There is a halo around the news ith no significant capacit e pansion planned in the
genre here which allows it to punch way Indian newsprint space, the changing aspects of the
beyond its weight in terms of ad revenue imported newsprint concerning landed cost and alit
share. In digital, there is no aura around co ld contin e to direct the ind str in the coming ears.
news products. In fact, in the digital space,
the news brand has been diluted because Restrained growth opportunities in print media
the nature of news itself undergoing a
dramatic transformation and individuals Market fragmentation and existing competition
are getting to be media houses on their restrict expansion opportunities
own. So, it is unlikely that a news product wing to the rising demand of regional content and
in the digital space is ever going to be able saturating circulation in metros and tier-I cities, print
to command a premium in the ad market pla ers ha e briskl e panded their presence to markets
space like print or broadcast. That is why cons ming news in lang ages other than nglish. er
payment gateways are not going to be easy the past few ears, pla ers ha e la nched co ntless new
to enforce in India. Yet, no digital revenue papers/editions in regional markets. onse entiall , a
model will be successful until companies majorit of indi-speaking states are now home to a
start charging the consumers as they are n mber of media pla ers, leading to a massi e pa cit
the ones that will bring in the volume. That of new markets to be e plored for spreading b siness.
is the challenge that digital news is facing. ernac lar markets, too, e hibit a similar trend as a high
It is waiting for the magic bullet. degree of competition e ists in ke lang age markets,
s ch as amil ad , Kerala, Karnataka, ndhra Pradesh,
B. V. Rao disha and est engal.
Capital intensive nature of the industry

Editor constrains organic growth
Firstpost
Print is a capital-intensi e ind str and it takes an where
between to 10 ears to reach break-e en.102 hile this
makes it diffic lt for small pla ers to hold their footing, it
lea es little or no headroom for f rther organic growth for
large players, compelling them to either calibrate
86

their in estment efforts on the e isting markets to fortif growing focus on tier II, tier III and rural areas, the sectors
their presence or di ersif into other M sectors radio, such as FMCG, auto, retail, e-commerce are likely to
tele ision, etc. . he imes Gro p, a leading p blishing increase their ad spend in these markets. Changes on the
pla er in the Indian media market, has contin ed macroeconomic level are also likely to be conducive for
to e plore growth territories other than newspaper the print industry.
p blishing, b establishing presence in the radio Radio
Mirchi , tele ision oom, M and digital imes obs, With a number of third-party apps, social media players,
technology giants, and television players establishing
impl Marr , Magic ricks spaces.

their presence in the digital news and information space,
competition is likely to intensify for the print players on
digital platforms. Thus, in the near future, we could see
heightened collaboration among the print and curated
Non-print businesses like digital and radio news aggregators to increase their returns from the
will provide the added support in terms of medium. Content differentiation, innovative ways of
a stronger media proposition. With greater storytelling and superior content mobility could become
acceptance of digital news, shelf life of imperative for print companies, as access on ubiquitous
news has greatly increased as readers are screens gain further traction.
able to access news throughout the day
rather than ust being limited to the first
part of the day.
Girish Aggarwal Demanding readers, growing opinions,

digital profligacy, accurate and yet
differentiated coverage, etc., placed
Promoter Director greater demands on the industry. The
Dainik Bhaskar Group need to continuously improve the content,
look, tone and feel continues to dominate
the editorial rooms. Stickiness will be
a huge factor for the industry and the
future belongs to those who quickly adapt
to readers needs. The need to connect
Conclusion with readers and gauge their preferences
has grown this year and is likely to keep
Even though revenue growth has slowed down in the moving in this direction.
recent years, the print media continues to hold relevance,
Pradeep Dwivedi
which can be gauged from the addition of more than
5,000 registered newspapers/periodicals annually for the
last few years103. Regardless of the noteworthy growth
in digital media, the print industry faces no immediate Chief Corporate Sales and
challenge as internet penetration in India stands at a Marketing officer
mere 27 per cent104, which is currently too low to cause Dainik Bhaskar Group
any adverse impact. Print companies are utilising digital
medium for a consolidated service offering and many
of the companies have expanded their existing portfolio
to include new delivery formats such as social media
platforms, mobile news apps, etc., for an additional
stream of revenue. As content becomes the focus of the print players,
the improvement in reader experience and overall
2015 turned out to be an interesting year for the print effectiveness of ad placements is likely to be key. This
circulation revenue. In spite of an increase in cover prices, could partially depend on the robust measurement
several of the players recorded a rise in their circulations, systems, by measuring user engagement across
resulting in a y-o-y growth of 8.2 per cent in 2015, over numerous platforms and screens, and thus allowing
the previous year. Although the advertising revenue the companies and the advertisers to make informed
grew at a slower pace (approximately 7.3 per cent) than decisions.
the circulation revenue during 2015, it is expected to
surpass circulation growth in 2016 and maintain the
growth trajectory over the next five years.104 With a
87
10 . he Registrar of ewspaper in India, nn al Report 1 ended on 1 March 201 .

10 . KPMG in India s anal sis, 2016.
88
Films
Screened out
Executive summary
he ear 201 e perienced an assortment of the b siness model, with actors increasingl accepting
de elopments for the Indian film ind str . hile a re en e share instead of frontloading the entire fee,
e hibitors recorded a significant growth in regional and th s enabling risk-sharing across the al e chain. t dios
oll wood film collections, the collection for indi films are also e perimenting with fresh talent, which comes
oll wood was almost at as compared to pre io s onboard for a lower fee. or instance, talent costs at
ears. n the other hand, strong regional content ash Raj ilms are appro imatel 2 per cent lower than
seemed to ha e gained acceptance e en among the the ind str a erage beca se b lk deals are signed
non-nati e lang age speaking a dience, impro ing the with new actors.02 n the marketing front, there ha e
share of regional films in the o erall re en e pie. ction- been acti e meas res to c rtail the marketing spend b
hero film franchises, along with wide distrib tion and rationalising spends on print media, red cing the n mber
marketing, helped oll wood in contin ing its do ble of promotional to rs, and shortening the d ration of the
digit growth trajector in India, clearl demonstrating the campaign.03
a dience s appetite for differentiated content.01
oll wood too deli ered a handf l of films based on The theatrical performance of Hindi
s perior content that performed well. owe er, weak movies is more polarised today than
contents failed to attract a diences to theatres. ith the ever before. If a movie is loved, it goes
rising a erage ticket prices and a ailabilit of alternate on to doing great business and if its
entertainment platforms, the domestic a dience toda not, then the numbers see a steep fall
has become more discerning than e er, when it comes to even if it opened well. Getting the cost
watching films in theatres. n the contrar , the o erseas model of any movie right is critical. The
a diences, and cable and satellite rights contin ed excess in movie marketing budgets and
to fa o r films of -listed actors in 201 . Prod cers need the indulgence in movie production
to take cognisance of the e ol ing a dience and pro ide budgets must go. There is a high level of
content that earns footfalls.01 awareness on this, it is now important
n the other hand, nder-penetration of screens for the industry and all stakeholders to
contin es to limit the domestic performance of the Indian align with this thought process.
film ind str . a ing ndergone a phase of consolidation,
the e hibition pla ers are now foc ssing on organic
screen additions and miscellaneo s re en e streams,
s ch as in-cinema ad ertising and al e added ser ices,
Amrita Pandey
VP - Studios
to dri e growth. owe er, it is high time that both the Disney India
go ernment and the ind str start thinking of inno ati e
sol tions to increase the screen densit , and nlock its Increasing focus on content development
tr e potential. In the coming ears, digital is e pected to
emerge as a strong re en e stream as both the domestic he pre io s ear saw man films with a strong stor line
as well as international digital platforms are b ilding with or witho t -listed actors doing well and a few
libraries for Indian a diences.01 films ha ing -listed actors crash at the bo office,
f rther strengthening the h pothesis that a good script is
indispensable for the s ccess of a film. onse entiall ,
Production pla ers ha e initiated se eral programmes to conscio sl
foc s on content de elopment
Increased cost consciousness in the
industry Shift from the acquisition of projects to in-house
content development: Corporatised studios which
he ind str has been taking into acco nt the losses used to acquire films a few years ago and invest in
inc rred, ear on ear, d e to increasing b dgets that fail multiple projects like a private equity firm are now
to translate into a corresponding increase in bo office getting involved in developing the scripts, identifying
collections, th s threatening the iabilit of the ind str . the cast of the films and even working on the
alent and marketing costs are the main areas that are ensembles. By doing so, they have more control
being looked at to impro e the profitabilit of projects. over the costs and the content from an early stage
In oll wood, the talent costs can be as high as 60 per itself. Disney Indias ABCD 2 and Eros Internationals
cent of the b dget of a film01, while the are limited Bajirao Mastani were noteworthy examples of
between 1 and 20 per cent across the rest of the corporatised studios making films in-house.04
world.02 ost conscio sness has led to a stead shift in
90
01. KPMG in India anal sis based on ind str disc ssions 0 . Ind str disc ssions cond cted b KPMG in India
02. oll wood goes for cost-c tting Promotional to rs to be c rtailed , oll wood ngama, http //
www.boll woodh ngama.com/mo ies/feat res/t pe/ iew/id/ 2 6 accessed on 0 March 2016
0 . oll wood goes for cost-c tting Promotional to rs to be c rtailed , oll wood ngama, http //
www.boll woodh ngama.com/mo ies/feat res/t pe/ iew/id/ 2 6 accessed on 0 March 2016
International alliances and mentoring for content Building franchisees
development: Amongst other initiatives for content er the last ear, some of the st dios ha e taken lead
development, Drishyam Films, an independent film in de eloping stories that ha e the potential to span for
production company, has collaborated with the U.S.- a series of films and co ld be t rned into s ccessf l
based Sundance Institute in organising the Drishyam- franchises.06 rom a b siness point of iew, franchises
Sundance Screenwriters Lab. The lab, organised offer m ltiple potential benefits
annually, is aimed at developing good scripts by

The Future: now streaming | Films
identifying and training new writers and directors Leveraging historical success to attract footfalls:
and giving them an opportunity to be mentored by ranchisees are like strong brands that can help
experienced international film-makers.0 06 b ild strong e it , which can be le eraged across
a n mber of films b creating a lo al c stomer base.
Strategic alliances with domestic players across t of the si franchisee films released in 201 in
the value chain: a ing nderstood the need for a oll wood, fi e ha e s ccessf ll reco ered their
strong creati e team and realising that it is diffic lt costs from domestic theatricals and e en s rpassed
to get good creati e artists on pa roll, Reliance ig their forer nners in terms of domestic bo office
ntertainment s film prod ction and distrib tion collections, indicating higher pop larit .
b siness has partnered with bo ti e prod ction
compan , Phantom ilms in a 0 0 ent re for film Comparison of lifetime collections of franchisee
prod ction. Reliance is e pected to benefit from films released in a ainst their respe tive
the creati e abilities of Phantom while e ercising
their commercial e pertise to make profitable films. forerunners
imilarl , o tar has collaborated with harma Lifetime Lifetime % Increase
Sequels in
Prod ctions for a deal worth I R billion.0 his wo ld (INR Prequels (INR In lifetime
2015
allow the latter to foc s on its core competenc of million) million) collection
content prod ction and le erage o s distrib tion
network. h s, the pla ers are consolidating thro gh Tanu Weds Tanu Weds
strategic alliances to maintain the foc s on their ke Manu 1,520 Manu (2011) 380 300
strengths.0 Returns
ABCD 2 1,057 ABCD (2013) 455 132
In order to cater to the evolving Welcome

audience preferences, several 970 Welcome(2007) 550 76
Back
initiatives are being undertaken
with a view to be a market thought Pyar ka
leader and profitable. There is a real Pyaar Ka
620 Panchnama 110 463
commitment to development , scripts Panchnama 2
(2011)
& story telling .Themes centred around
womens empowerment, biopics, and Hate Story
stories which are rooted in real life will 271 96
2(2014)
resonate well with the audience. There Hate Story 3 535
will be a greater focus on creating Hate Story
franchises which offer a better return 140 281
(2012)
on investments. VFX technologies will
be leveraged to up the quality of movie Ab tak Ab Tak Chappan
experience .The coming years are going 66 24 177
Chappan 2 (2004)
to be exciting for Bollywood as it also
focuses on getting its business model Source: http //www.koimoi.com/ and http //www.boll woodh ngama.com/ accessed on 2 ebr ar
right with a view to putting the industry 2016
back on a growth trajectory.
Vijay Singh
Fox Star Studios
91
0 . http //www.screendail .com/news/prod ction/drish am-s ndance-instit te-line- p-writer- 0 . Karan ohar s harma Prod ctions joins hands with o tar t dios for a Rs. 00 crore deal ,
lab/ 0 .article as accessed on 0 March 2016 oll wood ngama, http //www.boll woodh ngama.com/news/1 0 00 /Karan- ohars- harma-
06. Ind str disc ssions cond cted b KPMG in India Prod ctions-joins-hands-with- o - tar- t dios-for-a-Rs.- 00-crore-deal accessed on 2 an ar 2016
0. conomics times, ne 201 , tar India, Karan ohar ink three ear prod ction and distrib tion
deal worth Rs 00 crore
oll wood s s ccess in 201 was h gel attrib ted
to an increase in special-effects film franchises like
ast rio s , engers , he nger Games ,
rassic Park , ames ond and tar ars . hese
franchisees led a gro p of 1 films with more than
00 million each in worldwide bo -office takings,
p from j st fi e s ch films in 2006.0
Reduced dependence on star talent: ranchisees
are dri en b strong stories and characters, rather
than star power. a ing realised this, the franchisee
films of oll wood are conscio sl mo ing awa from
star cast as the ha e been pro en to do well witho t
-leag e actors.0 he same learnings are being
le eraged in the Indian film ind str with st dios
casting new talent or non -leag e actors for s ch
franchisee films.
Development of ancillary revenue streams: The
brand e it of the franchise and pop larit of the
characters can also be e tended to licensing and
merchandising to achie e greater profitabilit . he
engers ge of ltron , which released in India
in 201 made comparable re en es from licensing
and merchandising as from bo office.10 tension of
the film to other platforms s ch as serials, digital
comics, stor book adaptations allow additional
re en es to ow in.
How te hnolo is transformin film produ tion
Improving quality of films: Continuous industry

innovations, such as higher frame rates, 3 filming
technologies, 4K and 8K resolution shooting and
computer-generated imaging (CGI) are improving the
quality of films produced.
Improving efficiency of production: Cloud-computing
services are facilitating development of collaborative
ecosystems which help manage the data requirements
for film production and also facilitate collaborative film-
making, thereby improving the efficiency of the various
processes such as file conversions, real-time editing and
storage of large media files.
Improving the return on investment: Analytical
solutions are being used to gauge the audience
engagement across various touch-points and take
measures to maximize the return on investments. Movie
studios around the world are also exploring predictive
analytics algorithms that can forecast the success of
their projects.
0 . he conomist, 2 ebr ar 2016, ading stars

10. Ind str disc ssions cond cted b KPMG in India
Marketing and distribution Exhibition
Rationalisation of marketing costs Closing consolidation and moving to
organic growth
Man film prod ction ho ses are taking steps to
rationalise their marketing spends, s ch as ggressi e consolidation in the last co ple of ears has
led to the emergence of fo r pla ers controlling close to
Shortening the duration of promotion campaigns: 0 per cent of the total m ltiple screens in the co ntr .
he prod ction ho ses are red cing the d ration of Going b the n mber of screens owned, P R cinemas
promotion campaigns from the former eight to ten P R , with 14
screens, contin es to lead the Indian
weeks, to fi e to si weeks.11 e hibition ind str , tho gh a series of major ac isitions
Lower investment in print media: he media platform in 201 and 201 ha e seen other pla ers I
mi is shifting towards tele ision and digital. t pical eis re, arni al inemas and inepolis - closing in on
media mi now comprises 0 to 0 per cent of , 10 to the gap. hile large consolidation opport nities seem
1 per cent digital, 20 to 0 per cent acti ations and onl to ha e been e ha sted, pla ers contin e to look o t for
10 to 20 per cent print.11 ocial media is becoming a er smaller ac isitions. he ne t phase of screen growth is
important part of the marketing strateg beca se of the e pected to be dri en b organic additions.
potential benefits of the two-wa comm nication.
Integrated brand-tie ups to unlock synergies: ilms Exhibition player Number of screens
are integrating rele ant brands to foster a s mbiotic
relationship. or instance, aldiram, an Indian sweets and PVR Cinemas 49714
snacks brand tied- p with Prem Ratan han Pa o for
both in-film and o t of film associations.12 imilarl , Pik INOX Leisure 41615
and omba el et co ered aro nd I R1 0 million and
I R1 0 million worth of p blicit thro gh brand tie- ps, Carnival Cinemas 34116
respecti el .13
Cinepolis 21517
Growth of digital marketing: Promoting films digitall
has become attracti e as it allows the prod ction ho ses
to emplo a ariet of strategies at lower costs. few
e ol ing feat res of digital marketing are as follows
Use of newer platforms: ew social media The market for cinemas has been
platforms s ch as napchat, Instagram and expanding and 2015 has witnessed
hats pp are being e plored for film promotions. significantly better footfalls than 201 .
er-the-top content platforms are being sed This coupled with robust growth in
to la nch e cl si e original a dio- is al content. or average ticket prices has resulted in
instance, o tar t dios la nched a mobile-first overall growth for the business. 2015
film pre iew for omba el et , on its partner has also seen major consolidation in
platform - otstar.11 exhibition and it is now imperative to
look at organic pathways to growth.
Growth of content marketing: ons mers
prefer cons ming content rather than ad ertising
comm nication. ence, there is an increasing
foc s on the se of content platforms. or instance,
Nitin Sood
isticles ha e started becoming pop lar d e to PVR Cinemas Ltd.
their abilit to satisf the re irements of the digital
a dience for entertainment and information.11
93
11. Ind str disc ssions cond cted b KPMG in India 1 . I eis re, http //www.ino mo ies.com/ as accessed on 01 March, 201
12. agp r oda , 02 ecember 201 , aldirams Inno ation In Prem Ratan han Pa o 16. arni al inemas, https //www.carni alcinemas.in/ as accessed on 01 March, 201
1 . siness tandard, 02 ne 201 , rands join the star cast 1. inepolis, http //www.cinepolisindia.com/ as accessed on 01 March 201
1 . P R inemas, http //www.p rcinemas.com/ as accessed on 01 March, 201
Evolution of online ticketing
he share of online ticketing has increased significantl The Indian multiplex industry has largely
from 6 per cent in 2006 to 2 per cent in 201 .1 The completed the consolidation phase and
con enience of deciding and choosing the seats witho t for the new growth wave the Industry
waiting in e es has enhanced the film watching urgently needs to endorse technology
e perience and enco raged the o erall footfalls.1 nline not only to understand the patron (CRM,
ticketing also allows the e hibitors to psell other al e big data) but also to integrate business
addition ser ices s ch as ood and e erage functions; improve reach through
ser ices, thereb impro ing the total re en es per quality patron touch points; and deliver
footfall. he entr of mobile wallet compan Pa tm, with customer delight. It will soon face
a large e isting ser base, in the online ticketing space is pressure from global media companies
e pected to pro ide f rther impet s to online ticketing. in the TV space for patron share of
wallet.
Sunil Punjabi
Quest for improving comfort and
experience by exhibitors
ontin o s inno ation s pported b technolog e ol tion Strategic Advisor
has become a ke dri er of growth for the e hibition CJ CGV
ind str . or a wholesome iewing e perience, e hibitors
are adopting newer technologies s ch as the and
olb tmos s immersi e a dio and laser projection.
consists of high tech motion seats that are s nchronised
with the on-screen action to heighten a dience emotion Convenience, comfort and choice in
thro gho t the film. It offers o er 2 arieties of special terms of shows, films and formats is
effects s ch as wind, fog, lightning mist and scents in a changing the film viewing experience.
format. In the standard theatres, the focus is
merely on the film. In the more evolved
lso, there is an added foc s to differentiate on the basis theatres, the focus is on the other
of con enience while P R screens pro ide wider seats, experiences such as the picture quality,
inepolis theatres allow more leg space. hibition comfort, F&B service, etc. The value
pla ers ha e also started their own in-ho se added services and luxury experiences
o tlets to pro ide an elaborate range of freshl prepared are allowing the exhibitors to cater
options. Impro ing the theatre e perience b reno ating to more consumer segments and
the ac ired properties is e pected to bring abo t an increasing the pie for the exhibition
increase of 10 to 1 per cent in re en e.1 1 industry.
Kamal Gianchandani
CEO
PVR Pictures Ltd
94
1 . Ind str disc ssions cond cted b KPMG in India

1 . siness Korea, pril 201 , M lti-projection ech G to Present creen at inema on
201 in . .
uturisti te hnolo ies irtual realit in films
As the focus shifts from seeing to experiencing films and making oneself a part of the ecosystem, the standards, hardware
specifications and medium of consumption of high-quality films are expected to undergo a ma or change.
The ability of virtual reality (VR) to create a computer-generated three dimensional environment provides an ideal platform to
create and consume content. It has the potential to engage with the users on a deeper level than any other existing media with
merely a smartphone and its headgear. The immersive content allows the consumer to be an active part of the film ecosystem,
fully understand the setting the director wishes to portray and even participate and change the course of the story rather than
stay a passive viewer.20 The ability to include the viewer in a scene provides huge opportunities for scriptwriters to further stretch
their creativity. Camera movements too are likely to experience a shift to complement the consumer centric consumption. Various
features such as better resolution, feedback mechanisms for touch and feel, seating arrangements and 4D effects are expected
to further add to the VR experience. Thus, VR together with its potential of a superior viewing experience and the convenience of
on-demand consumption has the potential to revolutionise the film industry.
Oculus rift, Sonys project Morpheus, HTC Vive, Google cardboard & Samsung gear VR are well-known brands promoting the use
of V technology. Short films such as Henry and The displaced are currently used to market the technology and have received
exceedingly positive responses.
Technological advancements in the Indian cinema exhibition business
Companies today are going beyond the traditional ways to connect with their audience. From smartphones and tablets to mobile
apps and cloud-based technology, there is a plethora of advancements to not only keep track of, but also to profit from. To stay one
step ahead in the competitive environment, it is of utmost importance to anticipate the most significant technology trends that are
shaping the business. One would need to then develop innovative ways to use them to an advantage, both inside and outside an
organisation.
At a time when consumers have the latest technology equipped home theatres and devices - the big challenge for the multiplex
industry is to increase the frequency of visits, as well as offer different kinds of experiences that attract an audience of all age
groups. Key players in the industry today have set new standards for themselves, an effort which has revolutionised the way
entertainment is consumed in the country. Todays techno-savvy audience wants it all - crystal clear projection, distortion free
immersive sound and great acoustics. Multiplex owners are stepping up to this challenge with the use of technology.
As multiplex chains gain scale, providing a consistent consumer experience and handling operations across all facilities becomes
more challenging. Today, at INOX, technology has helped ensure a superior viewing experience across all screens by monitoring
and maintaining a consistent sound and brightness level, as well as monitoring the health of the sound and projection system to
prevent disruption in film viewing experience. There are systems in place to boost the in-cinema advertising revenues by enabling
the advertisers monitor the advertising content directly and access logs on a real-time basis. INO has set up Network Operating
Centre to provide a superior and consistent on-screen experience to its guests and also provide seamless reports to its business
partners.
With increasing competition in the exhibition industry, it is essential for the players to differentiate themselves with attractive
services. Multiplexes can use analytical tools to analyse data from various touch points such as the box office, counters, and
bookings made through the website and mobile applications. The insights from data can be used to understand consumption
patterns and consumer preferences which can help them design effective services, and can assist them in differentiating
themselves, as well as gain a loyal customer base, and support in unlocking higher value from each customer. At INOX, we have
partnered with SAP HANA as our technology provider to integrate our back-end systems, improve efficiency and streamline
processes which target our guests. Technology can also enable multiplexes provide a superior ticket-booking experience and F&B
experience by providing added convenience. or instance, Paperless Entry at INO allows consumers to book tickets online and
removes the hassle of long queues at the box office. Also, - uster enables customers standing in queue to place their order via
a tab that will get their F&B orders directly delivered to their seats. Also, guests can now order their food by using the INOX mobile
app while watching a movie, by paying through the saved card feature. INO has also deployed information beacons, which
work on low energy bluetooth to provide location-based information and offers. Once guests walk in at an INOX, they start getting
relevant offers and information pushed through the beacons to their smartphones. This information and offers can be availed at the
ticket counters or at the F&B counters.
20. hat It as ike to atch the ew ork imes R Mo ie , ort ne, http //fort ne.com/201 /11/0 /
new- ork-times- irt al-realit / accessed on 26 ebr ar 2016
Consumers today are very discerning and look for the best-in-class service from any provider. We are excited to be able to create
more opportunities in the entertainment space for our guests. With these state-of-the-art initiatives undertaken, it is evident
that the Indian cinema exhibition business is shifting towards two polar points: convenience and technology. 2016 is all set to be
another great year for the industry and there is a lot in store. Multiplexes like INOX are set to provide their guests with the best
movie viewing experience India can offer, including a lot more. As they say, this is just the tip of the iceberg.
Alok Tandon
INOX Leisure Limited
Unless otherwise noted, all information included in this column/ article was provided by Alok Tandon. The views and opinions expressed herein are those of the author and do not necessarily
represent the views and opinions of KPMG in India
96
Industry performance and projections
Film Industry Performance

Revenues (INR billion) 2011 2012 2013 2014 2015 2016p 2017p 2018p 2019p 2020p 2014-15 CAGR
(YoY 2015-
growth) 2020
Domestic theatrical 68.8 85.1 93.4 93.5 101.4 115.8 125.7 136.1 147.6 159.9 8.5% 9.5%
Overseas theatrical 6.9 7.6 8.3 8.6 9.6 11.4 12.4 13.5 14.5 15.6 11.5% 10.9%
Cable and satellite rights 10.5 12.6 15.2 14.7 15.9 18.2 19.8 21.4 23.2 25.1 8.1% 9.5%
Home video 2.0 1.7 1.4 1.2 1.0 0.9 0.8 0.7 0.6 0.6 -14.0% -12.2%
Ancillary revenue 4.7 5.4 7.0 8.4 10.2 12.5 15.4 18.3 21.9 26.1 22.3% 21.1%
streams
Total
Source: KPMG in India anal sis
Domestic theatricals Quarter-wise comparison of occupancies (CY14

vs a ross omparable properties of I
Regional, Hollywood driving the growth of Leisure
domestic theatricals
omestic theatricals contin ed to be the main so rce of
re en e with a per cent share in the total re en es
for the Indian film ind str .21 In 201 , domestic theatrical
re en es grew b . per cent to reach I R101 billion
on the back of an increase in o erall footfalls as well as
an in ationar growth in a erage ticket prices.21 hile,
oll wood had a soft ear, oll wood, with its tent pole
franchise films and regional films with strong content,
more than compensated for the former s downslide
performance.
ne of the most important themes that emerged d ring
201 is the increasing share of oll wood and regional
content in the total domestic re en es. his ma be an
indicator of cons mers looking be ond oll wood for Source: In estor Presentation, Ino eis re imited, ebr ar 2016
their entertainment.
he first arter of 201 witnessed lower than normal Quarter-wise comparison of occupancies (CY14 vs
domestic collections, mainl d e to the I orld p a ross omparable properties of
and lack of good content films that resonated with
the a dience. econd arter was re i ed b some
films s ch as an eds Man Ret rns , Pik and
2 that performed er well at the bo office d e
to the strong content. lso, a few oll wood franchise
films s ch as engers ge of ltron , ast rio s
, rassic orld , which got a wider release d e to
d bbing and release on e-cinema screens, also showed
strong performance. he third arter belonged to the
domestic s ccesses of the ear ajrangi haijaan and
aah bali , which witnessed record collections.
97
21. KPMG in India anal sis based on ind str disc ssions
Source: P R inemas
rther, regional films which are normall the mainsta of
single screens, contrib ted p to 0 per cent in re en es With the multitude of entertainment
at some national m ltiple es d ring the second and options that are available and easily
the third arter, indicating wide acceptance of good accessible today, the Indian audience is
regional content. he fo rth arter was m ted as a few becoming much more discerning about
films with leading actors failed to perform well at the bo its choices. It is looking for experiences
office. his trend across the arters is re ected in the that are compelling, engaging and
occ panc le els of national m ltiple chains s ch as specifically customised to suit individual
I and P R.22 tastes and preferences.
Bollywood
he bo office collections for oll wood in 201 were low
compared to 201 . In partic lar, onl si of the leading 10
Siddharth Roy Kapur
Managing Director
grossing films in 201 crossed the I R1 billion mark and Disney India
two crossed the I R2 billion mark as compared to 201
wherein nine of the leading 10 grossers had collections
abo e I R1 billion.23
i ht out of the top movies for the hi hest I
ome of the ke takeawa s for oll wood from the ear per ent in were low bud et movies ess
201 are than I million bud et
Domestic audience growing more discerning,
focussing on strong content: nlike the last few Rank
ears when categor - films with -listed actors according to Movie Budget
in ariabl did well at bo office, 201 saw ite a few ROI %
films with -listed actors failing at the bo office d e to
lack of strong content. ith a wide e pos re to good 1 Tanu Weds Manu Returns Low
content cinema from oll wood and regional films, the
preferences of the a dience are e ol ing. 2 Bajrangi Bhaijaan High
eed to reassess the bud ets eepin profitabilit 3 Pyaar Ka Punchnama 2 Low
in mind: mere 26 of the leading 0 indi films in 201
recorded a positi e ret rn on in estment from their 4 Kis Kisko Pyaar Karoon Low
domestic collections. his has increased the need for a
serio s cost restr ct ring and marketing optimisation 5 Dum Laga Ke Haisha Low
plan.23 In terms of absol te al e of ret rns, fi e of the
leading 10 films were low b dget less than I R 00 9 Piku Low
million films, which were mainl dri en b strong
content. lso, amongst the leading 10 films at the bo 6 Hate Story 3 Low
office, fo r films failed to reco er more than 2 per cent
of their in estments from their bo office collections, 7 Badlapur Low
despite their collections being pwards of I R 00
million. h s, ha ing seen that the high b dgets do not 8 ABCD 2 Medium
necessaril lead to proportional ret rns, there is a need to
reassess the spending.23 10 NH10 Low
eed for better windowin and slate plannin The

ear 201 witnessed a major clash between two big Methodology: R I is calc lated as ollections from domestic theatricals / cost of prod ction
releases ilwale and ajirao Mastani . his is e pected P dget categorisation igh I R1 billion Medi m I R 00 million to I R1
billion ow I R 00 million
to ha e res lted in a loss of re en e of abo t 1 to 20
Source: http //www.koimoi.com/ and http //www.boll mo iere iew .com/ accessed on 2 ebr ar
per cent to each, reiterating the importance of ha ing the 2016
right release strateg in place.23
98
22. KPMG in India anal sis based on ind str disc ssions cond cted b KPMG in India
2 . KPMG in India s anal sis
At a time when Movie goer base in India is not growing organically, ox office revenue clocked becomes an
aggregation of the overall content performance of films on footfalls generated by existing movie goer base. Some
marquee films underperformed while some had breakout numbers resulting in the overall box office revenue
remaining stagnant. There was a contribution of 10-11 per cent growth in ATP. Movies have to perform to earn
footfalls, theatrical collection does not grow in line with economy as it is not an annuity income. Films that
delivered great content did see break out collections whether its Tanu Weds Manu or Pyaar Ka Punchnaama. So
better content films cleaner windowing at box office to avoid cannibalisation are two key lessons from the year.
How to grow movie goer base in the face of growing satellite penetration & piracy remains the bigger & more
fundamental challenge.
Ajit Andhare
COO
Viacom18 Motion Pictures
99
Regional markets
he ear 201 stands as a testimon to the establishment Today the theatrical audience is much
of a strong foothold of regional cinema in both domestic more willing to experiment. With greater
as well as o erseas market. amil and el g films, along number of regional films performing
with oll wood, make abo t two thirds of the films exceedingly well in the non-language
prod ced e er ear.24 It is e pected that the cinema in markets, it is expected that language
so thern India, especiall amil and el g , shall soon barriers will soon cease to exist and
s rpass oll wood in terms of the share of bo office content will emerge as the sole factor
collections b lang age.2 in deciding a films performance. The
flourishing digital landscape also
aah bali , a el g -lang age film, grossed I R6 billion supports this trend, as it allows greater
worldwide.26 It opened in appro imatel 2,000 screens creative freedom to content makers by
in northern India market, ltimatel contrib ting abo t enabling them visualise films beyond
2 per cent to its o erall domestic collections.2 This the confines of theatrical performance.
phenomenal s ccess s ggests that good content is
breaking lang age barriers and fast gaining pop larit
among a diences. Shibasish Sarkar
Chief Operating Officer
hift from star-driven to ontent-based films in Reliance Big Entertainment
the amil film industr
he amil film ind str prod ced 20 films in 201 , o t of
which onl 1 were profitable for the prod cers, ha ing
s ccessf ll reco ered their cost of prod ction.2 ilms
with strong content like Kaaka M ttai performed well
not j st at the amil bo office, b t were also accepted
well in new markets like ong Kong , collecting o er
K 1 million I R .6 million .2 Kanchana 2 along with
its el g d bbed ersion Ganga grossed o er I R1
billion worldwide on an in estment of I R1 0 million.2
owe er, certain films s ch as ttama illain , despite
starring top actors, performed poorl at the bo office.
Cross-border popularity of strong cinema drives

rowth of the elu u film industr
he el g film ind str prod ced abo t 162 films in 201 .
t of these, onl 0 per cent were able to reco er their
prod ction costs.30 owe er, 201 emerged as a ear of
transition for this ind str with films gaining nationwide
and international acceptance - aah bali became the
highest and Srimanthudu became the second highest
grossing el g film of all-time in the co ntr apart
from earning aro nd I R 1 million and I R1 million
respecti el in the o erseas markets.31
100
2 . tat s heck Indian cinema in -201 , Indian ele ision, http //www.indiantele ision.com/ 2 . he ind , 26 ecember 201 , he highs and lows of 201
mo ies/hindi/stat s-check-indian-cinema-in-f -201 -1 0 12 accessed on 2 an ar 2016 2 . he Indian press, 0 ne 201 , o thern cinema in 201 ontent r led o er star power in first
2 . he inancial press, an ar 2016, oll wood bo office collections at Rs 11, 00 crore o erall half
re en es ma cross Rs 1 , 00 crore b 1 0. International siness imes, 6 an ar 2016, aah bali to K mari 21 op 1 highest-grossing
26. aah bali aah bali otal orld ide o ffice ollections , esire rees, http //www. el g / oll wood mo ies of 201
desiretrees.com/baah bali-bah bali-total-worldwide-bo -office-collections/ accessed on 10 an ar 1. ighest Grossing el g Mo ies in 201 , pic nion, http //spic onion.com/bo -office-india/
2016 highest-grossing-toll wood-mo ies-in-201 / accessed on 10 an ar 2016
tron ontent drives rowth profitabilit in ltho gh the t rno er of the engali film ind str in
the ala alam film industr 201 was appro imatel I R1.2 billion, e i alent to
the pre io s ear , 201 registered a lower realisation
er 1 0 films were released in Mala alam film ind str on a per-film basis. he highest grosser for the ear
in 201 .32 wo of the biggest blockb sters Premam and ela heshe collected merel I R million at the
nn inte Moideen , made on a b dget of nder I R 0 bo office. omkesh akshi along with ela
million and I R120 million respecti el , collected more heshe witnessed 0 per cent occ panc for o er a
than I R 00 million at the bo office d e to their good
month in single screens and m ltiple es, highlighting

content.33 r adakkan elfie earned I R200 million the preference for strong narrati es amongst engali
from theatricals alone and was chosen to be remade a dience.36 en rshinagar witnessed f ll ho se
in el g , amil, indi, Marathi and engali. erall, shows d ring the hristmas week indicating that rich,
e perimentation was the hallmark of the films released in aried content co ld draw a diences to theatres. In
201 .32 stark contrast, films boasting of the t pical action-
romance-foreign location combination, s ch as erogiri ,
Content and infrastructure challenges pain the Kathm nd , amai 20 , esh Korechhi Prem Korechhi
en ali film industr and Romeo and liet failed to register e en 0 per cent
he engali film ind str contin ed to s ffer losses for occ panc two weeks into their r n.36
the third s ccessi e ear as single screen theatres in
est engal closed down and the state s film ind str
was hit b a dience s growing preference for indi and
nglish films. er 100 theatres ha e sh t down in the
last 1. ears.34 here are appro imatel 0 centres with
a pop lation of o er one million, witho t an screens.34 In
all, there are e pected to be 2 0 to 00 screens in est
engal.34
There is a strong need to improve the In the past, Bengali movies which have
exhibition infrastructure in order to been successful in connecting with
revive the engali film industry. The people, have been very successful.
government must take unbiased However, in the last few years, there
initiatives to revive the defunct single has been a dearth of good cinema due
screens and incentivise the surviving to lack of serious players. Lack of good
screens for renovation. There also a cinema coupled with the deteriorating
need to promote economic ways of exhibition infrastructure has been
theatrical distribution. The distribution discouraging the footfalls, leading to a
rates need to be standardised and made stress in the economics of the Bengali
equivalent to the national rates. Film industry.
Himanshu Dhanuka
Director
Arijit Dutta
Managing Director
Eskay Video Pvt. Ltd. Priya Entertainments
101
2. he ew Indian press, 2 ecember 201 , 201 o ngsters reigned, s perstars failed in 6. he conomic imes,2 ecember 201 , dience embracing content-dri en films in engal in
Moll wood 201
. he ew Indian press, 20 ecember 201 , ontent ri mphed er tar Power in o thern
ilmdom ring 201
. Ind str disc ssions cond cted b KPMG in India
. he conomic imes, an ar 2016, oll wood slips into Rs 100-crore loss in 201
Strong content, low budgets and government Baahubali: The Beginning A case study
support drivin the rowth of the arathi film
industry Baahubali: The Beginning, directed by S S Rajamouli, became
he Marathi film ind str is presentl pegged to be worth the third highest grosser worldwide in the history of Indian
I R1. 0 billion. he ind str showed a growth of abo t cinema with gross box office collections of IN billion.42
0 to per cent in 201 . he state go ernment s r le The film was simultaneously made in Telugu and Tamil and
of screening at least one show of a Marathi film in a was simultaneously dubbed in Hindi, and Malayalam. It was
m ltiple , in a prime slot has definitel benefitted this released in 4,000 screens all over the world, including 175
ind str . owe er, its res rgence in the last few ears screens in the U.S..43 The international version of the film
is not onl limited to this factor. In the last few ears, this is soon expected to be released in other parts of the world,
ind str has prod ced an assortment of coming-of-age including China, Latin America and Europe.44
films, social dramas, biopics as well as commercial films aahubali The eginning, the first of the two cinematic parts
for the masses, which ha e been a delight for a diences. of an epic Indian historical fiction, was released on 10 uly
o rt , a m ltiling al art-ho se drama has been chosen 2015. The film crossed IN 5 billion mark at the box office in
as India s contender in the foreign lang age film categor four weeks and went on to become: 45
at the 2016 cadem wards scars apart from ha ing
won se eral national and international awards. The first south Indian film to gross over IN billion
worldwide46
u arati film industr revives on the ba of The first non-Hindi film to gross over IN 1 billion in the
urban- entri films dubbed Hindi version47
Recentl , G jarati films ha e been performing well at the The highest grossing Telugu film of all time48
bo office, raising hopes of the re i al of the G jarati film
ind str after a decade-long sl mp. nlike films in the The fastest among all Indian films to reach IN 1 billion
past, there has been a sp rt in rban-centric films with (two days), IN 2 billion (five days), and IN 3 billion (eight
growing in estment. In 201 , the bo office collection for days) thresholds of international box office revenue49
G jarati films was o er I R 0 million, p from I R 0 The film leveraged an Indian tale of good and evil, diligently
million in 201 .40 ilms s ch as G jj bhai the great , crafted on a scale representative of Hollywoods grandeur
hhelo di as and e aar ha e performed well at the bo while also being a family entertainer. However, there are a
office.40 number of factors behind the success story of this film, which
ther than these, the P njabi film ind str e perienced a could be summarised below:
good growth of abo t 1 -20 per cent in 201 .41 Rich characters backed by a talented cast: The film
ast ear also saw regional cinema e ploring newer features leading South Indian artistes in key roles, with
markets thro gh greater distrib tion and marketing. female actors playing valuable roles equivalent to the lead,
ith the a dience getting more e perimental, there is thereby brilliantly portraying their respective characters
an increasing acceptance for regional cinema. owe er, and contributing towards the films overall plot.
there are challenges to b ilding scale and generating non- Strong emphasis on production: The director,
theatrical re en e.36 Rajamouli, has spent more on the production than on
any artiste in the film. He roped in skilled technicians and
national award winners such as production designer, Sabu
Cyril; music director, MM Keeravani; and visual effects
supervisor, V. Srinivas Mohan. The films writer-lyricist,
Madhan Karky, invented a new language Kiliki- made up
of about 750 words, with its own set of 40 grammar rules.50
. Mid- a , pril 201 , ere s wh Marathi cinema is doing better than oll wood 6. aah bali aah bali otal orld ide o ffice ollections , esire rees, http //www.
. he elegraph, 1 an ar 201 , mchi Marathi desiretrees.com/baah bali-bah bali-total-worldwide-bo -office-collections/ accessed on 10 an ar
2016
. he ind , 2 eptember 201 , haitan a s o rt chosen as India s scar entr
. International siness imes, 2 l 201 , aah bali ah bali 1 th a o ffice ollection
0. , 12 an ar 2016, fter Recent its t he o ffice, Goll wood Rises in G jarat Rajamo li s ilm et to ethrone hoom orldwide
1. Ind str disc ssions cond cted b KPMG in India . ighest oll wood Grossers and est ongs of 201 , Maps of India, http //www.mapsofindia.
2. he Indian press, g st 201 , ajrangi haijaan, aah bali, PK India s highest grossing films com/m -india/mo ies/highest-boll wood-grossers-and-best-songs-of-201 accessed on 1 an ar
. he siness tandard, l 201 , aah bali set to hit ,000 screens on l 10 2016
. International siness imes, 1 eptember 201 , aah bali aah bali to Release in ,000 . he imes of India, aah bali Records made b the film so far , 0 g st 201
creens in hina Rajamo li ilm to eat PK , Records 0. aah bali marketing magn m op s , siness ine on apmp s, http //www.bloncamp s.com/
. he imes of India, aah bali Records made b the film so far , 0 g st 201 hango t-at-bloc/cinema/baah bali-a-marketing-magn m-op s/article 21 .ece accessed on 1
an ar 2016
Showcases VFX prowess: About 17 VFX studios (Indian - Social media promotions attracted the youth and the
and international) and 600 graphic artists worked to create resulting word-of-mouth created curiosity among older
the films 5,000 V shots.51 52 The cost of VFX effects used audiences as well.55
was about INR30 million.53 - The trailer of the film which first released on ouTube
Strategic approach to the films release: The on 1 June 2015, garnered positive reviews from several
producers realised that its story was too big to be Indian actors, and several mentions, and shares soon
compressed into a single film and hence decided to followed on Twitter praising the overall look of the film
release the film in two parts. This two-part release and the directors efforts.56 The film used an augmented
decision was meant not just to leverage the production reality application to play the trailer on smartphones
cost better but also to do complete justice to its storyline.53 and tablets.57
Integration with well-established local players for - Karan Johar released the Hindi version like a big budget
global reach: A number of leading production houses ollywood film with aggressive promotions, including a
came together to market the film in different regions. The star-studded premiere in Mumbai.58
film was marketed by Karan ohars harma Productions, - The makers of the film held benefit shows in various
Studio Greens K.E. Gnanavel Raja (through Sri Thenandal places with the ticket prices ranging between INR4,000
Films), Global United Media and the U.S.-based BlueSky to INR8,000 and the proceeds were donated to charity.59
inemas who took care of the films marketing in North
India, Tamil Nadu, Kerala and overseas (Indian diaspora), - The marketing team also had a strong presence in
respectively.53 various Comic Cons around the country.
Aggressive promotion and marketing: Even though - A cosplay event was held in which chosen winners
the film took almost three years to hit the screens, the were given a chance to visit the sets of the film.55
production house made sure that people were kept
updated with the developments. Starting from films - WhatsApp messenger was used to give regular updates
pre-production stage, it was aggressively promoted in a about the film to the subscribers.55
number of ways. - A special skit was performed by the aahubali team
- Marketing of the film started a year before the shoot for the event named Memu Saitham to help the victims
with an audition campaign on social media platforms.54 affected by Cyclone Hudhud.60
- A number of short promotional making-of videos - There was an audio launch event in Tirupati in a
were released on video-sharing website and the team stadium, attended by over 100,000 fans and was
unveiled first look posters and videos featuring the telecast live on TV. Another event in Cochin featured the
films lead stars on the occasions of their birthdays.55 unveiling of the worlds largest poster and entered the
Guinness Book of World Records.61
- The films website hosts merchandise that includes
apparels, accessories and films collectibles. 61
India is one of the most under-screened markets in the world, especially considering the number of films that are
released in this market, not ust Hindi but regional and Hollywood films too. Therefore it is absolutely important to
get the right release date and desired showcasing in this crowded marketplace. Hand to hand with this however,
audience tastes are also evolving and films like Piku, Airlift, Neer a etc are proof that they are seeking quality content
which generates good word of mouth and thereby leads to box office success. e are seeing an upsurge in the
popularity of Marathi, Pun abi and even Gu arati films lately all driven by great content. Hollywood films too have seen
good growth in India thanks to an increase in multiplexes, 3D screens as well as changes in audience preferences.
Hollywoods share back in 2009 was around 5 per cent, and now its around 9 per cent.
Vivek Krishnani
Managing Director
Sony Pictures Entertainment Films India
1. he Indian press, 2 pril 201 , 600 artists, 1 st dios working on aah bali . . aah bali - he eginning in Indian siness Perspecti e , inkedIn, https //www.linkedin.com/
103 Rajamo li p lse/baah bali-beginning-indian-b siness-perspecti e-parthasarath accessed on 20 an ar
2. hat are some of the mind-blowing facts abo t the aah bali mo ie , ora, https //www. 2016
ora.com/ hat-are-some-of-the-mind-blowing-facts-abo t-the- aah bali-mo ie accessed on 2 . Karan ohar and I share the same passion for films aah bali director Rajamo li , irstpost,
an ar 2016 http //www.firstpost.com/boll wood/karan-johar-and-i-share-the-same-passion-for-films-baah bali-
. he ind stan imes, pril 201 , Rajamo li s ne t, aah bali has is al effects worth Rs director-ss-rajamo li-2 61 6.html accessed on 1 an ar 2016
crore . International siness imes, 6 l 201 , aah bali enefit hows icket Price Ranges from
. aah bali ow social media added to its bo office s ccess , ode ridea, http //code ridea.com/ ,000 to ,000 Rajamo li ets ew Record
baah bali-how-social-media-added-to-its-bo -office-s ccess/ accessed on 1 an ar 2016 60. aah bali eam pecial kit for Mem aitam o be , o be ideo, https //www. o t be.
. aah bali he eginning 201 atest per Mo ies , Mo iecracker, http //www.mo iecracker. com/watch Ka R accessed on 2 an ar 2016
com/201 /0 /bah bali-beginning-201 .html accessed on 20 an ar 2016 61. Ind str disc ssions cond cted b KPMG in India
6. I imes, 1 ne 201 , aah bali he eginning 201
104
Hollywood he leadin Holl wood films in India
he ear 201 witnessed a health growth in the
Titles Lifetime GBO (INR million)
oll wood collections compared to 201 . he collections
of the fi e leading oll wood titles in India increased from Fast & Furious 7 1,550
abo t I R2. billion in 201 to more than I R billion
in 201 . he share of oll wood in the total domestic Jurassic World 1,456
collections for India has also witnessed an increase. his

co ld be attrib ted to three main ca ses The Avengers: Age of Ultron 1,085
Slate consisting of a strong action-hero, adventure-
based franchises: n increase in the n mber of action- Mission Impossible: Rogue Nation 767
hero and ad ent re-based franchise films engers ,
rassic orld , ast rio s , Mission Impossible , Terminator Genisys 329
erminator , pectre which is a pop lar genre in India,
has contrib ted to the growth in collections. The Martian 314*
Wider release e- inema s reens in luded The reach
Star Wars: The Force awakens 310
of oll wood films is limited in India d e to concerns
regarding alit and sec rit , which limits the release
Spectre 294*
of oll wood films on the igital inema Initiati es I
compliant digital cinema screens onl . here are abo t
Everest 207
1, 00 I compliant screens in India.62 owe er in 201 ,
ast rio s and rassic orld , two of the pop lar
Minions 181
franchise films, were released across e-cinema screens
as well, taking their indi id al screen co nts to o er two Source: Kinematograph Renters Society as received on 25 February 2016
tho sand 2, 0063 and 2,10 64 screens, respecti el . *Still running (as per status received on 25 February 2016). Estimated collections.
s a res lt, each of these films earned more than I R1

billion in India, a feat not achie ed b an oll wood film
in India ntil 201 .6
Dubbing in regional languages: ang age barrier is
another impediment to the pop larit of oll wood. he
release of oll wood films d bbed in regional lang ages,
s ch as amil and el g as well, increased their reach in
the co ntr in 201 .66
n the whole, the appetite for good films which pro ide
a cinematic e perience is increasing in India. he growth
of oll wood films in India indicates that films that
pro ide this e perience ma be accepted b the a dience
irrespecti e of the lang age.
otal olle tion of top Holl wood movies in

I billion
Source: Kinematograph Renters ociet

6 . he ind , 12 pril 201 , he c rio s case of rio s
6 . he inancial press, 2 ne 201 , Irrfan Khan starrer rassic orld bo office collections soar
to Rs 100 crore in India,
6 . larm bells in oll wood as ah bali , oll wood films reap bo -office gold , Re ters India
Insight, http //blogs.re ters.com/india/201 /0 /2 /boll wood-bah bali-holl wood-films-bo -office/
accessed on 1 ebr ar 2016
able and satellite ltho gh the al ation of the satellite rights has gone
p for Marathi films owing to the s rge in bo office
ith a share of 12 per cent, able and satellite rights collections, the film content d ration has red ced across
rights contin ed to be the second largest major Marathi general entertainment channels G s
contrib tor to the o erall ind str s re en e in 201 . he o er the past fo r ears. h s, while total n mber of films
film re en es from the sale of rights grew b .1 per has grown from 6 in 201 to more than 100 in 201 , the
cent to I R1 . million in 201 . satellite demand has remained nchanged - the n mber
C&S market has stabilised with respect to Hindi of films sold has been almost constant from 1 in 201
films to 20 in 201 .6 s a res lt, almost 0 per cent films
ha e remained nsold, p from 6 per cent in 201 . his
can no longer be seen as a bailo t medi m b imbalance between s ppl and demand is e pected to
prod ction ho ses as was seen two to three ears ago. trigger a downward correction in 2016. 1
ne of the high grossers this ear, ajirao Mastani
domestic bo office collection I R1. billion net was or the engali market, the market has crashed
al ed at I R 00 million almost comparable to 201 s as there were no takers for films. More than 100 films
ang ang domestic bo office collection I R1. 1 billion remained nsold beca se of lack of serio s b ers and
net getting sold for close to I R 0 million.66 cept no new G coming p.6
for a few -lister films, man of the deals are being
linked to the bo office performance of films. few films verseas theatri als
that performed well at the bo office, s ch as 10 ,
adlap r and al ar , s ffered depressed rates d e to erseas theatricals witnessed a 11. per cent increase
content that was not tele ision friendl . from I R .6 billion in 201 to I R .6 billion in 201 , while
the total contrib tion stood at per cent of the total
ith the la nch of a new film channel b iacom1 , the re en e.
prices are e pected to increase marginall in 2016. he
e ol tion of digital is also e pected to bring a different additions to the ten leadin overseas
colo r to the e isting landscape. rrentl , the digital
rights are largel b ndled with the rights. s satellite grossers of all time
tele ision broadcasters b fewer films and at lower
prices, the ind str ma need to assess its abilit to Movie Overseas collection
monetise a ailable digital platforms. ith the e ol tion of
digital as an independent re en e stream, the al ation Bajrangi Bhaijaan USD29 million72
of rights co ld swing either wa .
Dilwale USD25.6 million72
Pressure on C&S revenues for regional content
due to the lack of demand Bajirao Mastani USD14.5 million72
he press re is also being felt in so thern India in terms
of the market for satellite . or the el g market, Prem Ratan Dhan Payo USD13 million73
Maa and Gemini contin ed to be main b ers ee
p rchased limited content.6 he penetration of
local cable networks, torrent downloads, home ideos
ha e affected film iewership on the platform. he
prod ction boom in amil cinema has also created a
gl t in the market. nl a handf l of top-leag e actors
get good RPs and repeat al e. lso, award e ents are
replacing films in prime slots, as the work o t to be 2
to per cent lower in cost.6 onetheless, broadcasters
contin e to in est in ac iring film rights. or instance,
n ele ision etwork s n contin ed to in est
close to I R . billion for the ac isition of film rights for
satellite broadcast across its ario s channels.6 0
106
66. http //www.koimoi.com/ as accessed on 2 ebr ar 2016 0. siness tandard, 01 g st 201 , n to in est Rs 0 cr in b ing mo ie rights isc ssion
6. Ind str disc ssions cond cted b KPMG in India cond cted b KPMG in India
6 . he ind , 20 ne 201 , atellite market goes b st 1. KPMG in India anal sis
6 . n etwork clarifies Rs 0 crore in estment in b ing mo ie rights , change media, http // 2. International siness imes, 2 an ar 2016, erseas bo office collection ilwale second
www.e change media.com/t /s n-t -network-clarifies-rs- 0-crore-in estment-in-b ing-mo ie- highest after ajrangi haijaan ajirao Mastani among top 10
rights 610 2.html accessed on 2 ebr ar 2016 . International siness imes, 2 o ember 201 , Prem Ratan han Pa o o erseas bo office
collection PR P beats aah bali lifetime record
Films with A-league actors continue to attract Ancillary revenues
overseas audience
Pop larit of star-led films contin es to dri e o erseas In-cinema advertising
collections from diaspora markets. esides, a few smaller he re en es from in-cinema ad ertising grew b a
content-dri en films ha e also fared better, especiall health 2 per cent o er 201 and are estimated to ha e
in the non-diaspora markets, contrib ting to f rther reached I R6.2 billion at the end of 201 . ollowing
growth. are a few factors that ha e dri en the growth of in-cinema
rther, certain genres ha e been identified to work ad ertising

within certain markets. amil dramas s ch as Prem Increase in volume of ad inventory due to digitisation
Ratan han Pa o contin e to work in the .K., while the of single screens: igital cinema with its ad antages
content-rich and intelligent films ha e fo nd an ptick incl ding 1 im ltaneo s screening witho t ph sical
with the Indian diaspora in the . .. owe er, since these prints 2 roadcast of geo-targeted ads transparent
films are cons med thro gh non-theatrical channels, electronic logs red ced impact of rer ns on the alit
their theatrical contrib tion is still not significant. of ads, has established in-cinema as an integral part of
oll wood formed per cent of the total o erseas media campaigns.
re en es while amil cinema constit ted 10 per cent Consolidation of ad inventory: ith the consolidation
followed b el g that comprised most of the remaining in the m ltiple b siness, brands and agencies now
per cent. ha e to liaison with a fewer people in the process. ne
Diaspora market remains a key contributor to of the biggest challenges for this market was in terms of
overseas collection capt ring a dience in single screen theatres especiall in
smaller markets it was infeasible for a brand to liaison
Indian diaspora based in the . ., Middle ast and the with appro imatel 6000 separate entities. Pla ers s ch
.K. remained the major markets for o erseas theatricals, as Mo ie and Real Image ha e been capitalising on
constit ting 0 to per cent of total o erseas re en es. this opport nit , b aggregating the ad in entor of single
erall, the . . contrib ted appro imatel per cent, screen theatres.
the Middle- ast also contrib ted per cent and the rest
consisted of the .K. and the rest of the world. s Indian Shift from government to private sector, improving
films ha e failed to connect with the third generation margins for exhibitors: he client mi for in-cinema
of the Indian diaspora in the .K., the .K. market has ad ertising has seen a grad al change o er the ears,
shr nk and become comparable to the stralia and ew from a go ernment foc sed medi m - as m ch as 0
ealand market in si e. per cent of the ad ertising re en e was attrib ted to
p blic sector ad ertising abo t three to fo r ears ago -
The Middle East emerges as a strong demand centre to a foc s on local and corporate ad ertising - the latter
for Indian films alone occ p ing aro nd per cent of the portfolio.
In 201 the Middle ast market for Indian films grew b he blockb ster film shows for premi m e hibition
2 to 0 per cent o er 201 . he growth of this market is pla ers are alread operating at f ll in entor le els. he
attrib ted to increase in the n mber of digitised screens, ad ertisement al e is e pected to increase as this new
which in t rn is red cing distrib tion costs and leading to media establishes itself.
wider releases. lso, the n mber of screens are growing
- the Middle ast is adding 2 to 0 screens e er si
months and is e pected to add 1 0 screens o er the
ne t three ears. lso, the a erage re en e per screen
is considerabl higher in the Middle ast. he re en es
from 0 screens in the region are comparable to that
from 0 to 100 screens in the . ..
107

. KPMG in India anal sis
In-cinema advertising is evolving and the Media inventory consolidation in recent
share of cinema in the total advertising times, both by digital deployment agents
pie is increasing. Adoption of newer like Real Image / UFO and multiplexes,
technology has enabled better monitoring, has seen a resurgence of in-cinema
development of a pay per view model and advertising. multiplex chains, which
thus, made this media more measurable are able to share their footfall data
and reliable. Also brands are exploring more readily, have already reaped the
newer ways of talking directly to the benefit of this more impactful medium.
consumer. A large scale move to computerised box
office is now in the making for single
Devang Sampat
Business Head - Strategic Initiatives
screens that have suffered unfairly in
relative earning potential as a result.
With other efforts also under way for
Cinepolis India audience measurement in all cinemas,
the headroom for growth of advertising
revenues for single screens is significant
owe er, despite the growth sp rt, cinema ad ertising and will drive the sectors overall ad-
is still less than 1 per cent of the total pie of ad ertising. revenue growth going forward.
here are man opport nities for f rther growth of this
ind str as mentioned below
Robust and credible systems for tracking the
Arvind Ranganathan
CEO
audience: Real Image
more rob st and scientific s stem that can throw
light on iewer demographics, cons mption patterns
wo ld aid in bringing more in estments. ompanies
are in esting in inema dit and Monitoring M Technology in in-cinema advertising
which tracks ad ertising across the 200 most important
screens in India. 6 Interacti e ele ision I , which UFO Moviez India (UFO) has launched UFO Framez,
b s space for ad ertisement in theatre screens, is a cloud based platform, to explore the local retail
working with Rentrak to track real-time bo office ticket advertisement opportunity. UFO Framez would be an
sales and together the hope to bring a new s stem of extension to UFOs existing in-cinema advertising. It
meas rement which wo ld enable cinema ad ertising to is expected to enable local businesses to reach out to
go to the ne t le el. their audience more effectively and economically. Retail
advertisers would be able to create, personalise and
Penetration of in-cinema advertising in single launch campaigns on local film screens. U O would
screens: be hiring local sales forces comprising of Direct Sales
rrentl , the ad d ration for a single screen is abo t Associates (DSAs), who would handle the local accounts,
three to fo r min tes per film as against appro imatel setup an advertising campaign instantly (it can go
20 min tes for m ltiple es, s ggesting potential for ad live in as less as six hours) and personalise it with the
ol me growth in single screens. lso, appro imatel user-friendly interface guiding them. The interface is
00 m ltiple screens, which are not owned b an of designed to meet the essential demands of advertisers
the big national chains, ha e comparable ad ertising such as screen inventory management and campaign
potential et to be e plored. management.79 Thus, simplifying the operations for
managing their B2B business.
108
6. he conomic imes, g st 201 , n-screen cinema ad ertising a hit, thanks to m ltiple es
and aggressi e marketing
. he conomic imes, l 201 , Media research compan Rentrak ties p with Interacti e
ele ision to collect bo -office data
. P R imited 1 16 arnings onference all, 22 l 201
Music rights
he sale of m sic rights, e en tho gh a small re en e
stream, has contin ed to perform strongl . M sic rights
are e pected to reco er on an a erage abo t to per
cent of the prod ction costs of a film. 0
ast ear the ind str saw the entr of a new pla er - ee
M sic ompan M . here are three main pla ers in

the co ntr c rrentl -series, on M sic and M .
esides, prod ction ho ses s ch as ros International
and ash Raj ilms R also ha e their own m sic labels.
M sic re en es ha e increased b 10 to 20 per cent for
prod ction ho ses d e to the increase in demand. he
prices for categor - films ha e risen to I R1 0-200
million from I R100-1 0 million in 201 . 0 on M sic
ac ired the m sic of ilwale at aro nd I R1 0
million. 1 he m sic rights of Prem Ratan han Pa o
were sold for I R1 0 million to - eries. 2 Music rights
ategor films were sold for, on an a erage, abo t
I R 0 million.
aravan al ies - e tendin rea h of films to media

dark areas
aravan Talkies is a movie-on-wheels concept, by

UFO Moviez India Pvt. Ltd., wherein sundown non-
ticketed shows are played at villages for Indias rural
population situated in media dark areas. It leverages the
companys access to film content, its existing advertiser
relationships and digital distribution capabilities to
provide a unique platform for advertisers to reach their
consumer base in media dark areas.
Caravan Talkies uses vans which display advertisements
during the day and act as exhibition centres for free film
watching in the evening in designated rural areas on the
weekly market day (haat). Each van covers seven haats
in a week.80 There are 90 such vans operational in seven
states (Uttar Pradesh, Bihar, Madhya Pradesh, West
engal, Maharashtra, Odisha and Gu arat). Each film
show witnesses 250 to 1,100 footfalls and runs up to
25 minutes of advertisements.80 The realisation per van
is pegged at about INR1 million per year.84 HUL, Parle,
Marico, other FMCG companies and telecom companies
are the popular advertisers on this platform.80
109
0. Ind str disc ssions cond cted b KPMG in India . KPMG in India anal sis
1. ere re he iggest eals in he istor of Indian inema , , http //www.ndt .com/india- . Mo ie P t. td, nal st Report b is apital, 0 eb 2016
news/here-are-the-biggest-deals-in-the-histor -of-indian-cinema- accessed on ebr ar
2016
2. imes of India,2 eptember 201 , Prem Ratan han Pa o s m sic rights sold for a whopping
Rs1 crore
i ital ideo n emand servi es Entry of subscription-based video on demand
-onl pla ers in the films lands ape
he on-demand a dio and ideo content ser ices are at
the c sp of in ection point in India. n entire ecos stem he Indian landscape was dominated b the
aro nd s ch ser ices has emerged, incl ding content ad ertising-based, pa per iew and freemi m
pro iders, aggregators, distrib tion channels, technolog models. owe er, the entr of et i , which follows
platforms, ad ertising platforms, pa ment channels a s bscription-onl model, into the Indian market has
and marketing channels. hile the c rrent monetised added a new dimension. et i has been la nched at
al e of the platform is small, the ind str is in esting a higher price with three packages - I R 00 , one
in directing the iewing habits of cons mers to legal de ice , I R6 0 iewing, two de ices and I R 00
platforms, awa from illegal platforms. igital re en es , fo r de ices , targeting the high-end cons mers. 0
constit te less than per cent of the o erall domestic his is e pected to segment the digital market and make
theatricals market, b t are obser ing do ble digit wa for the other pla ers as well.
growth. few other pla ers s ch as , ngama Pla ,
platforms displa in pp ha e also la nched s bscription-based ser ices.
he ptick of these platforms ma lead to e ol tion of
ast ear saw the broadcast windows shifting for the first newer models in the space.
time as ros International, which has adopted a digital-
first strateg for its growth, started windowing premieres ewer pla ers to boost the ni he films improve
as part of its marketing initiati es for its platform - reach in India and beyond
ros ow. It released an eds Man Ret rns on its he entr of new pla ers is e pected to boost the
platform, before its tele ision premiere. 6 co ple independent cinema which is c rrentl depressed d e to
of its other films adlap r , 10 , hamitabh , and low marketing b dgets and pa cit of screens.
app nding also premiered on the ros ow platform
before their satellite premiere. et i has alread ac ired its first e cl si e global
licence for an Indian film rahman aman for a
reported se en digit fig re. 1 et i has also bo ght
With the multitude of entertainment films s ch as andr , mal , oins of P njab , Ksha
options that are available and easily and leimaani Keeda , which re ect a different
accessible today, the Indian audience is sensibilit than mainstream oll wood films. Gangs of
becoming much more discerning about asse p r was streamed on et i as an eight episode
its choices. It is looking for experiences series s btitled in nglish, panish, rench, rabic and
that are compelling, engaging and hinese, indicating the potential of Indian films seeking
specifically customised to suit individual an a dience be ond the diaspora on the platforms. 2
tastes and preferences. he pre io s ear also saw the la nch of M i .com,
an platform dedicated to pro ide c rated titles of
Dinesh Modi
content-dri en independent films incl ding feat re, non-
feat re, and doc mentar and short films.
Group CFO
Eros International Media Ltd.
India is largely an advertising market.
Intensifying competition In order to convert it into a subscription
market, there is a need of strong content
ith the entr of newer pla ers s ch as , - content that is better than that available
ngama Pla , M i , et i and pp in 201 , there on television. Technology is only an
are abo t 12 major pla ers in the films space now - enabler. We need to use it effectively to
otstar, p l, et i , M i , oo , ros ow, o , understand the consumer profiles study
on I , pp , itto , gle, ngama Pla . hile the consumer behaviour using analytics,
these pla ers are e pected to increase their in estments, and create content accordingly.
few more new arri als are also e pected in this ear -
Aashish Singh
ma on Prime, iacom1 s oot and alaji elefilms
. s more pla ers are ac iring content in India and
globall , the s ndication re en es for film libraries are Vice President - Production
e pected to increase. Yash Raj Films
110
. KPMG in India anal sis 1. he imes of India, 1 an ar 2016, ow will s se en-fig re et i deal for rahman aman
6. Re ters, 16 l 201 , ros International nno nces fficial Marketing a nch for ros ow help engal s cine-trade
. Rishika lla ingh, , ros igital , creen ail , http //www.screendail .com/feat res/ 2. et i to tream Indian pic Gangs of asse p r as eries , he oll wood Reporter, http //
inter iews/ a-rishika-l lla-singh-ceo-eros-digital/ 0 0 .article accessed on ebr ar 2016 www.holl woodreporter.com/news/net i -stream-indian-epic-gangs- 26 accessed on 2
ebr ar 2016
. cl si e rated ideo-on-demand site M i raises angel f nding , IR , http //www.
. siness India, March 1 -2 2016, ta ing on top ccircle.com/news/technolog /201 /10/01/e cl si e-c rated- ideo-demand-site-m i -raises-
0. et i ow in India, ere s ow o Get It , Gadgets 60, http //gadgets.ndt .com/t /news/net i - angel-f nding accessed on ebr ar 2016
la nched-in-india-plans-start-at-rs- 00-per-month- 6 2 accessed on ebr ar 2016
pportunities for the Indian film properties alread hold e hibition licenses, what remains
to be impro ed is their abilit to offer good alit cinema
industry iewing e perience.
Improving domestic reach by increasing the ith metros and tier I cities hitting sat ration, m ltiple
number of screens owners had foc ssed on tier II and tier III cities. hile
the m ltiple chains contin e to add screens in the tier
India is one of the largest prod cers of films prod cing II and tier III towns, the pace 100 to 1 0 s ch screens
1,000 to 1, 00 films across ario s lang ages e er added per ear is one-third of the pace at which single
ear that is appro imatel 20 to 0 films e er weekend. screen theatres are closing down. he latter ha e seen
hile not all films ma be cinema-worth , the lack a slow and stead decline from more than 10,000 p
of a ailabilit of e hibition infrastr ct re is a major to fi e ears ago to abo t 6,000 c rrentl . itho t
impediment for man of the films in India. he screen faster addition of screens, especiall in small-towns and
growth has been rather slow compared to the potential r ral India where single screens are sh tting down fast,
demand, with the ind str adding onl 1 0 to 200 new growth of the ind str seems to gh. here is a dire need
screens gross additions per ear. to reach to at least 20,000 screens in order to do j stice
he screen penetration at India stands at 6 per million to all the films that are prod ced in the co ntr .
ers s 2 per million in hina and 126 per million in
the . .. lso, the biggest oll wood release of 201
ajrangi haijaan , which saw a domestic collection
of more than I R billion, was iewed across abo t Although over 2000 world- class multiplex
4,200 6 screens b merel 2 per cent of the total Indian screens have been built in India, over
pop lation. his indicates an immense opport nit for the the last ten years, the screen density in
film ind str to tap. the country continues to be exiguous
in comparison to the United States and
hina in the Asia Pacific region. To improve
The film industry in India is yet to exploit Indias screen density, Governments, both
its full potential, evidenced by the fact at the Central and State level need to back
that in India, compared to our population, appropriate policy redressal, lower taxes,
only a handful are going to theatres to provide tax holidays for ease of building
watch movies. In terms of numbers, even cinemas across India. This will help attract
a blockbuster film would only have been investment in cinema building and world-
watched in theatres by perhaps 2 to 3 per class cinema technology, which will improve
cent of Indias population. the movie experience for audiences in
addition to helping curb piracy.
Nina Lath Gupta

Managing Director Uday Singh
NFDC Managing Director
Motion Picture Dist. Association (India)
Pvt. Ltd
Indian e hibition ind str needs to re isit the wa it looks

at its screens. he ind str m st mo e awa from the
traditional classification of single screens and m ltiple es
and classif themsel es as profitable and nprofitable
screen operators.
ingle screen theatres, with a seating capacit of 00 to
1000 seats and erage icket Price P of I R 0 to
I R100 depending pon the location of the theater, ha e
become s non mo s with low occ panc , low ticket
prices and hence poor profitabilit . Such properties
offer a feasible alternati e to the tap the opport nit
of catering the nder-screened a diences. ince the
111

6. http //www.erosintl.com/ ros-In- ews ajrangi- haijaan-smashes-records.asp as
creens, occ panc and ticket prices are the main le ers Lack of funding and archaic regulations are
for the growth of the film ind str . Growth dri en b key challenges
increase in P is ns stainable in the long r n d e to
a ailabilit of cheaper alternate forms of entertainment. rrentl , man of the single screens in the co ntr are
h s, the opport nit lies in e panding the screen in a dilapidated state, especiall those in the smaller
a ailabilit and attracting the footfalls. few approaches districts. he theatre owners are not able to in est in
that the ind str can consider are as follows reno ation beca se of low re en es. he effects of this
are ampl isible on the engali film ind str , which is on
etrofittin - onvertin the sin le s reens a downfall d e to lack of good e hibition centres. ith
to two or three screen multiplexes con ersion to m ltiple screens, the theatres can also
command higher ticket prices, for the better e perience
Retrofitting or downsi ing the e isting single screens offered.
into m ltiple two or three - screens is one of the cost-
effecti e options for re i ing the screen growth. here are Retrofitting can cost I R to I R . million at the low-
appro imatel 6,000 single screen theatres. end and p to I R2 million per screen in the metros.
he f nding co ld come from a ta holida or s bsid
ss ming that per cent of the screens are retrofittable, or allowing single screen owners to ha e an e tra oor
con ersion to the more a dience friendl twin-screen space inde that co ld finance the retrofit.
m ltiple es co ld nlock re en es worth I R 0 to
0 billion for the film ind str . en tho gh the total here e ist str ct ral limitations which might not allow
n mber of seats ma red ce, retrofitting wo ld lead to con ersion of all single screens into m ltiple es. lso,
an increase in the footfalls d e content e ibilit and the single screens are mostl on a single plot of land, and
the abilit of the new facilities to attract famil a dience ndergro nd parking, and open areas aro nd are some of
rather than the c rrent male dominated a dience. the re isites for a m ltiple . owe er, the go ernment s
inter ention and retrofitting-friendl laws wo ld help
dvanta es of retrofittin ease these challenges.
reater availabilit of s reens for smaller films and K era era miniple is growing b ac iring single
regional cinema: ith digitisation and red ction in the screen theatre and con erting them into miniple es
costs of prints, films are targeting a wider release across with a new look and feel to the theatres. he compan
as man screens as possible. his is depressing the has aro nd 0 screens nder ario s stages of
smaller films and regional content d e to the press re on implementation.
the screens. M ltiple es, with their feasibilit of offering
more choices per location, are e pected to relie e this otential solutions for ease of retrofittin
press re.
Higher revenues due to higher footfalls and Government to extend tax benefits such as a tax
higher ATPs: plitting large 1,000 seat theaters into holidays for single screen owners retrofitting their
m ltiple screens can allow greater e ibilit in content properties
programming which co ld ha e a direct impact on
occ panc rates. Public private partnership model to be introduced,
under which the government may give a grant to
the cinema owner to convert his/her theater into a
miniplex
One of the biggest challenges with
retrofitting is that the rules and regulations Government could play the role of a moderator and
regarding theatres and their licenses are invite external players to invest in the revival plan
quite old and need revision. Also every state Reconsideration of licensing laws to make them
has different licensing rules and sometimes more relevant to current times
they are quite opaque and unclear.
Vineeta Dwivedi
CEO
KSS Digital Cinema Private Limited
Single window clearance/simpler laws to
start and exit the exhibition business There is a strong need to create no frills
he policies and laws for starting a new theatre in India cinema to cater to the needs of common
are disheartening, e en for the bigger pla ers. P R s fi e- man. As the profile of the customers varies
screen m ltiple at Grand Mall in hennai s elacher drastically and accordingly the needs of
had to wait for almost two ears to get the licence to the theatres differ too. A single law cannot
possibly work for all kind of cinemas across
open. he interest costs and the costs of keeping the

propert f ll -staffed in anticipation of the licence and any state hence needs to be localised. The
the opport nit costs are e tremel disco raging. he overall cinema licensing laws across the
go ernment needs to ha e a single window clearance country in any case are very restrictive and
which is estimated to sa e fi e to si months of waiting they havent changed since the British
for the e hibitors . imilarl , the laws for closing a times. These laws need to be relooked at
theatre or sing it for different p rposes d ring the lean and be brought up to pace with the modern
periods need to be relooked at. o s mmarise, the entr times and be customised according to the
and e it barriers need to be lowered from the reg lator context. Worldwide there are two kinds
perspecti e to make e hibition in India an attracti e of government policies for cinema - either
b siness. a market driven policy which promotes
the market as is present in the U.S. or
a government driven policy to promote
the market as in China. We are currently
having a government driven policy that only
discourages the market.
Kulmeet Makkar
The Film and Television Producer Guild of
India Ltd
113
. he ind , 26 o ember 201 , P R inemas application for license pending for o er 2 ears
Maharashtra state policy initiatives
Maharashtra has contributed significantly towards the The state governments IT/ITES Policy 2015 provides following
development of the Indian film Industry, both in terms of incentives to VFX/animation industry:
talent as well as other resources. The state government of Animation films produced and released in Maharashtra
Maharashtra has augmented the growth of this sector through would be exempted from payment of entertainment tax.103
several policy initiatives. This has also led to the resurgence
of the Marathi industry film industry in the recent times. This The films fully converted in Maharashtra from 2 to 3 in
also holds lessons for the other states. Some of the favourable stereoscopy and released in the state would be refunded
policies are as follows: 50 per cent of entertainment tax paid or INR25 million,
whichever is lower.103
The Maharashtra government has made it mandatory for
the multiplexes to screen at least 124 shows of Marathi ive action films releasing in the state which have a
films in a year in the prime time slot, thus providing minimum of 50 per cent duration of running length
impetus to Marathi cinema.99 created with the help of animation or visual effects
completed in Maharashtra would be refunded 50 per cent
Mumbai Next initiative was launched in 2015 with the of entertainment tax paid or INR25 million, whichever is
ob ective to transform Mumbai into a global financial and lower.103
entertainment centre.100
Animation films produced in the State would be given
The government is looking at ways to bring down the a capital subsidy equal to 50 per cent of the cost of film
number of clearances at par with other countries and production subject to a ceiling of INR3 million for creative
cities. Presently, filmmakers require approximately art films, educational, scientific, and mythological and
86 permissions for a single shoot in the state of childrens films.103
Maharashtra.101
The Maharashtra government provides five-year tax
As per the state governments onsultation Paper exemption to single-screen theaters under municipal
on Tourism Policy- 2016, up to 100 per cent of the councils and a seven-year tax exemption to those located
entertainment tax levied on the movie tickets would be in rural areas.104
waived off if the filmmaker spends 5 per cent or more of
the total number of dates allotted to shooting and canning The Maharashtra Tourism Development Corporation
the film in Maharashtra. Also, if the filmmaker spends (MTDC) has announced a Bollywood tourism plan, which
50 to 74 per cent of the total number of dates allotted to may enable Indian and foreign tourists to take guided
shooting and canning the film in Maharashtra, then 50 per tours of film studios and sets while being exposed to a
cent waiver would be provided.102 first-hand experience of film shooting.104
114
. he Indian press, 10 pril 201 , Maharashtra go t redefines prime time as noon to pm

100. i e Mint, 2 eb 201 , e endra adna is n eils M mbai e t initiati e to boost infrastr ct re
101. he Indian press, 20 eb 201 , tate looks at oll wood to gi e to rism a boost
102. Maharashtra Go ernment s ons ltation Paper on o rism Polic - 2016
10 . Maharashtra Go ernment I /I Polic Report 201
10 . Made in India ttracting and incenti ising film prod ctions, India ilm o ncil Repor
Franchise model for building screens in tier II tier III centres
ier II and tier III centres, with lower screen penetration 00 seater, it comes to an in estment of I R12. million
and lower real-estate costs, are e pected to dri e the to I R1 million, which is disco raging for a medi m
ne t le el of growth in the n mber of screens. ith scale entreprene r.10 eading e hibition pla ers can take
digitisation, the concerns of pirac and man al hassles a lead and dri e growth in these centres b adopting a
ha e red ced. owe er, so rcing technolog , design franchise model.
and logistics is still a challenge. heatres in s ch centres

re ire an in estment of abo t I R ,000 to I R 0,000
per seat. or a two to three screen theatre with 0 to
Bridging the infrastructure gap - building screens the smart way
India is one of the biggest producer of movies - more than through a standardised model both in terms of infrastructure
1,500 films are produced annually - a huge number compared and experience. Standardisation would allow streamlining
to 600 by the U.S. and 90 by China. However, it does not have government approvals and centralising volume procurement of
comparably more screens to screen them. India has fewer logistics including content, which would bring in economies
than 9,000 screens. To provide at least 25 screens per million of scale. The franchises can also leverage UFOs industry
population, there is a need of about 20,000 more cinema eminence to gain access to quality content at favourable terms.
screens and most of the unmet demand is from the tier III and The brand name would allow them to command premium
tier IV towns. advertising rates and significantly enhance their revenues.
There are two distinct segments in the exhibition landscape This franchise model would enable more entrepreneurs to
leading megaplexes and premium screens that cater mostly come on board and create significant ob opportunities - on
to the metros and tier I cities and non-premium single screen an average, it takes around 12 to 15 persons for running one
properties which majorly cater to the rural audience. Due to cinema property; in addition, cinemas have an inherent ability
the higher revenue opportunities, screen growth is primarily to grow their the ecosystems consisting of shops, hotels, and
happening in premium segment through organised players other footfall dependent businesses, further boosting the
while the need of the hour is that screen growth occurs in the employment in these areas.
non-premium market.
More theatres would provide a greater boost to the exhibition
We need to create a model for the exhibition sector which sector. Also, due to inaccessibility, the current state of
would engage the non-premium, rural demographic. Since exhibition attracts only male audience, the aim is to extend
the organised sector cannot or rather would not step into such the reach to family audiences and at minimum cost. The
markets, there is a need to create mini-entrepreneurs and need of the hour is to recognise the exhibition industry as
develop this market in a fragmented manner in order to ramp an infrastructure business and boost the sector by providing
up quickly. With rural incomes growing faster than their urban single window clearances, tax holidays and subsidies. Theatres
counterparts, there is a definite set of potential customers are no longer about films, they have become socio-economic
waiting for newer experiences, translating into better business links in Indias growth story.
prospects for investors.
People are willing to invest in the exhibition business in
the rural areas. Becoming a theatre owner escalates ones
local status and power in the community and also allows
monetisation of real estate assets. However, the lack of
technical know-how, hassles of government protocols and
permissions and prohibitive costs of logistics deters them from
venturing into this business.
Acknowledging this gap, UFO Moviez India (UFO), plans to
Sanjay Gaikwad
Managing Director
set up a chain of theatres across India, under the brand name UFO Moviez India Ltd
Nova inemas (Nova). Nova would follow the franchise model.
It would create a one stop solution for the exhibition players Unless otherwise noted, all information included in this column/ article was provided by
Sanjay Gaikwad. The views and opinions expressed herein are those of the author and do not
necessarily represent the views and opinions of KPMG in India
Exploring international markets KAAKA MUTTAI - a case study
ith the collections from domestic market platea ing, Kaaka Muttai (English The rows Egg) is a Tamil comedy-
the ind str needs to look at newer markets to dri e drama film about two slum children whose desire is to taste
growth. oll wood deri es more than 66 per cent of its a pizza. The film has been appreciated for its story and cast
collections from the international markets while for India performances and won two National ilm Awards best
the o erseas collections make less than 1 per cent of childrens film and best child artist
the total collections. nl a handf l of the international
markets ha e a strong local ind str , pro iding scope The strategy was to premiere the film at various film
for the Indian film ind str to capt re the demand for festivals and let the buzz flow into Tamil Nadu prior to its
entertainment. International co-prod ctions co ld be a release. Kaaka Muttai has screened at 25 festivals and
possible means of tapping this opport nit . still counting. Seven of these releases were before the
theatrical release in India.
a ing mastered the art of stor -telling and the techni e
of prod cing good films, Indian prod ction ho ses ma Kaaka Muttai premiered first on 5 September, 201 , at
consider prod cing films for the international markets b the 39th Toronto International Film Festival, and was
collaborating with local st dios and talent. well accepted. The Tamil Nadu theatrical release took
place only on 5 June 2015, nine months after its Toronto
ros International is considering a similar opport nit premiere. By then, the accolades it had won had created
in the hinese market b co-prod cing ino-Indian a strong demand base in India.
films along with hinese st dios. It has entered into
agreements with three major hinese state-owned film Post the Toronto ilm estival, the film was strategically
and entertainment companies to promote, co-produce, sold the film to very strong art house distributors for
distrib te and nlock al e in respecti e intellect al Japan, South Korea and Australia circuits so that there
properties for ino-Indian films across platforms in is significant visibility across the art house platforms
both the co ntries. It is also looking forward to similar around the world.
collaborations for coprod ction in o th Korea, apan and
o th merica.106 Consistent media presence was planned and social
buzz was commenced nine months prior to its release to
ensure unprecedented buzz for a film of this scale.
pportunities for International ollaborations
The film was dated ust after the national awards, as it
had applied for the awards, and was confident of getting
Distribution of dubbed movies in international acknowledged. The film received two awards, giving it
markets some more momentum before release.
Coproduction of movies for international markets A 10-day prior release media campaign was undertaken,
Coproduction of movies that would work in both to ensure that the film was pushed like a big ticket
markets release, through effective use of TV, radio, print and
outdoor media.
The two kids from the film were the face of the campaign
along with the producer Dhanush (a popular actor)
and did multiple events and TV integrations. This
generated good publicity and high visibility throughout
the campaign period. Also this ensured that audiences
connected with the boys before the release of the film.
ritics were shown the film three days before release
instead of the usual celebrity route.
116
106. siness tandard, 1 Ma 201 , ros ties p with hinese firms for film prod ction
The film ran on limited screens - around 110 screens in
Tamil Nadu, with a preference for mid-size screen, in
order to leverage the word of mouth publicity to get a
long run at the box office.
Kaaka Muttai got one of the biggest openings of all
time for a non-star cast/small film. It also got noticed
because of the box office collections and paved the way

recognition in international markets.
Even for the international release, it was released only
in the usual strong Tamil playing centres Malaysia,
Singapore, Sri Lanka and the Middle East.
It leveraged the Twentieth Century Fox (TCF) distribution
network to look at releasing in non diaspora markets.
The film was released in U.K., Taiwan and Hong Kong.
Further markets were explored using TCF distribution.
Unlocking digital revenues

At Rajshri, we have built a large digital
igital is e pected to emerge as an independent re en e content library across multiple genres
stream nlike the past when man of the deals ha e and are now aggressively localising
been a part of a bigger b ndled deal. he demand for it in key international languages.
digital content is e pected to increase with global pla ers The aim is to reach an audience
entering the market. he contrib tion of the digital beyond the diaspora. By remaining
platform to the total film ind str is estimated to be platform agnostic, retaining IPR and
less than 1 per cent e en tho gh it aries significantl collaborating with everyone across the
on a film to film basis. or instance, for a few films value chain, we have built a business
the contrib tion ma be as high as 10 per cent of their that is profitable, scalable and de-risked.
total re en es. In the coming ears, the share of digital We are in a sweet spot on the content
re en es is e pected to grow significantl on back of side but on the platform side, the
do ble digit growth pwards of 0 per cent of the digital biggest challenge in India is to build a
channel.10 service that consumers are willing to
he Indian film landscape is e pected to e ol e similar pay for month-on-month. This means
to oll wood to gi e rise to a polarised slate - consisting overcoming their unwillingness to pay
of tent pole films at one end and the small b dget, for content and more importantly, their
content-dri en films at the other end. s the a dience inability to pay.
gets more discerning, the m ltiple e perience wo ld
be reser ed for the big b dget ones and the smaller
films wo ld be cons med ia personal de ices. In short, Rajjat A. Barjatya
Managing Director and CEO
the digital penetration wo ld create a more democratic
en ironment for the sector, gi ing a thr st to the small Rajshri Entertainment Private Limited
b dget good content films.
117
t picall are habit ated to pa for access b t not for
Over a period of time, two distinct content. his wo ld need to change to increase the
categories of movies will arise - the high s bscription re en es.
budget, spectacle films and the low Acceptance of long form content on small screens:
budget, content heavy films of the likes ilms are characterised b long form content which
of art house movies. The former would is e periential. he acceptance of this content on the
be reserved for theatrical experience smaller de ices is estionable.
while the latter would leverage the
digital platforms extensively. The middle Valuation of the digital content: he al ation
rung of movies will continue to exist but of films is t picall dependent on their bo office
the numbers will only decline with time. collections. ew models wo ld ha e to e ol e to
price the content for a direct-to-digital release.
Apoorva Mehta
CEO
h s, in order to ma imise ret rns from digital platforms,
it is important for the digital pla ers to chalk o t a scalable
model, whereb Indian sers can see al e in pa ing for
Dharma Productions Pvt. Ltd content.
ilmmakers wo ld ha e to identif the cons mer

patterns and the conte t in which their films ma be The key to scalability for Digital Media
cons med and create the content accordingl . ith the will be the subscription revenue growth.
e ol tion of m ltiple channels of cons mption, and not Even though Indians are extremely
all films following the same pattern of theatrical, , value conscious, they have been
and , segmenting and targeting the a dience gradually shifting from a free content
wo ld become more critical than e er, to chart the consumption model to a paid model.
release strateg of a mo ie. Besides, television remains a low ARPU
platform and the digital ARPUs are in
a way dependent on it. However with
More than content, context will start digitisation, the television ARPUs are
playing an important role. Big data will bound to go up that will ultimately boost
help the players identify the context the digital revenue as well.
what is the context in which the viewers
are consuming the content? This will
enable the process of discovery and
consumption for the consumers using
Hiren Gada
Director
features such as personalisation and Shemaroo Entertainment Ltd
visual search.
Mohit Mehra
Cinema Capital Venture Fund
owe er, there e ist ite a few challenges in the

adoption of the digital channels for mo ie cons mption 10
Quality of viewing: consistent good alit
internet connection, which is essential for good
alit iewing on platforms, is still a challenge
in India.
Consumers propensity to pay: Indian consumers
are still not sed to pa ing for content online. able
is c rrentl er cheap and hence, there is not m ch
incenti e for the cons mers to pa for entertainment
on other platforms. lso, Indian cons mers
118
The Screening Room
The Screening Room is a startup venture backed by Sean giving the exhibitors the added advantage of profiting from
Parker (Napster co-founder and Ex-Facebook President) and concession sales to those spending on movie.110 Participating
Prem Akkaraju. The company plans to provide premium day- distributors would also get a share of the USD50-per-view
and-date movie release service wherein major blockbusters proceeds, speculated to be about 20 per cent, before The
would be made available at home on the same day they get Screening Room takes its own fee of 10 per cent.110
released in cinemas.
The company has also promised to offer secure anti-piracy
The service would charge about USD50 per view while technology to protect the rights of stakeholders. This feature
providing a 8-hour viewing window for every film to the is significantly appealing to ma or studios like Universal, ox
consumers. Also, consumers would be required to pay USD150 and Sony who have shown interest in The Screening Room as
for the set-leading box that would transmit the films. Although they constantly struggle with global content theft. However,
day-and-date service for screening major releases, called uncertainties around this concept continue to thrive as
Prima Cinema already exists in the U.S., it is prohibitively exhibitors worry about the ultimate impact of the shortened
expensive in nature (priced at about USD35,000).109 theatrical windows on their sustenance apart from distributors
being wary of Screening Room emerging as exclusive content
The Screening Room is a service that would work on a revenue- partner. 109,111
share model and help enhance revenues from premium home
video releases by shortening the current theatrical window
of 90 days.109 To exhibitors, the company has proposed a
significant share equaling about US 20 of the fee.109 Also,
customers who pay the USD50 would be provided two free
tickets to see the movie at a cinema of their choice thus
Miniplex designing progressive offerings to address the gaps in the current market
Given the screen paucity, the short theatrical windows and fast Thus, the Miniplex service has been designed to explore an
paced lifestyles, the Indian consumers often miss watching underserved segment of consumers looking for good quality
the non-blockbuster releases in theatres. Also, the satellite content and with the SVOD model, it is expected to induce the
rights of most films go unsold every year as the broadcasters habit to pay amongst the Indian audience. While the uptick
largely focus on the top 0-50 films only. The Indian film of this service is yet to be seen, the industry needs to think of
entertainment content house, Shemaroo Entertainment Ltd., more innovative services like these to improve the reach of
launched a movie premiere service Miniplex, with the aim Indian cinema.
to bridge this gap and improve the reach of the smaller good
films. A few key features
Service USP One movie premiere every riday for the first
time on Indian television
Content: Selectively curated content consisting of small
Hindi films with strong content selective, critically
acclaimed regional films having a worldwide appeal also
expected to feature in the future
Convenience: Ad free service delivered over direct-to-
home operators like Airtel and Tata Sky; Consumers get to
watch a single movie throughout the day at fixed timings
Cost: Subscription priced at INR60 per month
119
10 . t dios, hibitors onsider Re ol tionar Plan for a -and- ate Mo ies at ome , ariet , http // 111. he G ardian, 10 March 2016, apster fo nder plans to screen mo ies at home on da the hit
ariet .com/2016/film/news/st dios-e hibitors-consider-re ol tionar -plan-for-da -and-date-mo ies- cinemas
at-home-e cl si e-1201 2 16 / accessed on 1 March 2016
110. apster fo nder is making a da -and-date mo ie release ser ice , ngadget, http //www.engadget.
com/2016/0 /10/the-screening-room-mo ies/ accessed on 1 March 2016
Developing ancillary revenue streams Ticket pricing: Increasing Ps are diss ading the
a dience from watching the films in theaters. Regions
here co ld be m ltiple wa s for monetising the stories with low P prices ha e witnessed impro ed occ panc
long after the films are o er. few of them being le els and a boost to film b siness. or instance, the
Film remake rights in different languages: Production occ panc le els are er high in the so th where the
ho ses sho ld foc s on b ilding intellect al propert P prices are capped. lso, the Marathi film ind str
and create content that can work across lang ages. he e perienced a boom in the last ear d e to low P
c m lati e al e of the films locall adapted in different prices. ence, there is need to rationalise the P prices
regional lang ages is e pected to be more than generic to impro e the footfalls.
content e pected to work nationwide. nline pira here is an rgent need for penetration
TV series, comics building the stories of the of legal channels of entertainment in the r ral areas.
individual characters: ccessf l stories which rrentl , go ernment is foc ssed on incl si e societ
resonate with the a dience can be sp n aro nd to create initiati es which aim at connecting illages ia broadband.
a series for tele ision or online iewing. or instance, his has a potential to incenti ise pirac as people wo ld
historical fiction drama, aah bali he eginning , find it m ch easier to watch mo ie on their laptops
plans to e pand its franchise b releasing digital graphic than tra el to far off theatres. ence, there is need for a
no els later this ear. he graphic no el is to be based collecti e, str ct red, scientific, m lti-pronged and pro-
on the blockb ster film and wo ld nra el stories of the acti e approach to combat pirac .
characters which co ld not be shown in the film.112 Consumer preference shifting to alternate forms
Merchandising across various product categories: of entertainment: , IP , platforms, li e
icensing and merchandising c rrentl constit tes entertainment, etc. and other forms of o tdoor
a minisc le portion of the re en es for films. here entertainment s ch as sports, eating o t, etc. ma
is immense potential for de eloping this re en e eat into the share of domestic theatricals as an
stream. owe er, this wo ld need strong stor lines entertainment option.
and characters that resonate with the a dience. his
is e pected to de elop as more franchises get created.
hile merchandising clicks onl for certain genres of
films, filmmakers m st acti el e plore inno ati e wa s The evolution of a digital economy
to associate with the cons mers. including mobile devices, VoD sites
and TH, has disrupted the film space.
Consumers, especially the millenials, are
hreats to the Indian film industr leveraging such devices and platforms to
he growth of the Indian films ind str ma face some optimise their leisure time by exercising
headwinds d e to ario s technological de elopments the freedom of choosing their time for
and fast changing cons mer beha io r. he ind str viewing and engaging with content as per
m st take cognisance of these threats their convenience. Movie makers need to
adapt to these changes by charting out an
Lost opportunities due to the inability to add new engagement strategy for their films and
screens in a timely manner: s disc ssed earlier, India accordingly devising the release strategy.
lags behind on acco nt of screen penetration and lack of Challenges abound for content owners
infrastr ct re is leading to a lost re en e opport nit for as well as marketers in engaging such
the ind str .113 his affects the scope of the smaller films an audience that is socially networked,
to a greater e tent. ach meritorio s independent film, digitally wired and has access to multiple
nder marketed or nder monetised wo ld be a missed screens.
opport nit , not onl for that partic lar film or film maker,
b t for the entire Indian film ind str .
Vikramjit Roy
Head - Film Facilitation Office
NFDC
112. aah bali goes be ond the big screen Rajamo li s epic to be la nched as graphic no el series ,
irstpost, http //www.firstpost.com/boll wood/bah bali-goes-be ond-the-big-screen-ss-rajamo lis-
epic-to-be-la nched-as-graphic-no el-series-2610662.html accessed on 10 ebr ar 2016
We are still dependent on a handful of We need reliable data to make policies
brands and stars to bring in the audiences. which would catalyse the realisation of this
Screen penetration is the primary tool that potential. Currently, there is tremendous
shall help increase access to a larger share opaqueness in cinema revenues and a
of the population. On the structural side, the tendency to obfuscate statistics that is
industry is in urgent need of tax reforms to eventually self-defeating. All the developed
help the industry stay vibrant. Reforms in and most developing markets have
the education sector by allowing corporates mechanisms in place to measure box office
to enter this space will help the industry in revenues and related consumer trends
the long run by bringing about qualitative accurately and in near real time. India
improvements. needs such systems to develop favorable
policies for the industry.
Ravi Gupta
Dean and Director Rajkumar Akella
Whistling Woods International Managing Director - India
Rentrak (now ComScore) - Theatrical
Licensing and regulatory framework: Prohibitor Lack of talent: ke threat to the growth of the film
reg lator framework is impeding the growth of Indian ind str is shortage of talent. here is a need to de elop
cinema. tates need to be mandated and enco raged to more instit tions that impart world class formal training
grant licenses to new cinemas on a fast track basis and that wo ld help the ind str grow in the long r n.
also pro ide for a single window licensing s stem to c t
down the dela s of red tape. Incenti es to cinemas can
range from enco raging financial instit tions to e tend
assistance for b ilding cinema infrastr ct re, ta holida s, With the Indian Film Industry maturing
ta breaks, c stoms d t wai er on cinema e ipment, there is significant demand for well trained
simplification/lowering of ta es, permission to cinemas professionals. What is lacking in India is
for mi ed se of the land to enhance re en es and to set the mainstreaming of film education akin
off losses of lean mo ie seasons and so on. to that of engineering, medicine & other
Lack of data accuracy and transparency: In spite of the professions. There is a fervent need to
e ol tion of technolog and near 100 per cent digitisation, promote specialised training & education in
there is no mechanism in place to meas re bo office these sectors and both the NSDC (National
re en es, n mber of admissions and other cons mer Skill Development Corporation) and private
trends acc ratel .114 cc rate and scientific data is players have a major role to play. The
indispensable for state and central go ernments and double digit growth of the film industry
e en local bodies, to nderstand the trends, the market should warrant a double digit growth for
gaps, and design strategies and policies accordingl . film education as well.
Rahul Puri
Lack of incentives for domestic production: Man
co ntries, incl ding the . ., anada, pain, stralia,
. . , the .K., Ital , Mala sia, rke , Ma riti s, o th Managing Director
frica, and Ireland ha e ta credits or cash rebates Mukta Arts Limited
ranging from 1 per cent to 0 per cent on eligible
e pendit re for foreign film shootings, besides a single
window s stem to grant permissions for film shoots.114
Indian films that tilised these incenti es ha e boosted
to rism in these co ntries and added m ltifold al e
to their economies. India is losing potential re en e b
missing these opport nities. he go ernment needs to
draw from the ta models b ilt b these co ntries and
design incenti e policies in an e peditio s manner.
Lack of integration across the value chain and with
the government in India: India c rrentl lacks a lobb or the past 5 years, Indian film industry
wing, like the Motion Pict re ssociation of merica has been wallowing in a small pool of
MP of oll wood, which can act as an interface mediocrity. Its time we realise that there
between film ind str and go ernment. here is a need are many other leisure alternatives and film
of a nodal bod that co ld pla a role in form lating is only one mode of mass entertainment.
policies, facilitating clearances, interface between the There is an urgent need to develop cinema
ind str and the reg lators and th s enable smooth for other media such as desktop, tablets
f nctioning of the ind str . he bod co ld also be and other mobile devices & go beyond the
gi en the responsibilit to track performance of new diaspora market overseas. If this is not
policies and engage contin o sl with stakeholders from done, then the long walk on the sunset
oll wood as well as regional film ind stries to s stain boulevard has begun.
the growth moment m and remo e an bottlenecks.
hreat from Holl wood to the Indian film industr
s the distrib tion of oll wood cinema increases and
the n mber of screens fail to increase, oll wood and
Amit Khanna
Writer, Film Maker, Media Guru
regional cinema face a threat of losing the footfalls to the
oll wood cinemas.
Conclusion
he fail res and s ccesses of 201 hold important
lessons for the Indian film ind str . he ear saw ite
a few big b dget, -list actor starrer films fail at the bo
office, while the smaller content-led films emerged
s ccessf l. ontent clearl is indispensable for the
s ccess of a mo ie and it is imperati e that the prod cers

take cognisance of the changing tastes of the cons mers
and reassess their b dgets and b siness models to
create profitable films. he a dience has become more
e perimental and open to new concepts, platforms and
other so rces of entertainment. In these times, the
nder-penetration of screens and lack of accessibilit
to good cinema isibl threatens the growth of the
ind str . he ind str needs to look at inno ati e models
for b ilding the infrastr ct re and alternate so rces of
re en e streams for monetising the content, and the
go ernment needs to re isit the archaic laws to make
films more accessible to the a dience. he ind str is
inching closer towards digital as a potential re en e
stream, which co ld disr pt the ind str and completel
alter its o tlook, pro ided the ind str is able to le erage
and monetise it aptl .
Digital consumption
The second screen soars
Digital advertisement spend Mobile advertisement spends (INR billion)
Digital advertising spending is getting more

prominent
In line with the trends seen in digital media across
sectors, digital ad ertisement spend o tperformed
e pectations in 201 , growing almost .2 per cent o er
201 to reach I R60 billion01. It is e pected to cross
I R2 billion in 2020 dri en b a n mber of factors
incl ding
Increasing allocation of b dgets to engage c stomers
thro gh the digital medi m.
hift of traditional companies sing digital channels
for their b sinesses operations.
ontin ed allocation of spend from e-commerce
companies.
Source: KPMG India nal sis
ignificant rise in cons mption of ideo on-line, a
categor that tends to attract m ch higher PMs.
M G and a to sectors are e pected to be the largest
spenders on o erall ad ertisements in 2016 dri en b
Digital advertisement spend (INR billion) new prod ct la nches and -commerce shall contin e
to be a ke dri er in ad ertisment growth as the sector
b ilds and pla ers consolidate their market presence in
the co ntr 02.
Headroom for growth

igital ad ertisement spend per capita in India contin es
to significantl lag global economies. . ., hina,
apan, German and .K. are the top fi e spenders on
ad ertising0 . en with c rrent growth ass mptions
India is e pected to be abo t 0.6 per cent of global digital
spend in 201 indicating a significant headroom for
growth01.
Digital advertisement spend by segment 2015

Source: KPMG in India nal sis
Mobile ad ertisement spends contin e to see

significant growth dri en b a n mber of factors
better monetisation p t in place b p blishers
Growing smart phone penetration and
Increased cons mption of content on mobile.
Mobile ad ertisement spend in 201 is estimated to be
at I R billion and is e pected to grow at a GR of 62.
per cent to reach I R102.1 billion in 202001.
126
01. KPMG in India nal sis

02. KPMG Ind str isc ssions for the report Source: KPMG in India nal sis
0 . http //da einfo.com/201 /12/1 /global-digital-mobile-internet-ad-spending-201 - s-china-lead/
Analysis of segments Advertisment blocking-an ongoing problem
earch and displa contin es to be largest share of the he n mber of global cons mers who ha e installed
market mainl dri en b ol me. Gi en that this segment ad ertisement blocking software on their browsers has
is mat ring in relati e terms and contin es to see lower increased b nearl tenfold to 1 1 million between 2010
PMs, we e pect that this segment will grow slower and 201505. hile acti e ad ertisement blockers acco nt
than the categor . for merel per cent of the total internet pop lation, it
is becoming a widel adopted practice b cons mers to
The Future: now streaming | Digital consumption
ideo mo ed p the charts, dri en b new la nches s ch a oid watching nwanted content while carr ing o t their
as otstar, m ch better monetisation across platforms dail acti ities on the web.
and high PMs on premi m content. his categor
sho ld contin e to see significant growth till 2020 as he major share of ad ertisement blocking is faced
more and more premi m content is monteised on b desktop comp ters beca se the penetration of
platforms. ad ertisement blocks is c rrentl far lower in mobile
de ices as compared to desktop comp ters.
ocial has beg n the process of monetisation relati el
recentl in India, hence the re en e estimates are not
commens rate with the si e of the social ser base in Experimenting with cross platform
India. s platform owners get better at monetisation of advertising
the Indian a dience, the mi sho ld start changing in ons mers are increasingl disco ering content on both
fa o r of social ad ertisement spend o er the ne t few and digital de ices, which pro ides marketers with
ears. an opport nit to increase the reach efficienc of their
lassifieds contin e to be a significant categor for campaigns thro gh cross platform ad ertising partic larl
digital ad ertisement spend, howe er 201 saw the sing ario s social platforms.
consolidation of se eral ertical foc sed pla ers. e to a rapid adoption of mobile de ices, integration of
n mber of trends will contin e to dri e growth in this cross de ices platform contin es to grow at a fast pace.
space o er the medi m term he global cross-platform and mobile ad ertising market
si e is estimated to grow from 2 billion in 201
Increased competition among hori ontal and ertical to aro nd 0 billion in 202006. India is increasingl
foc sed pla ers like a kri, haadi, and ikr. following similar trends with brands le eraging tele ision,
Roll o t of specialist erticals s ch as a tomobiles, print and social media presence to a gment campaign
real estate etc. b hori ontal pla ers. effecti eness.
ontin ed in estment b traditional pla ers like st ew age companies s ch as il erp sh ha e started
ial in b ilding their online pla . to b ild technologies where smart de ices are able to
recognise sers and content being pla ed on screens
Infoedge s recr itment portal a kri.com, which is and conte t alise ads on the ser s smart de ice based
among the largest recr itment portals, has witnessed on pro imit to the content on the screen.
a growth of 0 per cent in domestic corporate sales in
cities like engal r , while non I markets like M mbai
and elhi were growing at 16 to 1 per cent per ann m. Digital campaigns need to iron out certain
his growth is primaril dri en b reco er in the job challenges
market, partic larl in the I segment along with
addition of new prod cts and ser ices like the areer echnolog pgrades and inno ations ha e enabled
site manager and referral hiring platform e-hire. he shift ad ertisers to reach and effecti el engage with their
towards Mobilit contin es with Mobile now acco nts for c stomers. or e ample, smartphones and tablets, which
per cent of all of a ki s traffic04. are alread , e ipped with accelerometer and g roscope
feat res, offer wide ranging possibilities incl ding irt al,
ho gh the real estate market contin ed to be slow, real location-based targeting and interacti e c stomisation.
estate ad ertisement b siness has seen do ble digit
growth on the back of increased c stomer ac isition owe er, with e plosion in both the de ice ecos stem
spend. or e ample cres e periences 1 per cent and ad ertising formats, monitoring of ad ertising
growth d ring this period04. campaigns is increasingl becoming challenging as the
end prod ct s iewabilit completel depends on the
cons mer. or e ample, sit ations where an ad ertiser
ends p pa ing in sit ations wherein the s pposed
iewer did not act all see the ad ertisement, like in the
case of scrolling down still tro ble digital campaigners07.
127
0 . Infoedge s arterl inancial reports 201 -2016 0. http //www. -net.t /digital-ad ertisers-can-plan-and-pa -for-campaigns-based-on- iewabilit -
0 . http //www.premedianewsletter.com/PreMedia /premedia.html arid 1 standards
06. http //insights.fb.com/201 /06/1 /cross-platform-strategies/
iewabilit co ld also become a metric wherein digital Over the top (OTT) video services
marketers wo ld e ec te their campaigns on the
likelihood of the iewership of the ad ertisements and Introduction
pa onl when the ad ertisements are indeed iewed. he ideo11 ser ices market in India is primaril
ome other metrics which seem to be appealing to the dri en b changing preferences of iewers towards
marketers are in- iew rate, in- iew time, and ni ersal watching content as per their con enience and indi id al
interaction rate among others0 . choices. Gi en that close to 0 per cent ho seholds
Programmatic b ing and selling has been also been ha e a single tele ision set in India12, watching and
impacting the implementation of digital campaigns. e other content on laptops and smartphones based on
to limited h man interaction, limited information abo t indi id al choices has been a ke trigger for increasing
the alit of in entor and online sec rit related fra ds adoption and sage of ser ices. ho gh ideo
are some of the factors that are ca sing programmatic cons mption has grown tremendo sl in j st a short
to be primaril sed to dispose of remnant in entor span there is ite a long wa to go, with poor internet
as s pposed to primar in entor as well. owe er, bandwidth and high data charges remaining some of the
programmatic brings a ni e al e proposition for the biggest roadblock to growth in online cons mption of
ad ertiser and is e pected to grow to do ble digits in the ideos. Impro ement in mobile broadband infrastr ct re,
ne t 12 to 1 months09. grad al red ction in the cost of internet and increase
in smartphone screen si es are dri ing cons mers to
shift their iewing preferences to mobile. dditionall ,
The future is digital entr of digital-oriented companies, ertical integration
igital ad ertising is e pected to contin e to be the b traditional media and telecomm nication companies
fastest growing ad ertising segment for the media across the al e chain to offer their own ser ices
ind str in the foreseeable f t re. In the .K., digital and increasing foc s on ideo b social media platforms
ad ertising has alread o tgrown ad ertising, while are f rther contrib ting towards the adoption of
in the . . it is e pected that digital ad ertising will ideo ser ices.
cross this benchmark in the coming ear. rrentl , in
India, digital ad ertising constit tes abo t 12.6 per cent
of the total ad ertising market in 201 and is e pected
to grow to 26 per cent of the total ad ertising market b The video on-demand market in India is at
202010. Increasing second screen cons mption, growing a cusp of a meteoric take-off. The numbers
mobile internet and de ice penetration and technolog already are substantial, but the next 24
inno ations will dri e digital ad ertising growth at a GR months will drive this up manifold driven
of . per cent o er the ne t fi e ears. by much improved mobile data speeds,
reduced data prices, fixed line broadband
growth and large OTT services investing
heavily on marketing and content. The
immediate term opportunity is Advertising
led, with digital video advertising expected
to become close to USD1bn market by
2020. On the pay side, while the market
will be smaller in the short run, the
opportunities lie in specialised and sharply
targeted subscription services as well as
transactional VOD. All this will be aided by
much reduced data prices (or bundled data
and content packs) as well as digital and
mobile wallets as payment modes.
Gaurav Gandhi
Viacom18 Digital Ventures
128
0 . http //techcr nch.com/201 /0 /0 /from-remnant-to-riches-what-the- est-for-premi m-in entor - the pro ider to the iewer sing an open Internet/broadband connection, independentl of the
means-for-the-ind str / iewer s Internet ser ice pro ider I P , witho t the need for carriage negotiations and witho t an
0 . KPMG Ind str isc ssion infrastr ct re in estment on the part of the pro ider.
10. KPMG in India nal sis 12. roadcasters e e digital platforms to enhance iewership in single- ho seholds,
change Media, http //www.e change media.com/t /broadcasters-e e-digital-platforms-to-
11. er-the-top refers to ideo, tele ision, and other ser ices pro ided o er the Internet rather enhance- iewership-in-single-t -ho seholds 21 .html accessed on 1 ebr ar 2016
than ia a ser ice pro ider s own dedicated, managed network. is deli ered directl from
Bandwidth constraints continue; mobile broadband to lead the way
ccess to fast internet and high data charges act as some speeds of 2. Mbps, with penetration of connections
of the biggest roadblocks for growth of online ideo with speeds abo e Mbps also the lowest at 6. per
cons mption. mong, sia Pacific co ntries s r e ed b cent.1
kamai in 201 , India had the lowest a erage broadband
omparison of broadband speeds with other sia a ifi ountries

Country/region Avg. speed in Mbps - 2014 Avg. Speed in Mbps - 2015 Per cent of broadband Per cent of broadband
connections above 4 Mbps connections above 4 Mbps
(2014) (2015)
South Korea 25.3 20.5 96% 96%
Hong Kong 16.3 15.8 89% 92%
Japan 15.0 15.0 87% 90%
Singapore 12.2 12.5 83% 87%
Taiwan 9.5 10.1 78% 88%
New Zealand 7.0 8.7 77% 87%
Thailand 6.6 8.2 85% 93%
Australia 6.9 7.8 66% 72%
Malaysia 4.1 4.9 39% 52%
China 3.8 3.7 34% 33%
Indonesia 3.7 3.0 35% 17%
Vietnam 2.5 3.4 14% 31%
Philippines 2.5 2.8 9% 10%
India 2.0 2.5 7% 14%
Source: kamai, tate of the internet report 201 , KPMG in India anal sis
129
1 . kamai, tate of the internet report 201
obile traffi share b ontent ate or
The shift to digital is happening - the TV
ratings system will further accelerate the
drive of differentiated content to digital but
the key to the speed of change is the speed
at which broadband grows in the
country.
Mahesh Samat
Founder & Managing Director
EPIC Television Networks Private
Limited
Source: India Mobile roadband Inde 2016, KPMG in India anal sis
hile wireline broadband contin es to be a constraint,
mobile is pa ing the wa for ideo cons mption. Mobile
data traffic grew 0 per cent in 201 , dri en b per
cent s rge in G data traffic. his growth is largel espite this growth, G de ice penetration in India is still
on the back of s rging cons mption of ideos, with at 2 per cent16 and of these onl per cent ha e G
appro imatel 0 per cent of mobile data traffic being connections, indicating the tremendo s growth potential
dri en b ideo and a dio cons mption14. lso, G data for high speed mobile data growth16.
traffic grew faster in and categor telecom circles roader adoption of G in 2016 is e pected to pro ide
in India, compared to Metros and categor circles, f rther impet s to ideo cons mption on smartphones
indicating that mobile data cons mption is no longer a and mobile networks. he G / de ice ecos stem is
metro / large cit phenomenon and is percolating down to also rapidl ad ancing, with the a erage selling price of
tier II and III cities as well15. entr -le el de ices declining from 1 0 in 201 to
0 in 201 14 a trend that is likel to contin e.
rrentl , short format ideos are dri ing ideo
cons mption on mobiles, with majorit of the ideo
With the increasing number of smartphones traffic on mobiles coming from short format ideos. s
in the country, the focus of the digital per clip s Global ideo Insights 201 , per cent
space should be mobile as it is soon of smartphone sers iew shorter ideo content with
expected to be the primary device of media r n time of nder ten min tes, while onl per cent
consumption. However, people tend to have of smartphone sers iew long format content on
a high switching habit on mobile platforms smartphones.17 owe er, this is e pected to change with
given that minimum effort is involved. cons mption of long format ideos e pected to grow
Hence, the challenge lies in providing as the internet infrastr ct re gets better and cheaper.
content that keeps the audience hooked to rther growth is almost entirel dependent on how fast
the app and website. the broadband and G infrastr ct re grows in the coming
ears.
Debashish Ghosh
ZEE Digital Convergence Limited
130
1 . okia India Mobile roadband Inde 2016 1. iewers in India cons me short form ideo content on smartphones- clip Global ideo
1 . India s mobile data traffic grew b 0 per cent in 201 , sa s okia, International siness imes, Insights Report, change media,http //www.e change media.com/digital/ - iewers-in-india-
http //www.ibtimes.co.in/indias-mobile-data-traffic-grew-b - 0-per cent-201 -sa s-nokia-66 2 cons me-short-form- ideo-content-on-smartphones-- clip-global- ideo-insights-report 62 .
accessed on 20 March 2016 html accessed on 1 March 2016
16. G, G dri ing data sage okia st d , he ind siness ine, March 2016
Competition continues to rise with no single
platform gaining critical mass yet New players are emerging in the
ompetition in the digital ideo space in India contin es very complex OTT space in India. To
to intensif with e er one from the traditional be successful it will require bringing
media companies broadcasters, distrib tors, together all the elemental parts of content,
film prod cers, content prod cers to telcos distribution, payment channels, access
to international ideo on demand o pla ers to and tech to create the ultimate seamless/
independent digital pla ers ing for a share of the efficient experience for the user. All this to
s rging online iewership. In addition to the alread be delivered at the right price points. Its
e isting ser ices, there ha e been se eral significant a tough ask but it will be the determinant
platform la nches o er the past ear notabl the which separates the winners from the
following losers.

Rajiv Vaidya
et i finall la nched its s bscription ideo on
demand platform in India in an ar 2016 after
m ch spec lation regarding the timing and nat re of
its la nch. et i is c rrentl offering three packages Chief Executive Officer
for I R 00 single de ice, content , I R6 0 2 Spuul India
de ices, content and I R 00 per month m ltiple
de ices, content .1
k p Media, la nched its ideo on demand
roadband ser ices priced at I R 0 per month in o be contin es to lead with ma im m share of the
201619. online ideo iewership and online ideo ad ertising
oo , a joint ent re of ingtel, on Pict res, and re en es, while other platforms c rrentl occ p
arner rothers entertainment, was la nched as a onl a small portion of this pie. ccording to Google,
s bscription-onl o platform in India in Ma 201 20. o be s total iewing d ration has grown 0 per cent
o er the past ear in India with per cent of o be s
pp , pro ider for Indian content across the world, watch time coming from mobile de ices and ho rs of
la nched its internet-based steaming ser ice in content ploaded from India growing b 0 per cent25.
India in ct 201 21. n o be, entertainment-related content film,
and m sic ideos contin e to take the lions share,
Made-for-digital content prod cer he iral e er contrib ting 0 per cent of iewership on the op 100
la nched its own platform Pla , marking a shift o be channels. d cation and health-related ideos
from its o be onl polic . are growing and likel to be the f t re growth dri ers on
ee platform from ee igital on ergence o be26.
td , the digital arm of ee ntertainment
nterprises td was la nched in ebr ar 2016. YouTube top 100 channels categories by viewership
he platform will ha e content from ee s channels
as well as e cl si e content from award shows,
mo ie premieres and m sic concerts22.
clip la nched its platform i in India in March
16, 20162 .
iacom1 s free ad-f nded platform is
e pected to be la nched in pril 2016. he platform
will ha e content from its e isting channels and
original content24.
alaji elefilms digital s bsidiar igital is
e pected to la nch its own platform soon.
Source: okia India Mobile roadband Inde 2016, KPMG in India anal sis
131
1 . et i in India ere s e er thing o need to know, he Indian press, 11 an ar 2016 2 . clip la nches ser ice i in India, siness tandard, March 2016
1 . http //www.l k p.com/b 2 . iacom1 channel to la nch in pril, Rapid ews, http //www.rapidt news.
20. Getting India oo -ed to egall treaming Mo ies and hows at Rs. 1 per Month, , com/20160226 1 / iacom1 - od-channel- oot-to-la nch-in-april.html i 2ob
http //gadgets.ndt .com/t /feat res/getting-india-hoo ed-to-legall -streaming-mo ies-and-t - accessed on 14 March 2016
shows-at-rs-1 -per-month-6 0 accessed on 1 March 2016 2 . o be nno nces reakneck Growth In India, late f ew hows rom ocal ontent
21. ser ice pro ider pp la nches in India, est Media Info, http //www.bestmediainfo. Partners, t befilter, http //www.t befilter.com/2016/0 /1 / o t be-anno nces-breakneck-growth-
com/201 /10/ott-ser ice-pro ider- ppt -la nches-in-india/ accessed on 1 March 2016 in-india-slate-of-new-shows-from-local-content-partners/
22. , the new ideo on demand platform b ee igital, India, 26 ebr ar 2016 26. okia India Mobile roadband Inde 2016
raditional and film ontent on new prod cers. Prod cers are also le eraging the
platforms driving adoption platforms for marketing initiati es. ith the entr of
raditional broadcasters and film prod cers are m ltiple pla ers who are tr ing to b ild film content
c rrentl le eraging the opport nit pro ided b both indi and regional for their platforms, the
ser ices b porting e isting content and mo ies s ndication re en es are e pected to increase and digital
to digital platforms and la nching their own is e pected to emerge as a strong re en e stream for
platforms. content is a ailable on platforms films.
as ideo-on-demand , i e and atch p hile so far, sers ha e been sing ideo platforms
specific ser ice where sers can watch recent as an e tension of their traditional media cons mption
episodes of c rrent series for a certain period of this is likel to change in the f t re. ith se eral different
da s after the original tele ision broadcast . Most platforms ing for e eballs, content differentiation and
broadcasters, c rrentl are making a ailable content ser e perience are becoming critical to ens re ser
on their platforms with a dela ranging from 1 min tes stickiness.
to one da . G content is the most pop lar genre on
platforms as well, with catch p being the most
common reason for sers to iew online. ther
content s ch as sports and news content are also gaining
traction, b t largel for li e streaming, gi en the nat re Digital ecosystem is increasingly becoming
of content. fragmented with multitude of choices
and experiences adding to the confusion.
In sports especiall , gi en the importance of watching Content curation and user engagement
matches li e with ero dela , mobile has the potential would be key to differentiation as delivery
to become the first screen for sports. or instance, experience becomes a commodity over
according to ele eb dience Meas rement s stem, in time.
the top si metros of M mbai, elhi, Kolkata, derabad,
Achint Setia
engal r and hennai, the tar India s platform otstar
managed to reach 1 per cent of the reach for IP
on on channels d ring pril- ne 201 .27 ccording
to he Global ports Media ons mption Report 201 , Head - Corporate Strategy and M&A
online cons mption pattern of sports is similar to with Viacom18 Media Private Limited
the top three most followed sports online in India being
ricket per cent , ennis per cent and ootball
per cent . lso cons mption of sports ia smartphones
and laptops/tablets b fans at least once a da stood at 2
per cent and per cent respecti el 2 . considerable
section of the pop lation also watched other sports
content s ch as inter iews, game highlights, li e
streaming of games, etc. his has res lted in online rights
for e ents being sold separatel from rights and digital
ads for sports e ents being sold separatel . part from
sports content generating online ad ertising re en es,
if packaged properl the potential for monetising sports
content online ia s bscription fees is high gi en that the
willingness of sports fans to pa for li e sports content
online is higher than for iewers of other content online.
or films, the digital rights are c rrentl sold b ndled
with the rights. owe er, digital is e pected to soon
emerge as an independent re en e stream. In 201 , as a
res lt of the aggressi e initiati es of a few pla ers to
b ild their platforms, a few films e perienced a de iation
from the traditional windowing - the digital window
was shifted before the cable and satellite broadcast
window. igital pro ides a iable sol tion to the
distrib tion challenges d e to low screen penetration,
faced especiall b the small and independent film
132
2. otstar tops as online so rce for sports in top 6 metros ele eb, Indian ele ision, http //www.
indiantele ision.com/tele ision/t -channels/ iewership/hotstar-tops-as-online-so rce-for-sports-in-
top-6-metros-teleweb-1 101 accessed on 1 March 2016
2 . Know the fan he Global ports Media ons mption Report 201
Original video content on OTT platforms has clip has plans for i riginals on its platform
arrived! i and has anno nced a the la nch of a cricket
comed chat show series hat he ck , to be
hile a majorit of ideos a ailable online are either hosted b ikram atha e and prod ced and co-
re-r ns of shows or mo ies or ser-generated content, created b l ence.
platforms and content creators are beginning to le erage
the growing iewership to offer original content for the igital from alaji elefilms has plans to offer
internet a dience. hese made-for-digital ideo offerings original and c rated premi m content on its own soon
are aried with e er thing from episodic web series, to be la nched platform across m ltiple genres
stand- p comed , sketches, mo ie re iews and short and lang ages. 6
films being tested to cater to this growing a dience.
iacom1 s soon-to-be-la nched platform
hile in the past a lot of short format original content also has plans to ha e original content from content
ha e been s ccessf l, largel on o be, 201 was a prod cers s ch as ndemol hine India, a rabh
landmark ear in which web series and made-for-digital iwari ilms, olosce m Media, rames Prod ction
long format content with r n time o er 10 min tes ompan , nshine Prod ction, hak tantalam
went mainstream29. his trend was led b two shows elefilms and odhi ree .
from he iral e er Permanent Roommates and
Pitchers, the latter especiall going on to become h gel
pop lar 0. - ilms, the o th content di ision of ashRaj
ilms, also had relati e s ccess with two web series in
1
201 Man s orld and ang aaja aaraat . tar The industry is betting on the growth of
India took a slightl different ro te b t ing p with ll OTT platforms and digital consumption of
India akchod I for 20-episode news comed series content at the backdrop of prolific growth
10 in nglish and 10 in indi , with each episode released in mobile subscribers and 4G explosion
first on otstar, and then aired on channels tar orld in India. At the heart of any consumption
nglish and tar Pl s indi 2. wave is of course compelling content.
Offering on a vast repertoire of movies and
ith traditional shows contin ing to foc s primaril music plus cool, contemporary original
on famil dramas d ring prime time, original web-series shows that will talk to young India will
offer a lot of potential, especiall since the demographics be critical for success, as we believe that
of the online a dience in India is different from the even the saas-bahus no longer want
traditional iewing a dience. his is also highlighted to watch the serials appearing on linear
in clip s Global ideo Insights 201 report, according television today. Offline viewing feature
to which online ideo iewers in India al e freshness can be a proactive strategy to work around
of content as the most important feat re with o er 6 the broadband streaming constraints so
per cent choosing this as the most important criteria people can truly watch content when
for watching ideos online. ith their contemporar they want it and on the go without being
stories, new-age stor telling and fresh actors, these connected to the Internet. The lack of on-
web series ha e become a hit among their target demand premium television in India today
demographics. ow censorship is another reason wh is the golden land-grab opportunity for OTT
made-for-digital content wins o er traditional content. players.
e eral more original series are in the pipeline as
Jyoti Deshpande
traditional as well as new age content prod cers climb on
to the band wagon.
nco raged b et i s e perience of original content Group Chief Executive Officer
helping in gaining lo al s bscribers internationall , & Managing Director
platforms in India are also planning to se original content Eros International
to ac ire and retain iewers, notabl
ros ow has anno nced plans for si original
digital series namel he lients, Khel, egac ,
ost, howtime and air tale feat ring mainstream
oll wood actors s ch as shmann Kh rrana, nil
Kapoor, ipasha as , hitrangda ingh, Radhika
pte and ana Patekar.
2 . ased on ind str disc ssions cons me-short-form- ideo-content-on-smartphones-- clip-global- ideo-insights-report 62 .
133 0. ho needs tele ision an more , he ind , 22 ebr rar 2016 html accessed on 1 March 2016
1. omegrown online series are changing the wa we watch tele ision, ind stan imes, 1 . ros ow introd ces two-tier s bscription for India spr ces p original content pipeline, ele ision
ecember 201 Post, http //www.tele isionpost.com/technolog /erosnow-introd ces-two-tier-s bscription-for-
india-spr ces- p-original-content-pipeline/ accessed on 1 March 2016
2. ith n ir with I , tar India laims to a e it the ll s- e nline ere s ow, dage
http //www.adageindia.in/digital/with-on-air-with-aib-star-india-claims-to-ha e-hit-the-b lls-e e- . clip to la nch cricket comed show hat he ck on , Indian ele ision, http //www.
online-heres-how/articleshow/ 6 661 .cms accessed on 26 ebr ar 2016 indiantele ision.com/iworld/ott-ser ices/ clip-to-la nch-cricket-comed -show-what-the-d ck-on-
ott-160 0 accessed on 1 March 2016
. iewers in India cons me short form ideo content on smartphones- clip Global ideo
Insights Report, change media, http //www.e change media.com/digital/ - iewers-in-india- 6. clip la nches ser ice i in India, siness tandard, March 2016
. iacom1 readies for la nch of platform, siness ine, 10 March 2016
part from ideo platforms wanting to showcase
original content on their platforms to create e cl si it , 2016 is the year of digital shift in content
there has also been a s rge in independent prod cers consumption other screens is faster than
generating made-for-digital content, creating si able ever. And it is changing the dynamics in
lo al a dience. Man of them are c rrentl foc sed on the industry by eliminating the middle
o be as a platform b t co ld likel e pand to other man between broadcaster and consumer,
platforms as the start gaining moment m. Man for the first time broadcasters have a
of these independent content creators are t ing p with direct handshake with their viewers. The
M lti- hannel etworks M s who help them with opportunity this presents to shape content,
distrib tion to their content on ario s ideo platforms sharpen advertising and customise product,
and enable them to monetise their content b pro iding is unprecedented.
ad ertisers reach in the targeted demographic for their
Sanjay Gupta
brands.
Monetisation through online video advertising Chief Operating Officer

he digital ad ertising market si e in India was aro nd Star India Private Limited
I R60 billion in 201 and is e pected to grow at . per
cent GR o er the ne t fi e ears to I R2 billion in
2020, I R12 billion is estimated to be from online ideo
ad ertising in 201 , and e pected to s rge to I R6 Brand stories through serials
billion b 2020, growing at 1 per cent ann all . erials like Permanent Roommates b ha e started
o be is c rrentl taking the lion s share of ideo to de elop c stomised content aro nd a brand like the
ad ertising in India, b t other ideo platforms are did in eason 1 in partnership with ommon oor and
also gaining traction40. Monetisation on a digital platform season 2 in partnership with la cabs.
thro gh ad ertising re en es is dependent on the thers following s it are lisha- ashion detecti e b
platform achie ing critical mass, since an ad ertiser will l sh which has created content for its 2 seasons with
look at a certain minim m n mber of impressions to be akme and abong respecti el . hese serials ha e fo nd
ser ed before deciding to ad ertise on the platform. s a wa of attracting a dience thro gh their common stor
a res lt, onl few platforms are able to monetise line which does not differ from an real time soap, et
thro gh ad ertising re en es. has a er ob io s brand proposition draped aro nd it.
e eral platforms of broadcasters sell ad ertising
slots thro gh separate digital ad ertising sales team and Opportunity for SVOD
not thro gh their ad ertising teams so as to ens re
that there is no cannibalisation of ad ertisement bscription has so far not taken off in
re en es. lso, ario s digital ad ertisements are sold b India40. Gi en that data cons mption charges are still
in-ho se dedicated ad sales team rather than thro gh ad er high in India, cons mers are pa ing for internet
networks or thro gh real time bidding. part from p re cons mption and not for the content and as a res lt there
pla impression-based ideo ad ertising, platforms and is a lack of willingness to pa for content on top of the
ad ertisers alike are e ploring sponsorship and branded bandwidth. en if iewers are willing to pa , the are
content. selecti e and read to pa onl for content where the
see additional al e in terms of e cl si it or timing or
nother ad antage with digital ideo ad ertising ers s a ailabilit . ence, for paid ersions of ser ices to be
tele ision ad ertising media is that e er thing and s ccessf l it is essential to pro ide differentiated content.
e er one is meas rable, as opposed to traditional media
where ad ertisers ha e to depend on the percei ed al e ho gh cord c tting is a m ch bandied abo t term,
of a dience, based on meas rement of a sample si e. India is still far awa from this phenomenon becoming
mainstream, largel d e to high cost of bandwidth
and low cost of monthl cable s bscription prices. or
instance, in the . ., where cord c tting has gained
traction, cable RP is aro nd 60-100 while
et i s s bscription rates are in the -12 range,
which is a significant price difference41. hereas in India,
. M s are entities that affiliate with m ltiple channels on ideo platforms s ch as o be cable s bscription RP is , one of the lowest
and offer assistance to the channels in man areas s ch as prod ct, programming, f nding,
cross-promotion, partner management, digital rights management, monetisation and a dience globall and et i s basic s bscription plan of I R 00
de elopment. per month is similar to the premi m /cable
. KPMG in India nal sis, Ind str isc ssions
0. KPMG Ind str disc ssions for the report
packs42. his combined with the high cost of bandwidth 134
1. ill et i s entr shake p the Indian market , ele isionPost, http //www.tele isionpost. which costs at least I R 00 per month for a speed
com/special-reports/will-net i s-entr -shake- p-the-indian-ott-market accessed on 26 ebr ar
2016
of 2 Mbps, makes the cost of s bscribing to et i
2. KPMG in India s anal sis 2016 based on data collected from ind str disc ssions naffordable for a large segment of the pop lation42.
part from pricing, lack of con enient pa ment e cl si el to its own s bscribers. ther telcos s ch
mechanisms is another barrier in getting c stomers to as harti irtel, odafone and Idea which are also hea il
pa for content online. hile on the one hand, low credit in esting in their G networks ma also come p with
card and internet banking penetration makes direct similar plans for hosting apps on their own network44.
pa ments incon enient, telco billing tho gh con enient is his co ld be a ke trigger for ideo ser ices
n iable for independent streaming ser ices d e to achie ing critical mass gi en the enormo s c stomer
the high re en e share asked b mobile operators. Rapid reach, capacit for large scale marketing efforts and
adoption of pa ment wallets and recharge sol tions is pa ment integration that telcos can bring to the table.
e pected to change this, making monthl s bscription
pa ments as well as per-transaction based micro-
pa ments easier for cons mers. Conclusion
s G network la nches pick p steam d ring the hile ideo is one of the fastest growing ser ices
ear, mobile operators will also be keen to increase on digital platforms, with e er one from traditional media
cons mption of ideos on digital platforms, since ideo companies to new-age media companies to telcos
will be the dri er of network tilisation. Increasing betting on online ideo cons mption going mainstream.
tilisation will be a ke foc s area for mobile operators n the demand side, there is a growing demand for
gi en the h ge pfront in estments made b them e ibilit in terms of t pe, timing, and place of content
in spectr m and network rollo t. ence, there was a cons mption. n the s ppl side, there are a m ltit de
possibilit of mobile operators partnering with ideo of ideo ser ices catering to different cons mer
ser ice pro iders to either s bsidise data charges or preferences while declining prices of smartphone and
ser ices or b ndle the two together. impro ing mobile broadband infrastr ct re are remo ing
roadblocks for ideo cons mption.
owe er, as per recent R I reg lation data ser ice
chapter 2016, differential pricing is not allowed on the s content differentiation becomes ke in a cl ttered
open internet nless it is on closed s stems intranet . landscape, man ideo platforms are betting on
his co ld res lt in telcos opting for ideo streaming prod cing and ac iring original content to gain sers
apps which are hosted on their own networks. Reliance and b ild a lo al s bscriber base. owe er, monetisation
io, the G ser ice to be la nched b Reliance Ind stries, remains largel ad ertisement dri en and paid models
alread has plans for an streaming ser ice, io Pla , contin e to see cons mer resistance, gi en the high cost
which will be hosted on its network and pro ide content of bandwidth and low cost of cable tele ision.
135
. irst look at Reliance io Pla e t gen ser ices, 100 i e and hannels being offered,
elecom alk Info, http //telecomtalk.info/reliance-jio-pla -li e-t -hd-channels/126 / accessed on
14 March 2016
. ased on ind str disc ssions
Digital music
he m sic ind str contin ed its shift to digital The rise of streaming services
cons mption in 201 . he market si e of the m sic
ind str is I R10. billion in 201 and is e pected to grow he ear 201 saw the m sic streaming ser ices getting
to I R20.6 billion b 202055. strong traction and clearer b siness models ha e beg n
to emerge for these pla ers.
Pla ers like Gaana, aa an, ngama, nk, Rdio, and
Music market (INR billion) G era ha e started to gain increased ser traffic on
the back of cheaper connecti it , better smartphone
penetration and acceptance of freemi m models
amongst cons mers s pplemented b high le els of
c stomer ac isition spend.
owe er, most sers are cons ming content for free
and there has been strong resistance to switching to
s bscription models. here are an estimated 0 million
acti e cons mers in India who stream e er month and
o t of which onl abo t 0.2 million c stomers are paid
s bscribers57.
The ability to scale content creation and

build strong digital media brands that can
monetise across various demographics,
Source: Ind str isc ssions and KPMG India nal sis
sub cultures and platforms is what will
determine the success of a true blooded
digital media company.
igital m sic now generates re en e of o er per cent
of the o erall si e of the m sic ind str in India56. earl
0 per cent of the m sic cons med is oll wood, 0 per
cent is Regional, 10 per cent is lassical and e otional
Sameer Pitalwalla
CEO & Co-Founder
and 20 per cent is the rest of the market56.
Culture Machine
ith better G co erage and introd ction of G ser ices,
the cons mption of digital m sic is e pected to increase
significantl o er the ne t few ears. owe er, to ens re
incremental re en e generation, the digital m sic
ind str has to come p with inno ati e monetisation he major streaming pla ers are c rrentl foc sing on
models. he re en e streams for digital m sic ind str freemi m models primaril comprising the following
can be broadl categorised into the following segments Pure Freemium Model his model aims at
con erting free sers to paid sers with ad free paid
models. potif makes se of this model where
it pro ides nlimited, ads-enabled free streaming,
which generates per cent of their ann al re en es.
his acts as a gatewa for the paid s bscription
ser ices, which acco nts for 1 per cent of the
re en es .
Limited Freemium Model In this model, there are
restrictions like a dio alit , abilit to skip songs,
a ailabilit of certain songs in the free model. or a
s perior m sic e perience, a ailabilit of all tracks and
premi m f nctionalities come at an additional cost .
136
. KPMG India nal sis . http //www.billboard.com/articles/b siness/6 1 2/battle-s bscription-b siness-models-
6. KPMG Ind str isc ssion strengths-weaknesses
. KPMG Ind str disc ssions for the report
of time. In a h per connected world, the time a ailable to
In the last 18 to 24 months the number monetise premi m content has shortened significantl . If
of users on ad supported/free to the it is not a ailable sim ltaneo sl on all platforms, then the
consumer streaming services have grown opport nit is lost as cons mers mo e on to new content
exponentially in India and will touch close or it is pirated and cons med.
to 100 million users in the next 24 months. In addition to the freemi m model, content owners and
However, the challenge will continue to distrib tors in the m sic ind str need to take more
remain on the conversion of free-users to of an omni-channel approach to monetisation, where

premium/paid users. I firmly believe that the new content is released prett m ch conc rrentl on all
paid consumers will come from the top 20 platforms59. he monetisation streams then change o er
per cent of the user base and that will more the passage of time as the content e ol es from s per
than ustify the business from a profitability premi m to librar to catalog e.
perspective.
Devraj Sanyal Technology innovations

er the last few ears, cons mer preferences ha e
MD and CEO (South Asia) shifted where the e pect content on demand on a
Universal Music Group de ice of their choice at the cheapest price point possible.
or content creators and distrib tors, to remain rele ant
in this world, this means co ering an increasingl
comple ecos stem of connected de ices, sophisticated
tiering of content and al e added personalised
e periences. he pla ers in the Indian ecos stem ha e
The next steps for the digital music industry taken these challenges head on and contin e to b ild
is to hit critical mass of ad supported free inno ati e feat res to their prod cts.
monthly users of 100 to 120 million then or e ample, ngama offers c stomers the ser ice
moving to a consumer paid model when to cache songs in their handsets for a specific d ration
there are sufficient feature differences ranging from 1 da to e en 6 months, depending on the
between free and paid models. Post that plan the c stomer wishes to choose60. harti irtel s
there needs to be some sort of consolidation nk pro ides different s bscription plans for non-
of players on the content and services irtel ndroid and iPhone sers and irtel ndroid and
side. iPhone sers60. he recentl also la nched a data cash
back offer of dail morning credit of 0 per cent of data
Sridhar Subramaniam cons med between 12 M and 6 M.
majorit of the pop lation in India is connected
President (India and Middle East)
wirelessl in India still ses 2G as a fa orable medi m to
Sony Music access the internet. Reaching o t to this target segment
taking a different approach wherein content pro iders
need to maintain the balance between content deli er
and the bandwidth which wo ld be re ired to cons me
360 degree marketing of music stars it. s award winning Kan Khaj ra esan is one s ch
inno ati e marketing initiati e whereb b gi ing a
In order to boost their re en es, m sic companies are missed call, the ser can enjo entertainment at low
increasingl sing adjacent re en e streams to hedge bandwidths. he entertainment librar has 1 0 million
their primar b siness model59. min tes of entertainment and more than 11 million
or e ample, m sic companies are in esting in s bscribers who ha e cons med ad ertisements
de eloping stars , which enables them not onl to more than 100 million times61.
monetise their content b t earn mone thro gh other
so rces s ch as merchandising, e ents, branding.
tars s ch as stin ieber and adshah allow m sic Regional content shall continue to drive the
companies to increase monetisation b merchandising, next phase of growth
branding, and e ents. ith the increased penetration of smart phones and
internet to r ral areas densit of 12. per 100 in 1
201 compared to 10.66 per 100 in end of 201 62 , there
Tiering of content has been an increase of r ral pop lation as potential
137
raditionall , content owners and distrib tors ha e sed c stomers. s a res lt, most digital m sic companies
indowing as a strateg to reach different a dience at in India are looking to de elop/in est in regional content
different price points to monetise content o er a period librar . s per Gaana, regional m sic witnessed
. KPMG Ind str isc ssions for the report 61. https //www.h l.co.in/news/news-and-feat res/201 /h ls-kan-khaj ra-tesan-wins- -gold-at-
60. http //www. ccircle.com/news/media-entertainment/201 /11/12/m sic-apps-e e-so nd-b siness cannes.html
62. R I Report 201
significant growth in 201 per cent in engali, 1 2 Developing innovative monetisation models
per cent in P njabi and 6 per cent in el g 6 . Globall , sers still prefer ad-s pported content as
compared to paid s bscription66. s the streaming ser
base grows, the real challenge will be to nderstand
Digital piracy, still a demon that the music deeper cons mer trends for creating insights to monetise
industry battles with? these c stomers at ario s to ch points of their
istoricall , digital pirac has alwa s been considered a c stomer jo rne .
threat b the m sic ind str .
In 201 , a st d was cond cted to check the effects of
online m sic pirac on sales64. ome of the ke findings
of the st d were VR and immersive video are a whole new
medium and require storytelling to be
1. ile sharing acti it has a statisticall significant b t crafted ground up for them. Monetisation
economicall , a modest negati e in ence on m sic and technology for these are still very
sales. early, but the great part is that they use
the same device platform, i.e. mobile, and
2. rtist s pop larit pla ed a major role in how big the hence consumers are already sampling this
impact of pirac was on sales. content with ease.
. or top-tier artists, pirac ca sed a decrease in
the ph sical sales, b t digital sales did offset this
decrease. Sameer Pitalwalla
. he mid-tier artists were relati el naffected b the CEO & Co-Founder
file sharing whereas m sic sales for lesser known Culture Machine
artists were significantl h rt.
hile digital pirac is still a major concern in India, we
belie e that with the increase in sers who stream m sic
s. who download, o er a period of time the impact of
pirac in m sic will decrease. t at the same time,
the go ernment has to contin e its effort of creating Terms like innovation and disruption are
frameworks and policies aro nd pirac for the m sic and loosely used in a ridiculous context by many
entertainment ind str to grow s stainabl . in the recorded music industry these days-
but what is critically inevitable prior to all of
that, is for music companies to invest very
Digital music outlook65 deeply in internal tracking systems like daily
App models and related innovations MIS cross platform data analytics/reporting
he ear 201 pa ed the wa for digital m sic companies for both digital and publishing, online
in India to showcase their content on the mobile royalty calculations and interconnecting
application app side which has pro ided an a erage ser software, multiformat metadata
prett m ch e er thing the wo ld be looking for. ne management and analytics. Going forward
s ch iteration is the abilit to work on 2G networks, as a companies who dont get this right will not
majorit of wireless pop lation in India is connected to survive in the digital retail business. Only
2G networks onl . on top of these nuts and bolts will anything
else thrive for growth from both an artistic
and commercial viewpoint.
Growing share of regional content
hile oll wood content shall remain the largest
contrib tor to the o erall digital m sic sales, regional Mandar Thakur
content is growing at a fast pace, and will help content COO
prod cers as well as distrib tors earn more c stomers Times Music
with India s increased dri e to increase penetration in the
r ral areas.
138
6 . http //www.tele isionpost.com/news/arijit-singh-most-pop lar-artist-on-gaana-com-in-201 / 66. http //www.medianama.com/2016/01/22 -o tlook16-what-indian-online-m sic-companies-plan-

6 . https //torrentfreak.com/pirac -can-boost-digital-m sic-sales-research-shows-160121/ to-do-in-2016/
6 . KPMG Ind str isc ssions for the report
Social media or brands in esting mone on digital, these ke
learnings means the will ha e to in est more time and
cti e social media sers j mped to 1 million in mone in effecti e listening of c stomer problems and
201 -1 , with a marked increase of 100 per cent in r ral tr ing to resol e those rather than di erting social media
areas67. ith an a erage dail sage of 2 ho rs and 6 c stomer eries to traditional channels s ch as email or
min tes, sers spend more time on social networks than call center.
on ele ision6 . rther, the a erage social media ser
in India is considerabl o nger than the global a erage,
Long form social content to gain traction in 2016
with more than half of the platform s Indian ser base

aged 2 or o nger69. his is likel to ens re a s stained ocial media has been blamed for the rise in se of short
ser base, at the same time pro iding significant term dictionar 74. t going forward we are likel to see
headroom for growth both demographicall and thro gh the ret rn of long form content in the form of blogs, since
greater mobile internet penetration and access different social sites plan to p t these p on the web ia
ariant channels.
acebook and hatsapp dominate the social media
sage rankings with per cent and per cent sage logging has become a million dollar ind str and
respecti el 69 and contin e to be the entr channel with ecommerce pla ers sing bloggers words as a
for digitall progressi e people. hatsapp is sed to mo thpiece, long form content is here to sta .
send o t 2 billion messages dail from India and is the n social media, acebook has the note option to displa
highest photo sharing co ntr in the world.70 long form content and inkedIn has a section called
Mobilit will contin e to be primar dri er for social posts where long form te t can be p blished. More and
media sage. erall, 2 per cent of India s social media more social websites and apps will soon be incorporating
sers log in ia mobile de ices, and this proportion will these long form writing options.
increase71. s a res lt, chat and micro content based
platforms ha e gained a m ch more important role o ial media will define the elebrities of
in sers li es, and therefore in marketers strategies. tomorrow
his presents an opport nit for internet and mobile
elebrities are to ted as the most engaging on social
companies in India the compan that can claim a
media. st three Indian celebrities eepika Pad kone,
disproportionate share of the nation s b rgeoning chat
alman Khan and one ingh on acebook, ha e close
app ser-base will be best placed to shape broader
to 0 million fans among them, while the largest fan base
cons mer beha io r and re en es of the ind str .
of an brand in India is j st a mere 1 million75.
Internet penetration and cost of data remains the ke
witter tells a similar tale with close to 1 million
barrier to growth in India. owe er, the barriers to
followers amongst the top three celebrities each and a
connecti it and cost of access are e pected to be
mere 2 million followers amongst each of the top three
increasingl resol ed in India o er the medi m term,
brands76.
indicating contin ed growth of social platforms in the
co ntr .
Social media is likely to become the key avenue
Social media The new CRM tool for recruitment
e also see more and more social media sage for alit of hire contin es to be a ke al able
a ailing c stomer s pport from companies. In 201 , 1 performance KPI for talent ac isition teams. Most
per cent Indians sed social media to get a c stomer companies are meas ring alit of hire with feedback
response, which was significantl p from per cent in methodolog s ch as new hire e al ations and hiring
201272. manager satisfaction , or a long-term methodolog
emplo ee retention 77.
Major reasons for which Indian cons mers se social
media on c stomer ser ice are ooking ahead, there are certain areas that will contin e
to remain dominant, like social professional networks
1. haring information abo t ser ice e periences 6 per
and so rcing passi e candidates. inkedIn also e pects
cent
emplo er branding and emplo ee referral programs to
2. sking others abo t how to get better ser ice 0 per get stronger in 2016 and be ond. he common thread
cent among all of these is the power of relationships the
relationships ha e with candidates, cross-f nctional
. Praising a compan for great ser ice e perience partners, and emplo ees will pa e the path to talent
per cent ac isition s ccess .
. eek an act al response from a compan abo t a
ser ice iss e per cent
139
6. http //articles.economictimes.indiatimes.com/201 -06-1 /news/6 0 01 1 social-media- sers- . http //lightho seinsights.in/201 -american-e press-indian-social-media-report.html/
rban-india-social-networking-sites . http //blog.h bspot.com/marketing/how-internet-changes-lang age
6 . http //wearesocial.com/ k/special-reports/digital-social-mobile-india-201 . http //www.socialbakers.com/statistics/facebook/pages/total/india/celebrities/
6 . http //wearesocial.com/blog/201 /0 /digital-social-mobile-india-201 6. http //www.socialbakers.com/statistics/twitter/profiles/india/celebrities/
0. http //indiane press.com/article/technolog /social/whatsapp-now-has-1-billion-monthl -acti e- . https //b siness.linkedin.com/talent-sol tions/blog/trends-and-research/201 / -ke -recr iting-
sers/ trends-to-watch-in-2016-infographic
1. http //www.thehind b sinessline.com/catal st/crossing-the-digital-di ide/article 001.ece . https //b siness.linkedin.com/content/dam/b siness/talent-sol tions/regional/ P /grt-2016/
2. http //brande it .economictimes.indiatimes.com/news/digital/indians- se-social-media-for- GR 16 IndiaRecr iting 100 1 .pdf
feedback-than-japanese-co nterparts-st d / 6 00
Social media for hyperlocation based Social commerce
businesses ons mers started warming p to social commerce in
ocation based marketing is gaining traction and 201 . rfing can now be transformed into p rchase
has been s pplemented b growth in ecommerce. intent. he rolling o t of the b tton on acebook
sinesses like M ntra, abong, etc., gi e o t freebies in and Pinterest has the potential to shift the primar
e change for social media realt . ith the se of Google objecti e of social media for rands from awareness/
Maps, location oriented b siness has spread to social engagement to a stronger foc s on lead generation 2.
media. hese are going to enhance the role of social media from
a for comm nication platform to a marketing medi m.
sers ha e more interest in connecting with goods
and ser ices near them than those located far awa .
herefore, social media marketers will contin e to keep Instant articles and live streaming
an e e on localit based marketing better ret rns. hether it s disco ering information abo t a breaking
news stor or an pcoming show, an e cl si e
The threat to privacy and security due to social screening of a mo ie trailer or celebrities engaging with
media fans in a thentic and meaningf l wa s, people con erse
on social media aro nd the things that matter most. he
e to growing social media sage, more sers ha e can now do this thro gh acebook i e and Periscope
become ictims of phishing and other c bercrimes79. which offers them an opport nit to stream li e content.
ch concerns call for better sec rit in di lging acebook also works with p blishers to integrate articles
personal information online. nderstanding what t pes into their site. ll the clicks are co nted in the p blishers
of attacks are most common on different social media acco nt. P blishers can render their own ads and sell ads
platforms, and wh , can help sers identif and defend th s gaining al e from the partnership .
against malware l rking on them. or e ample, c ber
criminals take ad antage of o be s ideo platform
to l re sers into downloading malicio s files 0. he Emphasis on visuals
promise of ideo game cracks, m sic ideos and is all -dominated social media sites, like Instagram and
sneak-peek mo ie trailers are pop lar scams that pi e o be, shall contin e to rise in pop larit , along with
sers interests. witter, on the other hand, is the most higher is al content on other social media acco nts that
con enient tool for spammers to p sh rog e links, will come p in a big wa . or e ample, 0 per cent of
especiall when spam r ns are a tomated. dail sers on acebook watch at least one ideo per da .
Mark ckerberg, the of acebook has said that he
Thought provokers for social media in India e pects the social network s ews eed to be mostl
ideo in fi e ears .
Real conversations
ocial media is abo t real interactions and not a tomatic
pdates. Man more brands shall realise this and change
their strateg to posting content that is a thentic and
engage their a dience in con ersations that are real to
add more al e to their social streams.
The rise of the personal videos

ith so man action cameras and eas editing tools
a ailable in the market we are going to see people
sharing more of their e perience thro gh ideos and not
j st thro gh pict res. In addition to this, people shall ie
to be the ne t o be or acebook li e sensation b
hosting e periences and telling stories abo t their life,
tra el, prod ct re iews and ario s other content that is
being cons med b their a dience 1.
140
. http //www.go-g lf.com/blog/c ber-crime/ . KPMG Ind str isc ssions for the report
0. https //www.facebook.com/ asomPartners/posts/1660 6 1 0 . http //www.c otoda .com/stor /6-wa s-social-media-can-be-a-game-changer-in-2016/
1. KPMG Ind str isc ssions for the report
2. ocialsamosa.com
. https //de elopers.facebook.com/docs/instant-articles/fa
Gaming growth in India (INR billion)
Publishers, media entities, actors,
sportspeople, journalists and other public
figures use acebook not ust to connect
with their followers but to authentically
engage with their communities around
the world. e recently launched acebook
Live, which enables people to share their

experiences and perspectives in real time,
with the people who matter to them -
whether theyre someone who wants to
broadcast to friends and family or a public
figure who wants to connect with fans.
ith acebook ive videos people are
getting the real deal - unedited, authentic,
and instant with a surprise element and a
valuable sense of community. People have
a growing appetite for creating, posting and
interacting with live videos on acebook, in Source: KPMG India nal sis
fact on an average people watch a live video
more than three times longer compared to
when it is not live. Gaming through mobility
s with other digital segments, the Indian market is
Saurabh Doshi mainl a mobile phenomenon, with console gaming
restricted to a small segment.
Head Media Partnerships
he mobile gaming market is primaril ad ertisement
Facebook, India dri en, b t in-app p rchases and paid pgrades are
grad all gaining traction. oth pple and Google are
e pected to red ce their in- app p rchase pricing tiers to
appro imatel I R10. his is e pected to f rther enhance
monetisation in this segment o er the ne t few ears .
Gaming
Indian mobile-game market is e pected to grow from
The Indian digital gaming market will see a 200 million toda to billion b 201 . Indian
steady growth companies are also getting read for what the forecast
he Indian digital gaming market is likel to grow at a as a h ge s rge for gaming content d e to increased
GR of 1 . per cent growth from I R26. billion in smartphone penetration and a growing internet
201 to I R 0. billion in 2020. 6 he Indian stor is aided s bscriber base which was 1. million90.
b mobile traffic growing b 0 per cent in 201 and
per cent s rge in G data traffic. Console gaming has not been able to replicate
global success in India
Globall , o er half a billion people worldwide pla ideo
and comp ter games on a dail basis, c m lating some
three billion ho rs of ideo games pla ed per week91.
eag e of egends was the most pop lar comp ter
game as 201 closed o t grabbing 22. 2 per cent market
share which was a significant rise o ers other pop lar
games like o nter trike and orld of arcraft that had
between to 6 per cent market share globall 92.
he two largest console makers ha e been going head
to head in this b siness for some time now, with on
ha ing sold o er . million consoles of P since its
la nch in 201 which nearl do ble of what Microsoft
managed with its bo one .
141 6. KPMG in India anal sis
. okia India Mobile roadband Inde 2016
. http // ent rebeat.com/201 /12/06/se en-mobile-game-trends-to-watch-for-in-2016/
. http // ent rebeat.com/201 /12/2 /the-deanbeat-predictions-for-the-game-ind str -in-2016/
0. R I, KPMG in India nal sis
1. http //faback per.jimdo.com/2016/01/0 /top-10-most-pla ed-comp ter-games/
2. http //www.statista.com/statistics/2 1222/most-pla ed-pc-games/
. http //www.ibtimes.com/ps - s- bo -one-son -has-sold- 02-million-pla station- -consoles-nearl -
do ble-21 0
owe er, console gaming has seen a limited market Explosion of Virtual Reality (VR)
gi en its high price points and cost of games. hile the R is the most awaited and e pected wearable
a dience for both mobile and gaming consoles remains technolog integration for a id gamers. Google s
er different, mobile gamers ha e been the foc s of the ardboard is becoming pop lar.
ind str simpl d e to increasing smart phone adoption.
he P and digital market is e pected to shrink o er he affordabilit of ardboard, and better internet
the ne t few ears as Mobile takes o er as the main connecti it was the ke reason for ardboard s
gaming destination for cas al gamers. acceptance in Indian markets. 2016 is e pected to see
the entr of the three big irt al headsets. Pla station R
for Pla station , c l s Rift for the P and the i e.
Innovation in monetisation owe er onl time will tell if these can ca se a h ge shift
Google Pla recentl introd ced carrier billing which lets in cons mption.
sers charge p rchases in Google Pla directl to their
phone bill and with the simplicit of a one click pa ment he market is relati el small, b t start ps are e pected
s stem and the mass market appeal of a smart phone to ock to R and a gmented realit . idia states that
Google Pla is re ol tionising the wa ser can access there might be close to 600 companies working on R.
alit content94. Presence apital recentl anno nced a 10 million
f nd to in est in R start ps .
Some challenges and opportunities for the

gaming sector
The battle for real estate The Indian consumer is increasingly aware
In this time of intense competition between apps, of new entertainment platforms and
companies are tr ing to be occ p the heart share and formats, including Virtual Reality. New
the mind share of sers to sta rele ant so that the can formats like these will let content producers
increase sage. ccording to a report on siness Insider, create immersive experiences, giving their
the cost-per-install on i soared per cent ear o er users the chance to explore the impossible.
ear in ctober 201 , while the cost to retain a lo al ser - We will also see more licensed and branded
defined as a ser who opens the app at least three times properties in the mix, as many games based
in a two-week period was p per cent ear o er ear. on popular film franchises, celebrities and
ettra finds that for a retailer, the ndroid app losses cartoons have found breakthrough success.
per cent dail acti e sers within the first three da s or monetisation, we see video ads playing
of install, lipkart, napdeal, M ntra, ha e an a erage a large role, especially as smartphone
retention drop of 6 per cent, per cent, 6 per cent, penetration increases and mobile internet
and 0 per cent respecti el in the first da s95. connectivity improves. The growth of mobile
wallets may also open up new avenues for
Soft monetisation in-app monetisation. The industry must
continue to innovate, to meet evolving
Instead of milking the whales, the ind str is grad all customer demands with new genres,
mo ing to monetisation strategies that collect a little formats and experiences.
mone from a large n mber of pla ers96. s cons mption
Sameer Ganapathy
of mobile gaming in India increases, ad ertisers are likel
to contin e to deli er most sophisticated ads/branded
content into this ecos stem to contin e to engage
the c stomers. ast ear Games2win estimated that Head Interactive
c stomers spend o er a 1 billion min tes on their gaming Disney India
prod cts97.
Casual gaming
Gaming is becoming more cas al, with sers pla ing
not j st one game b t m ltiple games in the same da
each from different genres. omen are pla ing more
games in India and being the n mber one game is not as
important as ha ing a pipe line of games that keep the
sers engaged.
142
. https //s pport.google.com/googlepla /answer/26 1 10 hl en-I . http //therodinhoods.com/for m/topics/the-opport nit -of-gaming-rodinhood-at-kotak-s-global-
. http //c stomerclick.in/201 /12/21/app-lo alt -a-new-challenge/ in estor-co g so rce msg mes network
6. http //www.pocketgamer.bi /comment-and-opinion/62 / -mobile-gaming-trends-to-help- o - . http // ent rebeat.com/201 /12/2 /the-deanbeat-predictions-for-the-game-ind str -in-2016/
get-rich-in-2016/entr / /
Radio
Phased growth
Round up of the year 2015 he radio ind str is enjo ing a stead GR 2011-201
of 1 . per cent and grew b an estimated 1 .1 per cent
In this age of technological disr ptions, radio contin es in 201 - to reach re en e of I R1 . billion0 . Growth
to hold its gro nd at least for now. 201 started well has been dri en b both - ol me enhancement in tier-II
with health ad spends. he completion of the tage I and tier-III cities and an o erall increase in ad rates. Radio
of the Phase III a ctions, migration of e isting operators pla ers across the co ntr ha e been able to hike ad
from Phase II to Phase III and the anno ncement of the rates0 . or e.g. 2. big fm hiked the ad rates b 0-
hike in the foreign direct in estment I cap for M per cent,0 Red M . increased ad rates b per
radio bro ght m ch cheer to the ind str . ompanies cent06. part from these stations, Radio ne0 , . M
spent appro imatel I R10. 6 billion to ac ire 1 new M0 and e er 10 M0 also hiked rates b 20 per cent.
stations01 and will spend I R . billion as the migrate
their e isting 2 stations to Phase III in 201 01. he sl ggish econom in 201 and stringent market
conditions had compelled companies to look at
tage I of Phase III rollo t fortifies the go ernment s internal efficiencies this had created a strong base
commitment to see M radio proliferate to more than for profitabilit 0 . Real growth in 201 is estimated to
per cent of India reaching newer cities and a diences. be higher, since 201 incl ded the impet s gi en to the
n the completion of Phase III, M Radio wo ld reach ind str b the general elections. he positi e economic
smaller towns and cities pro iding alit entertainment climate has also gi en a shot in the arm to the sector.
to a diences and enable marketers to penetrate a larger imilar to last ear, the radio ind str contin es to ha e
part of the co ntr . India is e pected to see additional rob st growth, and this witho t Phase III0 .
radio channels in 22 new cities, most of them being tier-
II and tier-III cities02. espite some ke contentio s iss es Radio s share in the o erall media and entertainment
of high reser e prices for the a ctions, high license fees, ind str pie contin es at appro imatel per cent of the
the 1 per cent0 limit on the total n mber of fre encies, total ad ertisement market si e.0
etc., contin e the ind str is resilient. s e pected, e-commerce companies ha e emerged
as big spenders in 201 in radio0 . Internet start- p
companies ha e been aggressi e in their comm nication
Size of the radio industry with high emphasis on tactical promotions and on
c stomising their offers for local and regional markets.
-commerce brands with high e pendit re seek
ni eness and conte t alisation in comm nication
and content differentiation to stando t. Radio has the
potential to pro ide this er effecti el and efficientl .
ther sectors like a tomobile, retail, cons mer d rables,
financial ser ices etc. also contin e to dri e growth
in this segment. alling interest rates ha e s pported
promotional acti it b real estate companies, altho gh
the sector contin ed to be challenged in 201 . In
fact, man of the radio pla ers we spoke to, agreed
that e-commerce wo ld contin e to remain a major
contrib tor to ad re en es in the coming ears0 .
Source: KPMG in India ind str disc ssion and anal sis It is estimated that appro imatel 10 per cent of radio
ad ertising comes from the go ernment and political
parties. Radio is now integral part of marketing plans and
marketers are acknowledging this fact10.
01. irst atch M Phase III ction Res lts, Ministr of Information and roadcasting, eptember 0. Radio ne to increase ad rates b 20 per cent, RandMbi , 2 ebr ar 201 , http //www.
201 , http //mib.nic.in/linksthird.asp , 12 March 2016 radioandm sic.com/bi /radio/pri ate-fm-stations/radio-one-increase-ad-rates-20-cent-1 0202, 1
02. it wise on-ref ndable one time migration fees M , Ministr of Information and March 2016
roadcasting, eptember 201 , http //mib.nic.in/linksthird.asp , 12 March 2016. 0 . M M hike ad ertising rates b 20 per cent, RandMbi , 10 ebr ar 201 http //www.
0 . otice for ction, Ministr of Information and roadcasting, l 201 , http //mib.nic.in/linksthird. radioandm sic.com/bi /radio/pri ate-fm-stations/m -fm-hike-ad ertising-rates-20-cent-1 0210,
asp , 12 March 2016. 1 March 2016
0 . KPMG in India ind str disc ssion and anal sis 0 . e er M increases ad rates b 20 per cent, e change media, 10 ebr ar 2016 http //www. 144
e change media.mobi/radio/fe er-fm-increases-ad-rates-b -20-per-cent 6 1 .html, 10 March
0 . ig M hikes ad rates b 0- per cent in ke markets, RandMbi ,10 March 201 http // 2016
www.radioandm sic.com/bi /radio/pri ate-fm-stations/big-fm-hikes-ad-rates- 0- -cent-ke -
markets-1 0 10, 1 March 2016 10. KPMG in India ind str disc ssion and anal sis
06. Red M s ad rates go p b per cent, RandMbi , 21 eptember 201 , http //www.
radioandm sic.com/bi /radio/pri ate-fm-stations/1 0 21-red-fms-ad-rates-go- -cent, 1 March
2016
ontent differentiation and inno ation has contrib ted to Red M ran campaigns to create awareness abo t noise
the strong performance for some pla ers. Red M . poll tion1 .
came p with horror shows k Kahani isi hi across
2 cities, which, the ompan claims has altered the arge brands contin e to dominate the medi m and the
iewing pattern in that its p.m. to 10 p.m. time slot11. he shift in the foc s from nationwide brand b ilding to more
show has recei ed more than 1 lac iews on its o be local brand b ilding contin es to be slow 16.
channel12. Man radio stations aired ario s initiati es for ccording to the Radio dio Meas rement r e
The Future: now streaming | Radio
social ca ses of health, en ironment, for e ample, 2. co ering fo r metros engal r , M mbai, Kolkata and
big fm created awareness abo t dangers of smoking elhi the comparisons in percentage shares between
and cons ming tobacco1 , . M M aired shows to 201 and 201 1 are as follows
create a stress- free en ironment at workplaces1 while
Citywise rankings - Bengaluru Citywise rankings - Kolkata
Source: Radio and nline er ice, R M report. op right reser ed with M M I R R P . Source: Radio and nline er ice, R M report. op right reser ed with M M I R R P .
. an se of M ata or deri ati e thereof mentioned herein witho t e press permission . an se of M ata or deri ati e thereof mentioned herein witho t e press permission
of M shall be treated as illegal. of M shall be treated as illegal.
Citywise rankings - Mumbai Citywise rankings - Delhi
Source: Radio and nline er ice, R M report. op right reser ed with M M I R R P . Source: Radio and nline er ice, R M report. op right reser ed with M M I R R P .
. an se of M ata or deri ati e thereof mentioned herein witho t e press permission . an se of M ata or deri ati e thereof mentioned herein witho t e press permission
of M shall be treated as illegal. of M shall be treated as illegal.
145 11. Pop lar Red M horror show bro ght o t as a book, RandMbi , 12 ecember 201 , http //www. 1 . Red M la nches the campaign on t e orn in association with M mbai raffic Police,
radioandm sic.com/bi /radio/pri ate-fm-stations/1 1212-pop lar-red-fm-horror-show-bro ght-o t- RandMbi , 2 Ma 201 , http //www.radioandm sic.com/bi /radio/pri ate-fm-stations/red-fm-
book, 1 March 2016 la nches-campaign-do-not-be-horn -association-m mbai-police-1 0 2 , 1 March 2016.
12. nal sis b KPMG in India 16. Ind str disc ssions cond cted b KPMG in India
1 . ig M sa s tta hhod e aar , RandM i , 2 Ma 201 , http //www.radioandm sic.com/bi / 1. Radio and nline er ice, R M report. op right reser ed with M M I R R P . .
radio/programming/big-fm-sa s-s tta-chhod-de- aar-1 0 2 ,1 March 2016. an se of M ata or deri ati e thereof mentioned herein witho t e press permission of M
1 . M M organises awat- m sic in hopal- spreading happiness thro gh m sic, RandMbi , shall be treated as illegal.
22 pril 201 http //www.radioandm sic.com/bi /radio/pri ate-fm-stations/m -fm-organises-
2 0 dawat-e-m sic 2 0 -bhopal-spreading-happiness-thro gh-m sic-1 0 22,
1 March 2016.
hallenges contin e to ho nd the ind str with smaller Listenership trends in 2015
and standalone stations feeling the press re of rising cost
str ct res, meas rement, higher license fees, ro alt he share of listeners t ning on to radio from home
fee iss es and the rising threat of the digital media eating contin e to increase. ccording to the Radio dio
into the radio ad b dget pie1 . Meas rement r e co ering fo r metros M mbai,
elhi, Kolkata and engal r , the share of listeners
t ning in to radio from home increased from . per cent
in 201 to .1 per cent in 201 1 .
While 2015 was a good year for the radio his shift has been largel consistent across the fo r
industry, we will see further growth and metros.
newer formats originating this year largely
due to the expansion into the third round
of licensing. The volume of business is
expected to pick up particularly in the tier-II
and tier-III markets, however the metros
will see consolidation. The challenges
remain lazy media planning where focused
media like radio is not paired with targeted
creative executions.
Sanjay Prabhu
Managing Director
Indigo 919
Home Listenership versus out of home
Source: Radio and nline er ice, R M report. op right reser ed with MM I R R P . . an se of M ata or deri ati e thereof mentioned herein witho t e press permission of M
shall be treated as illegal.
146
1 . KPMG in India ind str disc ssion and anal sis

1 . Radio and nline er ice, R M report. op right reser ed with M M I R R P . .
an se of M ata or deri ati e thereof mentioned herein witho t e press permission of M
shall be treated as illegal.
Time spent listening to the radio
In 201 , the time spent on radio contin ed to increase, min tes a week. elhi and M mbai had listeners
e en if marginall , in all metros e cept elhi. engal r t ning in to radio for appro imatel 1 -1 ho rs -
contin ed to maintain its top spot as the metro ha ing min tes a week. he a erage time spent on the
the highest radio listenership with listeners spending radio b listeners contin ed to skew more towards the
more than 2 ho rs 1, 1 min tes a week t ned in weekends20.
to the radio. Kolkata followed engal r with 16 ho rs
Time spent listening to the radio

Time spent on the radio Weekdays Saturdays Sundays Week
(average weekly minutes)
Major metros 2015 2014 2015 2014 2015 2014 2015 2014
Delhi 574 614 129 130 138 139 833 891
Mumbai 591 567 132 134 128 127 857 821
Bengaluru 990 953 211 212 201 204 1413 1358
Kolkata 648 624 154 157 155 151 959 929
Source: Radio and nline er ice, R M report. op right reser ed with MM I R R P . . an se of M ata or deri ati e thereof mentioned herein witho t e press permission of M shall be
treated as illegal.
Male versus female listeners
Source: Radio and nline er ice, R M report. op right reser ed with MM I R R P . . an se of M ata or deri ati e thereof mentioned herein witho t e press permission of M shall
be treated as illegal.
rofile of radio listeners in India

In 201 , male and female listeners spent almost an e al ha e the highest male listenership with .1 per cent,
time on radio in the fo r metros taken together, with while the female listenership was the highest in M mbai
male listenership decreasing marginall from 1.1 per with 6.1 per cent21. People aged between 12- ears
cent in 201 to . per cent in 201 . elhi contin ed to contin e to be primar listeners of radio.
147
20. Radio and nline er ice, R M report. op right reser ed with M M I R R P . . 21. Radio and nline er ice, R M report. op right reser ed with M M I R R P . .
an se of M ata or deri ati e thereof mentioned herein witho t e press permission of M an se of M ata or deri ati e thereof mentioned herein witho t e press permission of M
shall be treated as illegal. shall be treated as illegal.
Industr onsolidation FMisation of the country
ast ear saw two mergers namel agran Prakashan s tage I of Phase III M Radio a ctions ha e been the
M sic roadcast P t td ac isition of Radio it 22 and costliest in the histor of the M ind str . I R .22 billion
ntertainment etwork India imited s I ac isition was paid for stations in M mbai, elhi and engal r
of oda Gro p s e M in earl 201 2 . agran alone2 . he on-ref ndable ne ime ntr ee
Prakashan has recei ed appro al from the ministr of of I R10. billion2 along with on-ref ndable ne- ime
information and broadcasting for the ac isition, adding Migration ee M pa able of I R . billion2 is
20 e isting channels of Radio it to its kitt . or agran m ch higher than what was spent for the earlier Phase I
Prakashan, the ac isition complements their print, and II.
o tdoor, acti ation and digital b siness and consolidates
its position in the media ind str . In case of I , the
ac isition seems like a strategic fit to strengthen its
presence in the north and it s position in metros with
o erlapping stations.
In the case of I s ac isition of e M, reg lator
appro al was recei ed for fo r channels in the cities
of mritsar, odhp r, Patiala and himla2 . ppro al for
three other channels in the cities of M mbai, Kolkata
and elhi of e M was rejected b the ministr d e to
the o erlap with Radio Mirchi s e isting operations2 . he
matter is still in o rt2 .
hase III au tions - anal sis of versus reserve pri e
Source: KPMG in India disc ssion and anal sis
he high prices paid b companies clearl indicate that imilarl , I Radio Mirchi bo ght the engal r
in estors are b llish on radio for e.g. Media e er fre enc for I R1.0 billion, b pa ing significantl more
10 M paid I R1.6 billion for the elhi fre enc than the reser e price2 and also ac ired the M mbai
almost 0 per cent higher than the original reser e price fre enc for I R1.22 billion.2
and I R1.22 billion for the M mbai fre enc alone2 .
22. agran Prakashan completes ac isition of Radio it , mone control, ne 201 , http //www. 2 . I Ministr appro es I ac isition of fo r e M stations, radioandm sic, 22 l 201 , 148
mone control.com/news/b siness/jagran-prakashan-completes-ac isitionradio-cit 1 0 01. http //www.radioandm sic.com/bi /reg lators/ib-ministr /1 10 0-ib-ministr -appro es-enil-
html, 1 March 2016 ac isition-fo r-o e , 16 March 2016
2 . I rebrands e M s mritsar and Patiala stations as Radio Mirchi, ele ision post,12 2 . irst atch M Phase III ction Res lts, Ministr of Information and roadcasting, eptember
ecember 201 , http //www.tele isionpost.com/printradio/enil-rebrands-o e-fms-amritsar-and- 201 , http //mib.nic.in/linksthird.asp , 12 March 2016
patiala-stations-as-radio-mirchi/, 1 March 2016.
t the clos re of the e-a ction, o t of the 1 channels hase III radio au tions
p t p for a ction in the first batch, channels were
allotted across 6 cities with a c m lati e bid price of Phase III a ctions began in l 201 , a f ll fo r ears
I R11. billion against the aggregate reser e price of after the polic was anno nced.2 ela was in part d e
abo t I R .60 billion, thereb s rpassing the c m lati e to the go ernment finalising the finer n ances of the
reser e price of the corresponding channels b polic .
I R6. billion or 1 1. per cent. hirt eight channels ctions were proposed in two stages with the first
remained nsold in 22 cities. f the channels allotted, stage e pected to co er 6 e isting cities and 1
6 are c rrentl pending reg lator clearances26. fre encies and second stage to co er the balance 22
t of the channels, no bids were recei ed in the cities and 0 licenses2 .
1 cities ha ing 26 channels and partial bids were
recei ed in nine cities with 12 channels remaining
nsold. igh reser e prices, as well as a cap that restricts
broadcasters from bidding for more than 1 per cent of Think Global. Engage Local. This is the
the a ailable channels were some of the reasons for the rally cry for new age Marketers. Today, only
l kewarm response in these cities26. commercial radio is best placed to deliver
this. For the last few years, commercial
hile the new channels are e pected to Go i e b radio has commanded a high share of
20162 , ind str pla ers we inter iewed are concerned the mobile device viz. listening on the
that the high cost will impact the o erall profitabilit of go, especially among young adults. With
the ind str . o far Media has anno nced the la nch the recent exponential growth in smart
of its second radio station, Radio asha 10 .2 M, in phones, only commercial radio has the
elhi2 . unique advantage of being able to offer
marketers a frictionless ability to integrate
an analogue message into a digital platform
(e.g. on hearing the ad, trigger an online
Radio is perhaps the best medium to reach search instantly) and realise the marketing
the audience in tier-II and tier-III. The paradigm. Commercial radios ability to
smaller the town, the better live local radio generate live/real time content, throughout
entertainment will be -- as the literacy rate the day, in local languages across 300+
drops so print loses its edge, digital does not markets (post the next batch of auctions)
engage in local regional language, television should significantly expand its share of ad
is not live, in such cities, radio will be a boon. spends from current levels.
The increased penetration of broadband
enabled smartphones and mobiles
phone, have fuelled the consumption and N. Subramanian
penetration of Radio manifold. It has added Group CFO
further to the relevance of the medium. With
the Phase III Batch I stations going live in Entertainment Network India Ltd.
mid-2016. We are hopeful that remaining
Phase III auctions will be completed
in 2016 thus making radio a PAN India
medium. Radio should register about 15 per
cent growth in 2015 and we expect radio
advertising share to grow to about 8 to 10
per cent of the total advertising market in
next couple of years.
Migration fees due to be collected in
instalments instead of one time, waiver of
service tax and custom duty for import of
broadcasting equipment and resolution
of the Music royalty issue are the key
recommendations.
26. irst atch M Phase III ction Res lts, Ministr of Information and roadcasting, eptember
201 , http //mib.nic.in/linksthird.asp , 12 March 2016
149 Harrish M Bhatia 2.

2 .
KPMG in India ind str disc ssion and anal sis
Media la nches Radio asha in elhi, i emint, 10 March 2016 http //www.li emint.com/
ons mer/ c
2016
d gjt jt / -Media-la nches-Radio- asha-in- elhi.html, 1 March
Chief Executive Officer 2 . otice for ction, Ministr of Information and roadcasting, l 201 , http //mib.nic.in/linksthird.
asp , 12 March 2016
94.3 MY FM
perator-wise au tion results30
hase III au tions
Source: KPMG in India ind str disc ssion and anal sis. ote he abo e e cl des 6 fre encies which are c rrentl awaiting reg lator clearances
he a ctions themsel es ran 12 ro nds and lasted 2 billion. In contrast, it was I R0.1 billion in Indore, a cit
da s and had on offer 1 channels in 6 cities 1. hat which saw health bidding 2.
itself is a testimon to the comple ities in ol ed.
e to the high bid costs, the ann al license fee b
o dates ha e been anno nced for the second stage of radio broadcasters, determined at higher of 2. per cent
Phase III so far. of the highest bid recei ed in each cit or per cent
of re en e 2, is e pected to increase s bstantiall for
Go ernment needs to look at the n ances from tage I of operators whose license fees ntil now was based on
Phase III a ctions and also consider participants feedback re en es.
in form lating g idelines for the ne t phase of a ctions.
he migrating stations will enjo the license for 1 ears
as against 10 ears in phase II 2.
i ration to hase III32
oon after the a ction, the ministr notified the M
to be paid for migrating from Phase II to Phase III for the
e isting two h ndred fort three channels based on the Phase-3 policy has two components a) the
migration form la as s ggested b R I. hese were migration of Phase II stations for a fresh
later appro ed b the go ernment 2. ompanies are period of 15 years and b) the new stations
e pected to spend appro imatel I R . billion 2. acquired via the auction process. The
migration policy has made the core radio
perators in M mbai will pa the highest migration business profitable by keeping migration
fee compared to the others, which is I R0. billion, fees relatively reasonable. Auctions have
followed b elhi, for which the migration fee is been very onerous for broadcasters, and I
I R0. billion. he migration fee for engal r is as high think those who have bid irrationally will
as I R0.22 billion d e to higher bidding. hirteen other cause shareholder value depletion. But
cities had a migration fee of abo e I R0.10 billion these those who have bid sensibly will be able to
incl de hennai, hmedabad, derabad, cknow, grow rapidly and profitably.
P ne, oimbatore, ochin, Indore, Patna, adodara,
Prashant Panday
ishakhapatnam, handigarh and ashik. mong other
cities, had migration fees ranging from I R0.01
billion to I R0.10 billion. In cities with no bids, renewal
premi ms were higher. or instance, for oimbatore, Managing Director and CEO
which recei ed no bids, the renewal price was I R0.16 Entertainment Network India Ltd.
150
0. nal sis b KPMG in India

1. irst atch M Phase III ction Res lts, Ministr of Information and roadcasting, eptember
201 , http //mib.nic.in/linksthird.asp , 12 March 2016
2. it wise on-ref ndable one time migration fees M , Ministr of Information and
roadcasting, eptember 201 , http //mib.nic.in/linksthird.asp , 12 March 2016.
potli ht on some of the lar e pla ers in Indian radio
Performance breakup of some of the larger players
Source: KPMG in India ind str disc ssion and anal sis. ote he abo e e cl des 6 fre encies which are c rrentl awaiting reg lator clearances
Media which ntil recentl , had j st fo r stations in Reliance roadcast etwork, operates the biggest
the metros of elhi, M mbai, Kolkata and engal r network, 2. big fm in terms of fre encies. he
nder the e er 10 M brand, has emerged in a big wa network spent I R1.1 billion to ac ire fo rteen
in the first batch of M Phase III a ctions. It o tspent fre encies spread across the co ntr . ith stations
ri als to win ten licenses at I R . 0 billion, incl ding alread in operation, ig M will now be a -station
I R1.6 billion for the sole a ailable fre enc in elhi network, retaining its top position in terms of channels
and I R1.22 billion for M mbai . he a ction wins co ld operated .
help the radio network cement its position in man new
cities ickl . M sic roadcast P t td, which operates Radio it ,
remained foc sed on tier-II markets and ac ired ele en
I , which operates its M radio b siness nder the fre encies in the a ctions to the t ne of I R0.6
Radio Mirchi brand was the second largest spender at billion.
I R . billion . It pocketed the ma im m n mber
of fre encies with se enteen channels. s a res lt, mong the other pla ers, orp, which operates
the total n mber of stations will go p from thirt . M M, emerged strong b winning fo rteen
two to fort nine e cl ding the fo r e M stations fre encies for I R0. 2 billion ac iring smaller cities.
alread appro ed for ac isition . It picked p the single Rajasthan Patrika, which operates M adka, also won
fre enc in engal r for I R1.0 billion . Radio Mirchi fo rteen fre encies b spending I R0.12 billion. eing
became the onl pla er to ac ire a third fre enc in the co nted as among the differentiated pla ers, e t Radio
cit of derabad . td., which operates Radio ne, did not win a single
fre enc .
e to reg lator appro als, the fre encies ac ired
b n , o th sia M and Kal Radio were not he new entrants were bhijit Realtors and Infra ent res,
re ealed . h s, onl the res lts of n s associate arthak ilms, Renderli e ilms and ntertainment, bir
companies igital Radio roadcasting M mbai and ildcon and disha ele ision who ac ired a total of
igital Radio roadcasting elhi , which operate Red se en stations. isting pla er Matr bh mi Printing and
M M mbai and elhi respecti el , were re ealed. hile P blishing also participated and picked p one station in
igital Radio roadcasting M mbai won a channel in Ko hikode .
M mbai for I R1.22 billion, its elhi co nterpart won two
fre encies in odhp r and rinagar for a total of I R0.12
billion .
151
. irst atch M Phase III ction Res lts, Ministr of Information and roadcasting, eptember . n Gro p mo es Madras igh o rt for participation in M Phase-III a ction, he conomic
201 , http //mib.nic.in/linksthird.asp , 12 March 2016 imes, 21 l 201 , http //articles.economictimes.indiatimes.com/201 -0 -21/news/6 6 110 1
s n-gro p-fm-phase-sec rit -clearance, 1 March 2016
Radio like digital forms a small part of the There are unnecessary restrictions placed
Media and Entertainment industry. Large by government policy on FM radio. For
brands continue to dominate this media example, there are caps on how many
platform. Globally, Radio is considered radio stations a broadcaster can operate
a local medium but in India, national in a single city, as well as nationally. There
advertisers continue to command much are restrictions on selling more than 51 per
higher share. This trend should change, cent of equity imposed on the promoter
once media companies having knowledge for a period of three years. This restricts
of local audiences and strong foot hold in the extent of M&A activity that would
local markets operate the Radio stations normally happen in any vibrant industry.
in these markets . Broadcast of news Then there are discriminatory restrictions
whenever allowed by the government will on FM broadcasters which stop them from
be high point for this industry. offering news. Such a restriction exists
only on radio. No other medium needs
R K Agrawal any approvals from the government for

doing news. And lastly, the Reserve Fees
in radio are just too high. And with limited
Chief Financial Officer supply of frequencies, this leads to very
Jagran Prakashan high auction fees. This is the single biggest
danger to FM broadcasters who will suffer
from the high auction fees.
Prashant Panday
Geographical expansion of FM radio Entertainment Network India Ltd.
in India
Phase III is likel to see pla ers looking for e pansion in
tier-II and tier-III cities. large n mber of channels being
a ction in stage 2 of Phase III are in this categor .
eo raphi al e pansion of radio in India
Source: KPMG in India ind str disc ssion and anal sis 152
Recommendations for an enhanced regulatory Single window for operationalisation permissions
environment for the sector perationalisation of a Radio station re ires
hile the c rrent Phase III a ctions ha e been permission from different a thorities of ministr of
s ccessf l in terms of the bidding amo nts and the Information and roadcasting, the entire process
fre encies sold, the ind str is at an in e ion point. he of taking permission from different branches of
go ernment needs to pro ide impet s to the ind str in same a thorit is ite c mbersome for the Radio
the form of ta reforms and polic reforms. ome ke roadcasters. e recommend defining a time frame
areas of s ggestions and form lating a single window with respect to the
operationalisation permission.
wnership and orporate stru ture
Restriction on ownership of licenses with regards to Delay in the constitution of the Copyright Board
0 per cent of total channels in a cit and all channels It s s rprising that almost fo r ears ha e elapsed
allotted in the co ntr to 1 per cent. and till date the op right oard has not been
reconstit ted. ence, this nreasonable dela in
he cap on ownership be remo ed to enable national reconstit tion of the op right oard has led to chaos
pla ers and strong regional pla ers to consolidate in the ind str and has ca sed nnecessar dela in
operations, thereb bringing in not onl economies adj dication of the c rrent and long pending iss es.
of scale to the ind str , b t also wider reach to the
grass root le els. Channel spacing
ock-in period of three ears for the largest Indian hannel spacing be red ced grad all from c rrent
hareholder from the date on which all the channels 00 K to 200 K in line with the Global a erage
allotted to the compan holding permission stand for co ntries like nited tates, nited Kingdom
operationalised and ingapore, this will help in do bling the n mber
of fre encies in / categor cities, increased
ew allotments to the e isting radio broadcasters spectr m tilisation and greater emplo ment
sho ld be wai ed off if the ha e alread ser ed this opport nities.
lock-in in the pre io s a ction phases.
High license fee
oreign In estment in Radio roadcast kin to nn al license fee pa able is the lower of 2. per cent
roadcast licenses, Radio broadcast license of the bid amo nt or per cent of re en e. e to
sho ld be split ib news and non-news broadcasting the high on-ref ndable ne ime ntr ee/ on-
channels. here sho ld be parit in I polic ref ndable ne- ime Migration ee the base amo nt
between ario s media platforms and hence the has increased significantl . his will increase the cost
I limit in Radio roadcasting ompanies c rrentl for man operators and will p t increased press re
raised b 26 per cent to per cent sho ld be raised on smaller and regional pla ers.
to
- 100 per cent for stations broadcasting non-news and Debt funding
c rrent affairs, and
Priority Sector Status
- per cent for stations broadcasting news and
c rrent affairs. aking cognisance of the Phase III e pansion of M
radio, the radio ind str sho ld be considered nder
the priorit sector so that bank lending to the sector
perations can alif nder the priorit sector spending r les.
Restrictions on sourcing of news and current ternal ommer ial orrowin s
affairs Phase III of pri atisation of M radio broadcasting
It sho ld be considered as the primar medi m of wo ld re ire a h ge amo nt of capital for the
dissemination of information at national and local ind str pla ers to get the spectr m and pgrade
le el which will assist in formation of opinions and their broadcasting s stem. his in estment wo ld
better awareness amongst the listeners. be ha ing long gestation period and realisation of
this e pendit re in terms of increased re en e for
the Radio broadcasters wo ld take time, to make
this transition, the radio ind str , like the telecom
sector, sho ld be allowed to raise debt in the form of
153
ternal ommercial orrowing, which will red ce Industr lands ape
capital b rden on pla ers and allow Phase III to be
s ccessf l. he ind str landscape has remained nchanged with ll
India Radio IR , being the p blic broadcaster, Pri ate
M channels operating in 6 cities, comm nit radio
Taxation and digital radio. he newer entrant is the proliferation of
internet radio stations.
Tax Holiday period
In the light of recent increased o t ow for the
licenses in the Phase III a ctions, the ambig it ll India adio I
aro nd the re en e model, it is recommended IR is one of the largest media organisations of world
that the go ernment pro ides impet s to the radio and operates 262 radio stations - making it accessible
ind str in the form of ta holida period for new to almost 2 per cent of the co ntr . It broadcasts in 2
in estments lang ages and 1 6 dialects, offering ser ices to India s
Custom Duty socio-economicall and c lt rall di erse pop lation. he
ternal er ices i ision s programmes are broadcast
his phase III of M radio pri atisation wo ld re ire in 11 Indian lang ages and si foreign lang ages reaching
high end e ipment and res lt into h ge cash o t ow 100 co ntries. IR broadcasts in three tiers- ational,
for the M broadcasting ind str stakeholders. o, it Regional and ocal each catering to different a dience.
is recommended to red ce c stom d t on capital
e ipment for Radio broadcasting to per cent. he Regional channels which form the middle tier of the
IR broadcast s stem are operated in regional lang ages.
Service Tax/GST levy on Advertisement he 116 regional channels are operated in 2 states
d ertisement on radio is liable to er ice a le . and 6 nion territories catering ser ices to the sociall ,
Radio competes with newspaper at local le el. economicall and c lt rall di erse pop lation.
here is no le of ser ice ta on ad ertisement in 6 local channels are operated in M mode. he M
newspaper. It is recommended to remo e ser ice Mode operates in two forms- M Rainbow and M Gold.
ta on ad ertisement in Radio to pro ide le el pla ing ogether the ha e 206 M ransmitters co ering 2 .
field to it. per cent of area and 6. per cent of the pop lation. M
Rainbow is transmitted thro gh 1 radio stations and M
Auction process Gold operates onl in the fo r metros elhi, M mbai,
hennai and Kolkata. 6
Auction Rules for auction activity requirements
i idh harati, since its inception has been a great so rce
e belie e that the c rrent r les lea e a lot of room of entertainment for the listeners. he entertainment
for gaming, parking and artificial rate increase, R programmes in ario s formats of film m sic, skits and
sho ld be increased in an accelerated manner to short pla s broadcasts 2 ho rs co ntr wide. It operates
a oid this. with a wide network of centres and some local
Reserve Pricing centres reaching p to per cent of pop lation. i idh
harati is la nched in the M mode in the metros. 6
It is recommended that the reser e price be based
on prod ct of Gross tate omestic Prod ct,
listenership and Gross re en e instead of the c rrent
bid price model.
rrogate manner of Reser e Price ma pro e
harmf l for the ind str . ence, it is recommended to
keep Reser e price at a nominal le el and let e-a ction
help in price disco er .
Payment timelines
Instead of pa ment of entire fees pfront, the
s ccessf l bidders sho ld be allowed to pa in a
Asheesh Chatterjee
staggered manner o er the period of license. Chief Financial Officer
Reliance Broadcast Network Ltd.
Unless otherwise noted, all information included in this column/article was provided by Asheesh
Chatterjee. The views and opinions expressed herein are those of the authors and do not necessarily
represent the views and opinions of KPMG in India
154
. Growth and e elopment, ll India Radio, http //allindiaradio.go .in/Profile/Growth 20and 20 6. r n aitle la nches IR s i idh harti channel on M modes eenews.india.com, 1 pril
e elopment/Pages/defa lt.asp , 1 March 2016 201 ,1 March 2016
Community radio seems to ha e drawn wide interest from tech giants like
pple to elecom majors like irtel nk to P in estor-
omm nit radio in India ser es as a medi m to backed like aa n. 0
disseminate information regarding comm nit related
iss es. he n mber of comm nit radio stations M ltiple problems contin e to plag e internet radio,
has increased after the comm nit radio g idelines internet connecti it contin es to be a erage in tier-II and
were anno nced in 2006. he n mber of operational tier-III cities tho gh this is e pected to change in the ne t
two ears. 1 he high cost of data in the co ntr , the lack
comm nit radio stations stands at 1 , as per the

fig res for the ear 201 . of s pport from ad ertisers d e to a low ser base, and
s bscription based models still not pop lar in the co ntr
- all are factors that ha e strained growth for internet radio.
Community radio In addition, there are challenges aro nd cop right, m sic
license and ro alties. 2 errestrial radio does not iew
streaming as a s bstantial threat to their b siness model
for this reason. 2
Internet radio remains on the c sp of e ponential
growth howe er, it will ha e to wait for India s telecom
ecos stem to e ol e. Meanwhile, indi id al companies
will contin e to str ggle for a b siness model. hen the
sector does ha e a fo ndation of high bandwidth and
a critical mass of sers, it will likel form an e istential
threat to terrestrial radio.
Broadband penetration will surely increase

Source: omm nit Radio, ll India Radio, http //allindiaradio.go .in/Profile/ omm nit 20radio/
music streaming. But how much impact
Pages/defa lt.asp , 1 March 2016 this has on FM radio revenues/listenership
remains to be seen. In the last 10 years,
streaming music has exploded in the West,
Internet radio potential threat to but FM radio has held on strongly. I think
terrestrial radio the same could repeat in India as well.
However, we look at the internet as a source
Internet penetration in India has increased s bstantiall , of opportunity. To grow our radio brands
pigg backing on phenomenal growth in the smartphone beyond FM and make them available to the
ser base and a ailabilit of high speed internet. whole wide world.
ith 1. million internet sers alread , and with
projections of that n mber do bling in a few ears, the
potential growth opport nit for internet radio is h ge . Prashant Panday
ith broadband access poised to e pand in the co ntr Managing Director and CEO
thro gh G, internet radio can also enter r ral areas.
Entertainment Network India Ltd.
martphones ha e changed the wa an indi id al
cons mes content and internet radio is no e ception. 2
per cent of mobile sers se a smartphone now, p from
20 per cent of the sers j st si months earlier . he Key trends
smartphones boom poses an opport nit as well as a
challenge. he gi e more cons mers an opport nit to Content differentiation continues to take centre
listen to radio on the go, b t sim ltaneo sl e pand the stage
scope for competitor ser ices as well.
India s radio stations contin e to foc s on film based
Internet radio consists of se eral pla ers online m sic for the most part in order to appeal to the
ersions of e isting radio stations along with a wide broadest possible a dience. 2 here is, howe er, some
ariet of online streaming ser ices like pple M sic, programming to differentiate stations. ome e amples
nk, Gaana, aa n, G era, and ngama, the ind str are
155
. omm nit Radio, ll India Radio, http //allindiaradio.go .in/Profile/ omm nit 20radio/Pages/ 1. he Great Race, he conomist, March 2016, http //www.economist.com/news/
defa lt.asp , 1 March 2016 briefing/216 21-ne t-1 - ears-india-will-see-more-people-come-online-an -other-co ntr -e-com
. he Great Race, he conomist, March 2016, http //www.economist.com/news/ merce id 2 1 ah 06e6 ad01d2ee 1 60100b fa 02 , 1 March 2016
briefing/216 21-ne t-1 - ears-india-will-see-more-people-come-online-an -other-co ntr -e-com 2. Ind str disc ssions cond cted b KPMG in India
merce id 2 1 ah 06e6 ad01d2ee 1 60100b fa 02 , 1 March 2016 . R Malishka and rapper i ine to kick-off R M s digital concert, RandMbi , 1 ebr ar 2016,
. he t re of Internet Radio, treaming Media, 1 ctober 201 , http //www.streamingmedia. http //www.radioandm sic.com/bi /radio/pri ate-fm-stations/16021 -rj-malishka-and-rapper-di ine-
com/ rticles/Read rticle.asp rticleI 6 1 Page m , 1 March 2016 kick-red-fms , 1 March 2016
0. nal sis b KPMG in India . 2. ig M to la nch 2. -ho r R marathon, Greater Kashmir, 2 an ar 2016,http //www.
greaterkashmir.com/news/b siness/stor /20 6 0.html, 1 March 2016
Music based content on-musi based ontent has also emer ed
Red Live Unplugged 43 as a key trend
he show feat red three ho rs of original m sic and Radio reality shows
interaction with a rapper - i ian ernandes. he i e . M M la nched Paiso Ka Ped realit show
concert co ld also be accessed thro gh o be and which aimed at taking radio o t of the st dio and
acebook, thereb broadening the reach of Radio. interacting with the listeners personall . he
India hares India ares bi fm44 winner walked awa with a pri e of I Rfi e lakhs,
competing with 0 shortlisted candidates o t of 1 00
2. big fm, la nched an R Marathon for 2. registrations. his campaign was one of the first of its
ho rs. he programme hosted b R asir was kind, th s taking brand ad ertising to a ne t le el .
on air for a marathon 2. ho rs, ro nd-the-clock,
talking to listeners abo t social iss es and prosperit Horror shows
of Kashmir. o make the program more-li el , the he agship horror show k Kahani isi hi la nched
listeners co ld e en walk straight to the radio station s b Red M. his was aired in 2 cities across the
st dios for a li e chitchat with the R . In the cross co ntr which, the ompan claims has altered the
co ntr programme , R Rakshitha, associated with iewing pattern in its time slot book was also
the 2. Mangalore, e tended the Marathon to 106 released containing series of horror stories aired
ho rs, for a ca se in ol ing child ed cation where the d ring the show.
participating elco donated data min tes .
Social-cause based content
i ahani an with eelesh isra
Radio stations came p with ario s initiati es
he show is aimed at bringing o t positi e and and campaigns aro nd the ear s pporting ario s
inspiring stories from the state of ttar Pradesh. social iss es. he created awareness abo t some
ward-winning stor teller, eelesh Misra, pop lar of the common iss es of health, cleanliness and
for his show aadon ka Idiot o will be hosting the sec rit . In association with orporates, G s and
programme 6. celebrities, the de ised programmes appealing to
listeners addressing the social iss es and b ilding a
responsible and aware societ . ome e amples are
Social-cause based content

Programme Radio station Content of the show
Sutta Chhod De Yaar49 Big FM On the eve of World No Tobacco Day, created awareness about dangers of smoking and consuming
tobacco. Participants were tested on various challenges of resolution to quit tobacco.
Dawat-E-Music50 94.3 My FM The campaign aimed at creating a stress free environment at corporate workplaces and educational
institutes. The campaign targeted at corporate houses and it indeed created a lot of buzz in the sector
across the city of Bhopal.
Nature hai toh Future Radio City The initiative promoted the idea of nature conservation. The FM radio team engaged the residents in various
hai51 cities in cleaning their societies, managing waste and plant trees.
#SayNoToRoadRage52 Radio Mirchi The campaign aimed at creating awareness about the need for the security and surveillance systems in the
country. It tried to reinforce the fact that security is not just a sporadic need but an urban necessity.
#Superwoman53 Radio One The initiative in association with actress Vidya Balan talked about women in India who plays multiple roles
successfully making them Superwoman. The campaign was run in seven cities throughout the country.
Dont be Horny54 Red FM The campaign aimed at curbing the problem of noise pollution caused by honking of horns in association
with the Mumbai Traffic Police.
. 106 ho rs non-stop R Marathon 2. ig M sets a new enchmark, Readoo, 01 ebr ar 2016, 2 0 dawat-e-m sic 2 0 -bhopal-spreading-happiness-thro gh-m sic-1 0 22,
http //www.readoo.in/2016/02/106-ho rs-rj-marathon- 2- -big-fm-sets-a-new-benchmark, 1 1 March 2016
March 2016 1. e nat re s g ardian with Radio it s at re hai toh t re hai, RandMbi , 0 ne 201 , http //
6. IG M la nches .P. ki Kahani an with eelesh Misra , fa s, 2 Ma 2016, http //www.afa s. www.radioandm sic.com/bi /radio/programming/be-nat res-g ardian-radio-cit s-nat re-hai-toh-
com/news/stor / 20 IG- M-la nches- P-ki-Kahani an-with- eelesh-Misra, 1 March 2016 f t re-hai-1 060 , 1 March 2016
. M M la nches radio s first realit show Paiso ka Ped , RandM i , 0 pril 2016, http //www. 2. Radio Mirchi and P Pl s la nch new campaign a otoRoadRage, RandMbi , 0 Ma 201 ,
radioandm sic.com/bi /radio/programming/m -fm-la nches-radios-first-realit -show-paiso-ka- http //www.radioandm sic.com/bi /radio/pri ate-fm-stations/radio-mirchi-and-cp-pl s-la nch-new-
156
ped-1 0 0 , 1 March 2016 campaign-sa notoroadrage-1 0 0 , 1 March 2016.
. Pop lar Red M horror show bro ght o t as a book, RandMbi , 12 ecember 201 , http //www. . Radio ne and id a alan join hands for perwoman initiati e, RandMbi , 26 g st 201 ,
radioandm sic.com/bi /radio/pri ate-fm-stations/1 1212-pop lar-red-fm-horror-show-bro ght-o t- http //www.radioandm sic.com/bi /radio/programming/radio-one-and- id a-balan-join-hands-
book, 1 March 2016 s perwoman-initiati e-1 0 26, 1 March 2016.
. ig M sa s tta hhod e aar , RandM i , 2 Ma 201 , http //www.radioandm sic.com/bi / . Red M la nches the campaign on t e orn in association with M mbai raffic Police,
radio/programming/big-fm-sa s-s tta-chhod-de- aar-1 0 2 ,1 March 2016. RandMbi , 2 Ma 201 , http //www.radioandm sic.com/bi /radio/pri ate-fm-stations/red-fm-
0. M M organises awat- m sic in hopal- spreading happiness thro gh m sic, RandMbi , la nches-campaign-do-not-be-horn -association-m mbai-police-1 0 2 , 1 March 2016
22 pril 201 http //www.radioandm sic.com/bi /radio/pri ate-fm-stations/m -fm-organises-
vent-based ontent in the form of a tivities and etwor pro rammin
campaigns
etwork programming is sed b broadcasters where
Radio stations engaged in different acti ities and the create a single piece of content for stations across
campaigns with sports forming an integral part of them. the co ntr . hese programmes are aired in different
2. big fm was the e cl si e partner for I ricket cities with minor ariations to add local a o r, b t the
orld p 201 . kash ani got the e cl si e broadcast main theme and content remains the same. his red ces
rights for the commentar of the same 6. IP teams and the o erall cost of operations and gi es profits an pward
Pro restling leag e were partnered b ario s radio p sh. ith the new channels being added after the
stations . Red M in association with Ga tam Gambhir Phase III a ctions, this method of programming co ld
o ndation s pported the Indian ice ocke team to pro e to be real boost for the re en e considering the
compete at 201 hallenge p of sia, K wait . he companies ha e alread made h ge in estments .
radio channels contin ed their associations in the e ents
for greater brand isibilit and awareness.
thers
Support for natural disaster victims was garnered by Radio Mirchi has joined hands with elhi International
multiple stations59 irport P imited I for setting p a 2 c stom-
prod ced airport radio. Radio Mirchi and I ha e
Radio stations came forward to lend their s pport in la nched MIR I , co-c rated b Radio Mirchi and the
e er wa possible for two nat ral disasters which m sic trio- hankar, hsaan o . MIR I is India s
shocked India and its neighbo r epal. Red M and first airport radio that seeks to transform and enhance
epal s Radio Kantip r came together with an initiati e the tra el e perience of passengers at IGI irport62.
ajao for a ca se rging listeners to donate their one
da s salar for the epal earth ake relief f nd and Radio it 1.1 M has la nched a specialised creati e
e tend help for the ictims60. Radio stations went all o t client sol tions agenc called da I . he compan
and helped the hennai ood ictims b informing them hopes it will be a one stop shop for creati e sol tions that
abo t the shelter places, helpline n mbers and min te- brands wo ld need to ad ertise on radio6 .
to-min te pdates on the sit ation. ig M collected
essentials like food, water and clothes to pro ide to the
ood ictims61. The next phase of FM Radio growth will be
fuelled by consolidation and emergence of
n- round a tivation strong national and regional players. While
increase in reach and inventory will provide
n gro nd acti ation contin es to be sed b Radio a level playing field with other traditional
operators. d ertisers look at this as a better wa to mediums, improvement in Radio audience
engage with c stomers. Most large radio operators ha e measurement, investments behind content,
their own acti ation team . brand, differentiation and technology will
be required to reap the benefits offered by
economies of scale.
Asheesh Chatterjee
Reliance Broadcast Network Ltd.
. ig M is e cl si e partner for I ricket orld p 201 , RandMbi , 0 ebr ar 201 , http // 60. Red M and epal s radio station Radio Kantip r coming together for the first time, RandMbi , 06
www.radioandm sic.com/bi /radio/pri ate-fm-stations/big-fm-e cl si e-partner-icc-cricket-world- Ma 201 , http //www.radioandm sic.com/bi /radio/programming/red-fm-and-nepals-radio-station-
c p-201 -1 020 , 1 March 2016 radio-kantip r-coming-together-first-time-1 0 06, 1 March 2016.
6. kash ani gets e cl si e radio broadcast rights for the commentar of I ricket orld p 201 , 61. Red M and epal s radio station Radio Kantip r coming together for the first time, RandMbi , 06
RandMbi , 0 ebr ar 201 , http //www.radioandm sic.com/bi /radio/programming/akash ani- Ma 201 , http //www.radioandm sic.com/bi /radio/programming/red-fm-and-nepals-radio-station-
gets-e cl si e-radio-broadcast-rights-commentar -icc-cricket-world-c p-201 -1 020 , 1 March radio-kantip r-coming-together-first-time-1 0 06, 1 March 2016.
157 2016 62. Radio Mirchi and I join hands to la nch India s first airport radio station, e change media,
. ig M becomes official radio partner for Pro restling eag e, RandMbi , 01 ecember 201 , 02 o ember 201 , http //www.e change media.com/radio/radio-mirchi-and-dial-join-hands-to-
http //www.radioandm sic.com/bi /radio/pri ate-fm-stations/1 1201-big-fm-becomes-official-radio- la nch-india 2 0 s-first-airport-radio-station 6221 .html sthash. K .dp f, 1
partner-pro, 1 March 2016 march 2016.
. Red M and Ga tam Gambhir o ndation pledge to s pport the Indian ice hocke team, RandMbi , 6 . Radio it la nches creati e client sol tions agenc da I , e change media, 21 an ar 2016,
1 pril 201 http //www.radioandm sic.com/bi /radio/pri ate-fm-stations/red-fm-and-ga tam- http //www.e change media.com/radio/radio-cit -la nches-creati e-client-sol tions-agenc -
gambhir-fo ndation-pledge-s pport-indian-ice-hocke -team-1 0 1 , 1 March 2016 a dacit 6 0 .html sthash. I e I n.dp f,1 March 2016
. KPMG in India ind str disc ssion and anal sis
Key challenges the radio industry
fa es in India
Measuring the stations reach accurately continues eed for the establishment of a op ri ht oard
to be a challenge
Pre io sl radio operators were re ired to pa a needle
Meas rement contin es to be a challenge for the ho r ro alt to m sic companies. P rs ant to the
ind str , making it diffic lt for stations catering to op right mendments on 21 ne, 2012, the erstwhile
niche a diences to con ince ad ertisers of their reach. op right oard was dissol ed in order to reconstit te
onsidering the h ge in estments being made b the same as per the amended pro isions of the new
operators in Phase III there is a need to b ild a rob st op right ct. It is nfort nate that almost . ears
mechanism. his is an area where internet radio co ld be ha e elapsed and till date the op right oard has not
a clear differentiator for ad ertisers. been reconstit ted. his dela in the reconstit tion of
the op right oard has led to the nnecessar dela in
adj dication of the long pending iss es.
eed to rela the restri tions around the holdin
structure he op right R les en isages p blication of tariffs that
wo ld be pa able b a person for the e ploitation of
n a national le el, an entit can hold not more than 1 the content. he landmark j dgment dated g st 2 ,
per cent of all channels allotted in the o ntr e cl ding 2010 passed b the old op right oard specified that
channels located in amm and Kashmir, orth astern the ro alt rate be fi ed at 1 per cent of the net re en e.
tates and island territories. rther operators can r n/ owe er, d e to the non-f nctioning of the op right
own not more than 0 per cent of the total channels in a oard, the tariffs ha e not been p blished.
cit s bject to a minim m of three different operators in
the cit . he amendments ha e introd ced a new right in fa o r
of broadcasters i.e. tat tor icense , which applies
astl , there is a cap on ock-in period of three ears to all broadcasters. owe er, till date the proced ral
for largest Indian shareholder. his is detrimental to aspects of a ailing the benefits of stat tor licensing b
the prospects of M as companies as not allowed to the radio broadcasters are still not framed. It is therefore
change ownership pattern for prescribed period. s ggested that the op right oard is constit ted at the
earliest.
We have grown by 13 per cent during CY15

over CY14. With new stations launching in
the next 12 months, I think listenership will
grow. We see growth gathering pace soon
and expect it to be between 18-20 per cent
in the next 5 years.
Prashant Panday
Entertainment Network India Ltd.
158
Looking forward In rease in inventor - e e pect new stations to
be operational b of 20166 . erage in entor
here s plent of scope for a greater reach for M tilisation is c rrentl high indicating that operators can
radio, as c rrentl its reach has been as compared choose ad ertisers based on Rs. his impacts regional
to and Print which ha e a national footprint. ith ad ertisers with smaller b dgets who mo e to other
the commencement of Phase III, we e pect the radio local medi ms. creating additional in entor , Phase
ind str to grow rob stl and o tpace the growth of the III is likel to pro ide an opport nit for local ad ertisers
o erall ad ertising ind str in the coming ears. ith to reach o t to their target a dience in a cost-efficient
a forecasted GR of 1 .1 per cent till 2020, ind str manner. Radio co ld also compete more effecti el with
re en es are e pected to do ble b 20206 . Radio s and Print.
share of the o erall pie is estimated to contin e at
appro imatel per cent6 . Favourable macro-economic conditions he
nion dget for the fiscal 2016-201 sends o t
Growth ma also s rpass o r e pected growth rate as clear indications that India is pacing itself for stronger
and when Phase III is rolled o t entirel . growth, stabilit and s stained de elopment. India is
projected to achie e a G P growth rate of . per cent
in 1 , in ation is finall relenting according to the R I
ro e ted si e of the adio Industr projection of per cent for 1 and 0 billion
of foreign reser es f rther point to India s impro ing
fortification against e ternal olatilities. he inance
Minister s decision to stick to the . per cent fiscal
deficit target co ld res lt in lower ields on go ernment
bonds, which co ld in t rn lead to a red ction in
borrowing costs for b sinesses this can make it easier
for radio companies to f nd their growth6 .
mer en e of new ompanies and ate ories -
-commerce has been a ke growth dri er, as it
penetrates to tier-II and tier-III cities, we see the spend
increasing in these cities. Initiati es b the go ernment
s ch as Make in India and tart- p India can f rther
contrib te to growth. likel re i al in to with the
la nch of se eral new models in 2016, in telecom with
the la nch of G and contin ed strength in M G. lso,
increasing ad ertising from go ernment and political
parties as the become more sophisticated abo t
Source: KPMG in India ind str disc ssion and anal sis comm nication will also add to growth.
In rease in wallet share - ith an increase in the depth
he ke dri ers of growth are of penetration in e isting cities and the addition of new
fre encies, we see spends on radio growing from a
In rease in the listener base - ew stations in e isting c rrent wallet share of abo t per cent to abo t 6 per
cities and proliferation of pri ate radio to smaller cities cent o erall. oda in de eloped co ntries s ch as the
are likel to increase the listener base. he rationale for . . and .K., radio s wallet share is estimated between
some pla ers to obtain a second station in the e isting per cent to 10 per cent6 . pending b go ernment
cities is to c rate new content and attract non-listeners, and political parties in India has also been increasing
thereb increasing the c rrent listener base. Ind str consistentl .
p ndits we inter iewed are confident that ad ertisers will
soon follow. he c rrent radio listeners are estimated at he other ke dri ers that can propel the growth of
110 million to 120 million in India which is onl a fraction the ind str are the release of spectr m, cond ci e
of the o erall pop lation6 . In more de eloped co ntries reg lation, increased foc s on enhancing engagement
like the . . and .K., the listener base is significantl and the de elopment of a rob st listenership
high of their respecti e pop lations. hile socio- meas rement methodolog .
economic trends in India are changing, there is a h ge o while 201 has been a good ear for the radio
growth opport nit . ind str , we e pect the f t re to be brighter for the
ind str and its ecos stem.
159
6 . KPMG in India ind str disc ssion and anal sis
160
Animation,
VFX and
post-production
Rendering success
Overview INR in billion
Segments 2011 2012 2013 2014 2015 CAGR % 2011 2015 Growth in 2015
Animation services 7.1 7.6 8.0 8.1 8.3 4.0% 2.5%
Animation production 4.2 4.5 4.7 5.1 5.6 7.5% 9.8%
VFX 6.2 7.7 9.3 11.3 14.4 23.5% 27.4%
Post-production 13.5 15.5 17.7 20.4 22.8 14.0% 11.8%
Total 31.0 35.3 39.7 44.9 51.1 13.3% 13.8%
Source: KPMG in India analysis and discussions
he ear 201 co ld t rn o t to be a c sp ear for the Indian animation industrymoving

Indian animation and ind str . he ear saw the up the value chain
release of probabl one of the biggest hits of the Indian
film ind str , aah bali he eginning , not onl a oda , India has nearl 00 animation, 0 and
mo ie which is considered to ha e cost I R ,000 million game de elopment st dios with more than 1 ,000
b t importantl , a mo ie where I R 0 million were professionals working for them.02 hese st dios ha e
spent on onl .01 n the animation front, traditional e perienced a mi of content prod ction, o tso rced
broadcasting channels increased their content mi to animation ser ices and collaborati e animation ser ices.
incl de more locall made content. t dios now look er the last decade, the Indian animation ind str has
be ond traditional medi ms s ch as theatrical release mo ed p the al e chain from a traditional o tso rcing
and tele ision to showcase their content and se digital model to creating its own intellect al propert and
platforms s ch as o be, et i and others. hese are co-prod ctions. hile the Indian animation ind str
important indicators that ow is the time for the India witnessed no major bo office releases d ring the ear,
tor to be pla ed o t. short films s ch as hha a , ateline and hakra ha
won appreciation locall as well as internationall . lso,
Size of Animation, VFX and Post production 201 saw a larger intake of local content b the kids
industry in India entertainment channels incl ding the regional pla ers.
owe er, despite the p sh towards local content,
Indian animation st dios contin e to be ital partners to
animation st dios across the globe for o tso rcing and
co-prod ction work.
Animation business models in India
Source: KPMG in India anal sis and disc ssion

162
01. 1 -lesser-known-facts-abo t-bah bali,http //www.indiat news.com/entertainment/boll wood/1 -

lesser-known-facts-abo t-bah bali-22 2 .html dated 10 l 201 accessed on 22 ebr ar 2016
02. Ind str disc ssion cond cted b KPMG in India
Content production and IP
creation. Creating is the future Animation is the only medium that
transports children into an imaginary
ol tion of content prod ction and Intellect al Propert world allowing them to build lasting bonds
IP creation as a segment of Indian animation ind str with their favourite characters. Over time
o er the past few ears has passed b witho t m ch the popularity and affinity with our local
attention howe er, go ernment initiati es like Make in characters has grown leading to a large
The Future: now streaming | Animation, VFX and post-production
India and igital India ha e pro ided a renewed foc s number of local IPs being created. These
to the ind str and garnered interest of all ind str winning IPs have led to the birth of an entire
professionals, from animation st dios to broadcasters. ecosystem (digital, experiential, consumer
nimation st dios now look to own and co-prod ce products, licensing and on-ground) thereby
content, depicting a mo e from traditional o tso rcing creating new revenue opportunities
model. or long-term growth and s stainabilit , st dios within the genre. A notable trend in Indian
sho ld create content and IPs, which can enable them animation is that homegrown IPs have
to generate higher re en es and profitabilit . his can begun to make international inroads and
also help them create characters and themes that ha e will continue to make their mark overseas.
a longer shelf life and can be monetised thro gh ario s
Nina Elavia Jaipiria

a en es, incl ding merchandising. his approach has
worked well o erseas with st dios s ch as isne few
Indian t dios ha e also seen s ccess eg. with hhota
heem and Mot Patl .0 er the last few ears, one EVP and Business Head,
of the most noted shift among a diences too has been an Kids Cluster
increasing penchant towards local characters and stories, Viacom 18
be it films, tele ision or digital medi ms s ch as o be.
ith the ad ent of smartphones and the impending
thr st towards a digital ecos stem incl ding broadband Content production and ip creation distribution
and G rollo t, content will be a ke reso rce.
platforms
The last decade in the global animation

industry has helped prove true potential of
the Indian industry. Its now time for us to
graduate to the next Intellectual Property
(IP). Content creation is the next big
milestone and the industry eagerly awaits
to see a successful animation property
originating out of India.
A K Madhavan
Founder and CEO
Assemblage Entertainment
163
0 . Ind str disc ssion cond cted b KPMG in India
nimation films
Indian animated movies with produ tion bud et and bo offi e olle tions in and
ox office ox office collection

2015 movies Studio Budget 2014 movies Studio Budget
collection - net net05
Mighty Raju Rio Green Gold 50 11

Calling Animation04
Accel Animation
No major theatrical releases during the year Kochadaiiyaan (all studios in 1,250 810
languages) association with
foreign studios06
Chaar Sahibzaade iREALITIES04 200 332
here were no major theatrical releases d ring 201 . to create social awareness on serio s iss es s ch as
espite the bo office s ccess of films s ch as the child labo r, right to information R I , etc. econdl , the
hhota heem series and haar ahib aade , prod cers acc sation that Indian animation is st ck in m thological
are hesitant to take this segment to the ne t le el. mode which cannot transcend bo ndaries took a beating
hort films s ch as anja s per team , hha a , with the recentl scar nominated short film anja s
hakra ha and ateline were able to break se eral per team where Indian m thological characters are an
m ths regarding Indian animation content. irstl , the important aspect of the stor . ew s ccesses of Indian
acc sation that Indian animation content is onl for kids animation short films co ld be seen as first mo es of
saw a change with ateline where animation was sed acceptance of Indian animation content globall .
Name Key highlights Major achievements

07
Sanjays Super team A short film directed by Indian American director Produced by Pixar was nominated for Oscar 2016
Sanjay Patel tells the story of a young Indian in est Animated Short film category.
boy who feels conflicted by the modern world
and Hindu traditions of his family; it follows the
daydream of the boy, bored with his fathers
religious meditation, and imagines Hindu Gods as
superheroes.
Chhaya08 eban an Nandys animation film based on the agged the first prize in the animation category of
concept of the emotional bond of an old man with the international competition.
the shadow of his wife.
Fateline09 Made by Eeksauras, the film is based on a young The film won Indias first award at rances
child labourer who is determined to break free International Animation Film Festival Annecy
from the bonds that hold him down. Cristal Award in the Commissioned Film Category
out of 1 films selected for the official selection.
Chakravyuha10 An animation film by filmmaker hvani esai, The film was the only one from Asia selected for
(The Vicious Circle) shows the struggles of four characters from screening at the Holland Animation Film Festival.
different regions of India and throws light on how Also, the film had been voted the most popular
TI can be used to fight corruption. film at the Mumbai International ilm estival.
0 . www.beeka s.com 0 . hha a wins the est nimated ilm ward at the 1 th MI http //www.animation press.
0 . for bo office collections www.f nrahi.com com/inde .php/latest-news/chha a-wins-the-best-animated-film-award-at-the-1 th-miff dated 164
ebr ar 2016 accessed on 2 ebr ar 2016
06. www.indianmo iestats.com/Ifilm/koll wood-201 /kochadai aan.htmll
0 . eksa r s bags first e er award for India at nnec http //www.indiantele ision.com/mam/media-
0. scars 2016 Indian- merican director s anja s per eam nominated in animation shorts and-ad ertising/ad-campaigns/eeksa r s-bags-first-e er-award-for-india-at-annec -1 06 0 dated
categor http //www.ibnli e.com/news/mo ies/oscars-2016-indian-american-directors-sanja s- 0 ne 201 accessed on 2 ebr ar 2016
s per-team-nominated-in-animation-shorts-categor -11 .html dated 1 an ar 2016
accessed on 2 ebr ar 2016 10. nimation film on R I in olland nimation ilm esti al http //www.indiantele ision.com/
tele ision/t -shows/animation/animation-film-on-rti-in-holland-animation-film-festi al-1 0 1 dated
1 March 201 accessed on 2 ebr ar 2016
rther, the Indian animation films are now being made Globall , more than se en of the top 100 grossing mo ies
in man regional lang ages, for instance, the et to be at the bo office in 201 were animated mo ies.1 er
released hasinsoft s lick Rick is to ted as Karnataka s the ears, performance of animation mo ies like K ng
first animation film.11 lso, botani , a si and a half Panda , ow to rain o r ragon 2 , Rio 2 , Minions
min te short film con e s the stor of the c lt re of etc. indicates that the potential market for animated films
r nachal Pradesh stressing on the traditional c stoms in India is et to be f ll realised.
and folk c lt re.12
13
o offi e olle tion in India for international animation movies in and
Gross collection
Movie Year Movie Year Gross collection
(in INR millions)
How to Train Your
Minions 2015 173 2014 169
Dragon 2
Inside out 2015 94 Rio 2 2014 144
Hotel Transylvania 2 2015 44 Big Hero 6 2014 30
Home 2015 34 The LEGO Movie 2014 16
The Good Dinosaur 2015 30 Planes: Fire & Rescue 2014 9
The SpongeBob Movie: Mr. Peabody &

2015 12 2014 9
Sponge Out of Water Sherman
Penguins of 2014 97
Madagascar
Source: www.bo officemojo.com gross collection in con erted for 201 @ 1 I R6 . and 201 @ 1 I R 60. .
11. timesofindia.indiatimes.com/tech/comp ting/Rickshawdri erisheroof animationfilm/ 1 . www.bo officemojo.com op 100 201 bo office collection
articleshow/ dated 1 ctober 201 accessed on 26 ebr ar 2016
12. r nachal Pradesh gets its first animated feat re botani http //www.animation press.com/
inde .php/latest-news/ar nachal-pradesh-gets-its-first-animated-feat re-abotani dated 2 ctober
201 accessed on 26 ebr ar 2016
Animation on Indian television,
driving the ratings
emand for locall prod ced animation shows contin ed
to grow in 201 . hile shows like hhota heem and
Mot Patl contin e to do well, new shows like hi a ,
andb dh r dbak and P aar Mohabbat app
ck were la nched d ring the ear - hi a in fact on
its la nch in ecember 201 became one of the most
watched shows.1 he trend of made for tele ision
films contin ed with hhota heem inosa r orld ,
Pakdam Pakdai- ogg on s illiman, among others.
Kids channels contin e to in est hea il with new show
la nches and e tensi e on gro nd acti ities, marketing
campaigns. ith shows like hhoti nandi , mitabh
achchan s animation series stra force , creen g s
Mar Kom r and ar eroes of India , Graphiti s M
aro nd the corner, the ind str is in for e citing times
ahead.15
ill a few ears back, broadcasters were largel
dependent on imported content bo ght from st dios
across the world. his model had two major ad antages -
firstl , as these shows were s ccessf l, the broadcasters
were more certain abo t their acceptabilit and the were
onl re ired to rework the content in terms of d bbing
and editing. econdl , cost arbitrage i.e. cost of importing
a show is m ch less than prod cing one and considering
the disparit between the iewership and ad ertising mi
for the kids genre, importing is considered to be a more
profitable model.15
oda , the mi of local to imported content is seeing a

At an initial stage of starting an animation shift. roadcasters now realise that locall made content,
channel, the life cycle of animation tho gh costlier, has great potential in the long r n as seen
production being long, demands of in s ccessf l series of hhota heem , Mot Patl and
cash flows to sustain through the entire few others.15 lso, a diences, especiall those o tside
process have to be met. In such a scenario, metros, are more inclined towards locall made content
acquiring overseas content license becomes and characters based on familiar elements, dialect and
more feasible as opposed to local content lifest le. ocal content has the potential and in some
production which is costlier. wa s is pro ing to be the game changer for the kids genre
and has defined the wa kids channels ha e e ol ed in
Subhadarshi Tripathy
India.
Chief content officer

Living Network
166
1 . ickelodeon s hi a is highest rated kids show in India http //www.indiantele ision.com/

tele ision/t -channels/kids/nickelodeon-s-shi a-is-highest-rated-kids-show-in-india-1 121 dated 1
ecember 201 accessed on 26 ebr ar 2016
1 . Ind str disc ssion cond cted b KPMG in India
In the recent past there has been a stark
shift to local content production. Earlier
the broadcasters showed local content
very sparsely. But since the last few years
there is an overwhelming demand for
ethnic content by the broadcasters and
the audience. The digital world is opening

up remarkably thereby providing immense
opportunities to content producers
gradually eliminating gatekeepers.
P.Jaya Kumar
CEO
Toonz Media Group
ountr wise animated shows on Indian - ountr wise animated shows on Indian
Note: thers incl de hina, enmark, stralia, Ital , Ireland, German , rance, Me ico, Port gal, Pakistan, Mala sia, rgentina, ingapore and pain. 2. Global o-prod ction are ario s co-prod ctions animation
work between anada, . . ., Ireland, .K., weden, rance, . . ., stralia and elgi m. . India incl des fo r co-prod ctions between India and other co ntries
In 201 , animation content from co ntries s ch as . . ., s per the roadcast dience Research o ncil,
apan, .K., rance, anada, etc. contin ed to entertain India R , most iewed top 10 shows kids genre
the Indian a dience. he content imported from . . . were mostl locall made shows with the e ception of
had the largest share, followed b apan. owe er, local oraemon Mot Patl was most iewed show d ring
content has seen a shift as it contrib tes appro imatel the period.17
16 per cent of the total shows third largest contrib tor
from 1 per cent in 201 .16
167
16. KPMG in India anal sis and disc ssion

1. op right 2016 roadcast dience Research o ncil India. ll rights reser ed. Reprod ction of
an matter p blished in this report, in part or whole, in an lang age or format, or deri ati e work,
witho t the e press written permission of R India is strictl prohibited and will be liable for
legal action.
Weekly BARC rankings for top channels in kids
Weekly BARC rankings for top shows in kids genre
genre
Impressions000 Rank Channel Impressions000 {Av(Wg)}
Rank Description Channel
{Av(Wg)}
1 Motu Patlu in Alien World NICK 479.89 1 NICK 142.45
2 Pogo TV 128.74
2 Motu Patlu Kungfu Kings NICK 458.91
Oggy and the Cockroaches Cartoon 3 Cartoon Network 111.40

3 435.71
Indiawaale Network
4 Hungama 81.04
Chhota Bheem : Coco Mera
4 Pogo TV 402.12
Dost
5 Disney Channel 68.45
Disney
5 Doraemon Nobitaland 374.26
Channel
6 Sonic Nickelodeon 29.88
6 Pogovengers Pogo TV 373.47
7 Discovery Kids 13.55
Kris Aur Shahrukh Ki Dilwale Cartoon
7 366.75
Bollywood Class Network 8 Disney XD 12.47
Chhota Bheem and the Curse
8 Pogo TV 349.39
of Damyaan 9 NICK Junior 6.17
Chhota Bheem : Battle Of
9 Pogo TV 344.62
Heroes 10 Disney Junior 4.14
10 Chhota Bheem Ki Baazi Pogo TV 340.51 11 Toonami 0.59

168
Source: op right 2016 roadcast dience Research o ncil India. ll rights reser ed. Reprod ction of an matter p blished in this report, in part or whole, in an lang age or format, or deri ati e work, witho t
the e press written permission of R India is strictl prohibited and will be liable for legal action.
arget Gro p ll -
Market ll India
Period eek 1, 201 to eek , 2016
ele ision is probabl one of the largest cons mer are iewed b other famil members also and th s a lot
of animation content created in India, tho gh other of brands are realising the potential of this segment20.
medi ms s ch as films and online broadcasting are M G companies are alread sing kid s channels
also picking p. Kids genre acco nted for .6 per cent to promote soaps, shampoos, detergents and other
iewership o er the period eek 1, 201 to eek , non-kids brands.20 he brands that were first to come
2016.1 ltho gh there are e amples that a diences in were ins rance and a to brands20. his genre is now
are more inclined towards local content, howe er, for witnessing significant traction from anon, P, homas
broadcasters it also depends on the o erall cost mi ook, erger, ata ea, agh akri, anone, Mar ti,
and their long-term strateg for the channel. h s, local Microma and a whole new a en e has opened p
to imported content split aries from broadcaster to on the back of e-commerce websites like lipkart and
broadcaster, the range can be an thing between 0 0 napdeal.20 hannels are now p shing the bo ndar
to 0 0.1 he a dience generall does not iew a show be ond the traditional ree ommercial ime deals
based on its making b t elements s ch as entertainment to facilitate ad ertisers thro gh ario s c stom-made
al e, theme, reliabilit of character and dialect. brand associations. Gi en that a lot of shows are now
being prod ced locall , prod ct placement is an emerging
ost to the broadcaster of a locall made show is one opport nit .
of the important factors, considering that there is an
ad ertisement cap of 12 min tes and disparit between he ind str has long been waiting for an impet s from
iewership and ad sales can be a possible hindrance. the Go ernment of India which can gi e the locall made
oda depending on genre, n mber of ad ertising brands content the desired p sh something which go ernments
ma ar within the range of 00 to 1,000 b t in case of of other co ntries prod cing major animation content are
kids genre, the co nt was onl aro nd 200 pl s which pro iding. or instance, in hina, animation prod ction
has grown b appro imatel 2 per cent and now stands st dios get part of the cost reimb rsed from the
at 2 0 pl s.20 erall, ad rates ha e remained constant in go ernment, e cl si e time slots are reser ed for locall
past few ears and ha e increased b onl appro imatel made shows and others.21 lso, apan, Mala sia and
11 per cent howe er, in case of kids channels, ad rates anada gi e ta rebates for locall made shows.1
ha e increased b 20 per cent to 2 per cent depending
on the channel - this growth is dri en b ncon entional
brands not necessaril targeted at children.20 or Pogo
and artoon etwork, ncon entional ad ertisers now
contrib te per cent of ad re en es, for isne its 0
per cent and for ickelodeon per cent comes from
non-kids brands.20 he prime time on kids channels is
from 12 noon to p.m. and beca se of single per
home concept in se eral homes in India, these channels
169
1 . op right 2016 roadcast dience Research o ncil India. ll rights reser ed. Reprod ction of 20. Kids channels str ggling for b siness find sal ation in ads aimed at parents http //articles.
an matter p blished in this report, in part or whole, in an lang age or format, or deri ati e work, economictimes.indiatimes.com/201 -0 -0 /news/6 2 21 1 ad-rates-kids-channels-
witho t the e press written permission of R India is strictl prohibited and will be liable for ncon entional-ad ertisers dated g st 201 accessed on 2 ebr ar 2016
legal action. G ll , Market ll India, Period k 1, 201 to k , 2016. 21. hina s animation ind str tries to find its feet http //www.chinaeconomicre iew.com/one-frame-
1 . Ind str disc ssion cond cted b KPMG in India time dated 26 an ar 201 accessed on 2 ebr ar 2016
Animation on digital platforms
oda digital medi m or the so called third medi m or espite se eral positi e factors for digital platforms,
new media has earned good recognition to broadcast it has two major challenges - man areas in India lack
alit content. hile the Indian go ernment s thr st on decent internet connecti it and th s, these platforms
digital medi m thro gh the initiati e igital India has are not readil a ailable to all and, st dios ma find it
bro ght the medi m to the centre stage, man start- ps diffic lt to monetise the content on these platforms.
and entreprene rs in the animation sector for the past
few ears were s ccessf ll sing these platforms. se Recent foc s of the Indian go ernment on digital
of digital platforms has man ad antages first, the are technolog can in f t re ears increase the reach of
less reg lated in terms of censorship. econd, a st dio internet and it s connecti it . Man animation st dios
can e plore ario s genres witho t an prej dice in terms ha e started monetising content on digital platforms
of acceptabilit . hird, there are no restrictions on amo nt mainl thro gh re en e share with the platform e.g.
of content or channels a st dio can ha e. o rth, the o be and thro gh sponsorship.
content can be easil accessed on ariet of medi ms
s ch as mobiles, tablets, etc. nd finall , on these
platforms large amo nt of content is being ploaded
e er second and content can gain pop larit and go iral
e er min te.
Top subscribed animation channels on YouTube Top viewed animation content on YouTube
Number of Number of
Rank Channel name Rank Channel
views views
5 ChuChu TV Kids Songs 3,430,400 2 NICK 3,924,413,675
10 CVS 3D Rhymes 2,164,056 6 Pogo TV 2,572,316,603
Videogyan 3D Rhymes - Nursery Rhymes & Kids 1,016,429 11 Cartoon Network 1,154,024,879
25
Songs
526,572 19 Hungama 723,331,379
50 HooplaKidz TV
516,482 34 Disney Channel 479,259,869
52 Finger Family Songs
42 Sonic Nickelodeon 393,117,964
438,468
65 eDewcate
52 Discovery Kids 342,354,229
68 ChuChuTV Surprise 435,771
77 Disney XD 253,613,942
74 MagicBox English Kids Channel 410,079
85 NICK Junior 242,372,801
90 Shudh Desi Endings 331,166
93 Disney Junior 223,042,134
Source: ocial lade op 100 o bers in India b Most iewed and Most bscribed http //socialblade.com/ o t be/top/co ntr /in/mosts bscribed accessed on 2 ebr ar 2016
The content creators who were turned
down by content commissioners have
found a new hope in the form of internet
broadcasting. Content has become the
king in true sense once again for these
creators, as the control moved to the more
generous online platform. The shift has

already begun and is here to stay. The music
industry which was pronounced dead a
few years back is anticipating its revival
through online streaming. A content creator
is no longer dependent on the otherwise
traditional methods of productions,
distribution, first point of release etc. The
content creator is set free to express his or
her vision. This is a screen era, and one will
get noticed if one creates good content. The
question is about the change, if you do not
change you will perish.
Anand Pandey
Co-founder and Director
ScreenYug Creations Pvt. Ltd.
Netflix will drive content change, but

whats interesting is to see how Indian
market reacts to its subscription based
model as the Indian market is used to free
content. However at present, the challenge
is to educate people and inform them about
its content.
Ketan Mehta
Chairman and Promoter
Maya Digital
171
Animation branding and licensing & merchandising
icensing and Merchandising M is a si eable more. rrentl , M contrib tes mere 10 to 1 per
b siness globall , the alt isne ompan is probabl cent22 of the o erall b siness re en es howe er, this
the largest character licensor in the world22. India s segment is poised to grow f rther in the coming ears.
M ind str is making its presence felt and is poised
to grow significantl in the coming ears. Ind str he factors contrib ting to the growth of M segment
e perts estimate that the Indian M market is c rrentl are as nder
projected at appro imatel I R 0,000 to ,000 million Popularity of e-commerce players in India
and is growing at more than 12 per cent ear-on- ear2 coupled with attractive discounts on products:
ith iss es s ch as the ad cap on ad ertising, there is a -commerce this ear has been a significant catal st
limit to which channels can grow their re en e and this to licensing growth, ro ghl contrib ting to half the
is being looked at as an additional stream of re en e b siness and this is e pected to grow f rther.2
for channels. he M b siness has two models, one
where IPs are not owned b the channel and the ac ire Rising popularity of locally produced characters:
rights for a partic lar ten re while pa ing ro alt to the IP Major broadcasters ha e hosts of characters which
owner. econd, broadcasters create their own brands are pop lar, enabling broadcasters and st dios to
and hence own the IP rights enabling them to create s ccessf ll monetise them.
cons mer prod cts and distrib te it themsel es22. oda Branding and multi point contact with audience:
man broadcasters s ch as iacom1 , isne India and roadcasters ha e realised that in order to effecti el
rner International are s ccessf ll t rning towards monetise a character/show, the ha e to p t in
this model2 . iacom1 s cons mer prod cts di ision significant efforts towards brand b ilding acti ities
c rrentl boasts a range of 00 prod cts across ario s s ch as on gro nd e ents, online games sing
categories which incl de brand IPs that are network characters, online and of ine competitions, among
owned and non-network owned and the ha e been others. or instance, artoon etwork celebrated
monetising their own IP brands s ch as Mot , Patl , the birthda of Kris from the Roll o. 21 series.2
inja attori .2 In terms of growth, iacom1 e pects ickelodeon carried o t gro nd promotions on
the cons mer prod cts di ision to grow from 00 hildren s da where their fa o rite characters
hop Keeping nits K to 2,000 K s, more than interacted with children in elhi and Kolkata. Kids in
1 million prod cts in the market and a footprint of more Kolkata got a chance to meet Mot Patl and engage
than 10,000 in distrib tion and retail platforms.2 lipkart at the carni al with loads of games. he entire it
has tied p with iacom 1 for the licensing of three entre mall was gi en the look of rf rinagar and
of their largest brands eenage M tant inja rtles , kids got a chance to win Mot Patl merchandise.2
pongebob arepants and Pean ts for sellers2 .
isne India on the other hand has man IPs which ha e
been internationall b ilt o er the ears b the parent
compan and these brands toda ha e become larger
than life brands s ch as isne s Micke riends and
Princesses, Mar el s he engers, pider-Man and tar
ars2 . isne India offers a prod ct range that c ts
across ages and gender thro gh more than 000 K s.2
nother broadcaster rner India, which like iacom1
has le eraged the se of its own IPs as well as the one s
the ha e ac ired, has capitalised on the pop larit of
hhota heem2 . esides broadcasters, man other
merchandising companies ac ire rights from the brands
internationall , eg. ream heatre had recentl ac ired
the rights prod ct licensing as well as content rights
for pop lar kid s propert Pokemon2 . he pop larit
of certain characters e tends be ond screens to
prod cts, s ch as back-to-school prod cts, accessories,
to s, collectibles, clothing, footwear, bags and m ch
172
22. Ind str disc ssion cond cted b KPMG in India 2 . o kidding Kid s channels get serio s abo t iwali http //www.indiantele ision.com/tele ision/
2 . channels e e the Rs , 00 crore licensing and merchandising ind str http //www. t -channels/kids/kids-channels-bid-to-rake-in-the-moolah-with-new-diwali-la nches-and-e tensi e-
e change media.com/t /t -channels-e e-the-rs- 00-crore-licensing-and-merchandising- promotional-acti ities-1 111 dated 1 o ember 201 accessed on 2 ebr ar 2016
ind str 6 .html dated 2 an ar 201 accessed on 2 ebr ar 2016
nimation characters with strong brand al es can
be sed for s ccessf l partnership with other brands,
prod cts and mo ies. he trend of partnership and
collaboration with other brands is on an ps rge. Man
prod ct brands from M G, a to, ins rance and others
are proacti el sing characters like hhota heem ,
Mot Patl , Kris , etc for marketing campaigns. ome
e amples of s ch collaboration are as below
Cartoon Network and Pogo go filmy with Dilwale team was seen in three new TV specials created especially for kids. Kris Aur Shah Rukh Ki
Shah Rukh Khan's 'Dilwale'25 Dilwale Bollywood Class, Oggy Ki Birthday Party - Dilwale Style and Bheem Aur Dilwale
ellow iamond ings makers decided to launch three flavours of corn rings and they oined hands
Motu Patlu joins Yellow Diamond Rings with Nickelodeons Motu Patlu to use their images on their packets and also bought the rights to
club26 design their freebies.
Parle G joined hands with Chhota Bheem wherein a picture of Chhota Bheem graced the packet
Chhota Bheem and Parle girl spotted alongside the Parle girl. Also, every piece of biscuit, instead of the brands name, now has some
together!26 popular cartoon characters engraved on it including Chhota Bheem.
Dominos India at launch of its sub-brand Juniors Joy Box joined hands with Ninja Hattori. This
Dominos tempts kids with Ninja Hattori26 campaign got kids busy building their Ninja collection, while parents treated them to a Dominos
meal.
Ferrero India have procured the license of The Disney Princess and Marvels - The Avengers'
Kinder Joy packed with Disney surprises26 characters from Disney India to design their toys. The pink pack of Kinder Joy was accompanied with
one of the seven Disney princesses.
India s animation M b siness despite se eral positi e

factors, faces ke challenges that the need to o ercome
in order to realise their f ll potential. irstl , India is a
di erse co ntr , ha ing m ltiple choices and preferences
which wo ld differ in terms of characters, t pe and si e of
merchandise. econdl , there is no special law in India to
deal with an iss es related to character licensing. ence,
an concern is dealt with b taking into consideration
trademarks, cop rights and common law principles.
hirdl , pirac is a serio s challenge that has crept into
character licensing too.
nimation branding and M as a segment is c rrentl
nder-e ploited. his segment, if effecti el and
efficientl tapped, can become an important part of long-
term growth strateg of broadcasters and st dios.
173
2 . artoon etwork Pogo go film with hah R kh Khan s ilwale http //www.indiantele ision.
com/tele ision/t -channels/kids/cartoon-network-pogo-go-film -with-shah-r kh-khan-s-
dilwale-1 1210 dated 10 ecember 201 accessed on 2 ebr ar 2016.
26. www.premiafa s.com/ icensing accessed on 2 ebr ar 2016.
Outsourced animation services
ccording to a recent st d , abo t 0 per cent of all
merican tele ision animation is prod ced in sia.27
he pre-prod ction is done in the nited tates or other
ropean co ntries, after which, the package is sent to
sia for prod ction. he work is sent back to the . . . or
other head arter co ntries for post-prod ction. pical
for an Indian animation st dio, o tso rcing work from
co ntries across the world is the first step as o tso rcing
animation has led to the creating and n rt ring of a local
ind str as the infrastr ct re is b ilt p, e ipment is
p t into place and skills are transferred. lso, the model
is less risk compared to making its own content as the
st dios either get paid based on efforts on a time and
material basis or on a fi ed fees basis for the project.
owe er, o er the last few ears, Indian st dios are
competing with other sian and far east co ntries like
hina, Mala sia, Philippines and hailand for o tso rcing
work27. espite increased competition, Indian st dios
contin e to be an important strategic partner for its global
co nterparts. o ng Indian st dio ssemblage, for
e ample, worked on the films orm of the orth and
link ill- he Mo ie , prod ction of which was entirel
done in India2 . lso, few st dios contin ed to deli er
high- alit work for man oll wood animation top
grossers s ch as ha n he heep .
Collaborative animation services (co-

production)
o-prod ctions are collaborati e efforts between st dios
in India and abroad with different core competencies
who le erage on each other s e pertise while sharing
Intellect al Propert Rights IPRs and re en es. he
foc s of Indian st dios entering into s ch strategic
alliances is to establish a presence in the global animation
market. he ke attraction of a treat of co-prod ction
is that it alifies as a national prod ction in each of the
partner nation and can access benefits that are a ailable
to the local film and tele ision ind str in each co ntr .
he co-prod ction agreements seek to achie e economic,
c lt ral and diplomatic goals and benefits accr ing from
s ch agreements incl de ta concessions, go ernment
financial assistance, and incl sion in domestic tele ision
broadcast otas.
174
2. nimation shering in a igital ra http //www.broadcastandcablesat.co.in/animation- shering-in-

a-digital-era.html accessed on 2 ebr ar 2016
2 . ssemblage readies maiden animation film link ill http //www.animation press.com/inde .
php/latest-news/assemblage-readies-maiden-animation-film-blink -bill dated 2 g st 201
accessed on 2 ebr ar 2016
In 201 , India signed co-prod ction treaties with o th
Korea.2 India alread has similar agreements with hina, We are glad that the Indo-Canadian
ra il, ew ealand, and in rope with Ital , Poland, co-production treaty was signed last year
rance, German , pain and the .K. ring the c rrent along with a couple of more which will help
ear, ssemblage ntertainment completed its first add more value to what Indian animation
f ll-length animated feat re co-prod ction titled link studios bring to the table in global
ill he Mo ie , with the omp ter Graphics Imaging animation production. However, authorities
GI being co-prod ced o t of its st dio in M mbai., 0 need to simplify process operationalisation
and another st dio, igitales t dios entered into a m lti and implementation in actual business
project deal with . . based plash ntertainment for the world and that must gain momentum and
ionsgate franchise lpha and mega to be prod ced be a transparent process. Make in India
b plash. 1 ntertainment and Method nimation, has always been a big push for us in this
.K. ha e joined hands to co-prod ce series Sector especially in International TV and
I . 2 phere rigins the original prod ction ho se Direct to Home Animation Production. If
behind alika adh , animation st dio opMotion and we are able to bring to the table some tax
olors General ntertainment hannels G which incentives, cash flow incentives, then co-
c rrentl airs alika adh ha e joined hands to prod ce production will prosper.
new animated show hhoti nandi . rtha nimation
RK Chand
is working with o th frican compan M hild
in de eloping a new 2 animation series called M
hild . oon nimation signed a deal with G mm bear
International Inc which sees oon and G mm bear Co-Founder, Director of Busines
International, owners of the globall -recognised Development
G mm ear aka G mmib r IP, e tend the brand into Digitales Studios
entertainment and merchandising. he companies ha e
alread won a commission from o be for an initial
episodes which oon will prod ce o t of its st dio
in India. ntertainment will be co-prod cing the
third season of he ngle ook along with rance s
llipsanime and will be s pported and co-prod ced b
, German , German and PI I anal ,
rance. 6 ho gh there are few shows and mo ies which
were co-prod ced in India, the o erall potential of this
segment remains ntapped.
2 . India . Korea join hands for co-prod ctions in broadcasting, animationIndia - . Korea join hands . olors to la nch animated show hhoti nandi http //www.animation press.com/inde .php/
for co-prod ctions in broadcasting, animationIndia - . Korea join hands for co-prod ctions in latest-news/colors-to-la nch-animated-show-chhoti-anandi dated 1 an ar 2016 accessed on 2
broadcasting, animation http //timesofindia.indiatimes.com/t /trade-news/hindi/India- -Korea-join- ebr ar 2016
hands-for-co-prod ctions-in-broadcasting-animation/articleshow/ 2.cms dated 1 Ma 201 . India s rtha nimation collaborates with o th frican based M hild for new 2 animation
accessed on 2 ebr ar 2016 series, M hild http //www.animation press.com/inde .php/inter iews/indias-artha-animation-
0. ssemblage readies maiden animation film link ill http //www.animation press.com/inde . collaborates-with-so th-african-based-m -child-t -for-new-2d-animation-series-m -child dated 2
php/latest-news/assemblage-readies-maiden-animation-film-blink -bill dated 2 g st 201 eptember 201 accessed on 2 ebr ar 2016
accessed on 2 ebr ar 2016 . oon nimation and G mm bear International ink a deal for digiti ation of content http //www.
1. based plash ntertainment finds a partner in India s igitales t dios for lpha and mega animation press.com/inde .php/latest-news/toon -animation-and-g mm bear-international-ink-a-
re i al http //www.animation press.com/inde .php/latest-news/ s-based-splash-entertainment- deal-for-digitisation-of-content dated ecember 201 accessed on 2 ebr ar 2016
finds-a-partner-in-indias-digitales-st dios-for-alpha-and-omega-re i al dated ctober 201 6. ntertainment to co-prod ce he ngle ook season with llipsanime http //www.
accessed on 2 ebr ar 2016 animation press.com/inde .php/latest-news/d e-to-co-prod ce-the-j ngle-book-season- -with-
2. ntertainment sp rts on plan to co-prod ce animated series http //www.b siness- ellipsanime dated 10 ctober 201 accessed on 2 ebr ar 2016
standard.com/article/news-cm/d -entertainment-sp rts-on-plan-to-co-prod ce-animated-t -
series-11 100 00 1 1.html dated ctober 201 accessed on 2 ebr ar 2016
Potential challenges37
Animation education and skilled workforce Insuffi ient overnment support
s ocal IP creation and high end o tso rcing work for he ind str wo ld benefit considerabl from
estern st dios are e pected to be ke dri ers of growth go ernment s pport thro gh meas res s ch as
for the nimation, is al ffects, Gaming, and omics reser ation of a certain n mber of ho rs of domesticall
G sector, majorit of the incremental emplo ment prod ced content on channels, m st-carr cla se
is e pected to be in pre-prod ction and marketing with for kid s channels and ta benefits and treaties. Indian
highl skilled job roles s ch as stor boarding, content animation pla ers lack go ernment s pport that
creation, design, planning and promotion. enco rages growth of animation when compared
to competing nations s ch as hina, apan, anada,
he G d cation landscape in India is dominated b Mala sia, .K., . . etc. either thro gh fa o rable
training instit tes offering short term certificate/diploma policies or ta rebates and grants.
co rses 6 per cent of the o erall intake capacit . Most
of these are lacking in the alit of programmes inp ts
infrastr ct re, teaching reso rces etc. and o tp ts Intellectual Property protection
alit of st dents grad ating . he e isting G tso rcers ha e alwa s been concerned with the
ed cation also needs to shift foc s from the I tools protection of their IP in India as we ha e failed to take
towards the design and creati e aspects of content stern action against IP infringement. he IP polic
creation to generate professionals who co ld work needs to be strengthened and companies operating in
on the high- al e adding segments of pre-prod ction, the o tso rcing sphere need to take stringent steps to
stor boarding etc. protect clients IP rights.
In the absence of ade ate s ppl of talent, ind str
stakeholders ha e e pressed finding highl skilled
professionals as a major challenge to s stain growth. This past year some interesting
Man companies in the sector hire reg lar grad ate developments have taken place in the AVGC
st dents at the entr le el who are e pected to learn on sector.
the job. lot of prod ction ho ses in tele ision, films,
animation ha e in-ho se training schools, b t the lead All the kids channels in India have upped
to creation of a capti e talent pool and do not benefit their investment in local productions and
the ind str at large. e to the lack of a formal and moving forward I see this trend continuing
credible training ecos stem, an option a ailable is that of as this investment is already paying rich
nreg lated training pro iders who lack alit , teach an dividends. This will help the industry grow.
o tdated c rric l m and are mostl ill-e ipped to handle
demands of the ind str . The Maharashtra State has also recognised
the potential of not just Animation but the
Animation is not a quick and easy process entire Animation, Visual Effects and Gaming
sector. The new IT/ITES is amongst the most
he perception that animation is a comp terised process progressive policies announced by any state
which can be completed ickl needs to change. he government.
process is m ch more complicated, in ol ing a complete
is alisation of the campaign and a process of stor telling However I believe that we need to see
that needs to be worked o t before prod ction can a National Policy on Kids media with a
be commenced. hile short films can take an where framework for funding of local kids content.
between a few months to a ear to prod ce, the genre Lack of government initiative in India
needs more time and labo r. versus benefits provided by other countries
is an opportunity lost for us. Overseas
animation markets are turning out to be
Lack of funding more attractive destination than India
espite a ast talented and potential pool, India does not for outsourcing work with the advantage
prod ce a high percentage of animation films globall as of many government driven grants and
it lacks f nding nlike western film makers. he ind str incentives. This is one area that needs work
demands an initial high in estment and this poses a and we will continue to lobby for this.
major setback as most in estors are taken aback b the
n mbers game.
Munjal Shroff 176

Director
. KPMG in India anal sis and disc ssions
Graphiti Multimedia
n mber of tate Go ernments ha e taken cognisance
of the lack of alit training facilities and recognised the
strategic importance of in esting in this sector gi en its
emplo ment generation potential in the coming ears.
he Karnataka Go ernment has come p with
initiati es in the Karnataka G Polic incl ding
setting p a entre of cellence for promoting G
ed cation in the tate, setting p igital rt entres

to implement digital art and animation c rric l m in
select ine rt schools across Karnataka.
he Maharashtra Go ernment has also come p
with a n mber of pro isions in its I /I e polic
to promote the G sector incl ding attracting
global companies, foc ssing on legal framework
for Intellect al Propert creation and protection,
programme to train the trainer and setting p a entre
of cellence with state-of-the-art facilities.
he elengana Go ernment is also acti el promoting
the G sector eg. the anno ncement of the
inc bation centre IM G Inno ation in M ltimedia,
nimation, Gaming and ntertainment in derabad.
he entral Go ernment thro gh the Ministr of
Information and roadcasting and the Media and
ntertainment kills o ncil is in the process of setting
p a ational entre of cellence in the G sector.
he ational entre of cellence is e pected to impart
world class ed cation and also foster an en ironment of
research and entreprene rship in the G sector.
onsidering the G sector is largel led b the pri ate
sector in India, the different Go ernments ha e proposed
P blic Pri ate Partnership PPP models for promoting
alit G ed cation. model which in ol es
pri ate ed cational instit tions of rep te operating the
entres of cellence with financial assistance form
the Go ernment is proposed. tate Go ernments ha e
also proposed to in ol e pri ate ed cational instit tions
in setting p igital rt entres in ine rts schools to
implement the digital art c rric l m.
ith the right s pport from the different tates and the
entral Go ernment, the o tlook for G ed cation and
skilling in India is positi e. Rigoro s and persistent efforts
towards implementation from all stakeholders wo ld
res lt in G ind str in India emerging as a major
global h b.
177
178
Point of view: India Needs a Kids Content Act
Television has been in India for the past 50 odd years. For the What we lack
previous generation it was a friend. They saw it rise and they
grew with it. For the current generation, its been all about A quota/reservation for locally created content
nostalgia and a lot about being their go-to element in times Promotion of responsible programming, especially
of need for entertainment. However, for the generation thats animated content
still learning how to walk and talk, its a medium that will
show them how the world they have been born in, functions. Free access to kids content in cable dark areas
While the formal school education, home schooling and Emphasis on entertainment with education and vice-
natural learnings can go on in the present form, it is critical versa
in todays world to know what the present generation kids Promotion of cross-fertilization of diversified Indian
are exposed to, what content outside the formal structure cultures
are they consuming and how it is impacting their behavioural
pattern. Exposure for kids to our rich heritage of art, music,
mythology and customs
Television is their cartoon friend who wishes them a good
morning every day. It is their lunch time buddy who shows Increased awareness and tolerance to our cultural
them what a superhero can do. Its their snack time parent diversity
who will join them in their pranks. And its their bed time Till these voids are not filled, our kids may not be able to
grandparent who will narrate stories and make them believe understand and appreciate the cultural diversity of India
that the world is a beautiful place. due to erosion of sense of belonging. It is utterly essential
So what do we want our kids to learn from television and that we remain true in our journey of creating Ek Bharat,
films e want them to learn everything we did, everything Shreshtha Bharat with an even more serious approach to
our parents and grandparents did, and everything that will ensure the right development of our kids. It is good to have
help them grow as honest, truthful and virtuous youth of the the youngest population but it is a greater responsibility to
nation. ensure that the nurturing of this population is also in the
right direction. A good quality kids content through public
And this makes programming for childrens television an even broadcasting will lay a firm foundation.
more responsible job. Its imperative that our kids grow up
with the same values of patriotism and in an equally culturally What we need
rich environment as we did. Creating sensible and responsible We need to have a strong action-oriented approach to solve a
childrens programming in India is a social revolution of problem that has direct correlation with preserving our culture
bringing back the sense of pride for our country in every and tradition.
youngster across the nation. It is an effort to instill our roots in
them so that we create socially responsible citizens, and the We need a KIDS CONTENT ACT in India that will address
process starts when they are young. the existing gaps, formulate and enable strong policy driven
measures to ameliorate television programming content
To give you a deeper insight, the total number of kids for kids in India, even revive the Children Film culture for
channels in India is approximately 18 including regional Saturday and Sunday mornings as well as have digital gaming
languages. It represents around 3 per cent of total available and digital content for kids in the present day context.
number of channels in India. Viewership share of kids genres
is 7.3 per cent, much after Hindi GEC, News Channels and
Hindi movies. What India really needs is an exclusive kids
public broadcasting channel with a focus on animated
content for kids and focus on content creation with rich Indian
stories, culture and heritage.
How can we dream of building a strong nation when
the content value system of todays Indian kids is being
influenced by inadequate policy and funding? Even
more so when we have entered the ever evolving digital
content era.
179
Our recommendations for the Kids Content Act network in India. The producer/content creators
can probably retain the pay TV rights, Licensing and
Mandatory local animation content: In India, Merchandising, Gaming and digital rights.
Animation, VFX, Gaming and Comics are probably the
only industries where demand for manpower is more Creation of DD Kids: We strongly believe that Prasar
than supply. It is estimated that India has about 300 Bharati can play a pivotal role in our endeavors of
animation, 40 VFX and 85 game development studios revolutionising kids programming in India. What is
employing thousands of techno-creative professionals. If required is an exclusive kids channel for Doordarshan
the Information and Broadcasting (I&B) Ministry can take with a focus on animated and live content for kids.
measures and formulate policies in the right direction for
kids content on television, theatrical, gaming, comics The best way to do this is to start a DD Kids channel.
and digital, the kids in our country will get a healthy With its unmatched penetration in comparison to the cable
environment of education as well as entertainment. It and satellite channels, a digital terrestrial free-to-air public
can also meet the Governments objective of employment broadcasting DD Kids channel will surely position itself as
generation in the creative and artistic sector which has a differentiator and forerunner. Quality kids programming
been neglected for a long time. It will also give a great will also generate more viewership and thus attract even
boost to the studios and skills in India to retain work and more brands for advertisement. With its wide foot print and
creative jobs in India. reach, the Doordarshan Kids Channel with the right kind
of programming for kids will be able to lead the way and
So a start could be a 50 per cent quota of mandatory create a path for nation building just as other countries like
local animation content on the networks with an aim to U.S.A., Canada, China have public broadcasting services
reach 70 per cent over the next three years and special for nurturing kids and preparing them for the future. Under
protection for theaters and entertainment tax waiver the right to education through television, we can provide
for kids movies on weekends. This will help create a education as well as entertainment to the kids till the age of
substantial library of Indian animated content that can 12 till the last mile in India, that too in all regional languages.
travel globally and spread awareness about Indian culture
and heritage. This is probably the only way to strengthen the kids content
industry and bring about sustainability, stability and growth to
Setting up of AVGC co-production fund under CFSI: the artist community and other stake holders in the industry.
Establishing strong libraries and restoring forms of art, CFSI can operate on similar lines and manage the fund and
culture and creative styles will need immense support act as a de-facto producer of DD Kids content, partnering with
from I Ministry, more specifically, the hildrens ilm the local producers. The programmes produced should be
Society, India (CFSI). translated into regional languages so that they can be aired
Intellectual properties originating out of India can be on the regional channels of Doordarshan as well.
co-produced/co-funded by CFSI for the next 10 years. This Signing co-production treaties: This will help the
fund can be divided into 3 separate heads: Indian government to sign the co-production treaties
- Co-production fund with all the relevant countries interested in creating kids
content in a big way. The Co-production treaties have
- Content idea-story incubation fund become an important instrument for countries to access
- Marketing, Distribution and promotion budget global markets and know-how.
India can then probably boast of over 300 co-productions Creation of Creative Content Division: For India to be
and shows within India in the next 10 years. Kids TV and better poised to get into co-production treaties and many
kids movies from India would emerge a true leader in the new age partnerships with all international stake holders,
digital content economy generating jobs for over 4-5 lakh we need to create a stronger identity when it comes to
creative, techno-creative and artistic talent of the country. producing quality content.
The CFSI can recover this investment by keeping public

broadcasting rights in India through Doordarshan and
worldwide terrestrial rights of all these properties. CFSI
can become the sole programming arm for kids content
for public broadcasting on free-to-air Doordarshan
The Films Division under I&B Ministry, while playing its Affairs towards classifying Kids Programming officially
part, has the potential to operate on a much larger scale. eligible for CSR funding will provide the much needed
It is recommended that the Films Division be renamed as stimulus in this endeavor.
the Creative Content Division at the centre and the state
levels. Age group for TV Ratings: While we implement the
above measures, we need to track our progress. Currently,

Films, TV, Animation, Radio, Gaming, Comics, Online, the TV ratings available in India are only from the age of
Social Media and Mobile and all forms of content 4 years and above. It is therefore required that the ratings
creation must be brought under this division. This will start from the age of 2 years as the pre-school market in
bring focus in these areas in terms of long term vision India is too huge to be ignored. In the absence of these
and effective policies that will enable the creative, social, ratings, we are losing the revenue and content attention
cultural, heritage, entertainment and content industry of at the extremely important pre-school level.
India to flourish in the right path.
Along with this, in the era of digital and social media The Kids Content Act of India
boom, we must grab the opportunity to remodel, relook We strongly believe that the future of this nation deserves
and give a facelift to the Films Division, empowering to know every bit about this nations culture, heritage and
it with the new proposed identity by changing its values before it gets lost and eroded with time. Animated,
institutional design and positioning. Majority of the gaming and comics content has an everlasting shelf life; one
countries in Asia Pacific have aligned their policies and needs to make an effort to create the right content, preserve
initiatives to support the digital content creation industry and monetise the same for centuries to come. We need to
while enforcing the ethics and safeguarding the cultural preserve our roots and we need to shape our kids in a way
fabric of their countries, thereby enabling a conducive that they become the exponents of India in the future an
environment of morality, culture and technology. India that is a land of rich and unique cultures, languages,
music and history. The Kids Content Act for India will not only
The formation of Creative-Content- Division and help save the cultural values but also impart right education
establishing its working under the I&B ministry will be a and values to the upcoming generations- making them
landmark step in Indian history and enable restoration responsible global citizens.
and re-positioning effort of Indian ethics and values.
We need to secure our future by securing our past.
The Creative Content Division will help immensely to
facilitate the kids content co-productions will all the And its only possible if we act now.
foreign countries that India has signed the audio-visual
co-production treaties. It will become the single point
contact for overseas studios and Indian studios to create
kids content using the co-production treaties.
Corporate Social Responsibility (CSR) for Kids
content: Creating sensible and responsible children
programming in India is a social revolution of bringing
back the pride for our country to every youngster across
Ashish S K
the nation. It is an effort to instil our roots in them so
that we create socially responsible citizens, and the
process starts when they are young. What can be a more Founder, Punnaryug Artvision Pvt Ltd and Chairman
appropriate reason to seek the enormous resource FICCI-AVGC
that Corporate India can provide through CSR towards
supporting Kids Programming e need a legal initiative
from Government to provide a legitimate platform that
it deserves. An approval from the Ministry of Corporate
Unless otherwise noted, all information included in this column/article was provided by Ashish S K. The views and opinions expressed herein are those of the author and do not necessarily
represent the views and opinions of KPMG in India.
181
Animation technology trends that are expected to dominate the future
ot onl is the se of animation across a range of The rise of Non Photorealistic Rendering
media channels, from applications apps to ad ertising, (NPR)
websites to m sic ideos increasing, b t the distincti e
lines between li e action and animation are also bl rring, on-Photorealistic Rendering PR is an area of
as shown in some of the mo ies in 201 namel otel comp ter graphics that foc sses on enabling a wide
rans l ania 2 , l in and the hipm nks he Road ariet of e pressi e st les for digital art. In contrast to
hip and the more recentl eadpool , which depended traditional comp ter graphics, which has foc ssed on
as m ch on the belie abilit of their animated/motion photorealism, PR is inspired b artistic st les s ch as
capt red characters as m ch as the real actors . painting, drawing, technical ill stration, and animated
cartoons.
ome of the notable trends mostl likel to dominate the
f t re are nimation professionals rel more and more on PR
rather than G animator. he se software to
Use of 3D printing create an impressionistic animation that s similar to
hand-drawn media. ne of the best e ample of this
he stop-motion animation segment is ndergoing a trend is the animated mo ie all and hains . Part of
re ol tion beca se of printing. raditionall , stop- the reason for this trend is that the animation tools ha e
motion animation is sort of slow motion p ppetr . n become so ad anced that photo real GI is now more
animator takes a fig re made of cla and a wire and straightforward to ac ire.
mo es it a bit in e er frame, gi ing the appearance of
mo ement when the film is pla ed at 2 frames per
second. tate-of-the-art printers are de eloping
protot pes, which are then being sed for creating a stop-
motion ideo. hase Me , the world s first Printed film
re ired its mo ing components to be separatel printed
o t on a printer. 0
olo r printing can help generate millions of facial
e pressions for the characters which stop-motion and
GI e perts se. Ind str pla ers belie e that printing
is going to be an in al able tool to stop-motion animators,
who will be able to le erage its possibilities to create
bigger, better and more comple animations.
3D Printing has amped up the animation,

film and gaming industry by virtue of
facilitating a physical creation of highly
detailed, lifelike characters, sets, gadgets,
etc. A new breed of smaller and faster 3D
Printers will be targeting the Design and
Animation studios. Nonetheless, material
science needs to be understood behind 3D
printing.
Milind Bhavsar
Director
Trigyasa 3D Technologies Pvt. Ltd.
182
. KPMG in India anal sis and disc ssion

. new animation trends for 201 that will change e er thing http //www.creati eblo .com/ d/
animation-trends-201 , dated 11 ecember 201 accessed on 2 March 2016.
0. hase Me he world s first printed film is a wonderf l piece of artwork. http //www.
creati eboom.com/chasemetheworldsfirst dprintedfilmisawonderf lpieceofartwork/1 / dated 1
pril 201 accessed on 2 March 2016
Projection mapping Emerging VR/AR solutions42
Projection mapping is a projection technolog sed
to t rn objects, often irreg larl shaped, into a displa AR - Microsoft HoloLens
s rface for ideo projection. hese objects ma be The HoloLens is a holographic, augmented reality
comple ind strial landscapes, s ch as b ildings, small headset consisting of holographic lenses, a depth
indoor objects or theatrical stages. sing specialised camera and speakers. One can experience virtual 3D
software, a two or three-dimensional object is spatiall
models of objects that appear either as part of ones real

mapped on the irt al programme which mimics the real surroundings, or combine to make up entirely new ones.
en ironment it is to be projected on. he software can
interact with a projector to fit an desired image onto the AR - ODG Smartglasses
s rface of that object.
ODGs pair of augmented reality glasses were initially
his techni e is sed b artists and ad ertisers alike designed for military and industrial uses and a consumer
who can add e tra dimensions, optical ill sions, and version is being developed. The product is expected to
notions of mo ement onto pre io sl static objects. he be a cross between a Google Glass and the Oculus Rift.
ideo is commonl combined with, or triggered b , a dio Unlike Google Glass, ODGs glasses has two displays i.e.
to create an a dio- is al narrati e. ne of the e amples one for each eye and it can employ stereoscopic 3D. .
of its se in 201 was the se of the dne pera o se
b 20 different animation st dios worldwide to create a VR - Oculus Sound SDK
li ing m ral. 1
Oculus Sound SDK supports a higher resolution display,
Merging with reality-Augmented Reality lower weight, built-in audio, and 360 tracking. The
upcoming Oculus Audio SDK will incorporate head-
(AR) and Virtual Reality (VR) related Transfer Function technology.
R and R are emerging as important tools for
technolog companies, content pro iders and animation/ Samsung Gear VR
pla ers, and are slowl starting to change the r les of The Samsung Gear VR is a mobile virtual reality headset
the narrati e engagements. ltho gh there e ists a clear developed in collaboration with Oculus. A compatible
distinction between the two, these two terms are often Samsung Galaxy smartphone acts as the display and
inad ertentl sed interchangeabl . processor, while the Gear VR unit acts as the controller,
R is an immersi e comp ter-sim lated realit that which contains the high field of view connecting to the
can replicate an en ironment, sim lating a ph sical smartphone via micro-USB.
e istence and interaction in different places, be it in
the real world or h pothetical in nat re.
oftware e ol tion and lack of depth in dedicated R/
R blends irt al realit and real life. sing this R content is a ke limitation in the short term to R/ R
technolog , de elopers are able to generate images becoming tr l mass. owe er, companies are working
inside applications that merge with s bject in the real towards lowering the barriers of entr to R creation
world. thro gh the la nch of software de elopment kits for
hile smart phones contin e to be the major people with little know-how. hese de elopment kits
cons mption de ice for R, largel d e to its affordabilit , allow sers to create immersi e applications that s pport
dedicated R headsets are also being rolled o t into head-mo nted displa s, motion trackers, - displa s
mainstream iewership. rther, since R in ol es and other inp t de ices. rther, R hardware companies
streaming hea content and high processing power, are also looking to tie p with content creators to de elop
telecom and smartphone pla ers are also working dedicated R content which in t rn will de elop the
towards impro ing network infrastr ct re and handset o erall R ecos stem.
processing capabilities in order to make R a smooth
e perience.
183
1. atch he pera o se ome li e ith Projection Mapping 2. irt al gmented Realit n pdate http //daretodifr.com/ irt ala gmentedrealit pdate/
nimation or i id dne . http //www.gi modo.com.a /201 /0 / dated 16 ebr ar 201 accessed on 16 March 2016
ideos dne operaho secomesali ewithprojectionmappinganimation/ dated 2 Ma 201
In India, R adoption is at a er earl stage with foc s on
ine pensi e R headsets compatible with smartphones.
or instance, in 2016, ams ng has la nched Gear R
for Indian cons mers, at a price of I R ,200. India-
based gn s also la nched a R headset compatible
with smartphones, selling it at an introd ctor price of
I R2, . owe er, penetration of these de ices is
c rrentl at low le els tho gh this will change as R
prod cts become a ailable at lower price points.
Applications
Sector Example Indian Perspective
Gaming: Lower costs and nominal time To go along with the launch of its VR headset VR in gaming is fairly new to India, with a
requirements are major incentives for game in 2016, Sony is currently in the process of few smaller companies offering VR game
developers, who are likely to be the chief VR developing around 30 VR games.46 development services. In 2016, the FX School
content providers. Around 829 VR games are has launched the first V game design and
currently under development.45 development course in India.47
Film and TV: Companies have started to In 2015, Oculus teamed up with 20th Century The Indian film industry is still in the phase
experiment with VR through tie-ins to well- Fox to release movies on its VR cinema platform, of testing waters on how well the content
known movie franchises.48 Oculus Video. About 100 ox films would be would be accepted among the audience, and
accessible on the platform. what could be the business model for such
experiential viewing.
Advertising: VR has emerged as a foremost In 2016, Coca-Cola has introduced a novel In 2015, CommonFloor, a map-based search
platform to change advertising norms, enabling design for its retail packing which will allow the engine for finding properties, unveiled etina, a
brands/advertisers empathise with consumers cardboard to be folded into VR glasses, which Google Cardboard-based virtual reality platform
in a whole new way can then be used with a smartphone.49 that enables users to view builder properties
using their smartphones.50
OOH: A number of companies around the world Marriott Hotels carried out a VR campaign The trend of using VR in outdoor ads is still to
have incorporated the VR technology in their ad in 2015, creating a 4D sensory experience gain acceptance in India.
campaigns. to teleport people to several locations such as
Hawaii and London.51
Live Events: Live events, such as sports, is The National Basketball Association (NBA) Meraki released a 3 0-degree concert film
another sector that has started to imbibe VR used the VR technology in the basketball game in December 2015 on musician Hardwells
technology between Golden State Warriors and New performance in Mumbai to mark its debut as a
Orleans Pelicans in 2015.52 VR content production start-up.53 54
The AR technology was used during Prime
Minister Narendra Modis electoral campaign,
where his holographic image was used to
address audiences at more than 800 rallies in a
number of remote areas in the country.55
. ams ng Gear R eadset a nched at Rs. ,200 http //gadgets.ndt .com/wearables/news/ . oke and mcdonalds are in irt al realit b siness. http //www.eater.com/2016/ /2/111 1 /coca-
sams ng-gear- r-headset-la nched-at-rs- 200- 2 1 dated 21 an ar 2016 accessed on 21 cola-mcdonalds- irt al-realit -headsets 2 March 2016 accessed on dated 21 March 2016
March 2016 0. ikr officiall anno nces Merger of ommon oor with ikr omes http //gadgets.ndt .com/
. op Indian tart ps abbling in irt al/ gmented realit http //www.gi modo.in/indiamodo/ op- internet/news/ ikr-merges-common oorcom-into- ikrhomes- 6 2 an ar 2016 accessed
Indian- tart ps- abbling-in- irt al/ gmented-Realit /articleshow/ 6 16 .cms 1 o ember on dated 21 March 2016
201 accessed on 21 March 2016 1. 10 e amples of irt al realit marketing in action http //www.cmo.com.a /article/ 22 /10-
. irt al realit becoming real-ces http //indiane press.com/article/technolog /tech-news- e amples- irt al-realit -marketing-action/ dated 12 ne 201 accessed on 21 March 2016
technolog / irt al-realit -finall -becoming-real-ces/ dated 20 an ar 2016 accessed on 21 March 2. , rner sports deli er first li e game in irt al realit for fans http //www.nba.com/201 /
2016 news/10/2 / irt al-realit -a ailable-for-golden-state-warriors-new-orleans-pelicans-season-opener 184
6. on alread has o er 0 project Morphe s R games in the works http //www.engadget. dated 2 ctober 201 accessed on 21 March 2016
com/201 /06/1 /son -project-morphe s/ 1 ne 201 accessed on dated 21 March 2016 . tart p from India enters irt al Realit content market with a 60 degree concert film
. http //f school.in/news-details.php news id 1 1 g st 201 accessed on 21 March 2016 . http // rperception.com/2016/01/0 /start p-from-india-enters- irt al-realit -content-market-with-a-
. 20th ent r o first major oll wood st dio to release f ll length films on c l s http //www. 60-degree-concert-film an ar 2016 accessed on 21 March 2016
fastcompan .com/ 0 1 /tech-forecast/20th-cent r -fo -first-major-holl wood-st dio-to-release- . Magic Modi ses hologram to address do ens of rallies at once http //www.telegraph.co. k/news/
f ll-length-films-on- dated 2 eptember 201 accessed on 21 March 2016 worldnews/asia/india/10 0 61/Magic-Modi- ses-hologram-to-address-do ens-of-rallies-at-once.
html dated 2 Ma 201 accessed on 21 March 2016
ompared to the R/ R de elopments happening at The road ahead
the global le el, India lies wa behind and it wo ld take
a few ears for the technologies to find a niche amongst
the Indian a dience and ser ice pro iders. rrentl , Industry size I R billion
R/ R applications are mostl biased toward games
and while enthralling, immersi e ideos are onl in
the form of demos/promos. ompanies are hesitant
to de ote finances in non-gaming R d e to lack of

demand for s ch media. herefore, R/ R s immediate
challenge is to mo e be ond the gaming domain and
e pand its reach in other forms of entertainment. o this
end, R/ R pla ers are collaborating with media firms
to increase alternati es for non-gamers and the f t re is
likel to witness ab ndance of R applications and R
content incorporating new forms of stor -telling.
CAGR %
Segments 2016P 2017P 2018P 2019P 2020P
2016-20
Animation
8.8 9.5 10.4 11.4 12.5 8.6%
services
Animation 6.0 6.5 7.0 7.6 8.4 8.4%

production
Total 14.8 16.0 17.4 19.0 20.9 8.5%

animation
ith India bagging its first e er award at nnec in
201 , the world s oldest, largest and most prestigio s
animation film festi al, the animation ind str is slowl
recognising the potential that India has from a creati e
perspecti e. he animation ind str faces a talent cr nch,
and trained and talented people are the need of the ho r.
ith the changing mindset of the a dience, animation
has the potential to become one of the most so ght-after
medi ms for entertainment and stor telling in India b t
this wo ld need a strong p sh from the go ernment
in the form of incenti es, and an e ol ed mindset and
approach of the creators.
Indian animation on Indian TV has started to pick up. While audience craving has always been for good content
irrespective of the medium (2D or 3D animation), many content creators had focused on 3D since it was perceived
to be more modern. That thinking has, thankfully, been replaced by them building up good content models of well
written 2D animated content.
The deployment of some form of V on almost all content (film, TV, web) has led to a huge proliferating of that
industry, which is offsetting the sluggish growth the animated content creation industry is showing, giving the AVGC
industry as a whole good growth.
With travel times increasing and smartphones becoming cheaper, India continues to be one of the fulcrums of
mobile gaming growth in the world.
Lack of an Indian globally merchandisable original IP/brand is the single largest problem that the animation industry
faces. While investment in IP needs deep pockets and an appetite for risk, it seems to me that several current content
creators in the market are working their way towards becoming that company which has the risk appetite and the
deep pockets to give original IP the backing it deserves. e should see Indias first globally-merchandisable original
IP brand emerge within the next two to three years.
The central governments plans for setting up a Centre of Excellence for the AVGC industry is commendable, however
just one such wont work. The country is starving for high quality, full-time career education in the AVGC sector,
which not many are providing currently.
Chaitanya Chinchlikar
Vice President
Business Development Whistling Woods International
186
Indian production houses must make bold,
ambitious and passionate moves with a
clear focus, never to settle for second best.
In working with worldwide leaders and with
notable clients, we need to be in sync with
their workflows and piplelines and ensure a
seamless execution in content production to

achieve the goal.
VFX and animation are expensive content to
create and hence must be done with an eye
on the bottom line.
The Indian media and entertainment
industry has recorded unprecendented
growth over the last two decades, making
it one of the fastest growing industries in
India. The need of the hour is to leverage
this opportunity and work hand-in-hand
with the government and academia to
ensure that standards and best practices
are set and implemented to increase Indias
global share.
Jeemon P V
Managing Director
Epica Studio
187
VFX and post production, a new Use of VFX in India
dawn he ear 201 was a milestone ear for in India
Overview of the Indian VFX industry with the release of the first part of the long awaited
Rajamo li s aah bali he eginning in which
he Indian ind str is transforming rapidl . ith was sed in almost 0 per cent of the scenes.57
e er passing ear, the st dios are mat ring in terms rther, d ring the ear man mo ies released where
of technolog , techni es and o tp t, aided b the filmmakers s ccessf ll sed as an important
e perience from oll wood o tso rced work. lso, tool for stor telling s ch as ajirao Mastani , I ,
filmmakers toda are beginning to accept as an awai aade , etecti e omkesh akshi , omba
integral part of stor telling. Man mo ies and tele ision el et and ajrangi haijaan to name a few. he se
series now ha e on-board st dios right from the of b these filmmakers was dri en b ariet of
pre-prod ction stage itself and this trend is onl going to reasons - few to recreate an earlier era s ch as etecti e
increase. he se of is not restricted to main stream omkesh akshi to create Kolkatta of 1 0s, omba
indi films, in fact o th Indian films are torch bearers el et to M mbai of 1 0s and ajirao Mastani was a
in making centric films. Importantl , man Indian period drama and was sed to create palaces and
st dios s ch as Prime oc s are taking centre stage war se ences, and others to red ce costs as it wo ld
globall , b ac iring oll wood st dios and setting be more con enient and economical for them to shoot
p facilities across the world.56 inall , the entire eco- in a st dio in M mbai and finish the balance work with
s stem is e ol ing, be it theatres, tele isions, mobiles or se of GI. is making its presence felt in films of all
iewing preference of the a diences, which has gi en the genre be it action, comed or romance and irrespecti e
sector the m ch needed impet s. of scale, be it small, medi m or big b dget mo ies. ther
regional films too are now sing it effecti el , for instance
the Marathi film Mitwa sed total of 2 shots
b erter olt and this trend is e pected to increase in
f t re.
6. echnicolor b s Mikros Image strengths position in animation market http //www. . wapnil oshi starrer Mitwaa gets 0 shots done b erte olt http //www. 188
indiantele ision.com/tele ision/prod ction-ho se/post-prod ction/technicolor-b s-mikros-image- animation press.com/inde .php/latest-news/swapnil-joshi-starrer-mitwaa-gets- 0- f -shots-done-
strengthens-position-in-animation-market-1 0 0 dated pril 201 and Prime oc s orld and b - erte - olt dated 0 March 201 accessed on 1 March 2016.
o ble egati e nno nce Merger http //www.primefoc sworld.com/news/201 /6/26/prime-
foc s-world-and-do ble-negati e-anno nce-merger dated 26 ne 201 Reliance Gro p and Prime
oc s complete transaction http //www.primefoc sworld.com/news/201 / / /reliance-gro p-and-
prime-foc s-complete-transaction dated pril 201 accessed on 2 ebr ar 2016
. 1 lesser known facts abo t ah bali http //www.indiat news.com/entertainment/boll wood/1 -
lesser-known-facts-abo t-bah bali-22 2 .html dated 10 l 201 accessed 1 March 2016.
op oll wood rossers domesti olle tion net of and with number of shots
Box office Number of Box office Number of

2015 movies collection VFX partner VFX shots 2014 movies collection VFX partner VFX shots
INR million59 (approx) INR million59 (approx)
Bajrangi 3,203 Prime Focus60 500 PK 3395 Riva VFX64 700

Bhaijaan
Prem Ratan 2,074 Prime Focus61 1,200 plus Kick 2330 Prime Focus62 1,000
Dhan Paayo
Bajirao Mastani 1,750 NY VFXWAALA65 1,800 plus Happy New Year 2,033 Red Chillies VFX64 2,000
Tanu weds Manu 1,520 Prime Focus62 200 plus Bang Bang 1,810 Prime Focus62 1,600
Returns
Dilwale 1,480 Red Chillies VFX63 Reliance

1600 Singham Returns 1,410 2,500
Mediaworks66
ABCD 2 1,057 Riva VFX64 70 Holiday 1,127 Future Works67 750
Baby 955 Riva VFX64 900 Jai Ho 1,110 Prime Focus62 150 plus
Welcome Back 948 Prime Focus62 835 Ek Villain 1,055 Prime Focus62 200 plus
Reliance
Singh is Bliing 902 Prime Focus62 620 2 States 1,040 250
Mediaworks66
I believe this trend is here to stay, and will

continue in the coming years with films like
Fan, Robot 2, Baahubali 2, among others
that will enthrall the Indian as well as global
audience; where VFX will play an integral
role in the success and appreciation for
such unique storylines . The VFX industry
has come a long way since its initial days,
where it was considered only to be a cost
and time saving tool. Films like Ra.One,
Robot, Krrish 3 and last years Baahubali
have proved that a few filmmakers are
breaking away from the traditional ways
of telling stories and are becoming overtly
dependent on the use of visual effects to
bring unimaginable stories to life on the big
screen.
Keitan Yadav
COO
Redchillies.vfx
. http //www.koimoi.com/ accessed on 1 March 2016 6 . ja e gn kick starts , a di ision of ja e gn ilms http //www.
60. http //www.primefoc sindia.com/films/bajrangi-bhaijaan dated l 201 accessed on 1 March boll woodh ngama.com/news/16 0/ ja - e gn-kick-starts- - -a-di ision-of- ja -
189 2016 e gn- ilms dated 6 ctober 201 accessed on 1 March 2016
61. ow will make alman Khan s Prem Ratan han Pa o larger than life http //indiane press. 66. www.animationboss.com
com/article/entertainment/boll wood/e cl si e-how- f -will-make-salman-khans-prem-ratan-dhan- 6. t reworks packs a p nch with .R. M r gadoss s olida www.f t reworks.in dated 1 ne
pa o-larger-than-life/ dated 6 o ember 201 accessed on 1 March 2016 201 .
62. http //www.primefoc sindia.com/films
6 . http //www.redchillies.com/ efa lt.asp
6 . www.animatione press.com
Globall , there are man mo ies which can be called as In India, few of the first efforts towards centric
centric films, in these mo ies significant portions mo ies were made b o th Indian mo ies s ch
are created digitall with the se of technolog , r ndhati and Magadheera in 200 tho gh the scale
for e ample ataar , rassic Park , Iron man series, was smaller. nthiran was a breakthro gh film in terms
he engers series and among others. Internationall , of se of in Indian films which was followed b , Ra
oll wood o er the past fi e ears has had at least fi e one , ega , and Krishh . he 201 release aah bali
films on the top 10 grossers list.6 In 201 , it was he eginning s rpassed the achie ement of these
ransformers ge of tinction , followed b he obbit mo ies in terms of shots, e pendit re on , scale
he attle of the i e rmies , aptain merica he of prod ction and bo office performance.70
inter olider , he nger Games , Mockingja - Part
1 , Maleficent and G ardians of the Gala .6 his ear,
tar wars he orce wakens , rassic orld has been
at the top of the heap, followed b rio s , engers
ge of ltron and he nger Games Mockingja - Part
2 .6 he bo office collection for these mo ies in India
has been good too.6
6 . KPMG in India anal sis and disc ssion

0. ill aah bali s ccess p r More esi licks http //www.o tlookb siness.com/
enterprise/trend/will-baah balis-s ccess-sp r-more-desi- f -clicks-1 6 dated 2 eptember 201
accessed on March 2016
Baahubali - The Beginning - Case study on a VFX success story
Background generating the digital feed with the best colour and audio
for editing. or the first time in Indian movies, Academy
S S Rajamouli directed Baahubali The Beginning, the olor Encoding System workflows were implemented
first of the two parts released in 2015. The movie was along with Infinitely Scalable Information Storage
simultaneously made in Telugu and Tamil and dubbed into keeping in mind the mammoth scale of digitally enhanced
Malayalam and Hindi.73 The film, a period drama set in a shots in the film.73
fictional kingdom on Mahishmati, was announced in 2011
and the actual production started in July 2013.73 0 to 80 per cent of V work for the film was performed
locally from Hyderabad.72
Production and collaboration ollywood filmmaker Karan ohars harma ilms
Indias most expensive movie with total budget of collaborated with SS Rajamouli to present Baahubali in
INR3,000 million (for both parts) with VFX budget Hindi. Transcending regional boundaries, Baahubali is the
amounting to INR850 million i.e. 28 per cent of total first regional film that had a pan-India appeal. This is the
budget allocated to V . The films had more than 0 per first time that a movie received partnerships from across
cent of scenes requiring CGI work with 4,500 to 5,000 states.
VFX shots.71 Key considerations behind the success of the movie
In a first of its kind collaboration, 1 V companies and The V and G of the film were a visual treat to the
600 VFX artists worked on the project over a period of two audience and there was effective use of available
years. VFX studios and artists from Hyderabad, Malaysia, technology to build and deliver products. This film was
America collaborated to work on the film.72 much dependent on VFX and computer graphics.72
The films V work was supervised by V. Srinivas Mohan, The sketches of the world of Mahishmati were lively
with Makuta VFX, Hyderabad chosen as the principal and believable and the art brought to life the kingdom
visual effects studio and was responsible for more than that was grand and huge. The design of armory and war
50 per cent V work in the film which includes waterfall machines was of high quality.73
scenes, mountains and huge landscapes including the
kingdom of Mahishmati.72 The action sequences throughout the film were well
choreographed which left the audience awestruck
irefly reative Studio, Hyderabad, worked primarily on especially the fight shot in snow and the 20 minute war
the avalanche and the epic war sequences and under- sequence. The war strategy in the film is based on the
water VFX shots. Tau Films from Malaysia was responsible Trishul Vyuh, inspired from Mahabharata.73
for creating the bison entirely on CGI whereas Prasad EFX
from Hyderabad was responsible for some shots in pre Baahubali proved that a universal story will be received
and post battle episodes involving digital multiplication well by audiences belonging to any place or language.
and creating a 3D image for some characters.73 Baahubali became a huge success in Hindi, Tamil and
Malayalam languages, but its Telugu version reached
Srushti VFX from Hyderabad was involved in digitally greatest heights and set new records in both the Telugu
creating some of the shots in war sequence along with speaking states and in the U.S..73
irefly studios.73
Annapurna Studios, Hyderabad was chosen as digital
intermediate partner for the film, which is responsible for
191 1. ill aah bhali s s ccess sp r more desi f http //www.o tlookb siness.com/enterprise/trend/
will-baah balis-s ccess-sp r-more-desi- f -clicks-1 6 dated 2 eptember 201 accessed on
March 2016
2. his little-known derabadi st dio made aah bali a is al spectacle. http // .com/ /this-
little-known-h derabadi-st dio-made-baah bali-a- is al-spectacle/ dated 16 l 201 accessed on
March 2016
VFX Beyond movies
Recentl , man primetime tele ision shows across M mbai teams.75 ne of the st dios working on the
channels are increasingl sing is al effects to add new of the show Game of hrones was the Indian s bsidiar
dimension to o erall iewing e perience of the a diences. of the os ngeles based Prana t dios, responsible for
was traditionall , d e to its cost benefit, considered bringing the might dragons to life in the show.76 Mo ing
more s itable for films b t has grad all made its wa Pict re ompan , better known as MP , did most of the
into li es of the a dience. tar Pl s, ee , on , major is al effects work on -Men pocal pse o t of its
, ife K and ha e la nched more shows facilit in engal r .77
that re ire the proficient se of for adding better
alit to iewing e perience. In 201 , few shows that
s ccessf ll sed this technolog incl de hakra artin
shoka amrat , showing jo rne of mperor shoka.,
Maharakshak e i , 26 episode series show re iring
abo t 2 0 shots which incl de chroma shots,
modeling, 2 animation and matte paintings. ther
shows that se are tar Pl s s i a Ke Ram ,
olors s aagin and a more recentl la nched show
anbaa indbad .
d ertising agencies ha e also beg n to in est hea il in
creating ideos and other forms of interacti e messaging
with the se of not onl is al effects, b t also e ploring
newer technolog like irt al realit and a gmented
realit . he past ear has certainl set some benchmarks
in terms of se of across media formats and it is
belie ed that the coming ears will definitel witness a
lot more e perimental techni es being sed to deli er
stronger stories.
VFX work outsourced to India

Indian o tso rcing sector is growing as Indian st dios
are mo ing p the al e chain from performing low end
work to high alit work for foreign films. India is the
preferred choice as an o tso rcing h b d e to the cost
arbitrage, a ailabilit of talent and good comm nication
skills. igital media has contrib ted to the growth sp rt in
the ind str . eca se of these factors, o tso rcing
projects to India is going to increase in n mbers.
he ear 201 saw ite a bit of alit o tso rcing
work done b Indian st dios. hronicles of the Ghostl
ribe , a hinese action ad ent re film, was managed b
Prime oc s orlds s eijing facilit , and the work was
completed b Prime oc s orld s M mbai team.
ince its release, the mo ie has been garnering man
fa o rable re iews for its work, which has been
described as establishing a new benchmark for work
in the hinese film ind str and leading hinese films
into a new era of . Mortdecai , a film based on the
series of books b K ril onfiglioli had a lot of in isible
work that the a diences did not recognise as is al
effects and 10 shots pro ided b the anco er and
. hronicles of the Ghostl ribe http //www.primefoc sworld.com/chronicles-of-the-ghostl -tribe/ . -Men pocal pse goes on oors 2 pril to release 2 Ma , 2016 http //www.animation press. 192
accessed on 1 March 2016 com/inde .php/latest-news/ -men-apocal pse-goes-on- oors-2 -april-to-release-2 -ma -2016
. Mortdecai http //www.primefoc sworld.com/mortdecai/ accessed on 1 March 2016 dated 2 pril 201 accessed on 1 March 2016
6. Game of hrones wins record breaking 12 mm s incl ding and o nd http //www.
animation press.com/inde .php/latest-news/game-of-thrones-wins-record-breaking-12-emm s-
incl ding- f -and-so nd dated 22 eptember 201 accessed on 1 March 2016
Unlike the manufacturing sector, creative sector does not have a prototype which can forecast quality with 100 per
cent certainty each time. Attaining the required quality could be like a walk through a maze. Each artist can take a
different route to achieve similar quality. Ensuring quality consistency and yet deliver in the same time, is another
logic which the business has to constantly innovate and experiment. The managers behind the scenes play a vital role
in providing creative but logical solutions to identify the best approach to navigate through this maze of subjectivity.
Being in the outsourcing business, it can be yet another vital component to be on the forefront and successful.
It was obivious that the low manpower cost was the primary attraction for the global partners to raise curtains for the
Indian studios initially, but their prerequiste was always high quality deliverance. The challange for the Indian Delivery
Managers, behind the scenes, were to balance between Quality and Cost. This fundamantal metric is crucial to sustain
in the outsourcing industry. A long-term perspective for business growth was to further solve the trignometry of Cost,
Quality and Delivery timeline.
Initially, India experienced a roller coaster ride, but today it has established itself as one of the premier partners in the
global AVGCS segment. The success story of India in the outsourced vertical has advanced to considerable heights.
This in turn has motivated the global partners to establish their operations with India as its key insource partner. The
persistent efforts of Indian stake holders have paid off in converting an outsource business model into a much more
robust insource model. This transition from being an outsource to insource partner have strengthened the credibility,
quality and security of the industry stakeholders on the global diaspora. This indeed is in line with the vision of Indian
government, Make in India
Prafull Gade
Managing Director
Deluxe India
193
Key trends78 Digital dawn78
Media cons mption across the globe is increasingl
Increasing presence of VFX in all M&E taking place in digital formats. Increasing internet
segments78 penetration and access speeds, a plethora of de ices
he ear saw increasing se of in all M segments, that s pport content cons mption, and the rise of digital
i.e films, tele ision and ad ertisements. ome scar media pla ers are dri ing the on-demand digital content
nominated mo ies had the work done in India and ind str . ith m ltiple content cons mption choices,
with aah bali, is now taken serio sl not j st in cons mers are shifting from content ownership to ha ing
mo ies b t also in the tele ision space with shows like alwa s-on access to a ast librar of digital entertainment
i a ke Ram , aagin and Mahabharata. ith genres on their own terms. he s ppl side ecos stem has to
s ch as s pernat ral and m tholog being recei ed fairl keep p.
well, the ind str is introd cing the a dience to good
alit . dditionall in the web space, new age Key challenges78
companies like o sing.com, acres.com etc. are sing
technolog to sell/rent homes on the internet. Incentives provided by foreign governments
Increased use of live action in VFX78 he trend of oll wood and other de eloped co ntries
o tso rcing projects to low-cost ones has been
pla ers are now increasingl engaged in creating li e significantl on the rise. his has ad ersel affected
action imager b sing comp ter-generated effects of artists in de eloped co ntries. o co nter this
what wo ld ha e been handled b traditional animation. sit ation, the go ernments of co ntries s ch as anada
In 201 , Maleficent sing li e action was a s ccess and are offering grants, labo r ta credits and s bsidies to
in 201 , inderella , engers ge of ltron and the sci- domestic companies engaged in work to help them
fi piter scending too s ccessf ll sed li e action. 0 retain artists as well as in their e pansion efforts. hese
grants are to be sed to create and retain o er man jobs,
Growing presence of Indian studios in and e pand and enhance st dios as centres of inno ation.
international markets78
he growing presence of Indian st dios in international Digital problems
markets has ca sed them to capitalise on s nergies he problems facing companies are also digitall
across their ario s offices, locations, talents and embedded. igital is al effects, compared to traditional
projects. Reliance Media orks, Prime oc s, ata l si, special effects, are also seen as being nearl infinitel
and Pi ion are some of the Indian st dios that ha e e ible and th s able to be re ised o er and o er again. If
established their footprint in the o erseas markets. there are onl two miniat re models b ilt for a practical
apti e centres in India ha e mo ed p the al e chain to e plosion then to do a third take is clearl more cost
become entres of cellence in specific areas for and time. If the second re ision of a digital e plosion
man animation and companies. Global acceptance sim lation is not right, it is almost alwa s ass med it will
of Indian talent is enco raging and has steered in a be re-rendered or re-sim lated ntil the correct creati e
new era where there is increased collaboration with o tp t is agreed pon. he hard costs of e ipment,
international prod ction ho ses. electricit , staff costs, rent, and e en depreciation are not
seen in the same wa as a cr mbled miniat re model on
From VFX to VRX78 the so nd stage oor.
ith the ind str gaining importance, R is also
seeing an pward trend. ow irt al Realit ffects Absence of back-end participation
R will change the media and entertainment world nother important iss e that ma be hampering the
will depend on how ickl people are trained on the financial s ccess of companies is the absence of
s bject. er one c rrentl working on R has trained back-end participation. rrentl , there appears to be
themsel es on the tools in the last twel e months or so. no re en e share model with the companies. ith
his has big implications for ne t generation talent, and is pla ing an increasingl important role in the making
the ine itable e ol tion of is al effects. of a mo ie, a composite model akin to MG with share in
o er ows sed in film distrib tion co ld pa e the wa for
increased se of alit to enhance ser e perience.
. Ind str disc ssion cond cted b KPMG in India 194

. M trends 2016 http //www.dail cadcam.com/me-trends-for-2016-alok-sharma-head-me-
a todesk-india-and-saarc/ 1 an ar 2016 accessed on March 2016
0. he biggest trends for 201 . http //www.creati eblo .com/ d/ -biggest- f -
trends-201 -11 1 0 dated an ar 201 accessed on March 2016
The road ahead
As an industry, one of the biggest ltho gh not as pop lar as the ind str
challenges we face is that it is often internationall , Ind str in India is gaining pop larit .
assumed by our clients that the initial bid he global c lt ral e change, cross fertilisation of talent
will be the final bill. The initial bid is based and ad ancement of technolog are the ke contrib ting
on the script and a set of assumptions factors. ith high-speed media net transfer capabilities
about the directors vision, and as we all
irt al worlds are being dri en b technolog that

know, things can change sometimes keeps getting better with a wider reach across the
radically once the shoot begins. A bid world. he mo ie making al e chain has ndergone
for 300 VFX shots on a project can end up a metamorphosis and it is indeed enco raging to see
growing to as many as 1,000 shots or more. that mainstream Indian filmmakers plan their prod ction
Our clients may be working with locked sched les to accommodate the component of the
budgets, but we must be clear if the film. Going forward, the trend is e pected to catch p
requirement changes, then so must the cost. e en f rther and thereb become the standard operating
The alternative is that we are undervaluing proced re. hat also shall pa e the wa for f rther
the work that we are delivering which integration of within the script, which ma e ent all
is not good for the company, and more lead to creating a film like Gra it o t of India.
importantly, is not good for the industry as
a whole
Industry size I R billion
Merzin Tavaria
Co-founder and
Chief Creative Director
Prime Focus
V is definitely picking up in India and is

gaining a strong foothold. While we are still
not doing the cream of the work currently
going to Canada and the U.K., the quality of
our work is increasing year on year. While
our talent is not as experienced as the west Source: KPMG in India anal sis and disc ssion
and it will take us some time to bridge that
gap but we have come a long way and are
beginning to contribute in fairly significant CAGR
ways globally. %
Segments 2016P 2017P 2018P 2019P 2020P
2016-
Krishna Murthy 20
CEO and Founder

VFX 18.0 22.5 28.4 35.8 45.1 25.6%
Anibrain
Post- 25.5 28.6 32.3 36.5 42.0 13.0%

production
Total VFX
and post 43.5 51.1 60.7 72.3 87.1 18.5%
production
Conclusion
he f t re of Indian animation and ind str is bright
and it is j st a matter of time before a new benchmark is
set. hile the ind str will get a boost after the release
of a few big films, the tele ision space is also not to be
nderestimated. he mobile and internet gaming area
altho gh still not big eno gh, sho ld also see accelerated
growth in the ne t co ple of ears. It is e pected that
digital will dri e growth, and inno ation will be the ke
which will be dri en b creati e e pression.
Opening a new frontier of wonder in immersive experiences for Asian artists and technologists
As the global media and entertainment sector continues to On one hand, the attention that these big technological
push the boundaries of creativity and engagement by creating moves have received makes sense. The challenges associated
more immersive experiences, artists and technologists in with recreating reality in a digital format inside a headset are
India and throughout Asia -- have an immense opportunity to immense. It requires the industry to take technologies like 4K/
participate in one of the most dramatic inflection points in the Ultra-High efinition (UH ), high dynamic range (H ), wide
history of this industry. colour gamut (WCG) and other image enhancing technologies
to entirely new levels.
Juniper Research has forecast that the virtual/augmented
reality (VR/AR) market will hit USD150 billion by 2020. Other But the other side of the VR/AR coin is equally exciting, and
reports indicate that the global AR market, alone, will grow at challenging. Artists and storytellers will have to work hand-
a AG of about 80 per cent over the next five years, with Asia in-hand with scientists and technologists to reinvent how to
being the prime growth driver. engage and direct audiences in a three dimensional and multi-
sensory environment that puts the consumer inside the
However, in order for these pro ections to be fulfilled, I believe experience. This is very different from developing content that
that 201 -1 will be a critical inflection point for V . hile is in front of audiences. While this presents great technical
there is a huge focus on getting the devices in place for a challenges, it also completely alters how content creators
seamless experience, content will, as always, be the pivot interact with consumers.
point which will either make or break this new and exciting
medium. Here are a few examples of some groundbreaking work in
this space:
The concept of Virtual Reality has been prevalent for many
years. In 1962, Morton Heilig, the father of VR patented the The Martian VR experience:
Sensorama Simulator. This mini theatre had a vibrating seat Moving Picture Company (MPC) VR joined forces with Robert
and a wind machine to blast the viewer. Since then, the past Stromberg, VRC, RSA and Fox Innovation Lab for The Martian
few decades have seen efforts to bring VR to market falter. VR Experience, executive produced by Ridley Scott.
This, however, appears to have changed when VR received a Ushering in a brand-new era of immersive entertainment,
shot in the arm in 2014 as Facebook bought Oculus Rifts head 20th Century Fox, Fox Innovation Lab, RSA Films and The VR
mounted display technology for USD2 billion. Zuckerberg Company partnered with Samsung for an exclusive sneak
called it the next most important computing platform. In peek of The Martian VR Experience. This thrilling preview
the aftermath of this acquisition, we have seen a flurry of allows one to fly onto the surface of Mars and experience
activity in the VR and AR space as major brands -- including key scenes from the adventure in a 360 virtual reality
Samsung, Sony, HTC, Microsoft and beyond have made environment. The immersive adventure runs 15- 20 minutes,
major headlines with new display technologies. with viewers participating from astronaut Mark Watneys
perspective, performing tasks that will facilitate his chances
for survival and rescue.
196
Goosebumps Virtual Reality Adventure:
Sony Pictures tapped a creative dream team to
bring R.L. Stines classic childrens book series
Goosebumps, to the big screen.
Goosebumps the movie, a Halloween release, is a
magical cinematic story featuring kids who try to

save their town from R.L. Stines monsters. MPC
created a VR experience enabling moviegoers to put
themselves inside an action-packed scene from the
movie. And motion systems technology company
D-Box provided the mechanical chairs for the VR
experience designed for use with Samsung Gear
VR headsets. The Goosebumps VR Adventure was
featured in select theaters for four weeks.
A custom mobile app was also created for the
experience, which runs on the Gear VR and works
hand in hand with the D-Box seat technology.
These examples are just the tip of the iceberg of
whats to come next. The immersive experience
space will up the ante with new innovation in
processing, transferring, communication, imaging,
storage and display technologies. The future of VR
will be amazing. Stand by for Magic Leaps Mixed
eality - where light-field displays could eventually
enable viewers to interact with both the real world
and a virtual object projected on it. VR and AR are
here today embrace it!
Biren Ghose
Country head
Technicolor India
Unless otherwise noted, all information included in this column/article was
provided by Biren Ghose. The views and opinions expressed herein are those of
the author and do not necessarily represent the views and opinions of KPMG
in India.
197
198
Out of Home
Driven by transit
Outlook for the year
OOH industry size OOH format-wise revenue split 2015
Source: KPMG in India anal sis and disc ssions Source: KPMG in India anal sis and disc ssions
In 201 , the t f ome ind str in India In terms of brands, Housing.com, Aakash Institute,
recei ed a boost b a combination of factors incl ding Kalyan Jewellers, Bhima Jewellers, Tanishq and Malabar
new categories spending on media, - ommerce Gold from the jewelry category and Flipkart, Quikr from
and M- ommerce. he c rrent ear s growth of 1 per the E-Commerce category made it to the list of top ten
cent1 was dri en mainl b a tomobile, e-commerce and spenders in OOH in 20152. In 2014, Vodafone, Tanishq
telecom sectors with the different formats benefitting. and Big Bazaar were listed in the top three positions
he o erall spend on o t of the total ad ertising for maximum space in OOH, they were replaced by
pie was . per cent which is higher as compared to the Housing.com, Amazon and Flipkart in 20152. Vodafone,
pre io s ear1. OLX, Idea, Big Bazaar and SBI Home Loans which were
in the top ten brands list in 2014 did not make to the list
illboards contin e to dominate the landscape. in 20152.
treet f rnit re howe er has declined from 20 per cent
fi e ears back to abo t per cent now1. he media
formats that ha e emerged as clear growth formats Sectorwise OOH split 2015
are ambient and transit. he new metro lines, malls,
corporate parks and world-class airports ha e gi en a
new boost to ad ertising. It is no s rprise that
airports, transit and ambient together acco nt for per
cent of re en e share and this segment is posting stead
growth1.
200
01. KPMG in India anal sis and disc ssions

02. hese rands ha e ma im m pends and pace in India 201 , http //www.allabo to tdoor.
com/news-detail.php mid 0 , accessed on 1 March 2016
hile retail, cons mer ser ices and real estate held Whats trending: How technology is
strong, the growth stor was scripted b ad ertisers from
e-commerce, a tomobile and telecom. In terms of cit - changing outdoor advertising
wise split, M mbai was the major contrib tor to echnolog is contino sl e ol ing and ad ancing and
re en es 22 per cent followed b elhi 1 per cent 1. changing the wa one does b siness. or ears, the
engal r has replaced Kolkata in the third place as onl real form of o tdoor ad ertising was billboards. he
compared to the pre io s ear with a contrib tion of 10 images, placed alongside highwa s, made it possible to
The Future: now streaming | Out of Home
per cent . ith a growing impet s on e-commerce, the pass along a message in order to help draw attention to
e pected la nch of a tomobiles thro gho t the ear, and a partic lar prod ct or ser ice, b t ltimatel , it allowed
signs of a strengthening econom , leading to increased indi id als to recei e the message onl if the dro e
ad spends, 2016 is e pected to see s stained growth for past the sign and if the act all paid attention to what
the sector. it said. echnolog has drasticall changed the wa one
s in the earlier ears, challenges s ch as lack of a might treat o tdoor ad ertising, and b sinesses are
meas rement metrics, fragmentation and slow adoption now looking at potentiall p rchasing ad ertisement
of technolog s ch as digital contin ed to be sore space and what different t pes of options are a ailable
points for the ind str . owe er, ind str pla ers are and how these can impact b sinesses. ome of the ke
working with Indian tdoor d ertising ssociation technolog trends in o tdoor ad ertising are as follows
I towards b ilding an dience Meas rement
stem for tdoor Media and if s ccessf l, co ld be Interactive advertising
a game changer. lso, digital is slowl gaining
moment m especiall tho gh transit media in metro Globall , interacti e ad ertising is a fast e ol ing trend,
cities. its major differentiator as compared to traditional media
is the abilit to allow cons mers to interact and select
the rele ant content of the ad ertisements as against
traditional media that distrib tes mass messages.
The time has come for all the stakeholders In case of an interacti e ad ertisement c stomers
in our industry to set aside their personal interact with the medi m which gi es more time for the
agendas for some time and focus on ad ertiser to comm nicate its message. or instance, a
the industry and a step in that direction telecom compan la nching its new ser ices can p t
has been taken by the signing of the an interacti e billboard to gi e details regarding its new
MOU between Advertising Agencies ser ices, rates, data and oice plans, etc. and c stomers
Association of India (AAAI) and IOAA. can filter the content based on their re irement.
Interacti it in the o tdoor sector is one of the latest
Soumitra
de elopments which aims at p tting the cons mer at the
centre of the campaign. he emergence of interacti e
o tdoor ad ertising has witnessed the merging of
Bhattacharyya e periential marketing with traditional posters, creating
an impact b which this medi m can be meas red.
espite its performance globall , in India interacti e
Madison Out of Home o tdoor ad ertising is at a nascent stage, the se of
interacti e o tdoor is limited to a few ind stries. Indian
ad ertisers ha e not et commenced sing the concept
of interacti e o tdoor ad ertising with real time content,
there are few iss es related to the se of interacti e
o tdoor mainl cost mi es i.e. interacti e is a costl
media and the allocation of the o erall ad ertising
pie is s all too little to se interacti e o tdoor.
owe er, there are few instances where interacti e
o tdoor was s ccessf ll sed in India for instance
olors for their realit series India s Got alent wherein
people were able to interact with the billboard and
an bod co ld call with their mobile phone and acti ate
e ents on the billboard . In India, altho gh c rrentl the
se of interacti e o tdoor is relati el scarce b t in the
coming ears with technological ad ancements and the
rise of new ind stries, the se of this technolog is onl
201 likel to increase.
0 . KPMG in India anal sis

0 . near-f t re trends set to change o t-of-home ad ertising, http //www.digitalsignagetoda .
com/articles/ -near-f t re-trends-set-to-change-o t-of-home-ad ertising/dated 1 ebr ar 2016
accessed on March 2016
Precision targeting with data analytics he road ahead for Indian ind str is stim lating, man
er the past co ple of ears, broadband networks factors are e pected to dri e growth for the sector. irstl ,
and low-cost at-screen tele isions ha e enabled static de elopment in infrastr ct re s ch as roads, railwa s,
billboards to change into id displa s that can be changed airports is likel to lead to the share of digital screens
at low cost m ltiple times each da . he widespread increasing manifold not onl in metro cities b t also in
adoption of smartphones has enabled the simple billboard ier II and ier III cities also red ced costs to prod ce
to become a portal for direct comm nication between screens is likel to gi e the segment a m ch needed
the ad ertiser and target a dience. n ad ertisement can impet s. he irports thorit of India I , has plans to
enco rage the iewer to send a te t message for more f nctionalise almost 0 airports o er the ne t 10 ears.5 he
information it can incl de a ick response code or a Go ernment of India recentl anno nced 100 cities which
near field comm nications chip that can be sed to will be de eloped as smart cities o er the ne t fi e ears,
p sh down more information to the mobile de ice. ntil o t of those towns and cities, 2 are capital cities, another
recentl , ad ertisers options for choosing locations for 2 are b siness and ind strial centres, 1 are c lt re and
their ad ertising were limited, the wo ld look at to rism in enced areas, fi e are port cities and three are
the location of the b s stop, train station or ta i stand and ed cation and health care h bs.6 he go ernment also
the wo ld s r e people at those locations to b ild a intends to take p road projects worth I R1,000,000 million
profile of the a erage passer-b . ow with inno ati e geo- a ear and 1 per cent of it I R10,000 million will be
location anal tics tools, ad ertisers can choose the location spent on tree plantation along national highwa s. ll the
and content of messages based on the near-real-time abo e are e pected to lead to an increase in spending
knowledge of cons mer profiles and locations. ompanies be ond what was projected in the pre io s ear. econdl ,
planning ad ertising campaigns can now get acc rate the sector is likel to see new de elopments in m lti-
information on the n mber of people at an location, b the targeting where planning s stems are integrating
time of da or da of the week. he can also nderstand with data so rces incl ding mobile, online browsing and
the age gro p, gender or demographic the belong to. shopper p rchase records. he ad ertisers can tilise
appl ing the science of data, there is the opport nit to to target micro-specific segments on the mo e. or
achie e precise targeting with ad ertising, res lting in instance, election campaigns can tap into first-part polling
potentiall more effecti e campaigns and impro ed Ret rn and location data to target constit ents in real-time. hirdl ,
on In estment R I on marketing b dgets. real-time trading co ld make its first mo es into
India as endors integrate in entor into demand-
side-platforms. igital s abilit to target cons mers
The road ahead on a real-time basis co ld lead to more rob st se of the
segment. o rthl , with technological ad ancements,
OOH industry size is likel to become a more intelligent option as man brands
wo ld take ad antage of the de elopments in internet-
connected and interacti e screens. his is likel to dri e
more c stomers and e ent all ad ertisers towards it.
he abo e predictions are based on ad ances in
technolog that contin e to shape the ind str and one can
e pect more intelligent, highl -targeted and meas rable
campaigns as the medi m e ol es.
202
0 . 0 new airports coming p in India in the ne t 10 rs dated o ember 201 , http //www. 0. Go t n eils polic to create green corridors along national highwa s dated 2 eptember 201 ,
b sinessinsider.in/ 0-new-airports-coming- p-in-India-in-thene t-10- rs/articleshow/ 6 61 . http //www.thehind b sinessline.com/econom /logistics/go t- n eils-polic -to-create-green-
cms accessed on 1 March 2016 corridors-along-national-highwa s/article 0 1 .ece accessed on 1 March 2016
06. Go t. anno nces list of first 20 smart cities nder mart ities Mission dated 0 an ar 2016
http //www.thehind .com/news/national/list-of-first-20-smart-cities- nder-smart-cities-mission/
article 162 .ece accessed on 1 March 2016
Regulations, Consolidation and
Measurement will be the game
changers! Government Regulations are
critical to the growth of this industry. We are
addressing this issue through IOAA
to lay down a universal rule that brings
The Future: now streaming | Out of Home
uniform regulations to one and all under the

roof. The OOH Industry has always suffered
because of the fragmentation
that exists in the industry. However, with
larger players coming together under
the unifying umbrella of IOAA, a lot of
transparency will come into the industry.
IOAA is also working towards building
an Audience Measurement System
for Outdoor Media. Industry players
are working very closely with IOAA
to deliver on these issues. AAAI and
IOAA coming together will surely add focus
on the regulations and create a culture of
discipline and good practices going forward.
2016 in all aspects, be
it Revenue Growth as predicted by
Warc, or Uniformity and Regulations through
IOAA, or the Infrastructure development and
Government Support along with their
Marketing spends on various initiatives
seems to be a year to look forward to. The
sector seems well placed for better year
ahead.
Alok Jalan
Managing Director
Laqshya Media Group
Conclusion
ith growing competition between the prod cts and
ser ices, effecti e and efficient ad ertising seems to
be the need of the ho r and this need has res lted in
new and inno ati e changes in ad ertising
media. d ancements in technolog and the
constant e ol ing ad ertising mi ha e created
newer trends in o tdoor media. Grad all , electronic
illboards, mobile displa s, roll ps, ehicle
wraps, sk walks, b ilding wraps, fl o er panels and
interacti e screens are changing the trends in Indian
ad ertising in a massi e wa .
203
204
1
Sports
Looking beyond cricket
TEAM
88
Overview of global sports industry

combination of ario s factors o er the past few ears, re en es. or e ample, the orld p 201 hosted
s ch as impro ed economic scenario, rising pa , b ra il generated 1. billion thro gh ario s
penetration, growth in ad ertising, ongoing migration sponsorship deals with 20 major companies showing a
of sports to paid channels and increasing proportion of 10 per cent increase from the orld p 2010.0 Looking
middle class income gro p, ha e led to the growth of the at the pace of growth, it is estimated that the global
sports sector worldwide. he global sports ind str is re en es from sports sponsorship might reach
estimated to be worth 600- 00 billion.01 Growing at billion b 2016.0
a GR of 6. per cent o er fi e ears, sporting e ents
generated a re en e of 0 billion incl si e of media
rights, sponsorship and gate re en es in 201 .02 North Broadcasting and media rights
merica is considered to be one of the largest markets he sale of broadcasting and media rights is one of the
for sports followed b rope, the Middle ast and frica biggest so rce of re en e for most sports organisations
region, and the sian market. these da s. he generate the f nds needed to finance
major sporting e ents, ref rbish sports infrastr ct re
he global sports market recei es a h ge ch nk of its and contrib te towards the de elopment of sport at the
re en e from fo r well-defined segments i gate fee, grass-roots le el.
ii sponsorship, iii broadcasting and media rights, and
i merchandising.
Merchandise
Key revenue segments for sports he sale of merchandise is directl proportional to the
engagement le el of the sport with its fans. Manchester
nited ootball l b, for e ample, did well to earn
G P 1.6 million in 201 06 from merchandising, apparel
and licensing re en e. he increased demand for
branded sports merchandise globall is primaril
being dri en b people shifting to healthier lifest les,
rising middle class and enhanced le el of cons mer
engagement b ario s sports brands.
The India story

he ongoing decade has been a strong one for sports
in India, with trends indicating s stained growth in the
Gate fee f t re as well. he s mbiotic relationship between
Gate fee or ticket re en es was once considered to entertainment and sports that started with the Indian
be the top re en e generator for the sports teams and Premier eag e IP has now spread o er other sports
leag es. ltho gh still significant in man sports, re en e with the Indian per eag e I , 2 million iewers ,
from merchandising commercials and broadcasting Indian adminton eag e I , 21 million iewers , Pro
ha e now taken prominence. e eral sports are also Kabaddi eag e PK , million iewers , etc.0 I has
finding it hard to l re fans to a stadi m. Man ational gained a lot of pop larit globall and has emerged as
asketball ssociation teams are now witnessing the third biggest football leag e in the world b a erage
declining ticket sales e en when the tickets are priced stadi m attendance 2 ,0 0 per game .0 he growing
as low as 1.03 o circ m ent this downward trend, pop larit of these leag es clearl indicates that India
teams are re ired to engage fans more fer entl and might well be on its wa from being a one-sport nation to
nderstand their cons mption habits in a better fashion. m ltiple sports nation.
he sports sector witnessed a growth of 10 per cent from
Sponsorship 201 to 201 p from I R , 2 million to I R ,06
million.0 n the contrar , cricket saw a dip in on-the-
ponsoring a team or an e ent has alwa s been a hit gro nd sponsorship n mbers which fell from I R ,0
form la for se eral companies. ow the are getting million to I R ,6 million.0 he n mbers clearl depict
more inno ati e and finding sponsorship a en es. that tho gh cricket contin es to be a dominant sport, the
rom stadi ms, to kit branding to being an official car rise of other new sports leag es is helping broaden the
pro ider, newer a en es are being sed leading to higher base of the ind str .
01. siness of ports , KPMG- II Report, 201 06. fficial website - Manchester nited ootball l b, http //ir.man td.com/compan -information/
02. inning in the siness of ports, Kearne , 201 b siness-model.asp , accessed on 1 March 2016 ort ne.com, 2 ctober 201 206
0 . h man high-performing sports teams are losing mone at the gate , ision ritical, https // 0 . Million-dollar games ow pri ate enterprise is changing non-cricket sports in India , orbes India,
www. isioncritical.com/gate-re en e/ , accessed on 1 March 2016 16 March 201 Presentation ports Ind str has grown b 10 per cent in 201 , fa s, http //
www.afa s.com/news/stor / 0
0 . I to reap 1. billion in sponsorship re en es from ra il 201 , Portada,, http //www.
portada-online.com/201 /01/2 /fifa-to-reap-1- -billion-in-sponsorship-re en es-from-bra il-201 / , 0 . orldfootball.net, http //www.worldfootball.net , accessed on 1 March 2016 KPMG in India s
accessed on 1 March 2016 anal sis, 2016
0 . Global ports ponsorship Re en e pected o Rise o In 16, t d inds , ports 0 . Presentation ports Ind str has grown b 10 per cent in 201 , fa s, http //www.afa s.com/
siness ail , 22 pril, 201 news/stor / 0 Presentation- ports-ind str -has-grown-b -10-per-cent-in-201 ,accessed on
1 March 2016
Trends driving the sports market Online consumption of sports content
worldwide
Major trends
The Future: now streaming | Sports
Source: Know the fan he Global ports Media ons mption Report, 201
prefer tele ision content. lso, 2 per cent of fans make

se of a tablet or smartphone to access sports content
Emerging importance of technology and while watching tele ision.10
In India, too, there has been an ps rge in the
data smartphone and internet sage statistics. his has
ith triggers like higher internet and mobile penetration pro ided cons mers with an option to cons me content
in place, broadcasters and sponsors are looking for on-the-go. he are accepting the time and space
m ltiple wa s to connect with fans across the digital e ibilit proposition that online media pro ides. ports
screens ranging from to mobile phones to tablets. fans of toda prefer a wide-ranging e perience and a lot
rom installing a n mber of camera angles to sing them watch other sports content, s ch as inter iews,
drones to pl gging microphone to pla ers clothes, game highlights and li e streaming of games. his is an
broadcasters are sing inno ati e wa s to make sports enco raging sign for pla ers interested in de eloping a
broadcast more immersi e. It is e all tr e for sponsors digital ecos stem for sports cons mption.
who are rein enting wa s to se digital technolog . he
are tr ing o t different p blicit methods based on data
gathered b a fan s past and f t re habits. he emphasis Growing female viewership
is on le eraging technolog for pro iding e cl si e on-the- here has been an ps rge in the global female
go and on-demand content to sports cons mers. iewership. emale sports fan base has strengthened
owing to a strong recent growth in the female iewership.
Engagement through social media or e ample, e en at the ational ootball eag e
, the female iewership has grown at a faster pace
he e plosi e growth of social media has been per asi e. compared to the male iewership. he female iewership
ike other ind stries, social media has acted as a game grew 26 per cent in 201 compared to 1 per cent growth
changer in the sports ind str too. ocial media is acting in male iewership.11 lso it has been obser ed that
as a catal st in harbo ring the interest of fans globall . female fans, apart from watching the game, follow it o er
engaging fans thro gh social media, sports rights holders second screens for game-related acti ities, majorl on
ha e disco ered new comm nication channels with social media. his trend is gaining traction and co ld be
their a diences that help them increase the engagement well capitalised b sponsors and broadcasters.
le els. his also helps in increasing the brand affinit and
lo alt . ports iewership, in India, is no longer male dominated
now, as females and kids are forming a significant portion
of the iewership pie.
Online streaming, delivery of niche content
In the first season of I , abo t per cent of the total
iewers these da s prefer watching sports thro gh li e iewership was contrib ted collecti el b women and
streaming, which gi es them the e ibilit of time and children.12 or the second season of PK , this statistic
space. mong de oted sports enth siasts globall , per was in e cess of 0 per cent.13
cent prefer online sports compared to per cent who
207
10. 10 stats to help o increase sports fan engagement , cribble i e, http //www.scribbleli e.com/ 12. Indian per eag e iewership s rpasses I orld p , he conomic imes, 1 ecember
blog/201 /02/1 /10-stats-to-help- o -increase-sports-fan-engagement/ ,accessed on 1 March 201
2016 1 . Pro Kabaddi eag e shows per cent rise in iewership in second season , irstpost, http //
11. he Is Growing nl eca se of omen , loomberg siness, 26 eptember 201 www.firstpost.com/sports/pro-kabaddi-leag e-shows- - per cent-rise-t - iewership-second-
season-2 2.html ,accessed on 1 March 2016
he trend clearl shows that broadcasters and sponsors
ha e to tweak their strategies to cater to the increasing Increase in engagement with females is
female iewership. few ad ertisers and sponsors ha e crucial for sustainability of any sport. In
alread started capitalising on these trends. or instance, the modern world families strive to be
i ame, an online lingerie store tied- p with M mba, a active, and be involved with a sport that all
Pro-Kabaddi team, to s pport a ca se o tlining the need members in the family can relate to. Lot of
to safeg ard the dignit of women.1 It is e pected that teams today are trying to engage females
other female-oriented brands wo ld follow s it. not just as audience, but also as active
he teams and sports associations are also cognisant of players. Football leagues of the West have
the fact and tr ing to woo female iewership and fandom. parallel competitions for females too. The
here are alread parallel to rnaments taking place for same culture has to be brought to India. The
women in cricket and football. e eral teams are also ecosystem is gaining traction with Indian
planning to ha e sports academies for women. Ga ging women teams performing well in Asian
b the market enth siasm, this trend of women following and International events. Once the female
and pla ing sports is here to sta . involvement reach similar levels, sports in
India would not only become inclusive, but
Female viewership of prominent Indian leagues also financially more attractive in terms of
investment.
Prashant Agarwal
President
Delhi Dynamos FC
ther India spe ifi fa tors

Expanding middle class and increasing
disposable income
he Indian middle class has been growing and is
e pected to increase to 1 per cent of the total
pop lation b 202 .1 here has been a stead increase
Source: India ports ponsorship Report , Gro p M- port power, 201 in the disposable income of the people leading to an
increased appetite for sports cons mption. here has
also been an increase in the a erage share of recreational
and ed cational acti ities in the ann al ho sehold
cons mption, and is e pected to increase from per
cent in 200 to per cent in 202 .16 ence, this is an
opport ne time for ario s ind str stakeholders to
capitalise on the opport nit and de elop an ecos stem
b impro ing the ret rns.
Growth in rural viewership numbers

Regional games packaged in interesting leag e formats
ha e been s ccessf l to an e tent in garnering r ral
iewership. s per the n mbers reported b R
roadcast dience Research o ncil India, r ral
contrib tion to the n mber of impressions was as high as
per cent in the sports genre.1 he trend is consistent
across new sporting leag es as well. or e ample, I
season 2 garnered per cent of its iewership from r ral
areas, with 210 o t of million s iewership in
tho sands coming from the r ral markets.1 208
1 . M mba collaborates with i ame to sal te the ignit of omen , his eek angalore, 16. 10 stats to help o increase sports fan engagement , cribble i e, http //www.scribbleli e.com/
http //www.thisweekbangalore.com/ -m mba-collaborates-with- i ame-to-sal te-the-dignit -of- blog/201 /02/1 /10-stats-to-help- o -increase-sports-fan-engagement/ ,accessed on 1 March
women/ , accessed on 1 March 2016 2016
1 . Rise of the Indian Middle lass , MapsofIndia, http //www.mapsofindia.com/m -india/india/rise-of- 1. ll India R ata for eek 1, 201 to eek , 2016
the-indian-middle-class ,accessed on 1 March 2016 1 . hree most promising greenshoot sporting leag es in India , he conomic imes, 1 ecember
201
igh le els of interest in r ral areas is indicati e of the Advertising, broadcasting and
latent potential in r ral sports offering. ith tar India viewership
placing its hope on kabaddi and on Pict res etwork
P on wrestling, the broadcasters too are ing to The three key metrics for sports
woo the r ral iewership. he interesting part here is
that the are tr ing to present these predominantl r ral rom an economic point of iew, there are three ke
sports with an rban packaging, and ha e seen significant stakeholders who end p re ing the cash engine for
sports properties on broadcasters, ad ertisers and
traction.
iewers.
Engagement through social media

he e plosi e growth of social media has been per asi e.
ike other ind stries, social media has acted as a game
changer in the sports ind str too. ocial media is acting
as a catal st in harbo ring the interest of fans globall .
engaging fans thro gh social media, sports rights holders
ha e disco ered new comm nication channels with
their a diences that help them increase the engagement
le els. his also helps in increasing the brand affinit and
lo alt .
Online streaming, delivery of niche content

iewers these da s prefer watching sports thro gh li e
streaming, which gi es them the e ibilit of time and
space. mong de oted sports enth siasts globall , per
cent prefer online sports compared to per cent who
prefer tele ision content. lso, 2 per cent of fans make
se of a tablet or smartphone to access sports content
while watching tele ision. he following section e amines how sports in India fares
to each of these ke metrics.
Advertising
Rurban sports are being seen as the game
changers. There is a lot of appetite for non- d ertising spends in India is on the rise with increased
conventional and predominantly rural sports. interest in sports, s ch as kabaddi, football and hocke ,
Kabaddi for one has seen tremendous apart from the most pop lar sport cricket.1 n arra of
response and can end up being the second specialised sports channels and other digital media ha e
sport in India (after cricket). The rise of ca ght ad ertisers fanc as a en es to connect with the
these traditional non-conventional sports iewers of these games.
has allowed regional brands to support
teams from their region and reach a wider New advertisers on the roll
base using prime time bands on sports
channels. These shifts in the ecosystem will ring the se enth season of the IP , sports ad ertising
bring about the much required widening of saw a new phase where lower-profile ad ertisers paid
the sports vertical as a whole and ultimately I R20 to 0 million20 for being associated with a team
help in the creation of sports infrastructure b wa of inscribing their logo on team niforms and
for multi disciplinary sports across the accessories. his is abo t one-tenth of the mone spent
country in the times to come. b larger brands associated with IP .
Karan Ahluwalia
part from reg lar ad ertisers, s ch as confectioner
brands, telecom companies and a tomoti e companies,
e-commerce companies ha e made a mark in the minds
Senior President & Country Head of IP iewers. ntil 2010-11, the top-10 e-commerce
Media & Entertainment, Fine Arts, companies hardl spent I R1 million each on ad ertising,
Luxury & Sports Banking Group Yes b t now it has increased to I R2 0 to 0 million each.21
Bank d ertising b e-commerce companies across media is
209
e pected to grow 0 per cent.
1 . India ports ponsorship Report , Gro p M- port power, 201

20. esser-known brands step forward in IP distress sale , i emint, 2 ebr ar 2016
21. -commerce boosting tele ision re en es , inancial hronicle, 26 g st 201
or the first time, a change toward new and lesser- for being the title sponsor for IP from 201 to 201 26,
known regional ad ertisers in esting in I orld replacing the pre io s sponsor that paid I R2,000
p 201 broadcast was seen, who were aiming to million to become title sponsors of the to rnament from
increase their isibilit thro gh their respecti e state s 200 to 2012.26
channels belonging to the tar India s bo et. Regional
ad ertisers contrib ted abo t 0 per cent22 of its igh ad ertising re en e has been a ke dri er of
ad ertising re en es for the cricket e ent. profitabilit for the broadcasters as well as the sports
associations. on Pict res etwork P has seen
its re en e from IP increase from abo t I R billion in
Cricket continuing as a brand puller season 1 to o er I R10 billion in f t re seasons. en in
ricket contin es to draw the interest of ad ertisers 2016, the re en e from ad sales alone is more than I R10
with mar ee properties, s ch as IP and orld billion with a ear-on- ear growth of appro imatel 1
p, witnessing growth in ad rates and sp rt in new per cent.2 his has r bbed on to I with the s rpl s
sponsorships. generated from IP reaching close to I R .6 billion in
season 6 itself.2
on Pict res etwork sold 100 per cent of the on-air
in entor 23 for the IP season e en before the start of Revenue generated for SPN from IPL
the to rnament. he ad rates too were prett high, in the
range of I R 00,000 to I R ,000 per 10 second spot
in 201 2 with a ear-on- ear increase of abo t 10 to 1
per cent .
Ad revenues from ICC World Cup and IPL (in INR

billion)
Source: Media er stimates, I nn al Reports 200 -201
he India ers s o th frica series attracted significant

brand attention with more than 10 co-sponsors and
associate sponsors. ith a n mber of brands associated
with this to rnament, it is e pected that ad re en es
Source: IP 201 gets bigger and better , inancial press, 21 pril 201 , KPMG in India disc ssion
were I R2, 00 million2 . he co-sponsorship brands
with Ind str , tar India e es o er Rs 00 crore as ad re en e from orld 20 , i emint, 1 incl ded a a mobiles, Ra mond, and Pa tm, while
March 2016
the associate sponsors incl ded ero Moto orp, ,
Mar ti ki, a ells, Idea and Ro al tag among
e eral brands are aware that association with cricket others. hese brands were keen to be associated with
pro ide them an nparalleled platform. o establish this to rnament despite high ad rate packages of abo t
its presence in India and b ild a platform for isibilit , I R1 0 to 1 0 million for associate sponsorship.2
hinese mobile phone maker i o replaced a be erage
compan as the title sponsor of IP for the ne t two ears tar India e pected a 60 per cent growth in re en e
ntil 201 . s per media reports, I s deal amo nt from I orld p 201 s 201130, and witnessed man
with i o is e pected to be worth I R1 billion per ear2 , first-time ad ertisers, s ch as Marico, epme, Pa tm
a 2 per cent increase in the price paid b the earlier and Ra mond. d ertisers who bo ght in entor for the
sponsor for its association with the to rnament. he India-Pakistan match at the last moment paid I R2. to
latter compan had committed to pa I R , 6 million . million for a 10-second spot.31
22. orld p regional ad ertisers on front foot with low rates , he ind siness ine, 1 ebr ar 2. Ind str disc ssion with KPMG in India
201 2 . IP teams ma lose 0 of re en es if e ent partl shifted to o th frica , he conomic ime, 210
2 . IP sells 100 in entor adds new sponsors , changeformedia.com, http //www. 1 ebr ar 201
e change media.com/ipl/ipl-sells-100-in entor -adds- -new-sponsors 6.html ,accessed 2 . Gandhi-Mandela series ad re en es e pected to cross Rs.2 0 crore , changeformedia.com,
on 1 March 2016 http //www.e change media.com/t /gandhi-mandela-series-ad-re en es-e pected-to-cross-
2 . ig ticket IP remains big brand branding fiesta , he inancial press, ecember 201 rs.2 0-crore 61 2 .html , accessed on 1 March 2016
2 . i o replaces Pepsi as IP title sponsor, deal pegged at Rs 200 crore , changeformedia.com, 0. ace off o er tar ports re en e anja G pta s arsha oshi , he inancial press, 10 March
http //www.e change media.com/ipl/ i o-replaces-pepsi-as-ipl-title-sponsor-deal-pegged-at-rs-200- 201
crore 620 .html , accessed on 1 March 2016 1. India-Pak match ad rates estimated at Rs 2 lakh per spot Is it iable for marketers ,
26. Pepsi pa Rs 6. crore to be IP title sponsors , irst Post, http //www.firstpost.com/sports/ipl/ changeformedia.com, http //www.e change media.com/t /india-pak-match-ad-rates-
pepsi-bid-rs- 6- -crores-to-be-ipl-title-sponsors- 0 1 .html , accessed on 1 March 2016 estimated-at-rs-2 -lakh-per-spotis-it- iable-for-marketers 0 6.html , accessed on 1 March 2016
tar India is e pected to earn abo t I R billion in ad Increasing popularity of leagues an
re en e from orld 20 in March 2016. ponsors opportunity for advertisers
lipkart, ppo and issan ha e shelled o t I R2 0
million each for abo t 12 seconds of air time per s sponsorship of big sporting e ents has gained
match.32 moment m, so has the ad ertisers need for new
platforms to associate with. ith ownership of cricket
Rising support for other sports as a platform becoming dearer, brands in India ha e
de eloped a new fondness for other sports.

Corporates have always extended support to cricket he 201 season of Pro Kabaddi eag e saw associate
in India, but in the last few years they have extended sponsorship for I R 0 to 0 million a ear33, nlike the
support to other sports too. first edition where there were no brand associations, and
Hero MotoCorp has been associated with a range of as a res lt tar India did not generate an ad ertising
sports, including golf, cricket, hockey and football, for re en e. or season , PK got eight brands on board
over two decades now. With an annual sponsorship as associate sponsors, which incl ded IP renchie,
budget of INR1.25-1.5 billion, the company has showed ajaj lectricals, h ms p, tate ank of India, lipkart,
its interest in tournaments such as epartment of tomic nerg among others.
ccording to media reports, in PK 2, se en o t of the
Hero World Challenge a Tiger Woods Invitational nine sponsors were new ad ertisers. he first season
and PGA sanctioned event, which features top-18 managed to garner onl limited attention of ad ertisers
golfers in the world in the form of few brand associations at the team
sponsorship le el, s ch as m l, e icol, t re Generali,
Hero Indian Open, an annual golf tournament ajaj lectricals and mami. his howe er changed in the
Womens Indian Open since 2010; Hero also ne t season and the brand associations ha e res lted in
sponsors Indias domestic Pro Tour for women. re en es for tar network to the t ne of I R 00 to 0
million. en tho gh tar India monetised this propert
Oxigen, the mobile wallet app, with an annual for the first time, its aggressi e p sh helped enforce
sponsorship budget of INR1 billion has sponsored a ad ertisers confidence in PK .
bilateral tournament for disabled cricketers from Sri
Lanka and India. Indian per eag e in its second season, too,
witnessed a fair share of interest from ad ertisers. I
Paytm is actively exploring opportunities in other sports 2 sponsorship re en es reportedl increased to I R1
and has allocated INR5 billion toward sports marketing billion in 201 , a 100 per cent increase from the I R 00
over the next four years. million generated in the first edition held in 201 . ith
Videocon, too, became the title sponsor for the Hockey title sponsor ero Moto orp, associate sponsors Mar ti
India League (HIL) team Dabang Mumbai. With ki and lipkart, and other brand associations with
its annual sponsorship budget of INR300 million, the m l, Imperial l e, he M thoot gro p and ,I
company wants to generate and garner popularity not 2 saw some big pla ers from aried sectors e pressing
just for the brand, but also for its DTH services. interests in football.
The Steel Authority of India (SAIL) undertakes Man ind stries toda see the al e of associating
sponsorship of various major sporting events. SAIL has with sports. In a s r e 36, it was fo nd that a majorit of
extended support/sponsorship for the Indian womens companies in technolog , cons mer goods and ser ices
weightlifting team to participate at international sector are ad ertising d ring sporting e ents, and are
events, the Indian Davis Cup team, Chennai Open (lawn willing to do so in f t re as well.
tennis), All India Jaipal Singh Gold Hockey Tournament
at Rourkela, AITFSAIL (India-Pakistan) Lawn Tennis
Championships, All India Tennis Association in New
Delhi, Seventh World Korfball Championship, and
Jawaharlal Nehru Hockey Tournament in New Delhi.
2. tar India e es o er Rs 00 crore as ad re en e from orld 20 , i emint, March 2016

211 . Pro Kabaddi eag e season 2 to ha e - on-air sponsors , siness tandard, 2 ne 201
. Pro Kabaddi eag e re en e estimated at Rs 0- crore in season2 , changeformedia.com,
http //www.e change media.com/t /pro-kabaddi-leag e-re en e-estimated-at-rs- 0- -crore-in-
season-2 61 .html , accessed on 1 March 2016
. I season pre iew entral sponsorship do bles to Rs 100 cr as 201 promises better football,
bigger battles , irstpost, http //www.firstpost.com/sports/isl-season-pre iew-central-
sponsorship-do bles-to-rs-100-cr-as-201 -promises-better-football-bigger-battles-2 216.html ,
6. t d on ports Marketing rends Perceptions in India, port ons lt, 2012
Percentage of industries willing to advertise Approximate sports investment by broadcasters
during sporting events
Source: nal st reports, siness of ports iming igher Reaching rther I I Report, 201
Source: t d on ports Marketing rends Perceptions in India, port ons lt, 2012
Popularity of prominent sports channels

hile brands with higher b dgets prefer to ad ertise on
cricket e ents, s ch as India- o th frica cricket series,
those with tighter b dgets are likel to look towards
ad ertising on newer leag es I and PK . ith
increasing reach and the pop larit of new leag es,
this pattern is slowl fading and all kinds of ad ertisers
ha e beg n to ad ertise o er a wide spectr m of sports
properties.
Broadcasting
ith 1 million ho seholds, India is the second
largest market for broadcast media, second onl to
hina. he ear 201 saw the broadcasters taking
ad antage of this large iewership base to earn re en es,
and sports channels b ilding affinit thro gh localisation.
ports is an imperati e constit ent of channel bo et
for a network to dri e the s bscription of other channels. Source: on -si -claims-to-be-the-most- iewed-sports-channel-of-201 , ele ision Post, www.
on-cricket sports help to increase li e sport co erage all tele isionpost.com/tele ision/son -si -claims-to-be-the-most- iewed-sports-channel-of-201
1 an ar 201
ear ro nd, which e pands the sports iewing ni erse
and helps ad ertisers in reaching o t to new a diences.
It is now apparent that broadcasters with a channel
bo et spread across genres are spending significantl Globall , s bscription contrib tes more to sports re en e
on sports. as compared to ad ertising re en es. owe er, the
scenario is e actl opposite in India. Internationall ,
s bscription is almost 0 per cent of re en es for
sports channels and the rest 10 per cent comes from ad
re en es. In India, it is almost 60 per cent from ads.
he share of broadcast fees is also a ke so rce of
re en es for leag e franchisees. or instance, more than
0 per cent of an IP team s re en e comes from the
share of the broadcasting fees and central sponsorship
income from I. It is e pected that this share ma rise
gi en the renewal of broadcast rights of the IP in 201 , 212
which co ld get them abo t billion or e en more.
. Ind str disc ssions with KPMG in India, KPMG in India s anal sis 2016
. Ind str disc ssions with KPMG in India
. ear 201 co ld be a game-changer for IP , he imes of India, 2 ctober 201
Star India: Eyeing the digital medium The glam quotient of international events
o air IP ntil 201 , P pa s abo t I R to billion a In 201 , broadcasters started getting increasingl
ear and holds the e cl si e broadcast rights for IP . in ol ed in ac iring the telecast rights for major
owe er, the digital rights for IP for the ears 201 , 2016 international e ents. he increasing interest of Indian
and 201 are held b tar India for which it paid I R ,022 a dience in s ch e ents has led to this de elopment.
million 0, sei ing the rights awa from on , with a bid of
I R2, 0 million. tar India streams sports on tar ports. P thro gh on i ac ired the telecast rights to
com and ot tar.com. he IP digital rights proc rement a iga, the premier di ision of the panish football
was a premeditated deal b tar to b ild otstar as a leag e s stem, for a period of three ears. It was the
primar destination for digital content cons mption. 1 e cl si e broadcaster for the per owl for the
Indian iewers in 201 . on i also ac ired the
tar India has also ac ired e cl si e media rights e cl si e telecast rights of the p and the eries
broadcast and digital rights for cricket matches prime football properties , across India, Pakistan, ri
organised b I from 2012 till 201 for I R . 1 anka, angladesh, h tan, epal and Maldi es. 6 he
billion. 2 tar strengthened its position as the home of channel has positioned itself as a premier destination for
international cricket b ac iring sia p rights ntil nparalleled football iewing e perience.
202 and e tended its partnership with ocke India b
renewing the telecast rights deal ntil 201 .
Going local to expand horizons
roadcast of major sports e ents in regional feeds has
Glimpse of Star Indias investment in cricket become the motto of leading broadcasters P and
tar. P la nched a new sports channel on Ki that
Country/ Amount Period Total India broadcasts the games in amil and el g feeds, while for
board (INR billion) matches related the engali feed broadcast it chose the network s engali
(at current matches channel on ath. he idea is to cater to the regional
rate) iewers demand. ccording to the channels, these feeds
wo ld help garner incremental increase in iewership.
India 46.03 2012-18 233 233
I orld c p 201 was the first e ent to be telecasted
England 12.27 2013-19 313 62 in si lang ages incl ding amil ija , Kannada
arna Pl s , Mala alam sianet Mo ies and engali
Australia NA 2013-17 191 33 tar alsa apart from indi and nglish. Pro Kabaddi
eag e is being broadcast b tar in fi e lang ages
Champions 55.24 2008-17 NA NA o er eight channels. Its ri al P enhanced broadcast
League T-20 prod ction alit with regional lang age feeds for
football. ch a mo e was beneficial for the regional
ICC 67.51 2007-15 NA NA ad ertisers too as it pro ided them a great opport nit
tournaments to grab isibilit with ad spots as low as I R 0,000 to
I R12 ,000 for a 10-second spot.
Source: tar banks on cricket for growth , siness tandard, 11 ebr ar 201
roadcast in m ltiple lang ages has also made it l crati e
for regional pla ers to ent re into sponsorships. It gi es
ith an initial in estment of I R billion, incl ding I R1. them access to a national platform to e pand reach and
billion in the first season in 201 , tar India is estimated cognisance of their brand apart from reaching their core
to ha e generated a re en e of abo t I R 00 to 0 target cons mers. Relati el regional brands, s ch as
million from the pop lar PK . tar India is also the nmol isc its and Red hief hoes, ha e hence come
official and e cl si e broadcaster of I . p as sponsors and ha e fo nd rele ance in s pporting
tar ports, the official broadcaster of I orld p, Kabaddi teams.
introd ced two new high-definition sports channels
tar ports and . hese channels also Collaborating to win
benefitted b packaging ad spots for highlights and India
matches as stand-alone properties. ports networks are collaborating to la nch co-branded
localised m ltisport channels to pro ide co erage
of ario s sports, s ch as cricket, football, tennis,
badminton and field hocke .
213
0. tar India pa s Rs 02.2 crores to clinch IP digital media rights for three seasons , India.com, . R India gears p for I orld p 201 , siness tandard, 2 an ar 201
http //www.india.com/sports/indian-premier-leag e-star-india-pa s-rs- 02-2-crores-to-clinch-ipl- 6. on Ki ac ires telecast rights for a iga in India , portskeeda, http //www.sportskeeda.com/
digital-media-rights-for-three-seasons-2 6 6/ , accessed on 1 March 2016 football/son -ki -telecast-rights-la-liga-india , accessed on 1 March 2016
1. India orld p matches deli er a boost for tar s otstar app , i e mint, 21 pril 210 . Going local , tat Press Release, http //www.start .com/PressRelease etails.asp pid 1 60 ,
2. tar India wins I media rights for 6 rs , siness tandard, 2 pril 2012 accessed on 1 March 2016
. ow sports broadcasters pla ed the game in 201 , ele isionPost.com, http //www.tele isionpost. . orld p regional ad ertisers on front foot with low rates , he ind siness ine, 1 ebr ar
com/t p-special/how-sports-broadcasters-pla ed-the-game-in-201 / , accessed on 1 March 2016 201
. Pro Kabaddi eag e season 2 to ha e - on-air sponsors , siness tandard, 2 ne 201
P and P ha e joined hands to la nch co-branded Challenges
channels with on Ki of P getting rebranded he scarcit of alit sports content, high cost of
to on P . oth broadcasters ha e also come p ac isition, high marketing cost and limited options of
with a website and app, showcasing an amalgamation monetisation are some of the ke challenges faced b the
of technolog integration and enhancement thro gho t broadcasters.
sports. he alliance with P wo ld help on as the
former is s non mo s with sports programming and has The scarcity of content and high acquisition costs:
a high brand recall. P s portfolio of li e and non-li e There seems to be a consistent scarcity of quality
contents wo ld also come in hand for on . sports content. Since the stock of sports content is
pre-determined and narrow, demand for this limited
Inno ations aro nd the traditional sports co ld content leads to high cost of broadcasting rights.
help in making it more aspirational. he creation of Content cannot be created as in GECs and supply
digital platforms are re ired for s stained and deep could only be increased to a limited extent with new
engagement with real time anal tics. events. Hence, content cost for sports turns out to be
more than 70 per cent of the total cost compared to
Telecast on traditional non-sports channels 55 per cent for GECs. To top it, every renewal in four
to five years, too, sees the rights amount go two to
indi mo ie channels are becoming the new destinations three times across all sports.54 Star Sports, the official
for sports properties. he trend of airing lang age feeds broadcaster of the ICC World Cup, faced challenges,
on indi mo ie channels gained traction in 201 . en such as scrambling to get advertisers on board for the
ports etwork started airing Raw and mack tournament initially, since the cost of acquisition of
own in indi on mo ie channel ee inema. he sports content was considered significantly high.55
objecti e was to e pose an ns specting cons mer to
high adrenaline sports feeds. on Ma , the indi mo ie High marketing costs: Considering its importance for
channel of P has been home to the IP for eight new sports and leagues, marketing is positioned at a
ears. It also has the telecast rights for the Pro restling close second in terms of cost. This too ends up driving
eag e P . his marked the channel s entr into non- the cost of broadcasting a sports property.
cricket sports. 0
Limited monetisation options: Limited space to fit in
ch channels ha e a track record for taking new an advertisement during the course of games, such
properties to masses. he bank on the pop larit of the as badminton, makes it difficult for the broadcasters
sport and the fact that contact sports with an on-gro nd to make money from the sport. The sport does not
presence do well on indi mo ie channels. et Ma deliver convincing ratings for advertisers to leverage
started its jo rne b getting e cl si e cable and satellite its popularity.
rights for the li e telecast of I ricket o rnament that
were held from 2002 to 200 . 1 or a mo ie channel to
get rights for the cricket matches was n s al. s per
ind str so rces, its bid of 2 million was higher
b at least 100 million. t the plo seemed to
ha e worked as e en in the I hampions roph held
before the orld p 200 , the matches saw a 2 per
cent increase in female iewership. ollowing this, on
ended p making I R 0 million in re en es. 2
ith a dience interest increasing in sports other
than cricket, the re en e potential is significant for
broadcasters. Major broadcasters ha e realised this and
making big bets on sports properties. or instance, tar
plans to in est o er billion for the ne t fi e ears in
sports e ents.
or broadcasters, monetisation and ret rn of in estment
for stakeholders, and the s stainabilit of the b siness
models are now the impending iss es.
214
. tar India wins I media rights for 6 rs , siness tandard, 2 pril 2012 . Pla er n mber 1 , he inancial press, 20 an ar 201
0. on Ma enters the ring , siness tandard, 1 ecember 201 . Ind str disc ssions with KPMG in India
1. ow sports broadcasters pla ed the game in 201 , ele isionPost.com, http //www.tele isionpost. . ith orld p iewership worse than 2011 edition, tar misses Rs 0-crore ad target , he
com/t p-special/how-sports-broadcasters-pla ed-the-game-in-201 / , accessed on 1 March 2016 conomic imes, 6 pril 201
2. wo is compan , three isn t a crowd , India ele ision, http //www.indiantele ision.com/ e2002/
sportschannels.htm , accessed on 1 March 2016
The road ahead Segmenting the sports viewers in India, 2015
Broadcasters could develop relatively lesser-known
sports into blockbusters by using appropriate packaging.
Although success is not always guaranteed, the returns
could be significantly higher.
A multi-platform strategy with digital avatars of their
broadcast properties is another step they have already

taken. It is a strategy to build the brand as the number of
people watching television content on digital platforms is
increasing substantially.
Even national broadcaster Doordarshan plans to air
content in High Definition, and stream programmes
live to smartphones. As feeds are available through the
internet, regional channels, mobile applications, etc.,
there are various media available for the content to take
centre stage.
The trend toward digital broadcasting delivery is here
to stay and broadcasters need to continue striving for
providing distinct sporting experiences to viewers,
thereby expanding and strengthening their target
audience.
Viewership
Over the last two years, sports viewership has witnessed
a rise of 30 per cent.56 As discussed earlier, this increase
in viewership has been broad. The reach of sports has
broken the barriers of age, gender and geography.
Source: R India, G ll , Market ll India op right 2016 roadcast dience Research

o ncil India. ll rights reser ed. Reprod ction of an matter p blished in this report, in part or
whole, in an lang age or format, or deri ati e work, witho t the e press written permission of
R India is strictl prohibited and will be liable for legal action.
215
6. on looks for pla ing fields be ond IP , siness tandard, 11 ebr ar 2016
Cricket vs non-cricket viewership Growing iewership and pop larit of other sports is
he ear 201 started on a promising note with 6 slowl b t steadil eating into screen-time for cricket.
million iewers ntil the semi-finals stage of the I hese sports ha e helped in e tending li e sports
orld p. bo t 0 million Indians watched India s co erage to all ear ro nd, which attract ad ertisers
semi-final match on R , comparati el lower than targeting sports- iewing a dience. espite this
anticipated, as the India- ri anka final in 2011 had a reach de elopment, the sponsorship and iewership n mbers
of appro imatel 00 million. he India-Pakistan match of cricket ha e remain naffected. his is a good sign for
on the other hand garnered a iewership of 2 million the sports comm nit in India and indicates the creation
on tele ision with indi and regional feeds contrib ting of a new categor for other sports.
abo t per cent of the o erall iewership. part from cricket, another sports gaining moment m in
IP 201 was s ccessf l in grabbing the attention of the terms of iewership is wrestling, a sport fairl ingrained
Indian a dience, with an a erage . per cent of all in India. he ina g ral season of P o tperformed the
iewers watching the first fi e matches against .1 per ero I , ero ocke India eag e and the International
cent in the pre io s season. ccording to media reports ennis Premier eag e I P . P saw an a erage dail
the first half of the opening match of IP between Kolkata reach of 1 million according to data pro ided b R
Knight Riders KKR and M mbai Indians MI aired on India.63 he to rnament appealed to the a diences in
on Ma reached 2 . million iewers and the second imachal Pradesh, handigarh, P njab and ar ana with
half too was watched b 2. million iewers. IP 201 significant on-gro nd presence, i.e., abo e 0 per cent
recorded a 1 per cent increase in iewership compared occ panc in north India. lso, 0 per cent ratings on
to the pre io s edition. he last fo r matches, being the on Ma was an o tcome of strong iewership in the
most pop lar and anticipated game of the whole e ent, mentioned states.
was enjo ed b 10 million iewers, a per cent increase
o er IP , on on Ma , on i and on ath. s per The shift towards tier-II cities
a research, ntil matches of the to rnament, female
iewership increased to an all-time high of 6 per cent.60 With multiple sporting and entertainment events
emographicall , the a dience constit ted of 26 per cent competing for eyeballs in metros, different leagues have
aged between 1 and 2 , per cent abo e and 1 taken to smaller towns to strengthen their fan base.
per cent each in 2 - and -1 age gro ps.61 he top-fi e On the one hand, new leagues like Pro-Wrestling have
states that watched IP were G jarat, Madh a Pradesh, teams from Ludhiana, seasoned leagues like IPL have
Maharashtra, est engal and ttar Pradesh.61 toyed with the idea of teams in tier-II cities, such as
Ranchi and Raipur, as a second home. In 2015, IPL also
introduced a concept called IPL Fan Park where stadium-
like experience was provided to viewers by putting up
Viewership for IPL 7 vs IPL 8 huge screens on weekends in smaller stadiums across
Viewership comparison IPL 7 IPL8 % in rise in IPL 8
small cities of Nashik and Kanpur. The strategy has
largely worked as it has allowed teams/leagues to
expand their fan-base and have audience stickiness,
Avg. TV viewership % 3.2 4.1 30 given the lack of quality entertainment options in
these cities. Going ahead, more teams across leagues
Time spent per viewer/ 41:46 49:04 17 could look beyond the top-six metro teams to increase
match (mm:ss) viewership and enhance their fan base.
Reach (in million) 138 145 5
Avg. TV viewership 8,366 10,151 21 ero I season 1 was the fo rth most watched leag e
(in 000s) in world football in terms of a erage attendance and
broke into top-three in its season 2.6
Source: IP iewership betters pre io s edition , siness tandard, 2 pril 201
Pro Kabaddi eag e achie ed 6 per cent6 increase

in iewership o er the pre io s season. In 201 , PK
he iewership of cricket has remained mostl garnered a iewership of 1.2 per cent of all iewers
nchanged gi en that it alread has the highest a dience as against 0. per cent in the ina g ral season in 201 .6
penetration. hings co ld change with I orld m lati e iewership of the first 12 games stood
went 20 cricket championship, which co ld see a
iewership in e cess of 100 million.62
216
. I orld p 201 was watched b 6 million iewers in India , he conomic imes, 2 pril 62. tar India e es o er Rs 00 crore as ad re en e from orld 20 , i emint, March 2016
201 6 . Pro restling eag e is season s 2nd most-watched non-cricket to rnament , siness tandard,
. I orld p is biggest e er on Indian tele ision , he ind , 2 pril 201 1 ebr ar 2016
. R India gears p for I orld p 201 , siness tandard, 2 an ar 201 6 . orldfootball.net, http //www.worldfootball.net , accessed on 1 March 2016 KPMG in India s
60. IP ttracts 1 2M iewers , rak.in, http //trak.in/tags/b siness/201 /0 /21/ipl- - iewership- anal sis, 2016
stats-top-ad ertisers/ , accessed on 1 March 2016 6 . Pro Kabaddi eag e ratings grow b 6 in season 2 , change media, http //www.
61. ith orld p iewership worse than 2011 edition, tar misses Rs 0-crore ad target , he e change media.com/t /pro-kabaddi-leag e-ratings-grow-b - 6-in-season-2 61 2.html ,
conomic imes, 6 pril 201 accessed on 1 March 2016
at 117 million. The percentage reach (percentage of Digital medium coming of age
people from the total television viewing universe who
have watched the tournament for at least one minute) Technology is a prime determinant that has influenced
of the tournament has gone up by 13.73 per cent, from change in sports consumption over the years.
3.86 in 2014 to 4.39 in 2015.66 The average time spent per Smartphones, tablets, dongles and increasing mobile
match per viewer has also increased by 22.6 per cent. internet penetration have facilitated the growth of
Significant rise was also witnessed in online viewership online sports consumption in India.
of the league owing to streaming on Hotstar.

Online platform is expected to grow by almost 30 to 35
per cent (on a small base), and companies are investing
Viewership for Pro Kabaddi League 1 vs 2 in this as the audience profile and viewing habits are
changing.
Viewership comparison PKL 1 PKL 2
Today, online rights for events are generally sold
separately. A big reason for this is the kind of viewership
Online viewers (distinct visitors) 700,000 26 million that the online medium commands. The India vs
Pakistan match of the ICC World Cup witnessed a
TV viewership rating 0.91 1.33 viewership of 25 million* on Hotstar. As per Star India,
this was a record for the maximum number of views
Average time spent per viewer 17.92 21.20 on a digital platform for a single match. Hotstar also
in mins recorded .2 million video views for the first match of
IPL 2015 between Mumbai Indians and Kolkata Knight
Percentage reach 3.85 4.56 Riders. This was six times the viewership on starsports.
com for the first match of Pepsi IP 201 . In IP 2015
Source: Pro-kabaddi-leag e-notches-more-scores , siness tandard, eptember 201
too, about 20 per cent viewership was online. The rates
for advertising on digital medium are also good and a
PKL 2015 showed that in a short span of time a cricket 10-second spot in IPL costs INR150,000. With multiple
obsessed nation could turn its attention to a rurban broadcasters launching their OTT (over the top) apps,
sport like Kabaddi. PKL capitalised on factors of this trend is expected to continue across multiple
good scheduling, crisp programme packaging, fan sporting events.
experience and excellent game quality. With telecast in As far as online sports consumption is concerned, the
five languages on eight channels under the Star India top-three most followed sports online in India are cricket
network StarGold, Star Sports 3, Star Sports HD2, Star (79 per cent), tennis (47 per cent) and football (45 per
Sports HD3, Maa Movies, Star Sports2, Plus Suvarna and cent). Indian consumers spent 18.4 hours per week on
Star Pravah, PKL 2015 recorded 53 per cent growth in sports consumption in 2014.
television viewership over the first season.67
Going local is another new trend as the popularity of IPL Medium of sports consumption in India
has given way to mini state leagues. Karnataka hosts (2014)
the Karnataka Premier League and Odisha has its own
version, called the Odisha Premier League.68 This culture
of local leagues has percolated to grass-root level, with
such tournaments being organised at even in district and
village settings.
Viewership ratings for some non-cricket leagues in

metros (2015)
League Viewership ratings in %
PKL 0.90
PWL 0.85
Source: Know the fan he Global ports Media ons mption Report 201
ISL 0.32
217 Source: Pro restling eag e is season s 2nd most-watched non-cricket to rnament , siness
tandard, 1 ebr ar 2016 t 2 mn, Indo-Pak match iewership creates histor , siness tandard, 1 ebr ar 201 tar
India s otstar gets .2 million ideo iews for the first match of IP , he conomic imes, pril 201
66. Pro Kabaddi eag e ratings grow b 6 in season 2 , change media, http //www. 6. tar ports Pro Kabaddi eag e nets 26 mn online iewers in season 2 , siness tandard, 1
e change media.com/t /pro-kabaddi-leag e-ratings-grow-b - 6-in-season-2 61 2.html , eptember 201 ranchises, a ctions, big b cks ow Indian sports t rned into a mone -making
accessed on 1 March 2016 enterprise , croll.in, http //scroll.in/article/ 6 /franchises-a ctions-big-b cks-how-indian-
sports-t rned-into-a-mone -making-enterprise , accessed on 1 March 2016
International sports also garnering healthy and high match day attendance are the characteristics
acceptance s non mo s with this cl b. hro gho t their 1 - ear-
oda , India is able to boast of ha ing to rnaments for old heritage, the cl b has won 62 trophies and has a
all kind of international sports. Man of these are also global fan following of 6 million followers. he cl b
seeing health rise in iewership. he iewership for has attracted some prominent sponsors on and
basketball as a game j mped from almost nothing to General Motors among others, who seek a committed
0 million6 in the last two to three ears, thanks to the engagement with the brand. he s ccess of the cl b
aggressi e marketing b P . asketball infrastr ct re co ld be attrib ted to ario s wa s in which the cl b
a ailable in rban areas is de eloping and is attracting engages with the followers
female attention too. also saw a high female In one of the most successful launches ever its
iewership of abo t per cent in India. 0 Twitter account attracted 345,000 followers in the first
I orld p 201 saw an nprecedented 24 hours of the launch
phenomenon of more than 0 per cent 1 of o erall Undertakes exhibition games and promotional tours
tele ision iewership consisting of female a diences. he on a global level, to garner enhanced exposure for the
biggest sporting e ent in the world, witnessed an Indian fans
iewership of million, o t of which 2 million were
men and 2 million were women. 1 Has a customer relationship (CRM) database with
particulars of global followers and customers.
ight sports ha e pop larit in non-metro areas. ith It enables the cl b to better anal se c stomer
onl 2 per cent d ration to the telecast of , en beha io r to dri e re en es.
ports is able to garner per cent 2 iewership.
howing an increasing trend, with . GRPs in 2012 to
.2 GRPs per week in 201 , tailor-made shows, s ch as Fan Engagement Initiatives by Manchester United
R and mackdown, garnered a iewership of aro nd
1 per cent of iewers. roadcast in m ltiple lang ages
co ld f rther aid in attracting attention of non-traditional
iewers to the e isting growth in iewership in this non-
cricket sport.
The coming of age of sporting

leagues
s mentioned earlier, sports leag es in India ha e seen
good ptake with the masses. he offer a perfect
combination of sports and entertainment, which is
helpf l in enhancing the engagement otient of fans.
ons mers with more time for recreation, growing
income and growing passion for sports a g r well for
s ch sports formats. on-cricket leag es feat ring
regional sports are also being well recei ed b fans.
he corporates owning these franchises ha e also
increasingl become adept in their management and are
realising benefits with the association.
International parallel and examples

here are man e amples of sporting cl bs and
franchises enjo ing a high brand al e owing to fan
power. he not onl pro ide a platform for engagement
of sports-lo ing a dience b t are also helping the hese initiati es ha e been catal sts for the cl b s
sports ecos stem grow in their respecti e co ntries. s ccess and ha e helped establish it as one of the
s ccessf l e ample here is the football cl b of the most followed and admired cl bs in the world, tr l a
nglish Premier eag e P Manchester nited. benchmark for the sports fraternit worldwide.
large fan base, high profile pla ers, swank sponsorships
218
6 . ational asketball ssociation e es India as part of global dri e , he conomic imes, 16 Ma 2. en ports ndisp ted leader in sports iewership co rtes , Indian ele ision.com,
201 http //www.indiantele ision.com/tele ision/t -channels/sports/ten-sports- ndisp ted-leader-in-
0. ational asketball ssociation la nches online store to promote brand in India , siness sports-t - iewership-co rtes -wwe-1 0 1 , accessed on 1 March 2016
tandard, 6 Ma 201 . fficial website - Manchester nited ootball l b, http //ir.man td.com/compan -information/
1. 0 of ifa orld p s desi a dience were women , he imes of India, 2 l 201 abo t-manchester- nited.asp , accessed on 1 March 2016
Example of fan engagement in India* Reach vs level of investment for some sports
leagues
Atletico de Kolkata, an Indian Super League football
franchisee based out of Kolkata, has formed an official
supports club in a bid to attract more fans. Club owners
have formed ATK Fans Fraternity to offer fans a
membership at a price of INR800, which is inclusive of
a home season ticket (seven games) and an official club

jersey. The members have been promised considerable
media coverage and would be seated together in the
stadium. Such initiatives ensures a win-win situation for
both fans and the club. They not only improve fan loyalty
and engagement, but guarantee a good support for the
home team as well.
tletico de Kolkata s brilliant fan membership deal is something other I cl bs sho ld replicate ,
irstpost, http //www.firstpost.com/sports/atletico-de-kolkatas-brilliant-fan-membership-deal-is-
something-other-isl-cl bs-sho ld-replicate-2 10160.html , accessed on 1 March 2016
Source: KPMG in India s anal sis, 2016
Groundwork done, non-cricket leagues are

gaining popularity Viewership of other leagues catching up
If 2008 became iconic because of IPL launch, then 2014 with IPL
marked the next big paradigm shift in the history of Indian
sports. A number of non-cricket leagues have come up. he coming p of new sports leag es ha e pla ed a
Among them, the admired ones were accepted with pi otal role in the growth of the Indian sports sector.
open arms by viewers, such as ISL and PKL. In its first he new sports leag es offer lots of choices to tr e
season in 2014 alone ISL garnered close to one million sports lo ers. aking e amples of some of the s ccessf l
fans.74 The league also saw an average per game turnout leag es, I s iewership increased abo t 26 per cent
of 26,376 spectators in its second season, which purely in 201 , compared to 201 . ith an a erage attendance
on stadium audience places it among the top-three of 2 ,0 0 d ring the 61 matches pla ed, I now is
football leagues globally.75 This clearly shows a change in the third highest attended football leag e after the
the attitude of the Indian sports lovers toward non-cricket ndesliga and the nglish Premier eag e. 6 PK , which
sports. plifted the regional game of Kabaddi, witnessed 20 per
As viewership leads to higher TV ratings, leading to cent rise in iewership in its second season.
higher advertising and sponsorship rates, finally leading bser ing the iewership pattern and s pport from
to profits to promoters, hence the viewership reach of sponsors and broadcasters, it is ob io s that these non-
any league becomes a significant factor for investors. As cricket leag es ma pla a pi otal role in establishing India
is visible in the figure, despite being high on investment, as a m lti-sport nation and e pand the sport iewing
IPL has the maximum reach and is an investors favourite. ni erse as a whole.
Among the new leagues, PKL performs the best by
having superior reach despite lower levels of investment
than ISL. Monetary incentives for the sports
associations
he phenomenal s ccess of IP not onl transformed the
fort nes of its telecaster on et Ma b t also t rned
the financial fate of I. he association in the er first
ear of IP raked a profit of I R . 0 billion more than the
initial profit of I R2. billion for all of 200 . ring 201 ,
I recorded a total IP re en e of I R . billion. It
has been estimated that IP wo ld bring in re en e of
I R1.2 billion per ann m into cricket, more than do ble
219
. I fo rth best leag e in world b a erage attendance, hits 1 million in-stadia fans , I i e, 2 . ow will Pro Kabaddi eag e s bi-ann al format pla o t for brands and the a dience ,
o ember 201 change media.com, http //www.e change media.com/t /how-will-pro-kabaddi-
. Indian per eag e 201 , orldfootball.net, http //www.worldfootball.net/competition/ind-indian- leag e 2 0 s-bi-ann al-format-pla -o t-for-brands-and-the-a dience- 6 0 .html ,
s per-leag e/ , accessed on 1 March 2016 accessed on 1 March 2016
6. ere s wh Indians will soon look be ond cricket on , rand it , 26 ecember 201 . IP do bles I profit , IP ricket i e, http //www.iplcricketli e.com/indian-premier-leag e-
news/ipl-do bles-bcci-profit/ , accessed on 1 March 2016
. nn al Report 201 , I, 201
the go ernment s sports b dget of I R . 0 billion. 0 Two new IPL franchisees for two years: Dissecting
learl , other associations ha e also been s pporti e of the rationale behind the investment^
shorter game formats and the introd ction of leag es.
e eral sports leag es toda r n with licences from the ue to the spot fixing scandal, the ustice M odha
respecti e sports associations. his res lts into a direct Committee pronounced the suspension of two of the
in ow of re en e for the associations. lso, indirect most consistent IPL teams, Chennai Super Kings and
benefits accr e in the form of sports infrastr ct re Rajasthan Royals for a period of two years. Owing to this,
de elopment and salar compensations that pla ers BCCI inducted two new franchisees for IPL Season 9
end p drawing from their respecti e cl bs/teams in the (2016) and Season 10 (2017).
leag es.
The two new teams, Rising Pune Supergiants and
ltho gh man contro ersies ha e marred IP , et Gujarat Lions, are backed by New Rising Promoters and
there is no den ing the fact that it is still one of the most Intex Group, respectively, who acquired their teams
prestigio s and pondered sports propert in India. e through reverse bidding process. While it is widely
it ad ertising spends or sponsorship re en e, IP still perceived that a short tenure (the teams would exist only
stands strong in the list. ring the pcoming season , for two seasons) might deter potential sponsors from the
where two new teams wo ld be pla ing their first innings, teams, this could be ruled out owing to the strong brand
the ad ertising spend is e pected to reach a new high of image of IPL. However, the new teams could possibly
I R1.2 billion. 1 lso, the e cl si e broadcast holder on be at a disadvantage vis--vis the existing teams in the
has increased the presenting sponsors from two to three following aspects:
comprising of ma on, ppo and odafone. 1 he season
is alread witnessing s ch strong n mbers owing to the By placing negative bids the teams have foregone
20 per cent increase in iewership d ring eason . 2 their right to the BCCIs central revenue, instead
they have to pay BCCI the respective bidding
amounts, INR160 million (New Rising Promoters)
and INR100 million (Intex Group).
IPL Season 9: bigger and better? Looking at the operational cost of the other teams,
the new teams are expected to end up spending
INR850 to 900 million annually.
If the owners are planning to capitalise on the
extended marketing opportunity, then they could
miss on the substantial sponsorship revenues being
earned in IPL.
On the other hand, keeping the absolute picture in mind,
these teams could gain the following advantages:
IPL can help the companies enhance their brand
values by providing them the desired exposure
outside their operating base.
The parent groups associated with these companies
might save advertising and marketing cost, which
Source: M ltiple press reports KPMG in India s anal sis, 2016
they would have otherwise incurred.
Through the IPL auction process, they have gained
access to some of the prominent and popular
players. The elite players being associated with
the teams can automatically become their brand
ambassadors for the next two years.
It could be ascertained that profit making is not a key
motive of the team owners as they do not expect to even
achieve breakeven in a short span of two years. In spite
of this, they have decided to be associated with the IPL
owing to the significant opportunity for corporate brand
building.
220
ew IP teams Inte , ew Rising to lose Rs100 crore each in 2 ears , i emint, 11 ecember 201
0. IP do bles I profit , IP ricket i e, http //www.iplcricketli e.com/indian-premier-leag e-

news/ipl-do bles-bcci-profit/ , accessed on 1 March 2016
1. ring IP , ad spend ma race to Rs 1,200 crore , he conomic imes, 2 ebr ar 2016
2. -commerce boosting tele ision re en es , inancial hronicle, 26 g st 201
Economics for league franchisees central
IPL as a league is an amalgamation of rights dominate the revenue pie
sports and entertainment, which makes it e eral IP franchisees ha e now reached the mat rit
conducive for family viewing at home or at stage of their gestation and ha e started making profits.
the stadium. The advent of other sporting his is in contrast with franchisees belonging to other
leagues following this format, is good for leag es, for whom the gestation period seems far from
the growth of the sector as a whole, as it
o er. mong the IP teams, KKR has been arg abl the
helps grow the sports watching universe. most s ccessf l franchise with net profits of I R10 .2
Eventually the same will also have a positive million, I R6 . million and I R 1. million in 2011-12,
rub off on IPL. 2012-1 and 201 -1 , respecti el . GMR ports also
Hemant Dua
made a profit of I R 0 million d ring 201 -1 .
Chief Executive Officer Key revenue streams for IPL teams

GMR Sports Pvt. Ltd.
Looking at the sponsorship figures (2014), IPL clocked

in the highest amount of INR6.5 billion, followed by ISL
which raked close to INR650 million. Pro Kabaddi League,
although giving neck-to-neck competition to IPL in terms
of viewership numbers (PKL 435 million and IPL
560 million in 2014), is yet to get the appropriate price for
sponsorship deals.83 As the popularity of a specific league
grows, so can the sponsorships. Early indications for ISL,
PKL and PWL seem to be positive.84
ponsorship fi ures for various sports lea ues
Source: ompan filings with M , Ind str disc ssion with KPMG in India, KPMG in India s anal sis,
2016
Many of the other leagues, such as PKL, ISL and PWL,

have either completed their first or the second season,
and have done a notable job in terms of attracting a
large number of viewers. But a sizeable fan base has
not transpired into big ground sponsorships, and several
franchises are yet to see traction from this side of the
revenue pie.
The economics of league format tends to remain
Source: port wiki, n o erall financial g ide for all the Indian sporting leag es , 2
Reported fig res for 201
ecember 201
similar across different sports. Although there exist
variations in the level of capital investment required (for
example, cricket and football need setting up significant
infrastructure compared to kabaddi, which essentially is
an asset-light sport), the key revenue and cost streams
are similar.
As an example of how a new league might stack up with
221 IPL and the way revenue and cost streams may evolve,
a comparison of ISL with IPL season 1 and their future
season has been provided.
. Pro Kabaddi eag e to ret rn profits b 201 , sa s tar India , i e Mint, g st 201
. Ind str disc ssions with KPMG in India
. lean bowled oss making IP team owners set for better r ns , Rediff.com, http //www.
rediff.com/b siness/report/pi -bowled-b -profits-ipl-franchises-set-for-better-r ns/201 120 .htm ,
Indian Super League (ISL) vs Indian Premier League (IPL)
Source: ompan filings with M , nal st Reports, KPMG in India s anal sis, 2016
erall, the leag e format is still in a gestating stage, and

ind str pla ers and other stakeholders need to take a We need to take a long term view
long-term iew of fostering and inno ating the leag es on the league format. 40-50 day league
to achie e s stainable benefits. Man leag es still need models like IPL are good for sponsors and
significant in estment to de elop and s pport leading broadcasters, but we need longer leagues
infrastr ct re. lso, a s stainable model needs to be to change the sports paradigm in this
fig red o t to ha e sports acti ities thro gho t the ear. country. They need to pan out longer
nlike football leag es of the est, for se eral leag es ranging from eight to nine months of a
in India this d ration is limited to 0 to 60 da s. ltho gh year, while considering team sports. When
Pro Kabaddi eag e has planned to ha e two seasons players get opportunity to play and perform
per year 6, the fact remains that for achie ing e cellent every day round the year that is when
stat re in most sports longer leag es might be re ired. youngsters would actually start taking
nother challenge for the leag es is to groom talent at up sports as a livelihood. That would give
the grass-root le el. he need to determine that this sportsmen at least 10 + years of sporting
amalgamation of sports and entertainment leads to life to showcase their talent.
the de elopment of sporting c lt re, and inspire more
children and o th to consider sports as a career option.
Supratik Sen
Unilazer Ventures Sports Business
222
6. tar ports Pro Kabaddi eag e to be back in ne , siness tandard, March 2016
Corruption is affecting the image of sports: Stakeholders need to be proactive in rooting out this evil
Deals and decisions behind closed doors and private interests and subsequently these teams were suspended for two
make sports a multi-billion dollar business from an economic years. Such instances have highlighted the need for better
perspective, but at the same time susceptible to corruption. management.
rom referees to players taking bribes, to fixing matches and
club owners rigging to betting scandals, reputation of sports The government did its part by pushing for introduction
keeps getting hit from time to time. of Sports Fraud Bill in 2015. The Lodha Committee Report
has gone a step further and laid down modern industry
The media reports on corruption in different sports ranging governance standard for the BCCI. The report has put forth
from football to tennis to cricket have been doing the rounds a detailed framework for a completely transparent and
for some time now. Such allegations have in several cases accountable governance body.
led to public dismay and doubts on credibility for sports
and sportsmen. There have been instances of advertisers Many Indian sports associations are plagued with similar
dropping brand ambassadors and sponsors terminating challenges, and transparency and accountability of office
their long-term association with sports. More often than not bearers is something that needs to be imbibed. An effective
sports administrators have been found to be perpetrators of way forward for them is self-regulation and evolving into a
corruption and illegal activities. professionally managed organisation. Otherwise there might
be need of regulations to ensure players independence,
In India charges of corruption and irregularities have been non-conflict functioning of organising committees, udicious
levied against IPL, which also affected its parent body-BCCI. dealing of ticketing, land acquisition, intellectual property
The Mudgal Report and Lodha Committee Report found rights, broadcasting and licensing rights, which could lead to
two of the most popular teams of IPL, Chennai Super Kings loss of autonomy for the sports governing bodies.
and a asthan oyals, guilty in the match-fixing probe
Source: odha ommittee Report, an ar 2016 KPMG in India s anal sis, 2016
Preventive steps to keep corruption at bay from sports
Source: odha ommittee Report, an ar 2016 KPMG in India s anal sis, 2016
223
Guest column: Developing a sports ecosystem in India
The importance of sports in harnessing the power of youth It is easy to say India lacks a sporting culture, while
towards nation building and economic development has been discussing the sporting ecosystem. Yes, the absence of grass-
evident ever since the 18 Olympics and has been firmly root sports infrastructure, leave alone giant world-class sports
established during subsequent international sporting events facilities, and the lack of a supporting education policy hurts
around the world. The last few years have seen a surge in the the overall nurturing of talent in sports at the village, district,
development of sports properties in India, and although at a state and national level. Hence, what we need is a more
nascent stage, the Indian sports industry presents substantial welcoming policy-driven approach with a central mandate,
opportunities. with a thrust from businesses with a promising blue-print to
build the right foundation of a sporting ecosystem. Here is an
There is a growing convergence between sports and interesting statistic from the mens 20km event at the third
entertainment in India over the last decade, as both have National Open Race Walking Championship. The top seven
risen to the challenge of leveraging new digital platforms and walkers clocked a time within the qualifying mark set for
technologies. Of late, Indias sporting calendar has seen the the Rio Olympic Games. This is an exceptional update, given
emergence of at least 12 recognised sports leagues across Indias traditionally weak qualifications in athletics, and the
nine different disciplines, giving unparalleled visibility to growing influence of marathons and walkathons among the
businesses and access to unseen opportunities to the Indian youth. There is talent, but it needs the right environment to
sporting talents. The reach has been phenomenal and so has be harnessed into a source of constant returns. Sports can
the influx of sponsors from varied domains. The popularity of offer significant employment opportunities, including sports
the league model has determined increase in gate receipts management, administration, business opportunities in sports,
and better TV ratings, leading to more free commercial time, coaching and fitness centres, and all of this is independent of
leading to increased sponsors shelling out more money and the final product the athlete.
supporting the game.
The various sporting leagues and events in India and across
Sports organisations of today are embracing their roles as the world have opened up the Indian mindset to now consider
entertainment providers with the realisation that their product sports as a full-time career. The grass-root level development
is unique and with the understanding that the development of of sports needs an immediate thrust through an active
a sports ecosystem could only sublimate to a greater success public- private collaboration. The government could help the
if the end-user the fan is kept in mind. The Pro Kabaddi development of sports through the education system by giving
League is one such example that rose, literally from the heart weightage to sports in academics and actively encouraging
of rural India to the urban masses, unveiling a utopian political sports scholarships, apart from enabling corporate
dream a seamless bridge of common interest between the participation through CSR platforms.
hinterlands and modern India, affecting a RURBAN sporting
revolution. India has more than 350 million people between the age
of 10 and 24, according to a 2015 UN report, and our youth
Sports broadcast has turned out to be a strong and viable continues to mobilise business decisions around the globe. It
model of investment leave alone the national sports would remain our most-valued asset for decades ahead a
broadcasters, telecast of sports in vernacular languages healthy economy needs a fit workforce. A sustainable sports
that have opened up new avenues for regional or local ecosystem could be the single biggest contributor to a skilled
brands to advertise, that too to the right target segment and fit economic powerhouse of the future, i.e., India.
at a comparatively reasonable price. This explains the
advent of local brand sponsorships in sports. And if Star
Sports endorsement of a property like Pro Kabaddi League
is the beginning of a trend for broadcaster investments in
sports, then we are perceptively looking at a higher degree
of professional sports properties in India clearly, a big
contributor to developing a sporting ecosystem, both for
businesses and the end consumers.
Add this with the growing interest of developed sports
economies, such as the U.S., driven by well-established sports
Karan Ahluwalia
magnets the NBA, the future is full of new avenues. NBA
officials consider the Indian market key to expanding the brand
outside the U.S. the next frontier, as NBA Commissioner
Adam Silver called it. About 14 live basketball games are Senior President & Country Head
broadcast every week on the Sony Six cable network starting Media & Entertainment, Fine Arts,
at 06:30 a.m. IST . According to NBA, these games and Luxury & Sports Banking Group
YES BANK Ltd. 224
other programming attracted 70 million viewers last season.
Therefore, the writing is on the wall India may soon see the
Unless otherwise noted, all information included in this column/article was
presence of other international broadcasters with a defined provided by the author. The views and opinions expressed herein are those of the
interest in driving talent and viewer interest for maximum author and do not necessarily represent the views and opinions of KPMG in India.
return of investment.
Way forward to a sustainable sports, nationally recognised sports, Paralympic sports
and Olympic sports as a CSR activity in Schedule VII of
sporting environment the Companies Act, 2013. More sports and grass-root
The onset and growing popularity of sporting leagues development activities could be brought under this ambit
is creating pervasive opportunities for various sports to help ensure increased investment in this space. Also,
focussed corporates and associated parties. Through for companies directly involved in sports, the process to
various commercial leagues, people are becoming raise capital for setting up training academies need to be
familiar with a gamut of sports, such as kabaddi, simplified.

wrestling, football and tennis. With these encouraging
triggers, it is necessary now to undertake grass-root
developments more rigorously. For sports to sustain as Promoting private participation
a business in India, it is imperative that it moves from The growth in the sports sector is attracting investment
a non-profit to for-profit model. The growing popularity by private players corporates as well as HNIs. For
calls for enhanced measures to encourage people to get example, Star India intends to invest INR1.5 billion during
involved with sports and develop an ecosystem. Overall, a time span of eight years for popularising hockey.87 The
sports as a sector needs a push from corporates as well government could explore measures to develop private-
as the governments to realise its full potential. investment lead sporting scenario, which could help in
Some of the steps that could further propel the growth in imbibing a sporting culture, thereby developing a sporting
this sector are: ecosystem. Some of the steps that could be taken are:
Public-private participation to renovate the existing
sports facilities
Granting industry status to sports
Inclusion of other sports activities like development of
For fostering growth and the overall development of the new sporting facilities under the ambit of CSR spend
sports sector, there is merit in assessing the need for the
sector to be granted the status of an industry. This could Tax holidays and financial incentives for investment
go a long way in increasing access to organised funding made toward grass-root development of sports.
for companies in the sports sector. For the government
too, granting of industry status to sports could lead to
following benefits: Improving infrastructure
The cross-sector linkages of the sports sector are More sporting events call for more stadiums and a
quite significant and could lead to having a multiplier better experience therein. To strengthen the revenues
effect on the growth of other sectors. from gate receipts, we need to focus on developing
stadium infrastructure, which can then play a pivotal
The enhancement of sports related exports, could role in enhancing the footfalls for various sporting
directly and indirectly enhance the receipts of the events, aiding monetisation of these investments.
government. Financial incentives could spur investment towards the
The development of various sports could lead to development of new infrastructure and redevelopment
increasing contribution to GDP through various of existing infrastructure. This is expected to push
revenue streams. This is likely to have proportional corporates to increase their spending. Another aspect
effect on the overall economic development of the of improving the infrastructure could be providing allied
country. services, such as offering free Wi-Fi to spectators. This
could provide an exciting avenue to spectators to share
real-time images, videos with friends over social media,
Development of human capital etc. For example, free 4G services were provided during
all IPL 2015 matches at the Wankhede Stadium.88
There is a dire need for improving human capital in
sports. The government and corporates need to focus To conclude, concerted efforts have been made in
on imparting appropriate skills to people interested in developing the sector over the past few years. There is a
sports. The environment could be such that sports are need to enhance cooperation and coordination by both
not treated as a secondary profession. There could be the government and corporates to strengthen the sector
an enhanced focus on establishing training academies from the grass-root level and develop a conducive climate
to produce high quality coaches, players, support staff, towards building sporting infrastructure and facilitating
etc., as they are instrumental in promoting sports and human capital development which put the sector on an
achieving excellence in the respective sporting field. accelerated path and enable India to emerge as a strong
To incentivise corporates to spend in this regard, the sports supporting/loving nation.
225 government had included training to promote rural
. tar India to in est I R1 00 crore to t rn aro nd India s hocke fort nes , i emint, 2 an ar 201
. Reliance io to G-f ankhede tadi m for IP matches , India, 1 pril 201
226
Live events
Ready to perform
Industry overview
i e ents e perienced a mi ed ear in 201 . ome or e en other erticals of media and entertainment to
of the generic trends of 201 and 201 across s b sectors warrant serio s polic attention.
like e periential marketing, intellect al propert IP and
e ent management started to ar in 201 b indi id al
compan , region and e ent t pe. stablished b siness
models are starting to gi e wa to newer and disr pti e The relevance of the activation & live events
approaches. sector as part of the the entire media and
entertainment industry has not been built
ent sa go ernments both center and states to potential yet. Little had changed over
emerged as the major new client gro p. e perienced a the years as the industry has not been able
growth of 1 per cent in 201 o er 201 01 with impro ed to grow its share of mind commensurate
cons mer spending, more ariet of e ents offered, and to industry growth. Things are rapidly
greater penetration into ier II and III cities,. owe er, changing now and I can see Activation &
the ind str contin ed to grapple with similar set of Live Events becoming a much stronger
infrastr ct re and compliance-related challenges this force and a much better industry. The need
ear as well as the did last ear. of the hour is various agencies coming
he ear witnessed a fair start across all s b sectors as together to form an audience engagement
the ear-end moment m of 201 carried o er. March to measurement system for us, possibly similar
g st was challenging for all companies across the to BARC.
board and most pla ers claimed it was worse than s al
seasonal dips. here were fewer MI and o erseas
corporate reward e ents that s all gi e respite to the Atul S. Nath
ind str in the s mmer. owe er, from eptember, the Founder & MD
ind str witnessed a phenomenal s rge in e periential Candid Marketing
marketing, go ernment-related e ents, and IP. ome
companies did more b siness in the last three months of
the ear than pre io s nine months combined.
he ear ended on an optimistic note with impro ed
alit and increased antit of e ents and the his chapter which seeks to capt re the trends that
organised pla ers entered 2016 with an increased shaped the ind str in 201 , and predict some for the
confidence and a big pipeline. he ind str remained ear 2016.
fairl fragmented thro gho t the ear. arger pla ers
contin ed to face competition and attrition in the
e periential marketing space and the ear also saw Exclusions
m shrooming of newer local, and m ltinational pla ers he fragmented nat re of the ind str hinders acc rate
with specialised competencies, offering ser ices in niche si ing of the ind str s re en es. In inter iews and
segments. he market for IP, on the other hand, has research cond cted for this chapter, estimates ranging
beg n to consolidate, and go ernment-related e ents from as wide as between I R12 billion to I R1 00
a tomaticall e cl de smaller pla ers. billion ha e been shared01. he e periential marketing s b
Major pla ers in this b siness demonstrated mat rit sector alone has been pegged, b ind str e perts, at
and a spirit of cooperation b coming together at ario s I R 0 billion ann all 01.
le els to address common concerns of the b siness. his norganised part of the b siness is predominantl
en e management and a ailabilit , ta polic , permission in social weddings, get-togethers, celebrations etc.
proced re, personnel, and nhealth competition and political rallies, felicitations, meetings, etc. e ents.
ha e been and contin e to be significant iss es for the here is no do bt that this spend is h ge and perhaps the
ind str . t b speaking in one oice, companies biggest n mber of e ents in India are indeed social and
ha e started to get some attention from polic makers political. his chapter e cl des these d e to dearth of
and in encers in the states and, to some degree, at the erifiable data and predominance of cash transactions.
center. ome indi id al e ent companies and IP owners
ha e s ccessf ll made an impact. nfort natel the
total si e, ta contrib tion, and economic impact of is
still considered too small when compared to to rism,
228
Live events industry in 2015 Economic recovery
Parameter Compared with 2014 Ind str disc ssions and research indicate that the
impro ement in the Indian econom helped grow the
Number of events (estimation) Increased by ~25% ind str 02. ith per capita net national income increasing
b . per cent0 , the PI nder control, and c rrenc
Profitability Flat; as margins under pressure being stable o er the past ear, P rchasing Price Parit
The Future: now streaming | Live events
PPP of the Indian cons mer saw an pward trend. his

Client Base/Demand Increased by ~18% also led to increasing Marginal Propensit to pend
MP towards ser ices it is estimated that nearl -10
Venues for Live Events Expanded slightly per cent of this MP is directed towards entertainment
b an a erage Indian ho sehold0 . he res ltant increase
Government Policies/ Same; some states got better in spending power co pled with a shift of cons mer
Framework preferences and tastes led to greater cons mption
of e periential entertainment . ootfalls at IP e ents,
Taxation Same; unresolved to industrys brand la nches, street festi als and niche e ents ha e
demand increased 2 - 0 per cent in 201 compared to 201 0 .
ategories like m sic, literar and art-related, a tomoti e
Infrastructure Moderately improved in some e periences, and food were the biggest growth dri ers.
states he b lk of the attendees still contin e to be in the 20-
ears age gro p b t newer a diences are being added
Regulation/regulatory bodies Absent; currently self regulated in smaller towns, and niche e ents aimed at the
age gro p is gaining traction. he ear also marked an
Source: Ind str disc ssions cond cted b KPMG in India
increase in ticket prices and food and be erages
spends at en es. icket rates ha e seen increases
ranging from 0 per cent at pop lar li e m sic and M
festi als p to 00 per cent at food, stand p comed ,
and fashion e ents , witho t affecting footfall0 .
It is live shows and live events that are
gaining momentum. Not only are more ent companies are increasingl foc sing on b ilding
international artists keen to perform in IPs in order to capitalise on the growing demand for
India, the number of shows, artists and alit e ents. IPs command a premi m o er other
ticket prices are also on an upswing. While e ent-related ser ices, generate more stable re en e
comedy and electronic dance music are to the compan , get signed on for long-term deals,
most sought after, Bollywood-themed demonstrate meas reable res lts, and are more resilient
live events are also highly popular. There to economic slowdowns. It also impro es the companies
has been the rise in the popularity of and perception in the market and in the minds of c stomers
demand for live events in general and and in estors. n pricing, interestingl , e en college
intellectual property (IP) driven events in fest and corporate e ents which are meant for a certain
particular. While IPs comprises just 2 per capti e a dience are also being ticketed d e to a s rge in
cent of the total events conducted, they demand.
provide 21 per cent of the total revenues. It
draws crowd and boost local economy. omed and stand- p acts as a categor is growing
in e cess of 200 per cent ear on ear, with se eral
Harindra Singh
international artists showing keen interest in India, and
national artists tra eling to smaller towns. he ticket
prices also a erage between I R ,000-6,000 which is
Chairman & MD higher b 0 per cent than li e m sic shows0 .
Percept Limited
ome of the credit for e pansion in market m st also go
to better marketing and inno ati e content. Growth in
new concepts in li e shows m sicals s ch as ea t
and the east , international speakers, combining
oll wood with stand p comed , and destination m sic
e ents , special interest motorbike riding and car rallies,
pet shows, personal finance and in estment s mmits,
and road-free da s combined with localit fests and at
camp ses e tension of li e m sic and M brands,
229 li e theme-based shows, and e pansion of college
fests ha e boosted the market significantl . More li e
02. http //www.tradingeconomics.com/india/cons mer-spending e ent options mean greater choices for the e isting and
0 . conomic r e of India 2016 dormant cons mer, and some e ents now appeal directl
to hitherto-ignored segments. his trend is e pected to
accelerate in 2016 and 201 .
ith a stable go ernment, e ent companies saw a onsolidation and collaboration acti it , so pre alent in
marked ptick in the n mber of en iries from their other parts of the media and entertainment ni erse, has
corporate clients in 201 . ho gh MI , corporate e ents started to show some signs in .
and r ral acti ation remained m ted for most of the ear,
brand promotions and la nches saw a definite growth.
ertain sectors of the econom s ch as e-commerce,
retail, apparel, and telecomm nications hardware and Music festivals are now being set up
a tomoti e witnessed 2 per cent growth, while in new, exciting destinations such as
infrastr ct re, cement, steel and telecom ser ices Shillong where the response has been
saw spending dip significantl 0 . s with other forms of overwhelming. Fans value high quality
promotion, the largest new categor of spenders were experiences are willing to pay for it - as
general merchandise e-commerce, their fashion and a result, ticket prices have been going
apparel co nterparts, and radio ta is. his was closel up. Some of the stage governments have
followed b a new wa e of hinese telecom handset become incredibly supportive including
brands. ithin a tomoti e, the massmarket brands Delhi, Maharashtra and Meghalaya -
stepped p spends while those of l r carmakers making it easier to organise large format
remained at.0 events. Brands continue to invest in such
he pri ate sector s se of e ent companies, and properties as sponsors given the attractive
sponsorship of li e e ents, o er other ad ertising ROIs from them and the ability to engage
medi ms, barring digital, increased between 1 -20 per with fans directly.
cent between 201 and 201 . ithin their ad ertising
b dget co ering sales stim lation, brand b ilding and
la nches e periential marketing and sponsorship Ajay Nair
of li e e ents is estimated to be in the region of 2 - Chief Operating Officer
0 per cent0 . In 201 , companies that do not ha e Only Much Louder (OML)
massmarket cons mer brands like technolog ser ices,
infrastr ct re, petrochemicals and s pport ser ices
or rel significantl on a dealer network ins rance
and financial ser ices, t res and l bes, appliances and
electronics, and a tomoti e ha e been raising their
e periential marketing b dgets faster than massmarket
cons mer brands. ons mer brands, especiall those
nable to ad ertise directl like li or and tobacco, ha e
been increasingl leaning towards sponsorship of fashion,
m sic and art e ents.
itnessing the general growth in the econom and
the e ents market, se eral international companies
are fora ing into India and consolidation is grad all
happening. bai Parks and Resorts, the Middle ast s
largest integrated theme park resort, has la nched a
talent h nt for performers and artists for a ariet of
shows across its parks and at the world s first oll wood
themed park oll wood Park bai06. erriswheel
ntertainment has won the open national tender for the
i International esti al. ith o er 1 0 shows and 00
artists, i International esti al will be the longest beach
festi al in sia. et to take place from ecember 201
to ebr ar 2016, this festi al will ha e a ni e format
with different artists performing to different themes
e er week. It will sim ltaneo sl foc s on jam sessions,
concerts, literar and art programmes, workshops,
comm nit o treach programmes and carni al. his
reiterates the importance of IP, destination and global
in ences in the e ents sector.07
230
0 . Ind str disc ssions cond cted b KPMG in India 0 .

06. http //www.b siness-standard.com/article, o ember 1 201 alent nt for oll wood inspired
theme park in bai begins
0. http //www.e entfa s.com, ctober 1 201 , erriswheel wins m lti-agenc pitch for i
International esti al
elow is a snapshot
Date Event management agency Type Description
Sep-15 Universal Acquisition Universal has entered India live music festival scene, by buying 50 per cent
stake in Enchanted Valley Carnival08
Sep-15 IMG Acquisition WME | IMG had announced the acquisition of The Miss Universe
Organisation, which includes MISS UNIVERSE, MISS USA, and MISS
TEEN USA, from Donald J. Trump. The Miss Universe Organisation is an
international organisation that advances and supports opportunities for
women09
Nov-15 Wizcraft Entertainment Advertising Campaign Wizcraft has joined hands with TATA Motors to launch their experiential multi
city campaign for their Passenger Vehicles Business10
Nov-15 Wizcraft Entertainment New Initiative-Infrastructure Bollywood Parks Dubai, in association with Wizcraft, is working on a
Bollywood inspired theme park in India11
Dec-15 Percept Product Launch Percept ICE executed the launch of the 21st Century Beetle for Volkswagen
on 19 December, 2015 at the India Dome, NSCI in Mumbai. The spectacular
and much awaited gala launch event saw more than 500 guests attending.
Jan-16 Fountainhead Acquisition Dentsu Aegis Network acquired Fountainhead Entertainment. Within the
Dentsu Aegis Network structure, Fountainhead and psLIVE India will be
merged to form Fountainhead-MKTG12
Government in the drivers seat

Consolidation is inevitable and will happen
faster than we think. The benefits of the Man ears ago, the ibrant G jarat e ent set the tone
being part of a larger entity are many: global for go ernment-backed e ents in India. In 201 and
best practices, systems and processes, going into 2016 this became de rige r for almost
cutting edge international technology, all state go ernments and state backed e ents ha e
and management bandwidth can quickly proliferated, keeping e ent companies er b s . he
be brought to India. Global media groups central go ernment, in t rn, was the ag bearer hosting
are very bullish on Indian IP events as a n mero s e ents with significantl large b dgets.
business segment. Such alignments also hemes s ch as Make in India , igital India , tart p
inculcate fiscal discipline in the company, India, tand p India and Pra asi harati a i as as well
and diversify risk. as wachh harat got bigger, went global and became
more sophisticated. he center s comm nication
Brian Tellis
strateg was deli ered across the co ntr thro gh state-
le el and cit -le el e ents and amplified ia social media.
cross the ind str there seems to be nanimit that
Chairman the c rrent central go ernment is the most e ent sa
Fountained Promotions and Events and e ent friendl go ernment in histor .
he general feedback was that the central go ernments
e ent programmes were well planned, professional and
metic lo s and that it belie es e ents are the most
effecti e wa to achie e reach and connecti it with its
a dience. e eral state go ernments irrespecti e of its
r ling part ha e ca ght on to the trend, and are sing
0 . http //articles.economictimes.indiatimes.com, eptember 11 201 , ni ersal enters India li e state backed e ents to achie e similar res lts. tate
m sic festi al scene, b s 0 per cent in nchanted alle arni al go ernments sed mega e ents to showcase its s ccess
231 0 . http //www.cbsnews.com, eptember 1 201 , oll wood talent agenc b s Miss ni erse
and policies primaril in agric lt re, ind str , to rism and
from r mp
10. http //www.e entfa s.com, o ember 10 201 , i craft to roll-o t on-gro nd acti ation with technolog some of these e ents were aimed at wooing
Messi for Motors madeofgreat campaign
11. http //www.e entfa s.com, March 26 201 , bai Parks Resorts partners with i craft for in estment, and some with an e e on the electorate.
oll wood
12. http //economictimes.indiatimes.com, ctober 1 201 , ents egis b s o ntainhead
ntertainment in Rs. 00- 00 r eal
tate-le el decision makers ha e come to the concl sion
that grand e ents are better at showcasing their The Rajasthan Chief Minister and her
leadership, and h man de elopment and economic government actively supports festival across
progress than traditional media. ents, in their opinion, the state and understands the potential that
tend to pro ide greater reach b word of mo th and et this has in bringing together built heritage,
manage to reach those nconnected to digital media.1 arts and entertainment and its contributing
ince mid 201 , when the c rrent go ernment took to local economies and in creating jobs! The
office, the moment m of s ch e ents has risen sharpl . government has been extremely supportive
cti it among e ent companies ser icing this segment of the annual Jaipur literature festival and
is p threefold1 . eside j st managing and e ec ting realise its potential as a brand ambassador
e ents, e ent companies are now being called to help of Rajasthan and Jaipur and as a economic
craft strateg for go ernments. Pre e ent disc ssions contributor to the state.
with e ent companies incl de their inp ts on location,
date and timing, se of hardware, promotional strateg ,
stage and en e design, a dience participation and Sanjoy Roy
control, social media amplification, and content e ent Managing Director
ow . ent companies often complain that the Teamwork Arts
pri ate sector considered their traditional clients
ha e hardl e er sed this skill set. e to recepti e
nat re of go ernment towards new ideas, inno ation,
technolog , and acceptance of international pla ers and
their e perience, e ent companies are now beginning
to serio sl in est in hardware and capabilities 1 . his go ernment p sh in 201 is co pled with greater
Go ernment b siness, therefore, has helped e ent transparenc , both at state and central le els, in tendering
companies a gment their strategic capabilities and and awarding of contracts. rganised and larger e ent
e ec tion skills. companies ha e th s benefitted when compared to
smaller, opport nistic pla ers. Picking an e ent manager
Indi id al states are also taking efforts for smooth for a go ernment project is no longer j st price-based.
f nctioning of the entire al e chain of the e ent with ent companies are seeing ideas technical bids
foc sed and predictable concept alisation, planning, getting increasing weightage to price. rther, companies
prod ction and e ec tion, and post e ent b thro gh that forsake go ernment b siness d e to percei ed
social media. o boost leis re and ad ent re to rism and corr ption and sloth concerns and foc sed on the pri ate
a iation based entertainment in the state, for e ample, sector, in the pre io s ears, seem to ha e lost o t. 6 of
he epartment of o rism, Go ernment of ttar the top 10 e ent companies inter iewed for this chapter
Pradesh, in association with - actor and k alt will mentioned that go ernment b siness is more than half
hosted the aj alloon esti al in gra. he de elopment their ann al re en e. f co rse, good networking skills
was anno nced to the media and press on the orld and nderstanding of the administrati e mechanism
o rism a 1 . he Rajasthan go ernment s s pport for contin e to remain ke s ccess factors.1
aip r iterat re esti al is ill strati e of this growing
trend.1 ith more than 0 new initiati es being taken p b
the central go ernment in 201 , the e ents ind str
was nderstandabl e cited and moti ated. lso, the
recognition of e ents, b the highest decision makers, as
a tool to achie e comm nication objecti es, citi en reach
and direct a dience connect comes as a major boost.
his is e pected to strengthen in 2016 and possibl there
will be a shift in go ernment approach from organising
e ents for la nches, declarations and s mmits to greater
e periential initiati es and grassroots to ch and feel.
Indi id al political parties and politicians are alread
creating new e periences for stakeholders. ocal area
festi als, road-free areas, direct citi en interactions,
and state-backed religio s e ents are growing and
getting increasingl integrated with the go ernment s
administrati e approach.
232

1 . http //www.e entfa s.com, ctober 1 201 , gra to host alloon esti al 201
Indian states and events (A glimpse)
The industry is witnessing a multiplicity of
State Event Tourism
similar events coming up across the country.
As an organiser it is increasingly putting a
Maharashtra Make in Maharashtra Elephanta Festival
pressure on break-even. It is very critical to
come up with new and unique ideas to grab
Gujrat Vibrant Gujrat Summit Rann Utsav
the attention of the target audience and

create brand establishment. Also essential
Madhya Invest MP MP Travel Mart
is to try and experiment with organising
Pradesh
different types of events, targeted at people
from various demographic profile.
Telangana HYSEA Annual Summit Surajkund Crafts Mela
Chhattisgarh Opportunity Chhattisgarh Sirpur Mahotsav

Leher Sethi
Founding Director
Assam NE-MSME Live Summit MLTR Live concert Something Creative
Co-ordinator
Kerala Young Entrepreneurship Visit Kerala Initiative Indian Council of UN Relations
Summit
Advisor
Source: ebsites of Indian tate Go ernments Delhi Literature Festival
Status check
i e concerts and e ents are no longer restricted ome of the ind str s own str ct ral problems
to a compan s abilit to so rce an artist or a single fragmentation, low barriers to entr , bottom end of the
promoter b siness that can j st o tso rce prod ction al e chain, and lack of benchmarking, among others
witho t ha ing in-depth knowledge, technical e pertise are intensified b macroeconomic and reg lator
or nderstanding of the challenges. is now r n challenges s ch as ta ncertaint and e cessi e
b professionals with e perience of handling and ta ation, b rea cratic h rdles, lack of go ernance and
nderstanding complicated riders, and also credentials reg lator ambig it . o address these, and other iss es
to con ince clients, go ernments and a diences on of common concern, major pla ers in ha e come
their ideas and e ec tional abilities. ertain Indian e ent together on platforms s ch as the periential and ent
companies ma ha e reached s ch le els of e pertise Management ssociation M and R ral Marketing
to nderstand, appreciate and na igate the comple ities ssociation of India RM I 1 .
of the b siness1 . In the reports of 201 and 201 we
identified se eral concerns for the sector. In 201 , it M and RM I are de eloping common minim m
clearl seems to be still str ggling with the same iss es programmes to help the ind str present its case to all
and challenges of the past ears. stakeholders. he main goals are
to be recognised as a large and significant
industry group in terms of revenue, taxes paid and
employment;
to present their point of view including problems
faced and concerns to decision makers in
government and clients;
to design common solutions for states, third
parties and regulatory bodies, and remain united for
challenges faced by their members; and
to reward and recognise their own efforts at brand
building and innovation.
233 hile there is no do bt the efforts of M and RM I
ha e res lted in go ernments recognising s growing
1 . Ind str disc ssions cond cted b KPMG in India stat re, we belie e, there is still a long wa before
16. M website finds the same sort of impact as tele ision or films or
1. http //eemaindia.in/eema-regional-initiati es/
e en digital.1 ,16,1
rep tation, and diminishes the reso rces, of the
The event savvy government is making ind str . ccording to e ent companies, this ear also
conscious efforts to boost the Industry, witnessed the alleged mis se of legal reco rse b IPR
moving forward on single window owners d e to the lack of proper adj dication bodies and
licensing and ease of business. Noticeably, laws.
government projects, similar to the private
sectors approach, are being provided large
scale event launches engaging some of the Infrastructure and venue management
best event agencies. However, recognition faces a two-wa challenge in India for both en e
of the Live Events as an Industry needs and infrastr ct re s pporting the en e. espite the
to be given importance and fast tracked. antit and sophistication of the e ents cond cted,
Theres need for definition of standards and India remains a highl immat re market for en es, and
a well-structured regulatory body to design connecti it and access to en es. his affects logistics
framework, norms and influence as well as of e ent management and adds significant costs to the
accelerate skills development. Expectedly e ent which mostl gets passed on to cons mers or
this will take time; but all stakeholders the sponsor thereb inhibiting growth of the sector.
should come together to achieve this
purpose.
Venues:
Dinesh Kummar 1. India lacks adequate and proper all-weather venues.

Most events still need to rely on sports stadiums,
open public areas, and hotel banqueting facilities for
CFO
Wizcraft International Entertainment events. The Dome (NSCI Complex-Worli) in Mumbai
Pvt. Ltd. and HICC (Hitex Convention Center) in Hyderabad
have recently come up to offer mutli-event, year
round event hosting.
2. Infrastructure for organising an event for a crowd
of 15,000 or more such as parking, toilets, safety
and fire management, emergency response and
assembly, medical aid is sorely lacking, and event
The main challenges that continue to companies still need to arrange for this themselves.
hamper LE18 Large-scale events are highly city or state government
IPR and violations dependent for such support, as well as permissions,
opening up possibilities of arbitrary and corrupt
is marred b a lack of consistenc in pricing norms practices. Industry still needs to depend on the open
for p blic performance of m sic and film-related IPR. spaces and stadiums for such events
here are no reg lations, transparent pricing and tariff
cards for the performance of li e m sic at e ents. his 3. Venue permissions especially for those controlled
leads to arbitrar charges imposed b m sic labels,Indian by the government and government bodies like
Performing Rights ociet IPR and Phonographic the Archaeological Survey of India (ASI) or Sports
Performers imited PP on e ent companies. ent thorit of India I take a long time to come,
companies complain that large and recognised e ents are and come with se eral restrictions. ent companies
charged e cessi el for li e and recorded performances, belie e that loosening of these strict norms will
and in the absence of p blished rate cards, the are often pro ide a massi e boost to to rism, destination
held to ransom b IPR owners. n the other hand, there e ents, and generall to arts and c lt re in the
are h ndreds, if not tho sands, of nreg lated m sic co ntr .
performances across the co ntr and o erseas iolating
e en basic IPR and PP norms. M sic labels and their
nominees complain of ast leakage and pirac from li e
e ents leading to se eral h ndred millions of R pees of
losses.
he percei ed iolation of IPR and pricing disp tes in
m sic and ideos is the major reason for legal disp tes
and co rtroom battles for e ent companies. mall and
social e ents are a big so rce of re en e leak ad ersel
affecting not onl the m sic labels, b t also the larger
234
e ents and e ent companies b b rdening the latter with
higher costs. Its h rts the profitabilit and also the
Government permissions, licenses and NOCs
There is only one factor common to real Required Details
estate and event management: Location,
Location, Location!!! In the past, we have Phonographic To play recorded music
had big concerts on uneven, open-air Performance
grounds where basic facilities were also License
unavailable. Live Events can only grow if

venues adopt the AEG Business Model: Excise License To keep and sale of alcohol in Live Events
consistent quality at par across the
country and a definite impetus on quality Loudspeaker To keep and usage of loudspeakers
of offerings to customers who come to License
enliven an experience.... The fact that Indian
venues like the Dome have realised the Premise License A premises license allows an event to carry all
importance of offering the best Plug & Play the licensable activities at the venue such as
facilities denotes the level of seriousness of providing late night entertainment between 11
the promoters. pm and 8 am
Mohomed Morani Performance

License
Performance license allows a child (anybody
below 18 years of age) to perform and take
Director part in the musical event.
Cineyug
Entertainment Tax Entertainment Tax has to be calculated based
on the estimated number of tickets to be sold.
The percentage of entertainment tax varies
from place to place and state to state.
NOCs from ire epartment, Police, Traffic epartment,

Connectivity
Electrical, Health, state art bodies and the
1. Transportation and board facilities for individual Ministry of External Affairs (in case of foreign
visitors to leisure events are still an overlooked issue artist)
both by organisers and local bodies. Events such as
Sulafest in Nasik, Hornbill in Meghalaya, Sunburn Source: http //blog.merae ents.com,
e ent in o r it
ne 201 , icenses and permissions for organising a m sical
in Goa, Rann Utsav in Kutch and many others can

greatly benefit and grow if these two main facilities
are augmented. o organise a single e ent, it ma take 1 - 0 licenses and
2. Physical infrastructure like roads, railways and air permissions from local bodies to the central go ernment.
connectivity is also not available at optimal capacity to his leads to increase in costs, time and h man
Tier II and Tier III towns hindering growth prospects reso rces spent, inefficient senior reso rce tilisation
of several LE properties and campaigns. Event and b rea cratic hassles.
companies are of the opinion that smaller cities and
towns have similar purchasing power compared to
pockets of the main metro cities. Reaching these
consumers is, however, expensive and inefficient
given under developed infrastructure.
3. The annual budget in 2016 has sent positive vibes
as it pushes for better and improved infrastructure
in, and to, all state capitals and across rural India. A
meticulous and practical implementation of the same
will help industry to grow 2-5 per cent faster than the
current rate as per the experts.
235
No major growth spurts but the industry has
maintained its pace despite the economic
slump. There is happiness & creativity all
along. From the policing aspect, Events
& Entertainment has always been a state
subject but the central government needs
to tap the live events industry and bring
reforms in Taxation, Licensing & other
clearances process to establish the industry
further
Tax should be levied only on event
management fees instead of the whole cost.
The government needs to take a fresh look
at the challenges still plaguing the industry
especially taxation, bureaucracy and black
money and resolve them at the earliest.
Government events have come up as a
major stakeholder for the industry but the
tendering process has huge implementation
and empanelment issues.
Rajeev Jain
Director
Rashi Entertainment Pvt. Ltd.
The expectations
Recognition for LE as an industry Creating ministry, or department within a ministry, for LE to coordinate at the highest level.
Formation of a regulatory body to monitor and govern LE on the lines of TRAI or IRDA.
Design tariffs and benchmarking frameworks.
Establishing approved training institutes and design courses for all the aspects of event management for skill
development.
Access to bank financing at reasonable rates.
Single Window Clearance Perhaps the most loudly voiced demand from all the stakeholders with equal enthusiasm. Industry expects to
reduce corruption, hassles and time spent on permissions and activities related to documentation. These benefits
could be passed on to the consumers. Single window clearance is a potential solution to curb red-tapism and
bring in transparency.
Reduce Taxation Service Tax: Makes the ticket price of the event go up for the end consumer. This additional burden has to be borne
by the end user, adversely affecting sales and market growth.
Entertainment Tax: A state levied tax based on the forecast and estimation of visitors is said to make the return on
investment less certain for the event management company.
Other Wish list Flexibility and extension in the maximum permissible time of the outdoor events.
Creation of entertainment zones and infrastructure in those zones.
Open up historical and government-controlled venues for greater and flexible private use.
Source: Ind str disc ssions cond cted b KPMG in India
236
Technology
LE have rapidly adopted technology across several areas F&B management (cashless events), live streaming, 360
of the business. Increased and in some cases quantum degree and 3D views, and virtual reality to making a huge
leaps use of technology has been seen across the impact on the actual content.20
industry in areas ranging from promotion on social media,
amplification of the event, sustaining event communities Technology is broadly being applied in three areas:
through the year, product launches, hardware for the event, Apps and online platforms on social media and digital
on stage and on ground, increasing glamour and the wow media for added value, increased reach, amplification,
factor, and impressing clients. Indian clients, including lengthening the event duration, and faster
government departments and agencies, have become communication.
eager and early adopters of wide ranging technology. This
is on par with developed economies; though in terms of The message is spread quicker, faster and cheaper and
budgets offered, India still has a long way to go. is resulting in increased footfall, better use of promotion
budgets and increased profitability per event. This is
With the rapid adoption of digital way of life among Indias also being followed up with faster review and feedback
consumers, clients and the government, event companies from audiences. Event managers and IP owners are able
have quickly adapted to use technology in their value to make quick course corrections and reset strategy
proposition, services offered, and in-house skill set. The if required. Social media, when managed well, also
introduction of digital initiatives by the government has lengthens the event by allowing for early announcement,
compelled government decision makers and their event building hype over a period of time, live coverage, and post
management vendors to move up the curve quickly to event community development and management. This
appear tech-savvy and tech-friendly. helps annual and multiple location events maximise their
On the content side, especially for dance music, digital marketing budgets. All stakeholders are expected to
technology has been the single most influencer, greatly increase their share on social media. Penetration of
differentiator and disruptive in the last 12-18 months. digital marketing technology in the LE will be two phased,
Technology has helped artists reposition themselves, i.e. primary to add value and secondary to add experience.
changed the look and feel and experience of concerts and Social media platforms like Facebook, twitter, Instagram,
festivals. Innovations through technology has touched Snapchat and Youtube will continue to revolutionise
each and every part of a LE - from mobile friendly ticketing, content marketing in year 2016.
social media led loyalty programmes, RFID for access, and
237
Event Name (As on February 4 2016) Presence Facebook Likes Twitter Followers Instagram Followers
IIFA Awards Yes 3,881,442 135,000 166,000
Jaipur Literature festival - 29,792 11,700 2,446
Sunburn Goa Yes 1,695,941 330,000 139,000
India Bike Week Yes 425,240 4,872 6,440
Femina Miss India Yes 577,432 14,659 873
Filmfare awards Yes 18,612 20,20,00,000 -
Tata Coffee Grand Yes 294,085 941 38
Lakme India Fashion Week Yes 845,953 63,200 201,000
Mood Indigo/Techfest Yes 372,984 5,802 -
Standard Chartered Mumbai Marathon Yes 116,701 3,771 -
Pro Kabaddi League Yes 16,644 40,700 -
Badminton (Indian Badminotn League) Yes 111,681 - -
Hockey (Hockey India League) Yes 2,019,735 16,600 -
Bacardi NH7 Weekender Yes 447,083 217,000 -
Storm Yes 55,103 4,271 -
Sulafest Yes 69,622 8,138 11,300
Escape Fest of art and music Yes 14,629 483 -
Source: KPMG in India nal sis
Cutting edge technology is currently in use in India

Indian brands and consumers are looking across events in areas of security, crowd control and
optimistically to leverage the new avenues ticketing.
in technology with equal zeal. I feel mere App-based payments are now fully integrated into
technology in ive Events is a superficial ticketing platforms and the events mobile and online
term. Going beyond, we should look at it portals.
as primary and secondary. In near future, Unique identification codes tagged to individual users
primary will add value to the Event through and consumers allow event companies, especially IP
live streaming, cashless transactions and owners, to minimise box office losses and revenue
safety measures etc. The secondary will leakage. The physical tags (wrist bands) are increasingly
create like never before experience. Thus in becoming intelligent, with each of them now unique
my view, it will be technology to add value to the ticket or pass holder. High precision cameras
and technology to create experience. and heat sensing devices are commonly being used at
high-end events to monitor crowd activity for security
Jaideep Singh and safety, and prevent hazards. This is particularly
widespread at government events with heads of state 238
Senior Vice President and attending. At the same time, the back-end functions of
Business Head control centers and online event flow management have
Integrated Network Solutions been rapidly digitised and moved online. In some cases
this has led to increased costs but in view of the
security and safety concerns in crowded venues, many IP Techies wish list
owners and clients are insisting on these measures.
Primary Secondary
Hardware technology at events have shown a
Live streaming Hologram and 3D techniques
remarkable improvement at events
Cashless transaction Niche consumer centric
From plain vanilla application of back-screen projections Automatic and mechanised safety experiential content
and basic pyro-technics, events in India have moved to management Participative design and production
drones, virtual reality, holograms, and other immersive Online vendor code techniques.
technologies. Spurred on initially by social and political
events, hologram and 3D technology is increasingly
being used at corporate events and IP events. Improved Source: Ind str disc ssions cond cted b KPMG in India
bandwidth, omnipresent smartphones, cumbersome

travel and venue infrastructure, and limits to crowd
capacity are all converging to boost use of such
technologies on the ground. Live streaming allows
remote participation by those unable to attend in person;
while virtual reality is becoming popular for automotive
companies to generate sales through real experiences.
One everyday consumer brand is now planning to launch
its products online 60-90 days before it is physically
available in stores. And based on the response they may
not even do a real-life launch through traditional media.
Indian consumer today is more aware of

and exposed to the use of International
level technology due to digitisation and
globalisation. He demands the finest and
the latest technology for Events to create
and deliver a world class experience. This
comes after the clients have realised
importance of being viral and digital.
Brands are also willingly ready to pay the
price to get the best for one of the biggest
emerging markets. I see technology as
an extension rather than an alternative.
Technology in Events will take a giant leap
with world class Technology being used
in Events and it will be like what has been
never seen before. India gets ready for
world class stage where we are bringing
MIND-BLOWING technologies in events.
Sharad Mathur
Director
EMG Entertainment
239
Point of view
In India, entertainment options aimed at families have largely Broadway-style musicals. We also had to change a few rules of
been confined to the conventional, passive formats. In fact, for the game to adapt to the challenges and audience preferences
many urban Indian families, a trip to the mall or a fine dining unique to the Indian set-up. Typically, musicals are conducted
experience passes off as a recreational experience, primarily in proscenium style theaters with an audience capacity close to
due to the lack of real entertainment options that can offer a 1000, but we re-imagined the format to suit an arena/ stadium
high quality experience. set-up, thus taking the production to a completely differently
scale. Our musical Disneys Beauty and the Beast opened at
There are several economic and behavioral factors playing the Dome@NSCI in Mumbai and Thyagaraj Sports Complex
out over the past few decades that have been responsible for in Delhi. We then conducted auditions across the country to
this, primarily low family incomes, low propensity to spend search for talent proficient in all three skills singing, dancing
on entertainment, lack of (global) awareness and stunted and acting and then trained them through a rigorous six-month
infrastructure. routine under the guidance of the best names that India has to
In the last 5-10 years though, India and Indians have offer in Western Arts and Music.
undergone a sea change, especially on the urban spectrum. The developments on the regulatory front are also providing
Economic liberalisation has given rise to new avenues for a significant boost to the investment appetite in the live
investments and enterprises across the board and has entertainment sector. The State Governments have rolled out
developed businesses that go beyond the conventional. multiple policies over the last 1-2 years to ensure a smoother
Alongside, there has been a significant increase in the state of functioning for the events industry at large. Delhi,
dispensable income of families and a simultaneous and now Maharashtra, have both rolled out a single window
improvement in the need to spend on quality. Todays urban system to speed-up the approval process and we hope this is
Indian is well-travelled, well-informed and desires the best in soon replicated in other cities as well.
life.
The risk and the hard work paid off for us when the first Season
These factors have played out well in the Media & of Disneys Beauty and the Beast received an overwhelming
Entertainment space, across almost all formats and response from audiences in both cities with sold out shows,
platforms. The rapid growth in investments by local and strong critical acclaim and an endorsement from the entire
global companies has been supported well by an increasing Creative fraternity. Backed by popular demand, we are now all
inclination to spend on entertainment options across age set to launch the second season of the show this summer.
groups. However, compared to Western markets, a large part of
the Entertainment industry continues to be unstructured and The biggest learning for us has been that, if you offer Indian
fragmented. audiences an entertainment option that is truly unique, high
quality and adapted to their tastes and preferences, they will
This was the starting point for us, when we decided to embrace it with open arms. This has given a boost to our long
venture beyond the current formats we operate in. Our core term vision of serving more and more Indian audiences with
philosophy globally as well as in India is to constantly look at high quality musical entertainment showcasing best-in-class
serving audiences with unique, high quality entertainment storytelling, acting, music and technology with the magic of
experiences that create unforgettable memories and Live Stage Disney. We intend to bring many more iconic shows to the
Musicals emerged as the ideal platform to bring this to life for Indian stage that are Uniquely Disney but Distinctly Indian.
the Indian families.
The musical culture is innately Indian in many ways. We love
our dramas, melodramas, songs and dances, and those form
the core of what a great Musical is all about! Yet until October
last year, there had been nothing as grand, extravagant and
lavish as a Broadway musical ever staged in this country.
This was primarily due to persistent challenges such as lack
of quality infrastructure, untrained talent and long drawn
Siddarth Roy Kapur

approval processes, to name a few.
But some of this begun to change last year on both fronts
supply as well as demand. While the top metros now have Managing Director
at least a few venues of international standards available for Disney India
hosting large scale events, the urban Indian has also started
adopting new formats of entertainment and is showing
a propensity to pay for quality. Triggered by this, we at
Disney India felt it was the right time to introduce one of our
most magical entertainment formats to Indian audiences 240
nless otherwise noted, all information incl ded in this col mn/ article was pro ided b iddharth Ro Kap r. he iews and opinions e pressed herein are those of the a thors and do not necessaril represent the
iews and opinions of KPMG in India.
Conclusion
Given the growth rates of the Indian economy, the
increased government spends on events, the ease and
use of technology, and the understanding of the industrys
issues and challenges, LE is a promising sector with its
best years ahead.
This is borne out by the fact that Disney is, finally, investing
heavily in India. Globally, Beauty and the Beast is a
traveling show, but for India in 2015, unlike any other
country Disney decided to produce it locally at a scale and
grandeur bigger than the original show. On an average a
musical show on Broadway or the West End has not more
than 30-40 artists on stage, but it had more than 100 local
performers, making it the biggest production of Beauty
and the Beast globally. The seating was unique as a select
set of audience could choose to be seated on swivel chairs
to enjoy a 360 degree view of the show as the action plays
out around them. This extraordinary expense created an
immersive experience and compelled audiences to pay in
excess of INR5,000 per ticket per show.21
Disney and Kingdom of Dreams currently the two
main operators of the live musical genre are betting
on the INR25,000 per month per capita spent per
household on live entertainment in cities like Mumbai,
Delhi and Bangalore. Advanced and capital expense
heavy technology through luminous stage and sets are
now being used at both acts. By bringing the first Disney
Classic musical, the company aims to provide audiences
with a live entertainment option on par with New York and
London. Similarly, Percepts live events vertical plans to
monetise global IPs from its portfolio. Since its launch in
2007 with few properties or events Percept conducted
about 300 events in 2015, and scaling this up to about 500
events in 2018. Similarly Wizcrafts IIFA is going regional as
well as multiple times a year; and Jaipur Literature Festival
is expanding its global footprint. All these point to a greater
confidence in 2016 and beyond.21
241
242
Theme parks
Get ready for the ride
he Indian am sement park sector which is al ed da s isit. ome operators in this space incl de labama
at 00 million I R2 billion is at a er nascent plash d ent re in labama nited tates , Gol and -
stage when compared to the 2 billion I R1,6 nsplash in ri ona nited tates , ssel orld in
billion global am sement park segment01. owe er, M mbai India , MGM i ee orld in hennai amil
with rising income le els, increasing domestic to rism ad , India and lackth nder in oimbatore amil ad ,
and fa o rable demographics, the sector is estimated India amongst others.
to grow b a ompo nded nn al Growth Rate GR
of 1 per cent o er the ne t fi e ears, thereb offering
immense growth opport nities in this sector01. The Concepts of amusement parks
Indian am sement park sector presentl is on a erge globally02
of transition, with se eral new am sement parks being
de eloped across the nation and is poised to become an Global am sement parks can also be categorised on the
alternati e a en e for entertainment in India. basis of the concepts and themes aro nd which a park
and its offerings are designed.
m sement parks are making significant in estments in
technolog to de elop prod cts/themes that significantl
enhance c stomer e perience and participation. or Thrill and adventure
instance, a gmented realit R and irt al realit R hese parks offer rides and attractions s ch as fast
ha e become areas of significant interest and in estment. roller coasters, safaris, ferris wheels, etc., as well as
ad anced games and ad ent re sports to pro ide
Sector segmentation02 thrilling e periences. ome parks in this categor incl de
i lags Me ico, nited tates and dlabs Imagica
m sement parks worldwide can be broadl segmented Maharashtra, India .
into three broad categories, based on their target
a dience and prod cts/ser ices
Sports
Destination/resort parks hese parks cater to the sports enth siasts and
attractions are based on sports acti ities s ch as racing
hese parks operate primaril as destinations with sports cars, rock climbing, swimming, ski-j mping,
on-site accommodation and cater to an a dience for a sprinting, para-sailing and man more. ome of the major
d ration of more than one da . he feat re themed rides parks in this categor incl de errari orld b habi,
and water parks, offer on-site hotels/accommodation nited rab mirates , P ide orld of ports
and ticket prices which are highest among all three omple rlando, . . .
segments. omestic and international to rists form a
major c stomer segment at these parks. amples of
companies with a large presence in this segment incl de Fun and learning
isne and ni ersal Parks Resorts. hese parks foc s on pro iding a combination of
ed cation and information thro gh entertainment, also
Regional parks known as ed tainment 03. he ma be based on
concepts s ch as histor , art and c lt re, science, m sic
hese parks offer a combination of thrill rides, water parks and dance, film and theatre and sports. ome of the
and on-site accommodation. icket prices at these parks major parks in this categor incl de ropa Park R st,
are generall lower in comparison to destination/resort German , he pcot enter lorida, nited tates ,
parks. he primar target area for these parks is the G lli er s co-Park Milton Ke nes, nited Kingdom ,
immediate cit where the park is located, the secondar Kid ania M mbai, India .
catchment co ers a radi s of appro imatel 00 to 00
kilometers. ome operators in this space incl de edar
air nited tates , dlabs Imagica Maharashtra, India Environment and nature
and Ramoji ilm cit derabad, India amongst others. he main foc s of parks in this categor is on nat re,
animals and en ironmental awareness. his categor
Local parks generall incl des nat re-based waterparks, marine life
based parks, animal theme oological theme parks,
hese parks generall offer rides and other attractions, gardens, eco-parks, etc. ome of the major pla ers in this
b t seldom pro ide on-site accommodations. isitors to categor are cean Park ong Kong , ea orld lorida,
these parks primaril come from a catchment distance nited tates , and nimal Kingdom nited tates .
of appro imatel 1 0 to 1 kilometers, t picall for a
244
01. India m sement Parks pport nities Galore p blished b nand Rathi ssociates on ecember
201 accessed on 16 ebr ar 2016.
02. Ind str disc ssions cond cted b KPMG in India KPMG in India s nal sis, 2016.
0 . siness orld website, http //b sinessworld.in/article/Kid ania- o-In est-Rs-100- r- o- pen-
d tainment- heme-Park-In- elhi- R/12-10-201 - 0 2/, accessed on 20 March 2016.
ifest le and film to de elop a snow park in e tremel hot weather, for
fferings of these parks re ol e aro nd lifest le instance, the ki bai now Park , or to operate
components s ch as fashion, films, shopping, themed a water park in er cold weather. echnolog pla s an
resta rants, concert halls, theatres, spas, nightcl bs increasingl integral part in the growth of the am sement
and bars co pled with rides. ome of the pla ers in this park segment, as introd ction of new attractions is ke to
segment incl de entosa Island ingapore , ni ersal maintaining footfalls.
Parks and Resorts nited tates and Ramoji ilm it
The Future: now streaming | Theme parks
derabad, India .
Global amusement park industry
Fiction and fantasy
performance Resurgence in
In this categor , offerings incl de m se ms and fiction-
footfalls04
based themes. he pla ers se technologies s ch as ttendance has shown stead growth after man ears
l etooth, radio fre enc , Global Positioning stems of challenges ca sed b slower economic growth in
GP , robotics, mobile de ices, etc., to bring their the est, with the top 10 am sement parks globall
characters to life. Ke pla ers in this categor incl de witnessing an attendance growth rate of appro imatel
he I he ision of Infinite imensions proposed per cent in 201 . he top 10 am sement parks
to open b ne 2016 in nited tates, and Riple s attendance for 201 was 1 0.1 million. he n mber
ntertainments nited tates amongst others. of isitors at top global am sement and theme parks,
region-wise, shows that orth merica has the highest
e eral inno ati e themes ha e emerged for parks footfall followed b the sia- Pacific region and rope
with the ad ent of new technologies. ow it is possible Middle ast and frica M .
Top 10 amusement parks in the world, 201404

Sr. Amusement park Percentage Attendance in Attendance in million
Location
no. change million (2014) (2013)
1 Magic Kingdom Walt Disney World, FL, U.S. 4.00% 19.33 18.59
2 Tokyo Disneyland Tokyo, Japan 0.50% 17.30 17.21
3 Disneyland Anaheim, CA, U.S. 3.50% 16.77 16.20
4 Tokyo Disney Sea Tokyo, Japan 0.10% 14.10 14.08
5 Universal Studios Japan Osaka, Japan 16.80% 11.80 10.10
6 EPCOT At Walt Disney World Lake Buena Vista, FL, U.S. 2.00% 11.45 11.23
7 Disney's Animal Kingdom Walt Disney World, FL, U.S. 2.00% 10.40 10.20
8 Disney's Hollywood Studios Walt Disney World, FL, U.S. 2.00% 10.31 10.11
9 Disneyland Park Disneyland Paris, Marne-La-Vallee, France -4.70% 9.94 10.43
10 Disney's Ca Adventure Anaheim, CA, U.S. 3.00% 8.77 8.51
Total 2.92% 130.18 126.67
245
0 . 201 heme Inde he Global ttractions ttendance Report KPMG in India s anal sis, 2016.
Performance of top 20 amusement parks across Indian amusement park sector
regions
Introduction
Inception of the Indian am sement and theme park
sector can be traced back to 1 when pp Ghar,
spread o er 1 . acres of land, was formall ina g rated
in ew elh06. he park was named pp after the
mascot of the 1 2 sian Games held in ew elhi.
ince then, the Indian am sement sector has grown to
aro nd 1 0 parks0 . fter pp Ghar, entr of pla ers s ch
as icco Park and ssel orld heralded the beginning of
larger am sement parks in India. icco Park, spread o er
0 acres of land in alt ake it in Kolkata was one of
the first major parks in eastern region of India and began
operations in 19910 . ssel orld was de eloped on the
coastal illage, Gorai, in northwest M mbai o er 6 acres
09
of land. It began its operations in 1 .
Source: 201 heme Inde he Global ttractions ttendance Report KPMG in India s anal sis, 2016.
he top 20 parks in orth merica saw appro imatel

1 .1 million isitors in 201 . ith the end of recession
in the . ., the am sement park ind str has seen a
rebo nd with attendance fig res e hibiting stable growth
appro imatel 2.2 per cent growth in attendance which
is characteristic of a mat re market. . . is the largest
market amongst other regions with the presence of
large parks s ch as isne Magic Kingdom, isne land,
ni ersal Parks and Resorts and man more.
op 20 M am sement parks witnessed a footfall of
appro imatel . million isitors in 201 appro imatel
per cent higher as compared to 201 . he ropean
am sement park ind str showed contin ed reco er
with the attendance fig res rising for all the parks e cept
isne land Paris. ther large ropean parks incl de
ropa Park in German and i oli Gardens in enmark
amongst a few. Middle ast as a region has witnessed
contin ed interest towards de elopment of theme
parks in recent times with few am sement parks nder
de elopment whereas no am sement parks projects
ha e made their wa to frica.
ring 201 , the top 20 am sement parks in sia-Pacific
region recei ed appro imatel 122. million isitors.
apan, hina, ong Kong and o th Korea are the fo r
large sian markets with apan leading the wa . erall
attendance at the top 20 am sement parks in the sian
market increased appro imatel per cent in 201 ,
compared to 201 . high ann al attendance growth
rate, fa o rable demographics, recent large-format
am sement park de elopment acti it and the fact that
sia-Pacific region contrib tes 10 am sement parks to
the list of top 2 worldwide highest attended am sement
parks, demonstrates that the sian market is contin ing
its growth pattern0 . ith dearth of alit am sement
parks in India, there is, at a macro le el, tremendo s
headroom for growth.
246
0 . KPMG in India nal sis, 2016. 0 . conomic imes website, http //economictimes.indiatimes.com/small-bi /east/nicco-park-is-now-
06. imes of India website, http //timesofindia.indiatimes.com/cit /delhi/ ont-close- pp -Ghar/ an-important-landmark-in-salt-lake-arijit-seng pta/articleshow/1 22 6 .cms, accessed on 20
articleshow/ 6 .cms, accessed on 20 March 2016. March 2016.
0. India m sement Parks pport nities Galore p blished b nand Rathi ssociates on ecember 0 . Maharashtra o rism website, https //www.maharashtrato rism.go .in/treas res/delight/
201 , accessed on 16 ebr ar 2016. esselworld, accessed on 20 March 2016.
Growth of the am sement and theme park sector in India
can be di ided into ario s phases as disc ssed below
Evolution of amusement and theme parks in India

Source: Ind str disc ssions cond cted b KPMG in India KPMG in India s nal sis, 2016.
he sector saw emergence of e ipment man fact rers In the new millenni m, the sector has witnessed the
and s ppliers in India in the earl 1 0s. or e ample, de elopment of large parks with combined offerings
ind stan m sement Machines, an e ipment s ch as malls, hotels and con ention centres. orlds
man fact rer, began its operations in 1 . ring of onder Park at oida is based on this concept. he
1 0s, the Indian am sement and theme park sector park has been de eloped on a 1 0 acre camp s and has
also saw the de elopment of its first theme-based park, a large mall. It has also forged an alliance with artoon
Kishkinta, in hennai10. he park, ina g rated in 1 , is etwork to se the latter s characters for its themed
based on the legend of the monke kingdom described attractions.
in the Rama ana. In 1 , GP ni ersal Kingdom,
another major o th Indian am sement park, became fter 2010, some companies raised capital thro gh
operational11. It was constr cted as an addition to the the IP ro te for e pansion for e ample dlabs and
e isting resort facilities of the park operators. he sector onderla.
witnessed another ro nd of de elopment with the entr
of pla ers s ch as GR antas Park in M sore , Ramoji
ilm it in derabad and cean Park in derabad
in the late 1 0s. his ro nd of de elopment was marked
b the introd ction of newer formats ilm it and the
emergence of large parks in other major Indian cities, e.g.,
in derabad and M sore.
247
10. he hennai orld Press website, https //thechennai.wordpress.com/2011/06/2 /kishkinta-theme-

park/, accessed on 20 March 2016.
11. GP ni ersal Kingdom website, http // gp ni ersalkingdom.in/ho se-of- gp/, accessed on 20
March 2016.
Major amusement parks in India and their attendance (in million) for FY2015
Source: India m sement Parks pport nities Galore p blished b nand Rathi ssociates on ecember 201 , accessed on 16 ebr ar 2016 Ind str disc ssions cond cted b KPMG in India KPMG in India s
nal sis, 2016.
mongst the Indian am sement parks, ssel orld has

e hibited the highest attendance with 1. million isitors
in the ear 201 owing to its pro imit to M mbai cit
along with relati el lower ticket price than its closest
competitors dlabs Imagica and onderla 12. Ramoji
ilm it recorded the second highest attendance
with 1. million isitors 201 . his was followed b
onderla engal r and ochin at 1. million and 1.1
million isitors respecti el for the ear 201 . dlabs
Imagica in M mbai attained ann al attendance of 0.
million isitors for the same ear13.
248
12. siness tandard website, http //www.b siness-standard.com/article/markets/adlabs-imagica-

increasing-footfalls-is-cr cial-for-t rnaro nd-11 0 0 00 1.html, accessed on 20 March 2016.
1 . India m sement Parks pport nities Galore p blished b nand Rathi ssociates on ecember
201 , accessed on 16 ebr ar 2016.
Changing trends of the Indian theme and
amusement sector
er the ears, there has been a change in the sector
o tlook with foc s shifting to enhance cons mer
e perience and match alit of parks to international
standards. dditionall there is increased foc s on
e panding the a erage spend per footfall thro gh m ltiple
re en e streams be ond rides to incl de , retail and

hospitalit .
1980-2000 2000-2016 2016 onwards
Considered to be a place only for kids Increase in the industry offerings Parks to be based on global standards with
use of innovative technology to enhance visitor
Key offerings: Key offerings:
experience and increase consumer spending.
Fun rides Themed rides
Water rides Fun rides/thrill rides Key offerings which could improve the overall
Food and beverages outlets. Water rides experience of the visitors:
Organised food courts/F&B centres Virtual Reality
Fitness house (Spas) Augmented Reality
Hotel and resorts Innovative concepts and themes
Shopping malls/retail zones Rides which would require higher visitor
Convention centres. participation, improving the overall experience
Edutainment gaining importance as a concept
in amusement parks.
rrent technolog sed in am sement parks and

amil ntertainment entres s in India is basic The Indian amusement sector is currently
when compared to the global pla ers. owe er, recent at a nascent stage as compared to its global
de elopments s ch as theme-based rides, irt al competitors. Going forward, awareness
realit based roller coasters, games, sports stim lation about the importance of design and safety,
technolog , ed cation based entertainment, etc. at ability to minimise CAPEX, bring in new
newl de eloped am sement centres is changing attractions periodically, train and retain
the Indian am sement sector. or e ample, maaash man power and to market the park as an
offers sports stim lation technolog th s combining aspirational product would be some of the
inno ati e technolog with sports to pro ide an engaging critical factors contributing to the success
c stomer e perience for sports enth siasts. oth of the amusement parks.
onderla and dlabs Imagica ha e rides which combine
Arun Chittilappil y
ario s themes with irt al realit to enhance c stomer
e perience and participation. Kid ania pro ides real life
role pla acti ities for children th s combining ed cation
with entertainment1 . Managing Director
Wonderla Holidays Private Limited
249
1 . Ind str disc ssions cond cted b KPMG in India KPMG in India s nal sis, 2016.
Key drivers for the Indian theme park sector
Source: 1 he ind website, http //www.thehind .com/news/national/india-is-set-to-become-the- o ngest-co ntr -b -2020/article 62 .ece, accessed on 16 ebr ar 2016.
2 tatistics imes website, http //statisticstimes.com/econom /gdp-capita-of-india.php, accessed on 16 ebr ar 2016.
ra el and to rism sector Potential, opport nities and enabling framework for s stainable growth, www.kpmg.com/I /en/.../KPMG- II- ra el- o rism-sector-Report.pdf, accessed on 16 ebr ar 2016.
ra el and to rism sector Potential, opport nities and enabling framework for s stainable growth, www.kpmg.com/I /en/.../KPMG- II- ra el- o rism-sector-Report.pdf, accessed on 16 ebr ar 2016.
nterprise Inno ation website, http //www.enterpriseinno ation.net/article/indias-100-smart-cities-plan-takes-shape-1 6 2 1 , accessed on 16 ebr ar , 2016.
6 rissa Post website, http //www.orissapost.com/1 -mn-foreign-to rist-arri als-likel -in-india-b -2020/, accessed on 16 ebr ar , 2016.
.
250
Key challenges faced by the sector
Ind str disc ssions indicate that there are ario s
challenges in the Indian am sement park sector which
are entr barriers for ario s global pla ers. hallenges
faced b the sector ha e been highlighted in the fig re
below
Key challenges faced by the amusement park sector
251
Sector size attendance at the top 2 global am sement park has
he am sement park sector in India, is c rrentl at a witnessed a GR of per cent for the period of 200
nascent stage when compared to the de eloped markets. to 201 , th s indicating the ast potential in the Indian
he Indian am sement park sector is estimated to be at am sement sector16. he footfalls are e pected to
00 million I R2 billion as on 201 and is e pected register a 10 to 1 per cent GR going forward and are
to register a 1 per cent GR o er the ne t fi e ears to likel to to ch appro imatel to 0 million in the ne t
reach at I R60 billion1 . his is likel to be dri en b new co ple of ears.
park de elopments and fa o rable demographics. India
has appro imatel 1 0 am sement parks for a pop lation
of 1.21 billion, while the . . has 00 am sement parks Estimated market size for the amusement park
for a pop lation of 1 million, hence India offers a ast industry in India
potential for growth in the am sement park segment1 .
Key industry highlights

Amusement park industry in India
No. of amusement parks, water parks, theme parks 150
Current market size, INR billion 25
Million visitors annually (2013) 64.7
Source: India m sement Parks pport nities Galore p blished b nand Rathi ssociates on
ecember 201 , accessed on 16 ebr ar 2016, Indian ssociation of m sement Parks and
Ind stries.
Attendance of visitors to theme parks in India

Source: India m sement Parks pport nities Galore p blished b nand Rathi ssociates on
ecember 201 .
Family entertainment centres

(Entertainment zones) vs amusement parks
in India17
he local parks in the am sement park sector are also
demarcated in terms of the attractions offered to the
isitors. here are amil ntertainment entres s
- stand alone or located in malls which offer arcade
games, irt al realit , a gmented realit attractions.
s are located inside the cit and are a en es where
people generall spend three to fo r ho rs of their time.
owe er, am sement parks located awa from the
cities pro ide theme based attractions where isitors
can spend their whole da . oth these entertainment
Note: stimated fig res for the ear 201 , 201 and 2020. he attendance fig res for these ears
are estimated at a GR of 16 . destinations differ in the attractions offered to isitors,
Source: siness oda website, http //www.b sinesstoda .in/maga ine/feat res/am sement-theme- howe er both cater to similar target gro p.
parks-attracting- isitors-despite-h rdles/stor /2022 6.html, accessed on 20 March 2016.
he a erage spend per person in an entertainment one
R/ R arenas is between I R 00 to I R1,200 per
Man Indian parks ha e poor infrastr ct re when person and the a erage time spent is between three and
compared to their global co nterparts, howe er the fo r ho rs. owe er, the a erage spend per person for an
Indian am sement park sector is on the erge of am sement park is in the range of I R 0 to I R2, 00
transition with se eral new parks being de eloped across for the whole da 1 .
the co ntr . istoricall , ann al isitors to am sement
parks in the co ntr has increased at a GR of 16 per
cent for the period of 200 to 201 . n the contrar , the
252
1 . India m sement Parks pport nities Galore p blished b nand Rathi ssociates on ecember 1. Ind str disc ssions cond cted b KPMG in India KPMG in India s nal sis, 2016.
201 , accessed on 16 ebr ar 2016.
16. I P Global heme and m sement Park tlook 201 -201 - http //www.iaapa.org/docs/
defa lt-so rce/defa lt-doc ment-librar /iaapa-global-theme-and-am sement-park-o tlook-201 -
to-201 .pdf sf rsn 0, accessed on 20 March 2016 200 heme Inde he Global ttractions
ttendance Report, KPMG in India s anal sis, 2016 201 heme Inde he Global ttractions
ttendance Report, KPMG in India s anal sis, 2016.
Revenue mix for a typical theme park in India
With India lacking quality entertainment
options, amusement parks of international
standards are poised to fill the gap in
the entertainment sector in India in the
coming period. This sector has also proven
to be a tourism boaster internationally
and this will also be true for our country.

However, quality of theme parks, ticket
pricing and spreading awareness about
the project is the key to the success of such
projects. At present, the major problem lies
in the communication gap between the
operator and the visitor as people do not
know what to expect. People benchmark
it with the existing amusement parks and
do not understand that an theme park
is different. The Indian amusement park
Source: Ind str disc ssions cond cted b KPMG in India KPMG in India s nal sis, 2016. sector is in a nascent stage and very small
as comparable to the global amusement
park industry. Accordingly, support from the
Revenue mix for a VR/AR theme arena in India Indian government is very important. The
big challenge faced by this sector is that the
government has double taxed this sector
with entertainment tax and the increased
service tax. Also, the government does not
promote the entertainment industry via
the tourism ministry, government should
participate in terms of provision of low cost
long-term funding, clarity on the taxation
policy, capital subsidy for large projects
amongst others. Giving an infrastructure
status to amusement parks would help in
reduced interest rate and help the operators
procure equipment from the leasing
companies.
Manmohan Shetty
Source: Ind str disc ssions cond cted b KPMG in India KPMG in India s nal sis, 2016. Chairman
ADLABS Imagica
Ind str e perts indicated there are two major a en es

for re en e generation in am sement parks i.e.
admission re en e admission ticket, parking re en es,
etc. and in-park re en e sales, merchandise sales,
hotel accommodation, etc. . t nlike am sement parks,
entertainment ones pla ers do not ha e an admission
fee. hese pla ers generate a large proportion of their
re en e thro gh gaming per game charge , followed b
e ents re en e corporates, school gro ps, kitt parties,
etc. and the rest is attrib ted to food and be erages.
253
Way forward
here ha e been ario s large in estments proposed in
the theme park sector both on P blic Pri ate Partnership
PPP basis and b pri ate pla ers in India. he list of
proposed in estments in the ind str ha e been listed
below
Proposed investment in the theme/amusement park sector in the near future
Project Location Theme/attractions Size (Acres) Proposed investment

(INR bn)
Surat theme park Surat, Gujarat Theme park 3200 100
Theme park Agra, Uttar Pradesh Mega theme park with 7 themes 1000 100
Om City Hyderabad, Telangana Replicas of 108 famous temples of the country. 2000 30
Jaipur Mega-tourism Jaipur, Rajasthan Mega tourism 300 25

City
Theme park Nagpur, Maharashtra Theme park concepts like Jurassic park, 300 15
Terminator and Spiderman
TBD Andhra Pradesh Three amusement parks TBD 10
Space World theme park Lavasa, Maharashtra India s first edutainment theme park (Under 65 4
construction).
Appu Ghar Gurgaon, Haryana Amusement and Water Park 60 4
Krishna Lila theme park Bengaluru, Karnataka Based on Vedic heroes 28 3.5
Wonderla Chennai, Tamil Nadu Amusement and Water Park NA 3
Wonderla Hyderabad, Andhra Pradesh Amusement and Water Park 49.5 2.5
Naya Raipur amusement Naya Raipur, Chattisgarh Recreation cum amusement park 40 0.23
park
Total 297.23
Source: India m sement Parks pport nities Galore p blished b nand Rathi ssociates on ecember 201 , accessed on 16 ebr ar 2016 conomic imes website, http //realt .economictimes.indiatimes.
com/news/infrastr ct re/work-on-rs-10000-cr-theme-park-in-agra-to-begin-from- march/ 0 1 1, accessed on 20 March 2016 imes of India website, http //timesofindia.indiatimes.com/good-go ernance/
karnatka/ engal r -likel -to-get-its-own- isne land/articleshow/ 6 .cms, accessed on 20 March 2016 imes of India website, http //timesofindia.indiatimes.com/cit /h derabad/ elangana-go t-to-
hand-o er- 0 -acres-for-Ramoji- m- it /articleshow/ 0 2 1 .cms, accessed on 20 March 2016 he ind website, http //www.thehind .com/news/cities/ ija awada/essel-world-e al ates-three-places-
for-theme-parks/article 11 2 .ece, accessed on 20 March 2016.
254
total of appro imatel I R2 billion is proposed
With the growth in the global amusement to be in ested in the Indian am sement park sector
park sector, going forward the Middle-East in the near f t re. ppro imatel 0 per cent of the
and India are poised to attract substantial in estment is proposed in the western region of the
investments and tourism within this co ntr with a large am sement park being proposed
sector. Augmented Reality (AR)/Virtual in rat on a PPP model basis. here has been minimal
Reality (VR) theme-park offering a digital acti it witnessed in the eastern region of the co ntr
alternative to cinemas, bowling alleys in terms of new proposals for the de elopment of
and shopping centres, though being a am sement parks.
relatively new concept, is fast gaining Ind str e perts belie e that majorit of the proposed
acceptance worldwide especially within in estments are e pected to follow the PPP model
the gaming concept. We intend to which wo ld allow the pri ate pla ers the re ired
capitalise on our early mover advantage leewa from the go ernment in terms of land
within the AR/VR space. The company is ac isition, incenti es, ta es etc. for de elopment
heavily invested in the AR/VR space and of s ch large projects1 . lso, India being a co ntr
is continuing to increase its presence in with a rich historic past has a large ant m of
the sector by developing technologies for heritage properties across the co ntr . ario s state
additional games. Apart from continuous go ernments are planning at tilising these heritage
up gradation of content and minimising properties for re en e generation and promotion
CAPEX by in-house development of of to rism. ence, this appears to be a l crati e
content, revising the F&B concept in the proposition for both am sement park operators and the
outlets at regular intervals along with the respecti e state go ernments.
expansion plans into other cities nationally
and internationally are some of the key ith fa o rable demographics, rich historical heritage,
strategies adopted by the firm. However, new inno ati e technologies, relati el ntapped
clarity in the tourism policy and incentives market, fa o rable PPP model, and proposed
such as tax holidays provided by the in estments the am sement park sector is e pected
government to this sector would be the key to emerge as a major constit ent of the entertainment
drivers for this industry going forward and ind str in the near f t re.
would provide a boost to this sector.
Vishwanath Kotian
Smaaash
255
1 . Ind str disc ssions cond cted b KPMG in India KPMG in India s nal sis, 2016.
256
Deal volume
and value
Deal volume and value in 2015
he n mber of transactions in the M ind str
decreased from 61 in 201 to in 201 . he o erall
deal al e decreased from 2, 0 million in 201 to
1,201 million in 201 . he deal al e in 201 was
lower than the deal al e in 201 beca se of the major
ac isition of etwork 1 Media In estments td
and 1 roadcast td b Reliance Ind stries td, for
appro imatel 1, 2 million that took place in 201 .
Trend of investments in M&E (volume and value)
Source: Merger Market and apital I , www.mergermarket.com, www.capitali .com, accessed on 1

ebr ar 2016
In estment in the M ind str contin ed on the basis of

a few significant themes, s ch as portfolio di ersification,
consolidation and digitalisation.
otable strategic transactions for 201 are
Deal value
Date Target Target sector Acquirer Transaction theme
(INR million)
Feb-15 Maa Television Network Limited TV Star India Private Limited 24,000 Portfolio diversification
Jul-15 Prism TV Pvt. Ltd. TV Nickelodeon Asia Holdings Pte Ltd. 9,405 Portfolio diversification
Jun-15 DT Cinemas Ltd. Film PVR Limited (BSE:532689) 5,000 Consolidation
May-15 Music Broadcast Private Limited Radio Jagran Prakashan Limited 5,000 Portfolio diversification
Mar-15 Reliance MediaWorks Ltd VFX Prime Focus Limited 3,688 Consolidation
Oct-15 Fountainhead Entertainment Pvt Ltd Digital Dentsu Aegis Network Limited 3,000 Consolidation
Jan-15 ZipDial Mobile Solutions Pvt. Ltd. Digital Twitter, Inc. (NYSE:TWTR) 1,851 iversification 258
Source: Merger Market and apital I , www.mergermarket.com, www.capitali .com, accessed on 1 ebr ar 2016
he mar ee pri ate e it transactions are
Target Deal value

Date Target Fund
sector (INR million)
Sep-15 Network18 Media & Investments Limited TV - 10,000

The Future: Now streaming | Deal volume and value
Jun-15 PVR Limited Film Multiples Alternate Asset Management Private Limited 3,500
Aug-15 Technology Frontiers India Pvt Ltd OOH ADV Opportunities Fund-I 2,318
Nov-15 Culture Machine Media Pvt Limited TV Tiger Global Management, LLC; Times Internet Limited 1,111
Jan-15 Amagi Media Labs Pvt. Ltd Digital Mayfield und Prem iInvest 900
Jun-15 Next Radio Limited Radio akesh hun hunwala 250
Categorisation of deals in M&E in 2015 by volume/ Breakdown of deals in M&E in 2015 (by value/
sector sector)
Source: Merger Market and apital I , www.mergermarket.com, www.capitali .com, accessed on 1 Source: Merger Market and apital I , www.mergermarket.com, www.capitali .com, accessed on 1
ebr ar 2016 ebr ar 2016
Breakdown of deals in M&E in 2015 by volume Breakdown of deals in M&E in 2015 by value
259
Source: Merger Market and apital I , www.mergermarket.com, www.capitali .com, accessed on 1 Source: Merger Market and apital I , www.mergermarket.com, www.capitali .com, accessed on 1
ebr ar 2016 ebr ar 2016
eal ol me in 201 in the digital/new media sector Television distribution
was higher than other sectors. igital/new media sector n the distrib tion front, M s are et to show eno gh
contin es to ride on the positi e wa e of performance monetisation from digitisation. Moreo er, M s are
from 201 and 201 , as strategic and pri ate e it in esting in rolling o t s, pgrading digital head-ends,
in estors primaril in ested in digital marketing and other back-end infrastr ct re for the implementation
content creation companies. eal acti ities in the of digitisation in Phase III and Phase I .02 rthermore,
tele ision, film e hibition and radio ha e taken place M s also re ire in estments to f nd ac isitions of
primaril on acco nt of e pansion into the regional other M s/ s in estments to pro ide broadband
markets. ser ices and f nd their working capital. In order to meet
s ch f nding re irements, iti able etwork td.
Television iss ed fresh e it amo nting to I R2,211 million in
March 201 .02
ele ision, one of the largest segments in the M
ind str in terms of deal al e, saw a rise in deal acti it rthermore, iti able wo ld ac ire stakes in se en
in 201 02. here were 10 transactions in 201 , which small-si ed cable companies. hese incl de companies
constit ted 6 per cent of the total deal al e. based in derabad, ew elhi, and hittoor. iti able
wo ld also ac ire the remaining per cent stake in
ew elhi-based iti action igital P t. td. and
Television broadcasting per cent stake in iti on igital able etwork. his
s per the elecom Reg lator thorit of India s R I transaction is e pected to close b March 2016.0
reg lations on channel aggregators, broadcasters cannot he operator segment is e pected to e perience a
package their channels with those of other broadcasters slowdown in in estments. he operating margins of
while offering them to able and operators.01 This operators are on the rise, leading to an increase in cash
led to lower bargaining power to broadcasters while profits.02 herefore, this segment is likel to to f nd their
negotiating s bscription re en es and carriage fees with capital re irements thro gh internal accr als and hence
M s and operators. hile this did not necessaril does not need f rther significant in estments.
impact large broadcasters with a strong portfolio of
channels, it has become more diffic lt for smaller
broadcasters ha ing onl a few channels. rthermore, Content creators
major broadcasting pla ers are aiming to fill gaps in their Increase in internet and smartphone penetration has led
assortment of channels in terms of regional lang ages to a s rge in cons mption of tele ision and other ideo
and niche genres. his trend has led to the following contents thro gh mobile apps and internet ser ices,
transactions02 s ch as o be, ot tar and ros ow.0 n increase in
transactions in the digital content creation segment has
Maa ele ision etwork td. sold its broadcasting been witnessed in 201 , and this trend is likel contin e
b siness to tar India P t. td. for I R2 ,000 million in 2016.0
in ebr ar 201 , allowing tar India to broadcast the lt re Machine, a digital ideo networks compan ,
Maa channels nder the tar brand and widen its raised I R1,111 million thro gh pri ate e it f nding
access to a el g -speaking a dience. b iger Global Management , and imes Internet
ickelodeon sia oldings Pte. td. ac ired 0 per td. lt re Machine wo ld se these f nds to in est
cent stake in Prism P t. td. for I R , 0 million in strengthening e isting technolog sol tions and
in l 201 to e pand iacom s regional footprint. creating content.
ickelodeon is tapping the regional tele ision o o o ew Media P t. td., which creates
segment b rebranding the channels as olors and licences characters and ideo content for
channels. children, sold per cent stake in the compan
ee ntertainment nterprises td. ac ired arthak to roadband orp. for I R60 million. his
ntertainment P t. td. in l 201 to access the ac isition wo ld allow roadband orp. to
di a-speaking a dience. access ideo content created b o o o for mobile
cons mption.
he tele ision broadcasting ind str has witnessed
increase in f nds being raised b ee Media orporation Ping, which prod ces ideo g ides for home cooking,
td and etwork1 Media In estments td. hese raised f nds thro gh pri ate e it in 201 .
companies intend to se the proceeds for pgrading td anno nced that the wo ld be recei ing
their broadcasting e ipment, f nding s bsidiaries e it f nding from iger Global Management . It
for repa ment of loans, and other general corporate is e pected that this deal is likel to close in 2016.
p rposes.02 260
01. R I r ling hits content aggregators , siness oda , 12 ebr ar 201 , http //www. 0 . iti able to ac ire 6 stake in cod1 plans to raise Rs 6 0 crore, ele ision Post, 6 an ar
b sinesstoda .in/sectors/telecom/trai-r ling-hits-content-aggregators/stor /20 2 .html, accessed 2016, http //www.tele isionpost.com/cable/siti-cable-ac ires- 6-stake-in-scod1 -plans-to-raise-rs-
on 2 ebr ar 2016 6 0-crore/, accessed on 2 ebr ar 2016
02. Merger Market and apital I , www.mergermarket.com, www.capitali .com, accessed on 1 0 . RI I Research, igital media gains pop larit among ad ertisers, dri en b growing se of
ebr ar 2016 smart phones and access to Internet , 201
0 . Merger Market and apital I , www.mergermarket.com, www.capitali .com, accessed on 1
ebr ar 2016
Radio
Regional consolidation iversifi ation of print into radio
arger pla ers in the radio segment e panded into tier-II Print and radio enable ad ertisers to reach o t to
and tier-III cities thro gh ac isitions of smaller pla ers a dience in a specific region. s the slow pace of growth
in the ind str . Man pla ers are e pected to enter new in the print segment is affecting large pla ers, the ha e
markets thro gh mergers and ac isitions rather than started di ersif ing into the radio segment. or e ample,
going thro gh the a ction process, since the cost of the imes Gro p operates Radio Mirchi, the ainik
setting p a new radio station and getting the re ired haskar gro p r ns radio stations in 1 cities nder the
licences is high in India. brand M M, n Gro p owns and operates radio
channels across India nder the name r an M and
or e ample, M sic roadcast td ac ired hri P ran Red M, and Media td operates e er 10 M radio
M ltimedia td. for an ndisclosed consideration in channels across metropolitan cities in India. ollowing
ctober 201 , as the latter operates radio stations in this trend, agran Prakashan td. completed the
ttar Pradesh, ar ana, P njab and harkhand nder the ac isition of M sic roadcast td. for I R ,000 million
Radio Mantra brand name. imilarl , oda etwork in Ma 201 from India al e nd d isors P t. td. his
entered into an agreement to sell fo r radio stations in ac isition consolidated agran Prakashan s position in
odhp r, mritsar, Patiala and himla to ntertainment the media and comm nication ind str .0
etwork India td for I R 0 million, in ebr ar 201 .06
ollowing is the post deal presence of radio stations in
n the other hand, in order to migrate from Phase II to India
Phase III licencing, radio channels were re ired to pa a
large one-time migration fee. ence, radio channels ha e
so ght f nds to pgrade e ipment and meet working Company Pre-deal presence Post-deal presence
capital re irements.06 e t Radio td, which operates
radio stations nder the brand name Radio ne . M, Jagran Prakashan Ltd 0 28
raised I R2 0 million from a pri ate in estor, Rakesh
h njh nwala. he f nds wo ld be sed for migration of
Entertainment Network 32 39
e t Radio s e isting licences from Phase II to Phase III,
India Ltd
apart from participation in the pcoming a ctions for new
M radio licences to ac ire new fre encies.0
Music Broadcast Ltd 20 28
rrentl , se eral pla ers are operating radio stations
and there is no large national pla er in the market. s
the trend of consolidation contin es the top- pla ers
Reliance roadcast etwork td, ntertainment etwork
India td, orp td and M sic roadcast P t. td.
are likel to emerge as national pla ers in the long r n.
Regulatory developments
Post the Phase III licence migration, all new radio
channels wo ld be nable to make changes in majorit
ownership for three ears once the become operational.
his wo ld slowdown deal acti ities for new radio
channels.
R I has also r led that starting 201 , the earlier limit
of 26 per cent I wo ld increase to per cent for all
radio stations.0 e eral pla ers in the ind str ha e
made representations to increase this to 100 per cent for
non-news channels, while retaining per cent for news
channels, mirroring the tele ision sector. If s ccessf l,
this de elopment wo ld sp r new in estments into
the sector, with foreign pla ers looking to e pand their
foothold in the Indian market.
261
06. Merger Market and apital I , www.mergermarket.com, www.capitali .com, accessed on 1 0 . I raised for M radio and news tele ision channels to per cent, Radio and M sic i , 10
ebr ar 2016 o ember 201 , http //www.radioandm sic.com/bi /reg lators/1 1110-fdi-raised-fm-radio-and-
0. RI I Research, Radio - Phase III a ctions awaited seen as ke dri er for re en es , 201 news-tele ision-channels- -cent, accessed on 1 ebr ar 2016
0 . Merger Market and apital I , www.mergermarket.com, www.capitali .com, accessed on 1
ebr ar 2016
Print Films
eal acti it in the print media segment was dri en b ransactions in the cinema e hibition space are in line
portfolio di ersification and digitalisation. with 201 s trend of consolidation and regional e pansion
thro gh mergers and ac isitions. P R td. ac ired
he print segment is fragmented with se eral pla ers inemas for I R ,000 million in ne 201 and added
offering newspapers in regional markets. ith the 6 screens to their portfolio. imilarl , arni al ilms P t.
ad ent of digital segment, the growth of print segment td. ac ired targa e ntertainment P t. td. in an ar
is e pected to slow down. his trend co ld ideall res lt 201 for an ndisclosed amo nt to increase their screen
in consolidation of smaller pla ers with larger pla ers. co nt.10
owe er, consolidation wo ld be challenging as the
smaller companies are nwilling to sell their b sinesses In the ne t fi e ears, the growth in the n mber of
that their families ha e r n for man ears. ence, the screens wo ld primaril be dri en b e pansion to tier-II
traditional print media companies wo ld look to raise and tier-III cities. ompanies wo ld re ire to raise
f nds and grow organicall . f nds to facilitate this growth. P R td. raised e it
of I R , 00 million from M ltiples lternate sset
Management P t. td. for e panding to tier-II and tier-III
ortfolio diversifi ation cities.10
ooking to grow organicall , mar jala P blications
td. raised I R 00 million thro gh a p blic offering, in
March 201 . mar jala P blications wo ld se the f nds Digital and new media
for e pansion of e isting printing capacit , p rchase igital and new media is one of the fastest growing
hoardings to e pand into the segment and in est in segments in the M ind str . etween 201 and 2020,
the e pansion of its digital b siness.10 the re en es for this segment are e pected to grow at a
. hand ompan P t. td. anno nced that it wo ld compo nded ann al growth rate GR of aro nd per
recei e I R1,200 million in a ro nd of f nding from cent. he ke growth dri ers for this segment are11
International inance orporation. he proceeds wo ld 1. he n mber of smartphone sers is e pected to grow
be sed to di ersif the compan s prod ct offerings at a GR of 2 .11 per cent between 201 and 2020,
and e plore new a en es of p blishing, s ch as regional enabling eas access to internet on smartphones.12
lang age, foreign lang age and hobbies.10
2. Impro ement in telecom technologies and increase in
a erage internet speed wo ld increase the s bscriber
Digitalisation base. he n mber of acti e wireless internet sers
was 11 million in 201 and is e pected to rise to 2
igital Information Pri ate td ac ired the m lti- million b 2020.
media content management ndertaking from ind stan
Media ent res td for an ndisclosed amo nt, in . oda , eas internet pa ment options are offered b
ctober 201 . his transaction wo ld allow igital banks, and an increase in the se of social media and
Information Pri ate td to se the content c rated b other digital platforms across ario s age brackets is
ind stan Media in their indi p blication ind stan to e pected to lead to an increase in the acceptabilit of
reach a indi-speaking a dience thro gh digital platforms, internet.
s ch as their website and other mobile applications.10 . igital marketing is an eas wa to reach o t to the
tar India P t. td. ac ired creen , the India-based target a dience, hence it is emerging as a cost-
weekl film maga ine, from he Indian press td for an effecti e medi m.
ndisclosed consideration. s part of the transaction, tar igitalisation in India is still in its nascent stages, and
India wo ld get an e cl si e ownership of the creen there is a lot of scope for de elopment and e pansion.
brand franchise, incl ding the entertainment editorial ence, there has been significant interest in both
s ite and transfer of ke emplo ees. pon completion, strategic and pri ate e it in estments. In 201 , 2 per
creen wo ld be a ailable in a digital form with a dio cent of all deals in the M ind str ha e taken place in
and ideo content, adding to the te t al content, thereb the digital and new media segment, constit ting 12 per
marking the end of creen s print form.10 In the long r n, cent of the total deal al e10.
print companies wo ld need to di ersif into different
areas, s ch as radio or , else embrace digitalisation
to s stain growth.
262
10. Merger Market and apital I , www.mergermarket.com, www.capitali .com, accessed on 1

ebr ar 2016.
11. KPMG India nal sis
12. G M Mobile India Report, 201
Strategic investments
trategic in estors primaril in ested in digital marketing f nding from Premji In est and the e isting in estor,
companies and companies foc ssed on news content Ma field in an ar 201 .
aggregation. his consolidation is e pected to contin e
o er the ne t few ears, ntil three or fo r larger pla ers ser igital Media er ices P t. td. has
remain in competition. ollowing are some mar ee raised I R6 million in f nding from Ma erick
strategic transactions in the digital marketing space1 apital ent res in ne 201 for e pansion and
strengthening their data anal tics platform.

ents egis etwork td. ac ired a 0 per
cent stake for I R ,000 million in o ntainhead aseline ent res India P t. td., a compan that
ntertainment P t. td. in ctober 201 , a compan offers sports marketing, media, entertainment, and
pro iding digital marketing, e ent marketing, licencing ser ices, raised I R26 million from a
promotions related and other ser ices in the brand ent re capitalist in the in g st 201 in order to
acti ation domain. o ntainhead ntertainment has s pplement e pansion and growth in the o th sian
a strong presence in India, with a rob st client base, region.
which ents wo ld be able to harness post the
ac isition. A shift in dynamics
ents egis etwork td. also ac ired a 0 per eals in the digital segment ha e fallen from per cent
cent stake for I R1, 00 million in ons lt, a of all deals in the M ind str in 201 to 2 per cent
social and digital media agenc , in pril 201 . in 201 . he d namics in the digital space are changing,
as traditional media companies are shifting their foc s
witter, Inc. ac ired e it stake for I R1, 1 million to technolog pro iders. ompanies are now looking to
in ip ial Mobile ol tions P t. td. in an ar 201 , a in est in technolog start- ps, which specialise in big
compan pro iding marketing, c stomer engagement data, data anal tics and predicti e anal sis1 . or e ample,
and anal tics sol tions. his transaction is e pected mtee Research and ons ltants Pri ate td, a compan
to be sed primaril for M technolog b witter. that offers digital market research ser ices, was ac ired
ollowing are some mar ee strategic transactions in the b MR India for an ndisclosed amo nt in 201 .
news content aggregation space1
ews orp ac ired ircle etwork, the India- Foreign Direct Investment
based media gro p engaged in p blishing of pri ate
e it , ent re capital, and M related information, Segment FDI limit
from Mosaic Media ent res P t. td. in l 201 for
an ndisclosed consideration. Television 74 per cent FDI is permissible for DTH, MSOs operating
at National or State or District level, Mobile TV &
igital Media oldings in ested in Planet GoGo
Headend-in-the Sky Broadcasting Services (HITS); 49%
P t. td., a compan that de elops a news application
FDI is permissible for Cable Network, and News &
for android mobile phones, in ecember 201 .
Current Affairs Channels
Private equity investments Radio 49 per cent for FM FM Radio) and Up-linking of News &
Current Affairs Channels with government approval
In line with the trends in 201 , pri ate e it firms
contin ed to f nd smaller companies in the digital
Print 26 per cent for publishing of newspapers, periodicals
ad ertising space, primaril in ol ed in mobile and social
and magazines dealing with news and current affairs;
media marketing in 201 . hese f nds are e pected to be
100 per cent for print media with governement approval
sed to s pplement national growth, as well e pansion of
these companies into international markets. rthermore,
Films 100 per cent
companies in ol ed in data anal tics saw traction in 201 ,
a trend which is e pected to contin e for the ne t fi e
Digital/ 100 per cent in the advertising sector through the
ears. Major pri ate e it transactions in 201 were1
New automatic route
Media
magi Media abs P t. td, which pro ides clo d-
based content deli er and monetisation platforms Source: In est India, Media and ntertainment, http //www.in estindia.go .in/media-and-entertainment-
sector/
to networks globall , recei ed I R 00 million of
If the go ernment increases foreign direct in estment

263 for non-news media to 100 per cent from the c rrent
per cent in radio and per cent in tele ision, these
1 . Merger Market and apital I , www.mergermarket.com, www.capitali .com, accessed on 1 segments are e pected to gain traction, and in estments
ebr ar 2016
are likel to increase.
Outlook
ignificant growth is e pected in the Indian M ew media b sinesses, s ch as digital marketing, and
ind str o er the ne t few ears. In the tele ision content creators and aggregators, wo ld contin e to
space, broadcasters wo ld contin e to strengthen their attract high growth in estments from pri ate e ities.
bo ets b ac iring niche channels. able operators ompanies specialising in imbibing digital platforms into
are likel to seek in estments to f nd ac isitions and da -to-da life and enhancing ser e perience are likel to
capital e pendit re. ontent creators in the digital space e perience an increase in in estments.
ma contin e to attract pri ate e it in estments. In
the radio and film e hibition segments, the large pla ers s the impact of digitisation contin es to affect the M
wo ld contin e to consolidate and emerge as national ind str , in estments toward nati e ad ertising are
pla ers, and raise f nds to e pand in tier-II and tier-III e pected to increase. herefore, companies that work
cities. to de elop interacti e and c stomisable digital content,
which co ld be adapted to ario s social media platforms,
are e pected to recei e in estments.
Date Target PE vs Strategic Acquirer Deal value (INR million)
Digital
Oct-15 Fountainhead Entertainment Pvt Ltd Strategic Dentsu Aegis Network Ltd. 3,000
Jan-15 ZipDial Mobile Solutions Pvt. Ltd. Strategic Twitter, Inc. 1,851
Apr-15 WATConsult Strategic Dentsu Aegis Network Ltd. 1,800
Jan-15 Amagi Media Labs Pvt. Ltd PE Mayfield und Prem iInvest 900
Nov-15 AdIQuity Technologies Pvt. Ltd. Strategic Flipkart Online Services Pvt. Ltd. 750
Jun-15 Vserv Digital Services Pvt Ltd PE Maverick Capital Ventures 679
Aug-15 Baseline Ventures (India) Private Ltd. PE - 265
Radio
May-15 Music Broadcast Private Ltd. Strategic Jagran Prakashan Ltd. 5,000
Jun-15 Next Radio Ltd. PE akesh hun hunwala 250
Feb-15 T.V. Today Network Ltd. Strategic Entertainment Network (India) Ltd. -
Oct-15 Shri Puran Multimedia Ltd. Strategic Music Broadcast Ltd. -
Print
Sep-15 Juggernaut PE - 150
Dec-15 Spunklane Media Private Ltd. PE Quintillion Media Pvt Ltd. -
Oct-15 Hindustan Media Ventures Ltd. Strategic HT Digital Information Private Ltd.; HT -
Digital Streams Ltd.
Sep-15 Alphabet Media (India) Pvt Ltd Strategic OpenGov Asia - CIO Network Pte Ltd. -
264
Dec-15 Planet GoGo Pvt. Ltd. Strategic HT Digital Media Holdings Ltd.; North -
Base Media Ltd
Date Target PE vs Strategic Acquirer Deal value (INR million)
Print
Mar-15 Screen Strategic Star India Pvt. Ltd. -

Mar-15 Amar U ala Publications td. IPO - -
Films
Jun-15 DT Cinemas Ltd. Strategic PVR Ltd. 5,000
Jun-15 PVR Ltd. PE Multiples Alternate Asset Management 3,500

Private Ltd.
May-15 Oyeeee Media Ltd. IPO - 159
Dec-15 SRS Entertainment Ltd. Strategic SRS Ltd. 134
Nov-15 Tips Industries Ltd. Strategic - 68
Jul-15 P B Films Ltd. IPO - 50
May-15 Onesource Techmedia Ltd. PE - 1
Television
Feb-15 Maa Television Network Ltd. Strategic Star India Private Ltd. 24,000
Sep-15 Network18 Media & Investments Ltd. PE - 10,000
Jul-15 Prism TV Pvt. Ltd. Strategic Nickelodeon Asia Holdings Pte Ltd. 9,405
Feb-15 Siti Cable Network Ltd. IPO - 2,211
Jan-15 Zee Media Corporation Ltd. IPO - 1,956
Jul-15 Sarthak Entertainment Pvt Ltd Strategic Zee Entertainment Enterprises Ltd. 1,150
Nov-15 Culture Machine Media Pvt Ltd. PE Tiger Global Management, LLC; Times 1,111
Internet Ltd.
Apr-15 YoBoHo New Media Pvt. Ltd. Strategic BroadbandTV Corp. 609
265
266
Tax and regulatory
Issues and developments
he Indian Media and ntertainment M ind str is a to satellite, music, home video and other rights in
s nrise sector for the econom and is growing at a rapid addition to theatrical rights, whether it is director or
pace. Rising income and e ol ing lifest les, backed b mandator , whether it o errides all other pro isions of the
increasing digitisation and higher internet usage, pave Income-ta ct, 1 61 I ct , for e ample, whether the
wa for the tremendo s scope of growth for almost all ded ction of e pendit re nder R le / is allowable
segments of this ind str . irrespecti e of whether it is capital or re en e in nat re,
whether ta has been ded cted at so rce or not ,
owe er, ind str pla ers face neb lo s and e atio s ded ctibilit of e penses which are not co ered b R le
ta ation iss es. onsidering the positi e global in estor / , etc.
sentiments, the Indian demographics and the probabilit
of high growth, the ind str was hoping for resol tion go ernment circ lar clarif ing the abo e aspects co ld
to some of the ta iss es faced b it. ome of the ke help dispel this ncertaint .
e pectations were elimination of d al le of ta ser ice
ta and al e added ta on ac isition of cop right on nother iss e which has been faced time and again
content, clarit on applicabilit of a ed ction at o rce is whether R le / applies to ta pa ers ac iring
pro isions on ario s e penses programme satellite rights in films. In this connection, the elhi igh
prod ction cost, placement fees, satellite transponder o rt has held that R le was applicable to satellite
pa ments, disco nt on set-top bo es, etc. , e tending rights in films and accordingl , entire cost of ac isition
benefits of set-off and carr forward of ta losses/ of satellite rights wo ld be allowable as ded ction.
nabsorbed depreciation on mergers, etc. ith reference to the iss e of applicabilit of R le
he nion dget 2016 which was tabled b the inance in respect of e pendit re inc rred on abandoned films,
Minister M on 2 ebr ar 2016, was b ilt on a recentl , the entral oard of irect a es has
transformati e agenda with nine distinct pillars and issued a circular01 clarif ing that R le does not appl
intense foc s on de elopment of r ral, agric lt ral, social to abandoned films and that the e pendit re inc rred on
sectors, incl ding skill de elopment, and rationalisation s ch films is not to be treated as capital e pendit re. It
of ta policies. ltho gh no ta e emptions/benefits clarified that the cost of prod ction of an abandoned film
ha e been made a ailable specificall to the M sector, is to be treated as re en e e pendit re and sho ld be
the incenti es to boost growth/emplo ment generation allowed as per the pro isions of the I ct.
and simplification/rationalisation of ta ation, with a
foc s on red cing litigation and pro iding certaint in Tax withholding on acquisition of copyright
ta ation, sho ld bring some respite. he go ernment has
also recentl iss ed a co ple of circ lars with a iew to nder the I ct, pa ments to Indian residents towards
resol e some of the ambig ities which ha e emerged ac isition of cop right on content for e ample, satellite
in the ta laws. his signals a positi e approach of the rights, home ideo rights, m sic rights, etc. attract a
go ernment to enable ease of doing b siness in India and 10 per cent withholding ta nder ection 1 . his
instills confidence in in estors. he ind str can hope withholding rate is e cessi e considering the profit
that in the near f t re, ario s other ta iss es being margins pre alent in the ind str and it has an ad erse
faced b the M sector can also be p t to rest. impact on ta pa ers cash ows. It co ld be worthwhile
for the go ernment to consider a lower withholding ta
In this chapter, we ha e disc ssed ke ta and reg lator on s ch pa ments.
iss es/recent de elopments relating to the M ind str .
Service tax on fees of actors/technicians
Film industry Re en es earned b film prod cers from the licensing
Key tax issues of cop right in cinematographic films for e hibition in
cinema halls/theaters, are e empt from ser ice ta .
Deduction of expenses owe er, the prod cers of cinematographic films a ail
he Income-ta R les, 1 62 R les and permits ario s inp t ser ices s ch as ser ices of actors and
ded ction of e pendit re inc rred on prod ction of films/ technicians which are liable to ser ice ta . ccordingl ,
ac isition of distrib tion rights therein, either in the first there is s bstantial loss of credit on inp ts/
ear of release or o er a period of two ears, based on inp t ser ices attrib table to re en e from e hibition in
when the cop rights/distrib tion rights in the films are cinema hall/theaters. his res lts in a h ge cost for film
e ploited or depending on the date of release of the film. prod cers and co ld be a oided b e empting the inp t
ser ices of actors and technicians from le of ser ice
There are several ambiguities surrounding the ta .
applicabilit of R le / , incl ding whether it e tends
268
01. irc lar o. 16/201 dated 6 ctober 201 .
Judicial decisions Broadcasting industry
Amount realised under Rule 9B, would mean Key tax issues
amount without accounting for any expenditure
(like cost of positive prints, etc.) Tax Deducted at Source (TDS) on various
payments by TV channel companies
In the case of one nterprise02, the ta pa er, a
film distrib tor, had ac ired rights for e hibition of ele ision broadcasting companies make significant
The Future: now streaming | Tax and regulatory
films on a minim m g arantee MG basis which did pa ments to software prod ction ho ses towards
not complete commercial r n of 1 0 da s in terms prod ction of programmes. he also pa placement/
of then pre alent r les d ring the assessment ear carriage fees to operators, m lti s stem operators
1 1- 2 preceding ear . ring s ch preceding and cable operators towards placement/carriage of the
ear, the ta pa er claimed to ha e first adj sted the channels. he channel companies are of the iew that
cost of positi e prints of feat re films against the gross s ch pa ments attract nder ection 1 of the I
realisation from the film and then adj sted MG ro alt ct at the rate of 2 per cent. owe er, the ta a thorities
against the balance realisation. he nabsorbed MG contend that s ch pa ments are liable for at 10
ro alt was th s carried forward b the ta pa er to per cent on the gro nd that the pa ments are towards
the s bse ent ear which is the ear of disp te technical ser ices/ro alt . his has res lted in protracted
and claimed as ded ction in terms of R le in the litigation.
s bse ent ear. owe er, one of the abo e iss es as regards the
In the co rse of assessment proceedings for the applicabilit of pro isions dealing with on
s bse ent ear, the ssessing fficer , howe er, pa ments made b broadcasters or tele ision channels
disallowed the claim of the ta pa er. to prod ction ho ses for prod ction of content or
programmes ha e been clarified recentl ide a circ lar0
Interpreting R le , the elhi igh o rt held that iss ed b . It has been clarified in the circ lar that
the e pression amo nt realised m st be gi en its plain where the content is prod ced as per the specifications
meaning i.e. amo nt realised witho t acco nting for pro ided b the broadcaster/telecaster and the cop right
an e pendit re that is inc rred b the ta pa er in its of the content programme also gets transferred to
b siness. he igh o rt obser ed that it was incorrect the broadcaster/telecaster, s ch contract is co ered
for the ta pa er to incl de the cost of prints along within the definition of the term work which is liable for
with the MG ro alt amo nt while determining the ded ction of ta at so rce nder ection 1 of the
amo nt to be carried forward in terms of R le . n I ct. owe er, in the case where the broadcaster/
the apprehension of the ta pa er that s ch a treatment telecaster ac ires onl the broadcasting/telecasting
wo ld render other e penses inc rred b it as dead rights of the content which is alread prod ced b the
e pense, the igh o rt held that if the ta pa er had prod ction ho se, there is no contract for carr ing o t an
claimed s ch e pendit re in its profit and loss acco nt work, and s ch pa ments are not liable for ded ction of
of 1 1- 2 itself i.e. preceding ear , then its income ta at so rce nder ection 1 of the I ct b t ma
statement wo ld ha e re ected a loss which wo ld be liable to other applicable pro isions .
be permitted to be set-off and/or carried forward in
accordance with the pro isions of the I ct.
Discount given to advertising agencies by
broadcasters
KPMG in Indias comments
Generall , ad ertising agencies p rchase ad ertisement
he abo e decision co ld be sef l to s pport the claim airtime from broadcasters for placement of
of film distrib tors that e pendit re towards preparation ad ertisements of their clients on tele ision channels
of prints, ad ertisement e penses, which are specificall of the broadcasters. s a c stomar practice followed
e cl ded from the meaning of cost of ac isition nder b the broadcasting ind str , the in oice raised b them
R le / sho ld be entitled as ded ction nder ection re ects a standard commission i.e. disco nt of 1 per
of the I ct in the ear in which s ch e pendit re is cent.
inc rred and sho ld not be carried forward to f t re ears
in terms of R le i.e. if the film is not e hibited on a he ta a thorities ha e been contending that s ch
commercial basis for at least 0 da s before the end of disco nt is in the nat re of commission or brokerage
the financial ear . his iew is also s pported b a recent paid b tele ision channels to ad ertising agencies and
decision of the derabad rib nal in the case of eja accordingl , is liable to withholding ta at 10 per cent
inema0 wherein it was held that e penses inc rred for nder ection 1 of the I ct.
preparation of positi e prints and ad ertisement for film
prod ction is allowable as b siness e pendit re nder
ection 1 of the I ct.
269
02. one nterprise s I 201 6 ta man.com elhi .

0 . eja inema s I 201 6 ta man.com 2 d rib nal .
0 . irc lar o. 0 /2016, dated 2 ebr ar 2016.
owe er, ta pa ers belie e that the aforesaid disco nt establishment P in India. he ta abilit in s ch cases
gi en to ad ertising agencies is not in the nat re of is onl on the income which is attrib table to the P /
commission or brokerage and hence, not liable for operations carried o t in India. he circ mstances in
nder ection 1 of the I ct. he abo e contro ers which the s constit te a P /b siness connection
had res lted in protracted litigation on the matter. in India and the determination of income attrib table
to s ch P /operations carried o t in India, contin es to
owe er, recentl , the ide a circ lar0 has clarified be a contentio s iss e between the s and the ta
that the ded ction of ta is not re ired on pa ments a thorities.
made b tele ision channels/newspaper companies to
the ad ertising agenc for booking or proc ring of or s generall appoint agents in India for marketing
can assing for ad ertisements. ad ertisement airtime slots. gents also facilitate
collection of ad ertisement re en es from ad ertisers
Taxation of transponder charges and its remittance abroad. he ta a thorities contend
that the agent of the in India constit tes its P for
roadcasting companies pa transponder charges to ario s reasons.
satellite companies for transmission of their signals.
he ta a thorities contend that pa ments made towards he omba igh o rt in the case of atellite
transponder charges are in the nat re of ro alt . owe er, ingapore Pte. td.0 has held that where an has
in the case of sia atellite elecomm nications o. an agenc P in India i.e. P on acco nt of its agent , a
td. sia at 06, the elhi igh o rt has held that s ch pa ment of arm s length rem neration b the to its
pa ments do not constit te ro alt and are not liable to Indian agent e ting ishes its ta liabilit in the co ntr .
ta in India. similar iew has been taken b the elhi igh o rt in the
case of orldwide td10 and b the omba igh
ith a iew to o erride the abo e decision, the definition o rt in the case of International oldings td11.
of ro alt nder the I ct was amended ide the inance
ct, 2012 with retrospecti e effect, to bring within its owe er, recentl , the M mbai rib nal in the case of
12
ambit pa ments made for transmission of signals ia a G etwork sia has held that an Indian compan
satellite. he elhi igh o rt in the case of oda proc ring ad ertisement in India for a foreign compan
etwork imited0 affirmed the ta abilit of pa ments constit ted a dependent agent in India. rther, it also
towards transponder charges as ro alt nder the I rejected the arg ment that pa ment of arm s length
ct, in iew of the retrospecti el amended definition of rem neration to an agent e ting ishes an f rther ta
ro alt . liabilit in India b disting ishing the decision of the
preme o rt in the case of Morgan tanle 1 and that
owe er, recentl , the elhi igh o rt in the case of of the omba igh o rt in the case of atellite
ew kies atellite and hin atellite P blic o. td0 ingapore on facts.
has held that e en post the amendment in the definition
of ro alt nder the I ct, pa ments recei ed b foreign
satellite companies for lease of transponders is not Taxation of subscription revenues
ta able as ro alt nder the ta treat . h s, rel ing on bscription re en es are generall collected b the
this decision, non-resident ta pa ers can contin e to Indian distrib tors and are s bse entl paid to the
take the benefit of ta treaties entered into with India to s. he are of the iew that the pa ment for grant of
contend that s ch pa ment is not in the nat re of ro alt distrib tion rights is not for an cop right and hence, is
nder the ta treat and hence, not liable to ta in India. not in the nat re of ro alt which is ta able on a gross
basis at a specified rate . s take a position that the
Taxation of a Foreign Telecasting Company (FTC) pa ment is in the nat re of b siness income and is
not ta able in India in the absence of an P in India.
he two primar so rces of re en e for s are income owe er, the ta a thorities hold a di ergent iew and
from sale of ad ertising airtime on the channel and contend that the s bscription re en es are liable to ta
s bscription re en es. as ro alties. he iss e is pending adj dication at appellate
le els.
Taxation of advertisement revenues
nder the I ct, ad ertisement re en es of s are
ta able in India, in case s ha e a b siness connection
in India. In case an operates from a co ntr with
which India has a ta treat , the ad ertisement re en es
wo ld be ta able in India onl if the has a permanent
270
0 . irc lar o. 0 /2016, dated 2 ebr ar 2016. 10. I s orldwide td. 2011 20 a man elhi .
06. sia atellite elecomm nications o. td. 2011 1 a man 26 elhi . 11. I s International oldings td 201 ta man.com 1 6 omba igh o rt .
0. I s oda etwork imited 201 221 ta man 12 elhi . 12. G etwork sia s I 201 6 ta man.com 2 M mbai rib nal .
0 . I s ew kies atellite and hin atellite P blic o. td I o 2, , 00/2012 and 1 . I s Morgan tanle o 200 2 2 I R 16 et atellite ingapore Pte. td s I
2 /201 elhi igh o rt . 200 0 I R omba igh o rt .
0 . et atellite ingapore Pte. td. s I I 200 1 a man M m .
Judicial decisions rights witho t retaining an rights for itself. h s, s ch
pa ments were in the nat re of o tright sale and hence,
Payments received by foreign satellite o tside the ambit of ro alt nder the I ct.
companies for lease of transponders is not
taxable as royalty under the tax treaty he , howe er, considered this amo nt as ro alt and
since the ta pa er had not ded cted an ta at so rce
In case of ew kies atellite and hin atellite on these pa ments, the treated the ta pa er as
P blic o. td1 , the ta pa ers satellite companies assessee-in-defa lt and le ied an interest and a penalt
earned income from leasing of transponder facilities to on it.

broadcasters. owe er, s ch income was not offered to
ta b the ta pa ers in India. he ta a thorities, howe er, The Tribunal concluded based on the agreement that the
held that the income arising from the leasing of the pa ment made for ac iring satellite rights is towards
transponders sho ld be ta able as ro alt nder ection o tright sale, distrib tion or e hibition of cinematographic
1 i of the I ct, as well as the respecti e ta treaties. films, which are specificall e cl ded from the definition
of ro alt nder the I ct. rther, the rib nal relied
he elhi igh o rt held that the retrospecti e on the decision of the Madras igh o rt in the case
amendment bro ght b the inance ct, 2012, which of K. hag alakshmi16 wherein the co rt considered an
introd ced the definition of process in ection 1 identical nat re of pa ment. It was obser ed that tho gh
i of the I ct, cannot be read along with ta treaties the agreements speak of perpet al transfer of ears,
and sho ld not be sed to interpret them. he co rt in terms of ection 26 of the op right ct, 1 , in the
categoricall obser ed that it is not open to the case of cinematographic film, a cop right shall s bsist
Parliament to change the terms of the ta treat . It held onl ntil 60 ears. herefore, since the agreement is
that the inance ct, 2012 will not affect rticle 12 of the be ond the period of 60 ears for which the cop right
ta treaties. wo ld be alid, the doc ment co ld onl be treated as
It f rther obser ed that the decision of the Madras igh a one of sale. ccordingl , s ch pa ments towards sale
o rt in the case of eri on omm nications wherein of cinematographic films wo ld fall o tside the scope of
it was obser ed that the meaning of the term process ro alt .
s bse entl introd ced b the inance ct sho ld also
be sed to interpret the ta treaties cites no reason for KPMG in Indias comments
e tension of the amendments in ection of the ta his j dgment reiterates the iew taken in ario s other
treat . he igh o rt did not gi e a finding whether s ch decisions that pa ment made for o tright ac isition of
retrospecti e amendment wo ld be applicable to cases a satellite/negati e rights on a perpet al basis is in the
preceding the inance ct, 2012 and where there does nat re of sale, which is specificall e cl ded from the
not e ist an ta treat . definition of ro alt nder the I ct. imilar r lings ha e
been deli ered, recentl , in the case of Ganapath Media
KPMG in Indias comments P. td1 and . Rama Krishna1 . a pa ers ha ing similar
his is a welcome r ling not onl for the broadcasting transactions can rel on these r lings to contend that
ind str , b t other ind stries in ol ing pa ments for pa ment made for ac iring a satellite/negati e rights on
connecti it . hile there ha e been other igh o rt a perpet al basis is not ta able nder the I ct.
decisions which ha e also held that amendments to the
I ct cannot be read into a treat , this j dgment is of Indian company procuring advertisement in
partic lar significance for broadcasters since it is er India for a foreign company constitutes its
specific to transponder pa ments, and the onl igh dependent agent in India
o rt r ling directl on the iss e, post the amendment to 1
the definition ro alt in ection i i of the I ct sia In case of G etwork sia , the ta pa er a . .
atellite being a decision in the conte t of the I ct, and compan , was engaged in the b siness of broadcasting
that too, prior to the amendment in ection . channels in ario s co ntries, incl ding India. It
entered into an ad ertisement sales agreement with
G India for sale of ad ertisement and sponsorship
uisition of satellite ri hts of a film for time on the channels to G India for a l mp s m
years not royalty and hence not liable to TDS consideration, on a principal-to-principal basis.
In case of ishwar a rt reations1 , the ta pa er he ta pa er contended the income earned from sale of
made pa ments to satellite right holders/film prod cers airtime was not liable to ta in India, in the absence of its
towards p rchase of satellite rights in films witho t P in India. he ta a thorities howe er, held that G
ded cting ta at so rce. he ta pa er contended that India was, in essence, an agent of the ta pa er, res lting
the rights were ac ired for a period of ears witho t in a dependent agent P of the ta pa er in India.
an restriction and the prod cer had assigned all the
271
1 . I s ew kies atellite and hin atellite P blic o. td I o 2, , 00/2012 and 1. I s Ganapath Media P. td 201 60 ta man.com 20 hennai rib nal .
2 /201 elhi igh o rt . 1 . I s . Rama Krishna 201 61 ta man.com 0 d rib nal .
1 . I s ishwar a rt reations I 201 ta mann.com 221 d rib nal . 1 . G etwork sia s I 201 6 ta man.com 2 M mbai rib nal .
16. a case ppeal o. of 201 .
The Mumbai Tribunal observed that advertisement airtime Indian ompan distributin news and finan ial
cannot be classified as goods which are capable of information products does not create a
p rchase and sale since it is not capable of being stored dependent agent of the foreign entity and hence
and is not capable of being cons med or sed nless the revenue earned from the same is not taxable in
ad ertisement material is telecasted b the broadcaster. India
ence, the ta pa er cannot be considered to be selling
an goods and in effect, G India was acting as an agent In the case of Re ters td22, the ta pa er, a .K. compan
of the ta pa er for can assing the ad ertisements on its was engaged in the b siness of pro iding worldwide
behalf. he rib nal held that since G India was gi en news and financial information prod cts. In India, nder
f ll a thorit to concl de the contracts in India which a distrib tion agreement, the ta pa er pro ided Re ters
were binding on the ta pa er, G India constit tes a prod cts to its Indian s bsidiar , Re ters India Pri ate
dependent agent P of the ta pa er in India. imited RIP , which in t rn distrib ted the same
to s bscribers in India on an independent basis. he
s regards the arg ment of the ta pa er that e en if it distrib tion fees recei ed b the ta pa er were claimed
has a P in India, pa ment of arm s length rem neration to be not ta able in India in absence of a P in India.
to G India e ting ishes its ta liabilit , the rib nal he ta a thorities, howe er, alleged that RIP was a
rejected s ch arg ment, disting ishing the decision of dependent agent of the ta pa er and hence, the entire
the preme o rt in the case of Morgan tanle 20 and distrib tion fee was ta able in India on a gross basis. he
that of the omba igh o rt in the case of atellite ta a thorities similarl alleged that one of the emplo ee
ingapore on facts. ccordingl , the ad ertisement who was dep ted to India as the rea hief also
re en es earned b the ta pa er were held to be ta able created a ser ice P of the ta pa er in India and hence,
in India. the entire distrib tion fee was ta able in India on a gross
nother important iss e before the rib nal was whether basis.
the distrib tion re en es earned b the ta pa er was he M mbai rib nal, howe er obser ed that the
ta able as ro alt . he rib nal has referred the matter alified character of an agenc is a thorised to act
back to the , with a direction to e amine the iss e on behalf of somebod else so m ch as to concl de
afresh in light of amended definition of ro alt nder the contracts. It was held that as per the terms of
the I ct, partic larl referring to planation 6, which the distrib tion agreement, RIP did not negotiate or
defines the term process. rther, the was directed to concl de contracts on behalf of the ta pa er. RIP had
also take into acco nt the fact that the ta pa er is ha ing s bstantial income from its own dealing with third part
a dependent agent P in India while e amining this iss e. c stomers and also independentl filed s its for reco er
of debts from s bscribers. h s, acti ities of RIP cannot
KPMG in Indias comments be said to be de oted wholl or almost wholl on behalf
of the ta pa er. ence, it was held that RIP cannot be
he abo e decision of the rib nal co ld impact other said to be a dependent agent of the ta pa er. rther,
foreign broadcasters ha ing similar arrangements for the rib nal held that presence of rea hief cannot
sale of airtime to Indian ad ertisers. It will be interesting constit te as ser ice P of the ta pa er in India as he/
to see if G etwork will challenge the decision of the she has not f rnished an ser ices in India on which the
rib nal in the igh o rt and the igh o rt s erdict ta pa er has earned the distrib tion fee.
thereon.
ill then, other foreign broadcasters ma rel on the KPMG in Indias comments
Morgan tanle / atellite decisions to contend that
e en if there is a dependent agent P in India, pa ment his is a welcome r ling reaffirming the position, that
of arm s length rem neration to their Indian agents as long as the Indian s bsidiar acts independentl on
e ting ishes their ta liabilit in India. his iew is also a principal to principal basis, does not negotiate and
s pported b the recent decision of the omba igh concl de contracts on behalf of the non-resident, and
o rt in the case of International oldings td21 bears the entreprene r risk, it sho ld not be considered
where it was held that where the Indian affiliate was as creating a dependent agent P in India. his decision
not a decision-maker nor it had a thorit to concl de can be sed b ario s ind str pla ers ha ing similar
contracts, it co ld not be treated as a dependent agent. distribution arrangement to support their contention that
en if it is a dependent agent and it has paid an arm s s ch acti ities sho ld not be ta able in India.
length remuneration, nothing can be attributed to the
foreign ta pa er.
272
20. I s Morgan tanle o 200 2 2 I R 16 et atellite ingapore Pte. td s I

200 0 I R omba igh o rt .
21. I s International oldings td 201 ta man.com 1 6 omba igh o rt .
22. Re ters td s I 201 6 ta man.com 11 M mbai rib nal .
Amount received for live coverage of Indian charges, programme prod ction charges, etc. on which
Premier League (IPL) cricket matches is not ta was withheld b it nder ection 1 . lso, the
taxable as FTS/royalty under the India-U.K. tax assesse reimb rsed the dealer s commission to ee
treaty rner witho t ded cting ta . he alleged that the
ta pa er o ght to ha e withheld ta from all pa ments
In case of IMG Media td2 , the ta pa er was a .K. at 10per cent. ccordingl , the held that the assesse
based entit engaged in the field of m ltimedia co erage was in defa lt nder the pro ision of the I ct for
of sports e ents. he ta pa er had a ser ice P in India
shortfall in .
on acco nt of few of its personnel isiting India for more
than 0 da s for li e co erage of IP matches and also or each pa ment, the M mbai rib nal held as nder
for recce/inspection acti ities. It offered its income
attrib table to the P in India on a net income basis. Payment to cable operator/MSO for placement
charges: Based on the decision of the Mumbai
he ta a thorities, howe er, took a iew that the Tribunal on this issue in the case of UTV
ser ices made a ailable fell nder the p r iew of Entertainment26, the Tribunal observed that the
technical plan or design and hence, alified as . payment is a standard fee for providing choice of
rther, it was held that the income was also in the nat re desired placement of the channels and is not for
of ro alt and hence the entire amo nt of gross receipt is availing technical services. It held that the payment
ta able in India. is in the nature of work as defined in Section 194C,
which includes broadcasting and telecasting.
he rib nal held that merel beca se technical aspects
were specified in the agreement, it does not mean that Payment for producing programmes on a
the ta pa er has s pplied the technolog in ol ed in the commissioned work basis: Following its decision in
prod ction of li e co erage feed to the broadcasters. the case of Sahara One Media & Entertainment2 ,
echnical aspects were mentioned to ens re that which followed the Delhi High Courts decision in
programme content is broadcasted at the same alit the case of Prasar Bharti2 , the Tribunal held that the
in which it was prod ced. h s, the essential condition payment is covered under Section 194C. It noted
of make a ailable in the cla se nder the ta treat that Section 194C specifically includes payments
fails i.e. I cannot on its own perform the ser ices of for production of programmes for broadcasting/
li e co erage witho t reco rse to the ta pa er and hence, telecasting within the ambit of work, whereas the
the ser ices do not alif as nder the India .K. provisions of Section 194J are general in nature; thus,
ta treat . Section 194C prevails over Section 194J of the IT Act.
rther, the decision of the elhi rib nal in the case of Event management fees: The Tribunal observed that
imb s port International Pte imited2 , wherein it was Notification 88/2008, which states that an event
held that prod ction and generation of li e tele isions managers fees are covered by Section 194J, is
signal alif as , was disting ished on the basis prospective and cannot be applied to earlier years and
that the make a ailable criterion was not e amined in hence these payments are also covered by Section
that case. rther, it was held that the pa ments are not 194C.
in the nat re of ro alt since the ta pa er did not retain
ownership rights o er programme content. Equipment hire charges: The Tribunal relied on CBDTs
Circular Nos. 681 of 1994 and 715 of 1995 to support
the contention that Section 194C applies to all types
KPMG in Indias comments of work contracts.
he abo e decision of the M mbai rib nal wherein it Reimbursement of dealers commission: The Tribunal
held that rendering the ser ice of co ering li e e ents held that in the absence of any profit element, there
does not satisf the make a ailable criteria nder the was no liability to deduct TDS by the assesse on the
applicable ta treat . his r ling is e pected to pro ide reimbursement of such commission.
some relief to the ta pa ers who earn income from
co erage of li e matches in India.
Placement charges, programme production he abo e decision of the M mbai rib nal s pports
charges on commissioned basis, event other fa o rable r lings on the iss e that the liabilit to
ded ct ta with respect to the abo e pa ments t picall
management fees, equipment hire charges paid made b broadcasters is nder ection 1 of the I ct
for production units liable to TDS at 2per cent at 2per cent and not 1 /1 at 10per cent on a gross
under Section 194C of the IT Act basis.
In case of ee ntertainment nterprises td2 , the
273 ta pa er made ario s pa ments s ch as placement
2 . IMG Media td s I 201 60 ta man.com 2 M mbai rib nal . 2. sst I s ahara ne Media and ntertainment 201 1 ta man.com M mbai
2 . imb s International Pte td s I 2012 1 ta man.com 10 elhi rib nal . rib nal .
2 . I s ee ntertainment nterprise td 201 61 ta man.com 1 M mbai rib nal . 2 . I s Prasar harti roadcsting orpn. f India 200 2 2I R 0 elhi igh o rt .
26. I s ntertainment td I ppeal o. 26 /M m/2012 M mbai rib nal .
DTH industry
Key tax issues a majorit of pla ers ha e shifted from the model of
selling s to the c stomers to pro iding the s on
Withholding tax on discount on sale of Set an entr stment basis, witho t charging an consideration
Top Boxes (STBs)/Recharge Coupon Vouchers for the same. hile there sho ld be no applicable on
(RCVs) s ch a transaction effected witho t consideration, the
rom an income ta perspecti e, an iss e arises is- - is a thorities of ario s states are seeking to le
applicabilit of withholding ta on the amo nt of disco nt on such transactions on the ground that the installation
gi en to distrib tors on the sale of s/R s. he and acti ation charges reco ered from the c stomers
ta a thorities are of the iew that disco nt on sale of incl de the price of s. his leads to do ble ta ation of
s/R s is in the nat re of commission, s bject to the same consideration i.e. and ser ice ta , thereb
withholding ta at the rate of 10 per cent nder ection ca sing significant strain to the ind str .
1 of the I ct. owe er, the ind str is of the iew ince installation and acti ation charges are ser ice
that the disco nt is not in the nat re of commission and re en es and ser ice ta is being le ied thereon, the
hence, ection 1 is not attracted thereon. his iew co ld be kept o tside the p r iew of .
is s pported b the decision of the preme o rt in
the case of hmedabad tamp endors ssociation2 .
In that case, stamp vendors bought stamp papers Taxability of RCVs
from state go ernment at a disco nted price. he ta a abilit of R for s bscriptions has long been a matter
a thorities claimed that the endors were agents of the of disp te, partic larl aro nd whether this alifies as a
state go ernment and the disco nt was nothing b t good or a ser ice.
commission or brokerage, liable to withholding ta nder
ection 1 . he preme o rt held that ta need he ind str has been adopting a position that the
not be withheld on the disco nt gi en to endors since R s are in the nat re of actionable claims and cannot
it is not in the nat re of commission or brokerage. he alif as goods. Moreo er, the intrinsic al e of R s is
ind str is of the iew that the ratio of this decision insignificant and the are sed in the co rse of pro ision
sho ld e all appl to disco nt gi en to distrib tors for of ser ices. owe er, a thorities of ario s states
sale of s/R s. ha e been seeking to le ta as well as entr ta
on s ch R s on their face al e, treating them as goods.
Recentl , the Karnataka igh o rt in case of harti
irtel td. 0, held that the discount given to distributors hile there are j dicial precedents which ha e held that
on sale of IM cards/R s does not generate income R s do not alif as goods, it co ld benefit the ind str
in the hands of the distrib tor since the distrib tors if the respecti e state go ernments iss e a clarification
deri e income onl on s bse ent sale of prepaid and makes s itable amendments to sched les, so as
cards. owe er, the igh o rt held that if, in the books to a oid litigation across India on this iss e.
of acco nts of the ta pa er, the disco nt is re ected
separatel , then the liabilit of ded cting ta es nder Judicial decisions
ection 1 of the I ct arises on the ta pa er. ho gh
the said decision is in the conte t of the telecom ind str , Levy of VAT on STBs
the ratio of this decision ma also appl to the he rip ra igh o rt in case of harti elemedia td 1
ind str . has held that s pro ided as part of ser ices are
s bject to . he igh o rt has obser ed that
It co ld benefit the ind str if the go ernment iss es a
s itable clarification that disco nt on sale of s/R s The company has not sold STBs to customers but has
is not in the nat re of commission/brokerage and not transferred the right to use STBs to the customers.
s bject to withholding ta , so as to a oid nnecessar It observed that nothing is given free of cost and
litigation across the sector. that the cost of such STB is obviously included in the
activation charges and/or the monthly subscription.
Dual levy of tax on DTH service The STBs are in total control of the customer, they
he ind str is s bject to a ariet of ta es on are installed in the customers house resulting in his/
ario s transactions, s ch as on sale of s, ser ice her effective control. It was also observed that the
ta and entertainment ta on s bscription re en es, etc. customer can use the STB whenever he/she wants
stomers are charged installation charges and to, he/she can use it to view whichever channel he/
acti ation charges, on which ser ice ta is being le ied. she wants to or may or may not use the STB at all. The
company does not even have the power of entering
Pro iding ser ices is the predominant objecti e of the premises of the customer.
operators. herefore, to b ild their s bscriber base, 274
2 . I s hmedabad tamp endors ssociation 2012 2 ta mann.com 201 preme o rt .

0. harti irtel td. s I 201 22 a man 21 Karnataka .
1. harti elemedia td s he tate of rip ra 201 61 rip ra igh o rt .
As per the terms of the agreement, the company is Under the Legal Metrology Act, 2009, RSP should be
responsible for the functioning of the STBs only for required to be declared on the package. In the given
a period of six months as thats how long a warranty case, STBs were specified in the said notification,
lasts for. Therefore, if a STB of a customer is spoiled however, the same were imported specially for the
after six months he/she will have to pay for repair or purpose of serving DTH industries and not meant for
replacement of the same. Hence, this amounts to retail sale. Accordingly, there was no requirement of
transfer of the right to use goods. declaring RSP on the STBs at any time. Thus, it was
held by CESTAT that since one of the condition was

Further, the High Court observed that the value not satisfied, CVD was not leviable on the basis of
of STBs as given in the books of accounts of the RSP/MRP.
company is the value of goods, the right to use of
which has been transferred to customers. The same is rther, the held that, sale as defined in egal
separable and discernable and the state has authority Metrolog ct sho ld ha e taken place. In the present
to levy VAT on the sale part of the transaction i.e. case, there was no transfer of propert or hire/p rchase
value of STBs. s stem or pa ment b installments, th s, there was no
sale of s to the ltimate c stomer. he also
obser ed that, the definition of sale as per ct,
KPMG in Indias comments 1 6 which incl des deemed sale b wa of transfer of
In case of ser ices, the intention of the parties is right to se goods, cannot be relied pon when is
to pro ide and recei e these ser ices. he intention of to be le ied as basis of egal Metrolog ct. ccordingl ,
the c stomer is to iew the channels offered b the is not le iable on the basis of R P/MRP.
ser ice pro ider and not to p rchase the . he
is onl made a ailable to the c stomer so that he/she is
able to recei e ninterr pted ser ices. rther, the KPMG in Indias comments
c stomer also does not ha e an control o er the , it he held that, what is rele ant for le of on
alwa s remains the propert of the ser ice pro ider. R P/MRP basis is the re irement of printing the R P/
he ser ice pro ider can stop the ser ices MRP on the packages and not the nat re of sale. In the
remotel b controlling the with help of the iewing present case, the importers are not selling s either
card placed in the . If this is done, the will not to the dealer or to the c stomer. he same were being
f nction and will be of no se to the c stomer. herefore, entr sted to the c stomers for pro iding the ser ice.
the c stomer has no control o er the f nctioning of the rther, also emphasised that if a compan has
and hence, it cannot be said that the ser ice reco ered damages from the s bscribers in case s
pro ider grants right to se the to the c stomers. are damaged and replacement bo es are sold to the
s bscriber at cost, then, element of sale is in ol ed. In
n mber of ser ice pro iders are recei ing notices s ch cases, wo ld be pa able nder ection of
from ario s state a thorities demanding on the the ct.
s made a ailable to the c stomers as a part of
ser ices. he aforementioned decision of the rip ra he ser ice pro iders s all import s which are
igh o rt le ing on the s made a ailable to re ired for pro ision of ser ices to the c stomers.
c stomers as a part of ser ices, ma ha e f rther his decision of M mbai is likel to gi e respite
ad erse impact on the ser ice pro iders. to ser ice pro iders from fre ent al ation related
disp tes at the time of import of s.
Valuation of STBs for levy of CVD
Recentl , the M mbai stoms cise and er ice
ta ppellate rib nal in the case of harti
elemedia td 2, held that, on Retail ale Price R P /
Ma im m Retail Price MRP basis in terms of ection
of the entral cise ct, 1 cannot be le ied on
imported s.
he obser ed that, for le of on basis of
R P/MRP following two conditions need to be satisfied
Imported goods must be specified in the notification
issued under Section 4A(1) of the Central Excise Act,
1944; and
275
2. M/s harti irtel elemedia td. s omm of stoms Import ha a he a - 6- -201

M m- .
Music industry Digital media/Out of Home
Key tax issues (OOH) industry
Deductibility of cost of music right Service tax implication on sale of space or time
ed ctibilit of ac isition cost of licence in m sic rights slots for advertisements
has been a contro ersial iss e. he iss e is whether s ch elling of space or time slots for ad ertisements, other
costs are entitled to depreciation at the rate of 2 per than ad ertisements broadcast on radio or tele ision, was
cent on written down al e basis , or are in the nat re e empt from le of ser ice ta b wa of an entr in the
of re en e e pendit re, ded ctible in the first ear or negati e list. owe er, the said entr has been amended
are to be amortised o er the period of licence. he elhi with effect from 1 ctober 201 b the inance ct, 201
igh o rt in the case of Krishan K mar , the Mumbai to incl de onl selling of space for ad ertisements in
rib nal in the case of ips assettes Record and the print media. his amendment has widened the ser ice
alc tta rib nal in the case of Gramophone ompan ta base to incl de sale of space for ad ertisements on
of India ha e held that the pa ment for ac iring m sic internet websites, o t-of-home media, on film screen in
rights is in the nat re of ac iring raw materials and theatres, bill boards, con e ances, b ildings, cell phones,
hence, ded ctible as re en e e pendit re. Gi en that it tomated eller Machines Ms , tickets, commercial
is a timing iss e, it co ld help the ca se of the ind str p blications, aerial ad ertising, etc.
and a oid litigation if the go ernment can iss e a circ lar/
clarification confirming this position.
Withholding tax on payment of advertisements
on a portal
Judicial decisions rom an income ta perspecti e, an iss e arises as
Payment for obtaining rights of reproduction of to whether pa ments made b Indian entities to a
audio sound and music allowable as revenue foreign compan for ploading and displa of banner
expenditure ad ertisements on its portal wo ld be liable to ta in India
in light of the retrospecti e amendment in the definition
In the case of Krishan K mar 6, the ta pa er was of ro alt nder the I ct.
engaged in reprod ction of a dio so nd and m sic from
the master plate pro ided b the film prod cers and Prior to retrospecti e amendments in the I ct, there
distrib tors. he ta pa er contended that ro alt paid have been some decisions wherein it has been held
both l mp s m pa ment and rec rring pa ment for that nless control and constr cti e possession of the
obtaining rights of reprod ction was an allowable re en e e ipment was handed o er to the pa er, the pa ments
e pendit re. he howe er, held that it was capital in co ld not be said to ha e been made for the se or right
nat re. to se an ind strial, commercial or scientific e ipment
and hence, pa ments for online ad ertisement on the
he elhi igh o rt, rel ing on its decision in the case portal of a foreign compan sho ld not be ta able as
of per assettes Ind stries P. td , observed that ro alt nder the I ct and ta treat . owe er, in iew
m sic/film do not ha e a long life and hence, each ear of the retrospecti e amendment in the I ct, clarif ing
the ta pa er inc rs a l mp s m e pendit re to ac ire that pa ments wo ld alif as ro alt irrespecti e of
and proc re similar rights in new m sic. h s, it is the control and possession of the e ipment, one wo ld
rec rring in nat re and similar to ac iring and p rchasing need to anal se whether there wo ld be an impact on
raw material. It was f rther obser ed that pop larit the position nder the ta treat .
of songs fades awa in sometime and hence there is
no end ring benefit from them. ccordingl , pa ment owe er, non-resident ta pa ers can contin e to take the
for reprod ction rights for songs both l mp s m and benefit of ta treaties entered into with India to contend
rec rring e pendit re cannot be capital in nat re. that s ch pa ments sho ld not be ta able as ro alt / .

he abo e decision s pports the contention that pa ment
for ac iring m sic rights whether l mp s m or rec rring
pa ment, is in the nat re of ac iring raw material and
hence, ded ctible as re en e e pendit re.
276
. I s Krishan K mar 201 ta man.com 2 elhi igh o rt . . per assettes Ind stries P. td s I 1 2 1I 0 elhi igh o rt .
. ips cassettes Record o. s I 2002 2I 6 1 M m rib nal . . ahoo India P. td. s I 2011 11 ta man.com 1 M m rib nal , Pinstorm echnologies
. Gramophone o. of India imited s I 1 I 1 alc tta rib nal . P t. td. s I 2012 2 ta man.com M m rib nal , I s Right lorists P t td. 201 2
I R 6 Kolkata rib nal
6. I s Krishan K mar 201 ta man.com 2 elhi igh o rt .
Radio industry
Key tax issues of man fact re nder ection 2 2 of the I ct,
prod ction of radio programmes in ol e processes
Deductibility of licence fees of recording, editing and making copies prior to
Radio broadcasters are re ired to pa licence fees broadcasting. ccordingl , it held that when the radio
one time entr fee and rec rring ann al fees to the programme is made there comes into e istence a thing
go ernment as per licence terms. he iss e that has which is intangible. ccordingl , the igh o rt allowed
arisen is whether s ch fees are in the nat re of re en e additional depreciation to the ta pa er on new machiner
e pendit re to be claimed as ded ction in the ear in sed in prod ction of radio programmes.
which the are inc rred or are in the nat re of capital
e pendit re, entitled to depreciation. ince the ann al eparatel , the co rt allowed a depreciation claim on
licence fee is pa able for each ear of operation, it co ld licence fees paid as one time entr fee for M channels,
be allowed as re en e e pendit re. rther, the one being an intangible asset, on the basis that the assets
time entr fee co ld be allowable as a ded ction o er were kept read for se in the b siness.
the period of license. owe er, another iew is that the KPMG in Indias comments
pa ment for the one time entr fee co ld be treated
towards license ac isition, specificall co ered as an he abo e r ling wherein additional depreciation has
intangible asset, eligible for depreciation at the rate of been allowed to the ta pa er engaged in M radio
2 per cent. his has res lted in a disp te between the broadcasting towards new machiner sed b it in the
ta pa er and the ta a thorities. he go ernment co ld prod ction of radio programmes. n a similar basis,
iss e a circ lar or clarification on this aspect so as to broadcasting companies ma rel on this r ling to
a oid protracted litigation. claim additional depreciation on new machiner sed in
prod ction of programmes that wo ld be broadcasted on
channels, etc.
Service tax on sale of advertisements
rom a ser ice ta perspecti e, selling space or time slots Sports
for ad ertisements other than ad ertisements broadcast
he importance of sports in the co ntr has increased
on radio or tele ision was e empt from the le of ser ice
o er a period of time with ario s international sports
ta b wa of an entr in the negati e list. owe er, the
e ents being cond cted in India s ch as cricket, golf,
said entr had been amended with effect from 1 ctober
orm la ne, etc. . a ation of sports associations,
201 b the inance ct, 201 to incl de onl selling of
sportspersons and foreign teams participating in s ch
space for ad ertisements in print media. h s, the sale
sporting e ents for e ample, ta abilit of broadcasting
of space or timeslots on radio contin es to remain liable
re en e earned b the sports associations, ta abilit
to ser ice ta in spite of the fact that radio is a cost-free
of participation fee recei ed b sportspersons,
and eas medi m of mass comm nication e en to the
ad ertisement and sponsorship income earned b the
illiterate pop lation nlike print media. herefore, the
participating teams, attrib tion of income in India, etc. is
ind str is of the iew that, the aforesaid benefit of
a e ed iss e.
e cl sion from the le of ser ice ta which is granted
to print media b t not to radio ind str , is an nfair he iss e regarding whether pa ment for ac iring rights
treatment to the radio ind str . he go ernment ma to telecast a li e e ent is in the nat re of ro alt s bject
consider e tending the benefit to the radio ind str as to ta in India, which was a s bject matter of prolonged
well. litigation has been dealt with b the elhi igh o rt. he
elhi igh o rt has held that since there is no cop right
Judicial decisions on li e e ents, the pa ment for broadcast of li e races is
not in the nat re of ro alt .
Additional depreciation allowable on new
s regards ta abilit of foreign sports bodies, the alc tta
machinery used in production of radio igh o rt in the case of PI M 0 has held that an
programmes amo nt incl ding the g aranteed amo nt paid to an non-
In the case of Radio oda roadcasting td , the resident sports association in relation to an match pla ed
ta pa er was in the b siness of M radio broadcasting in India, were liable to withholding ta in India.
and prod cing ario s radio programmes. ring the ear
nder consideration, the ta pa er claimed an additional s regards ta abilit of foreign teams, in the case of
depreciation on new plant and machiner p rchased b I M 1, the alc tta igh o rt has held that
it for prod ction of radio programmes. he , howe er, amo nts paid to a foreign team for participation in a
disallowed the claim of the ta pa er. match in India as pri e mone were ta able in India.
277 he igh o rt obser ed that in light of the definition larit on the iss es faced b the sector co pled with
of thing as per lack s aw dictionar and definition certain ta incenti es co ld contrib te towards the
de elopment of sports in the co ntr .
. I s Radio oda roadcasting td 201 6 ta man.com 16 elhi igh o rt . 1. I M s ommissioner of income a 2011 11 ta mann.com 10 al. .
0. PI M s ommissioner of Income a 2011 1 a man al. .
Other developments/issues has pro ided their recommendations on G rates,
compensation to states, disp te settlement a thorit ,
impacting the M&E industry etc. and c rrentl , the bill is pending with the Raj a abha
Service tax on licence fees paid to the Ministry for its appro al.
of Information and Broadcasting (MIB)
he M ide the inance ct, 201 , bro ght nder rther, the mpowered ommittee has also p t p fo r
ser ice ta net all ser ices pro ided b the go ernment reports on b siness process for registration, pa ments,
or local a thorit . rther, the go ernment has been ret rns and ref nds nder G .
defined to mean department of central go ernment, s a part of mo ement towards G ed cation cess and
state government and its departments, Union Territories secondar higher ed cation cess has been s bs med
and its departments. he go ernment recentl has ide inance ct, 201 . rther, ser ice ta rate has been
iss ed a notification, appointing 1 pril 2016 as the increased from 12. 6 per cent incl si e of cesses to
date with effect from which all the ser ices pro ided 1 . per cent incl ding ide inance ct 201 and
b go ernment as defined abo e or local a thorities to from 1 . per cent to an effecti e rate of 1 per cent per
b siness entities will be s bject to ser ice ta . cent incl ding and Krishi Kal an ess ide nion
In iew of the aforementioned amendment, it is likel that dget 2016 .
licence fees pa able b broadcasters and ser ice he M in the inance ct 201 had affirmed the
pro iders to the Ministr of Information and roadcasting go ernment s intention of implementing G b pril
will be s bject to ser ice ta nder the re erse charge 2016. owe er, the go ernment has missed the said
mechanism in the hands of broadcasters and deadline. onetheless, the ind str is hopef l that
ser ice pro iders. his ma res lt into h ge G will see the light of da an time in 2016 once the
credit acc m lation for the broadcasters and ser ice onstit tion mendment ill is passed.
pro iders.
he introd ction of G co ld go a long wa in red cing
the ta costs of the ind str , as credit for ta es paid on
Levy of Swachh Bharat Cess (SBC) p rchase of goods wo ld be a ailable for set off against
he go ernment in the inance ct, 201 , had inserted a ta es pa able on ser ices and ice ersa.
pro ision empowering the go ernment to impose on
all or an of the ta able ser ices at the rate of 2per cent of rther, the problem of d al ta ation i.e. le of ser ice
the al e of ta able ser ices. he central go ernment has ta as well as on certain transactions is e pected to
f rther, ide a notification, appointed 1 o ember 201 be clarified with the implementation of G . lso, since it
as the date with effect from which at the rate of is proposed to s bs me entertainment ta at state le el
0. per cent will be le ied on al e of all ta able ser ices. nder G , the ind str can hopef ll breathe sigh of
relief.
rther, as per the s iss ed b in connection
to , since is not integrated in the credit herefore, the ind str e pects the go ernment to come
chain, the credit of will not be allowed. lso p with a definiti e constr cti e road map towards
cannot be paid b tilising credit of an other d t or ta implementation of G at the earliest. e ertheless, the
i.e. the same will ha e to be paid in cash. ence, the go ernment will ha e to gi e the ind str s fficient time
same will be a cost to the ta pa ers. for effecti e implementation of G .
rther, will be le iable at abated al e where er

abatement is applicable and also on ser ices where
Value Added Tax and service tax on copyright
ser ice ta is pa able nder re erse charge mechanism. he inance ct, 2012, had e empted the licensing of
cop right in cinematographic films from ser ice ta .
owe er, effecti e 1 pril 201 the benefit of the said
Clear road map for implementation of Goods ser ice ta e emption has been restricted to licensing
and Services Tax (GST) of cop right in cinematographic film for e hibition in a
Post the broad agreement with the states on se eral of cinema hall/theaters. ccordingl , licensing of cop right
the iss es concerning the implementation of G , the in cinematographic film for other than theatrical
date for implementation of G was e pected to be 1 e hibition is liable to ser ice ta . eparatel , the
pril 2016. he onstit tion mendment ill bill on G go ernment of ario s states ha e made cop right liable
has been passed in the ok abha on 6 Ma 201 , mo ing to , treating the same as intangible goods.
closer to the rollo t of an ambitio s indirect ta reform.
herefore, the d al le of ser ice ta and on the
he bill has been tabled in the Raj a abha for appro al.
same transaction/consideration pertaining to cop right
Raj a abha has referred the bill to the elect ommittee in cinematographic films contin es, which needs to be
to pro ide recommendations on G . he said committee addressed b the go ernment. 278
Judicial decisions package on all ction Plans of the ase rosion and Profit
hifting P Project in ctober 201 . s a member of
he omba igh o rt, in the decision in case of ata G20 and an acti e participant in the P project, India
ons imited 2 the petitioner , has held that transfer has in its dget 2016 proposed to introd ce the three-
of right to se goods of incorporeal or an intangible tiered transfer pricing doc mentation str ct re consisting
character s ch as trademarks, cop rights, patents, etc. is of master file, local file and b report in line with the
e igible to state al e added ta and that there need not recommendations contained in the report on
be an e cl si e and nconditional transfer.
ction 1 of the P ction Plan.

rther, the igh o rt held that, the transaction sho ld P refers to ta planning strategies that e ploit gaps
attract sales ta e en if there ma be m ltiple transferees and mismatches in ta r les to artificiall shift profits
and the transferor contin es to se goods and that the to low or no-ta locations res lting in little or no o erall
ease a ct does not indicate that the right to se the corporate ta being paid. onse entl , implementation
incorporeal/intangible goods sho ld be e cl si el and of ction Plan 1 will ha e a significant impact on the
nconditionall transferred in fa o r of the transferee. wa M ltinational nterprises M s in India are
he igh o rt has disting ished the preme o rt s maintaining the doc mentation, pro iding information to
decision in the case of harat anchar igam imited ta a thorities as also on their P policies i.e. consistenc
on the gro nd that it dealt with an altogether of their P policies for ario s j risdictions. rther, in
different contro ers . light of the increased collaboration of foreign M
pla ers with the Indian ones, collation and reporting of
KPMG in Indias comments information nder ario s transfer pricing pro isions
he iss e of ta abilit of transaction of transfer of right co ld pose a significant challenge.
to se intangibles has alwa s been a matter of litigation. dditionall , the ta a thorities ha e taken ario s
he decision of the omba igh o rt has re-raised the measures to improve the TP landscape in India during
contro ersial iss e of transfer of right to se intangibles. the last ear. he Indian go ernment has conscio sl
In light of this igh o rt j dgment, the e isting iss e of p t the P s on a fast track which has helped in
d al ta ation on transactions of transfer of right to se boosting ta pa er confidence in the go ernment s P
intangibles, with or witho t e cl si e and nconditional programme. rther, the has also iss ed final
transfer, is likel to re-open the debate regarding the notifications on the se of range concept and m ltiple
meaning of transfer of the right to se goods. ear data as well as g idelines for reference of matters
his is e pected to f rther increase the e isting litigation to P s bringing abo t momento s changes in the
on the iss e of d al ta ation on licenses in respect of d namics of P in India.
intellect al propert s ch as trademarks, cop rights,
patents, etc. which are alread s bject to ser ice ta . Key transfer pricing issues for the M&E
industry
Transfer pricing he increased cross border acti it co pled with the
he Indian ransfer Pricing P reg lations re ire a pec liarities of the nat re of transactions ndertaken in
ta pa er to ndertake international transactions with the M ind str poses se eral practical challenges in
associated enterprises on an arm s length basis. rther, establishing the fact that the transactions ndertaken
the reg lations mandate the se of one of the si between related parties are at arm s length. he sections
prescribed methods as the Most ppropriate Method below pro ide an o er iew of P related iss es faced b
M M for the determination of the arm s length price the M ind str .
P . rom a compliance perspecti e, the reg lations
prescribe maintenance of mandator doc mentation Comparability for distinct transactions
b ta pa ers on an ann al basis in relation to their
international and pecified omestic ransactions s he Indian P reg lations pro ide that the comparabilit
and also cast a compliance obligation on the ta pa ers, of an international transaction with an ncontrolled
which in ol es filing of an ann al P certificate known as transaction sho ld be j dged with reference to
cco ntant s Report with the ta a thorities disclosing The specific characteristics of the property transferred
details of s ch transactions in a prescribed format. or services provided in the transaction
Recent developments Functions performed, taking into account assets

employed or to be employed and risks assumed, by
he P en ironment has ndergone a significant change the respective parties to the transactions
o er the past 12 months. he rganisation of conomic
279 o-operation and e elopment released the final
2. ata ons imited and another s tate of Maharashtra and another 201 - 1 -G -061 - M.
The contractual terms (whether or not such terms are R le 10 describes the other method as an method
formal/in writing) of the transactions which lay down which takes into acco nt the price which has been
explicitly or implicitly how responsibilities, risks and charged or paid, or wo ld ha e been charged or paid,
benefits are to be divided between the respective for the same or similar ncontrolled transaction, with
parties to the transactions or between non-associated enterprises, nder similar
circ mstances, considering all the rele ant facts. his
Conditions prevailing in the markets in which the R le has come into force from financial ear 2011-12
respective parties to the transactions operate, onwards.
including the geographical location and size of the
markets, laws and government orders in force, costs Gi en the distincti eness of international transactions
of labour and overall economic development and entered into between related parties in the M space,
level of competition and whether the markets are it is often felt that the benchmarking anal sis ma
wholesale or retail. not alwa s be possible within the p r iew of the fi e
methods prescribed nder the law.
In view of the above mentioned parameters, if the nature
of international transactions entered into between parties ith the introd ction of the other method , ta pa ers
in the M&E industry are analysed, it can be seen that they ma ha e a little more e ibilit to se tender doc ments,
are distinct and peculiar and are not comparable to those third part bids, proposals, al ation reports, standard
undertaken in any other industry, mainly on account of rate cards, price otations and commercial and
the nature of assets or intangibles being traded between economic b siness models, etc. to demonstrate arm s
the parties. The following examples will help in providing length intent. he application of the other method
a better understanding of the above. co ld be partic larl helpf l in cases where application
of the other fi e specific methods is not possible
An Indian TV broadcasting company purchases film d e to diffic lties in obtaining comparable data d e
rights from a related party situated abroad. However, to distincti eness of transactions s ch as intangible
the price paid may vary significantly for various films transfers, etc.
and would depend on factors such as whether a film
is being telecast on television for the first time, the
timing of telecast, etc. Introduction of Country-by-Country (CbyC)
norms in the Budget 2016
Similarly, in the case of an Indian company which
nion dget 2016 was anno nced on 2 ebr ar 2016
owns a channel being telecast in a foreign country
in India and one of the most important de elopments
and which grants advertisement rights on a revenue
from a P perspecti e therein is the introd ction of b
split basis to related parties abroad, the proportion of
norms for P doc mentation from ssessment ear
split may vary significantly depending upon various
201 -1 i.e. 2016-1 . hese norms are based on
economic and commercial factors.
recommendations iss ed b the s P ction
Given the nature of transactions undertaken, it poses Plan 1 . Man co ntries ha e alread introd ced the said
peculiar challenges from a benchmarking perspective. norms in their local reg lations.
Firstly, it is usually difficult to gather information from
new pro ision for b reporting has been introd ced
the public domain on similar independent transactions
nder ection 2 6 of the I ct.
undertaken in this industry. Secondly, even if some data
is available on certain similar transactions undertaken he b pro isions appl to all entities resident in
between unrelated parties, they can seldom be used for India incl ding Permanent stablishments P . he
benchmarking the related party transactions because of compliance re irements for an Indian parent entit of
material differences between the two transactions being a multinational group are higher and more onerous as
compared. compared to the responsibilities of a s bsidiar /P of an
m ltinational gro p head artered o tside India.
iffi ult in appli ation of pres ribed methods Where Indian entity is the parent entity of the
he Indian P reg lations ha e prescribed si methods multinational group: er Indian parent entit of
nder the law as prescribed b the for the a m ltinational gro p, which satisfies the conditions
p rpose of determination of the arm s length price, i ., prescribed for applicabilit of b pro isions, is
1 omparable ncontrolled Price P Method 2 re ired to file the b report for an before
Resale Price Method RPM ost Pl s Method PM the d e date of filing of Ret rn of Income i.e. 0
Profit plit Method P M ransactional et Margin o ember of the rele ant to the . or e.g. where
Method MM and 6 ther Method notified b b pro isions are applicable to an entit , it wo ld
the on 2 Ma 2012 ide a otification and R le be re ired to file a b report for 2016-1 b 0
10 inserted in the Income-ta R les, 1 62 the R les o ember 201 .
thereafter . 280
Where Indian entity is a subsidiary/PE of a re irement co pled with the limited time period allowed
multinational group headquartered outside India: from the end of the financial ear i.e. eight months - pril
here the m ltinational gro p is head artered to o ember to prepare s ch e tensi e doc mentation
o tside India, the Indian entit of the said gro p wo ld co ld pose a challenge to the Indian head artered
be responsible for notif ing the ta a thorities with m ltinational ta pa ers especiall since formats and
details of the parent entit /an other entit designated proced res ha e not et been prescribed and the said
b the parent entit for f rnishing of the b report. ta pa ers wo ld be preparing the b report for the first
owe er, the Indian entit will ha e to file the b time. he master file is also to be prepared and filed b
report in India where the ta a thorities are nable the said ta pa ers with the ta a thorities. It is imperati e
to obtain the b report filed b the parent entit that the ta pa ers identif and mobilise reso rces for
thro gh a tomatic e change of information ro te. collation of information re ired to be f rnished nder
the b pro isions at the earliest.
he b report is re ired to f rnish the following
information rther, nder certain circ mstances, Indian s bsidiaries/
P s of m ltinational gro ps head artered o t of India
a. Aggregate information in respect of the amount of wo ld be responsible to file the b report in India
revenue, profit or loss before income-tax, amount which otherwise will be filed b the Parent entit of the
of income-tax paid, amount of income-tax accrued, m ltinational gro p.
stated capital, accumulated earnings, number of
employees and tangible assets not being cash or cash In addition to the b report, additional doc mentation
equivalents, with regard to each country or territory in re irements master file ha e been imposed on
which the group operates; the said Indian s bsidiaries/P s. he e act nat re of
doc mentation and information re irement wo ld be
b. Details of each constituent entity of the group clear once the R les in this regard are prescribed. It is
including the country or territory in which such important to note that the penalt for fail re to f rnish the
constituent entity is incorporated or organised or aforementioned information wo ld attract a penalt of
established and the country or territory where it is I R 00,000.
resident;
e ising a consistent P polic for all j risdictions is er
c. Nature and details of the main business activity or challenging for M M s. nder these conditions,
activities of each constituent entity; compl ing with the re irements of P co ld f rther
place a significant b rden on M s with regard to
d. Any other information as may be prescribed.
doc mentation and j stification of ariable transfer
prices for similar transactions in ario s j risdictions.
he inance Minister in his b dget speech anno nced ompliance of P pro isions re ires maintenance
that the threshold for filing the b report is R 0 of consistent and contemporaneo s P doc mentation.
million and it is proposed in the Memorandum to the This entails meticulous planning, oversight and
inance ill, 2016 that the prescribed template will conse entl considerable reso rce strength on the part
be adopted. of the M gro p.
rther, a pro iso to ection 2 1 of the I ct has dditionall , it is important to note that steep penalties
been introd ced which mandates preparation and ha e been instit ted against defa lts committed with
maintenance of certain prescribed information and regard to b reporting ranging from I R ,000 per
doc ments. hile R les in this regard are awaited, the da to I R 00,000, for non-s bmission, incorrect
information and doc ments as mentioned in the said s bmission of P related doc ments, non-adherence
pro iso co ld be the master file as prescribed b ction of timelines for s bmission of P related doc ments,
Plan 1 of the P project. rther, a new s b- as per conditions prescribed. h s, P pro isions
section i . s b- ection to ection 2 is proposed cast a hea responsibilit on the ta pa ers in terms of
to be introd ced which mandates that the information compliance and form lation of P policies.
and doc ments prescribed nder the pro iso to ection
2 1 of the I ct is to be filed with the ta a thorities
b the d e date which will be prescribed.
Update on Advance Pricing Agreements (APAs)
ith a iew to address the increasing P litigation
he abo e doc mentation re irements are in addition to in India the Indian go ernment had introd ced P
the local P doc mentation re irements as o tlined in pro isions with effect from 1 l 2012. onse entl ,
ection 2 of the I ct. a gmentation of the P team and the introd ction of
the roll-back pro isions p t the Indian P pro isions at
KPMG in Indias comments par with international standards.
281 arlier the prescribed P doc mentation was onl to has concl ded more than 0 P s, o t of which
be prepared b the d e date of filing the ret rn and are nilateral and three are bilateral. In se eral other
was to be f rnished onl a few ears later d ring cases position papers ha e alread been sent to for
assessment proceedings. owe er, the b report has appro al/recommendations.
to be f rnished along with the ret rn of income. his
The first bilateral APA was signed with a Japanese MNE, Introduction of use of the range concept and
within 18 months of introduction of the APA programme use of multiple year data
and subsequently, two others were signed with Indian
group entities of a U.K. based MNE43. Tax treaties with In acknowledgement of the distinct P laws pre alent
Germany, France, Singapore, Italy and South Korea are in India, which ha e ca sed significant hardship to the
likely to be re-negotiated to enable filing of bilateral APAs ta pa ers and led to long drawn litigation, the inance
with these countries. ct no. 2 , 201 introd ced the se of range concept,
instead of an arithmetic mean, for benchmarking of the
Further, the Advance Pricing and Mutual Agreement intercompan transactions nder re iew and also se of
office (APMA), a representative office of the U.S. m ltiple ear data. he go ernment notified amended
Competent Authority, has started accepting Bilateral r les in this regard for determining arm s length range in
Advance Pricing Agreements (Bilateral APA) from India ctober 201 .
from 16 February 2016.
he amended regime will be applicable for comp tation
APAs entered into by the Indian government cover a of arm s length range of international transactions
range of international transactions including interest and s ndertaken on or after 1 pril 201 44. he
payments, corporate guarantees, non-binding investment amended r les allow for introd ction of a range concept
advisory services, contract manufacturing, logistics for determination of P and se of m ltiple ear data
service providers, animation industry players, services for ndertaking comparabilit anal sis in transfer pricing
provided by pharma company to its parent, etc. cases. rther, the notification specifies the se of
The two bilateral APAs which were concluded with weighted a erage of prices/data for determination of P.
the U.K. were significant as they address the issue Use of multiple year data: he notification states
of management charges and brand royalty. The APAs where RPM, PM or MM is tilised as the M M
involved significant amounts spread over a span of seven for determination of P of international transactions
years i.e. five future years and two rollback years. In or s, comparabilit will be cond cted based on
December 2015, India and the U.K. also concluded MAP
proceedings on transfer pricing of management charges - Data relating to the current year; or
and brand royalty in case of two companies. - Data relating to the financial year immediately
preceding the current year, if the data for the
KPMG in Indias comments current year is not available at the time of filing of
s is obser ed, the Indian P programme has mat red return of income.
considerabl . hile hitherto, P s that were signed owe er, it is important to note that it has been
pertained to mainstream ind str transactions, the pro ided that if data pertaining to the c rrent
recent trend of P s ha e been signed for comple and ear becomes a ailable s bse entl d ring
litigio s transactions. speciall the P s signed for the assessment proceedings, the same shall be
management cross charges and ro alt ha e helped in considered for determination of P, irrespecti e of
boosting the confidence of the ta pa er comm nit in the fact that c rrent ear data was not a ailable to the
India s P programme. ta pa er at the time of filing of ret rn of income.
M pla ers in India ha e significant intercompan h s, it is important to note that the benefit of sing
transactions in the nat re of ro alt gi en their ties with m ltiple ear data will onl be a ailable if the M M is
international M entities and nat re of their operations. RPM, PM or MM and the same is not a ailable in
hile the recent P and M P for brand ro alt was other cases. ertain additional conditions are re ired
not signed for an entit in the M ind str , pa ment to be f lfilled for a ailing the benefit of se of m ltiple
of brand ro alt being a contentio s P iss e in Indian ear data. h s, it will be important to closel anal se
P a dits, concl sion of an P /M P on the same is a the comparables being selected for comparabilit
welcome mo e and M pla ers co ld benefit from the p rposes.
precedent set b the said P .
Application of range concept: he notification
rther, pro iding an option of entering into a bilateral specifies that the range concept will be applicable on
P with the . . wo ld be of rele ance to the M f lfillment of the following conditions
ind str , gi en that major international pla ers in the
M ind str ha e ties with pla ers based in the . . - A minimum of six comparables would be required in
the dataset;
- Concept of range will not be applicable in cases
where MAM is selected to be PSM or other
method.
282
. Press release b Go ernment of India, dated 1 ebr ar 2016.

. otification o. /201 . o. 1 2/2 /201 - P / . . o. 2 60 dated 1 ctober 201 .
he notification specifies the methodolog of FDI in the M&E sector
comp ting the arm s length range with the help of
three simple ill strations. n arm s length range The current FDI limits relating to the M&E sector
beginning from thirt -fifth percentile of the dataset are as under:
arranged in ascending order and ending on si t -fifth
percentile will be considered. If the price at which Sr. No. Segment Existing limits/approval route
international transaction or is ndertaken is
within the thirt -fifth to si t -fifth percentile of the 1 Teleport/DTH/HITS/mobile TV

dataset, the transaction wo ld be considered to be at
arm s length. 2 Cable TV networks
If the price at which international transaction or is Cable Networks (MSOs)
ndertaken is o tside the aforementioned range, the operating at national 100%
P of the transaction wo ld be considered to be the or state or district level Up to 49% -automatic
median of the dataset. and undertaking up route
It is important to highlight that where n mber of gradation of networks Beyond 49% - government
comparables is less than si , or the M M is P M or towards digitalisation and route
other method, the P will be determined based on addressability)
the arithmetic mean of the said comparables. rther, Cable Networks (Other
the benefit of per cent ariation wo ld contin e to MSOs not undertaking
be a ailable to the ta pa er in s ch cases. upgradation of networks
towards digitisation with
addressability and Local
Cable Operators (LCOs))
ho gh the se of range and m ltiple ear data in ol es
satisfaction of a lot of pre-re isites and the range of 3 Downlinking of TV channels
thirt -fifth tosi t -fifth percentile pro ided is not at par 100%
with globall accepted range of twent -fifth to se et - 4 Uplinking of non news and automatic route
fifth percentile, it still pro ides a window of e ibilit to current affairs TV channels
the ta pa ers in determination of the P.
challenge that ta pa ers ma contin e to face is 5 Uplinking of news and
the se of c rrent ear data d ring the assessment current affairs TV channels 49%
proceedings where the same was not sed d ring P government route
doc mentation, as generall it is diffic lt to obtain c rrent 6 FM radio
ear data b the time of f rnishing of ret rn of income. Source: onsolidated I polic effecti e from 12 Ma 201 as amended b Press ote o. 12 201
eries .
lso, the ta pa ers need to closel anal se the
comparables selected to help ensure that the said
comparables f lfill all the conditions prescribed in the
notification to enable the ta pa er to a ail the benefit of
the aforementioned concepts.
pe ified omesti ransa tions

ide the inance ct 201 , the threshold for applicabilit
of P reg lations on transactions between domestic
related parties where certain ta holida s are claimed and
in respect of pa ments e pendit re to domestic related
parties was increased from I R 0 million to I R200
million.

he erstwhile threshold of I R 0 million was considered
too low and led to an nd e increase in compliance
b rden on the ta pa ers. Rationalisation of this threshold
is th s a positi e step in this regard.
283
Key Budget 2016 proposals
Equalisation levy rther, c stoms d t e emption has also been pro ided
In order to tax e-commerce transactions of non- on s b-parts for se in man fact re of parts, components
residents, an equalisation levy is to apply in line with and accessories of specified cons mer premise
the recommendation of the OECD BEPS project. e ipments s ch as ro ters, broadband, s for gaining
access to internet, etc.
Equalisation levy of 6 per cent introduced by way
of deduction from payments to non-residents from
Indian residents/Indian PEs of non-residents in Appeal against the directions issued by the
relation to online advertising and other services as Dispute Resolution Panel (DRP)
may be notified if the aggregate amount exceeds hile the directions iss ed b the RP are c rrentl
INR100,000 in a year for each payer. Such income of appealable b the ta pa er as well as b the ta
the non-resident proposed to be exempt under the authorities, pursuant to the amendment proposed, the
act. ta a thorities will ha e no right to appeal against the
instr ctions iss ed b the RP.
The payer will not be entitled to a deduction of such
payments to non-residents if the equalisation levy is Other important proposals
not withheld or after withholding it is not deposited orporate ta rates remain nchanged for 16-
with the government by due date. Such expenditure is 1 . omestic companies with t rno er less than
to be allowed as deduction to the payer in the year of I R 0 million for 1 -1 to be ta ed at 2 per cent
payment of equalisation levy. e cl ding s rcharge and cess)
The equalisation levy is to be governed by a Reduced corporate tax rate of 25 per cent (excluding
separate chapter which is a code in itself covering surcharge and cess) for domestic companies set up
establishment of statutory authorities, filings, post 1 March 2016 and engaged in manufacturing of
assessments, penalty and other procedures. article/thing to applicable, if such companies do not
claim specified investment/profit linked deductions.
Levy of Krishi Kalyan Cess (KKC)
Provisions of Place of Effective Management (POEM)
he go ernment has proposed to impose a new le b to determine tax residence of overseas companies
wa of KK with effect from 1 ne 2016, on all or an of in India deferred by one year. The government to
the ta able ser ices at the rate of 0. per cent of the al e introduce transition mechanism to address issues
of ta able ser ices. he said le is for the p rposes relating to advance tax, TDS applicability, set-off of
of the nion for financing and promoting initiati es to losses, transfer pricing provisions, etc. for companies
impro e agric lt re or for an other p rpose relating having POEM in India.
thereto.
Various withholding tax provisions are rationalised
rther, the as per the clarification iss ed the credit of by increasing the threshold limit for commission,
KK paid on inp t ser ices shall be allowed to be sed brokerage, contractual payments, etc. and reducing
for pa ment of the proposed cess le iable on ta able the WHT rates on commission/brokerage to 5 per
ser ices pro ided b a ser ice pro ider. owe er, there cent
is no corresponding notification iss ed at present which
pro ides for a ailment of credit of KK against pa ment Ro alt income of a resident patent holder in respect
of s ch cess to ser ice pro iders. of patent de eloped and registered in India to be
ta ed at the concessional ta rate of 10 per cent
rther, the KK paid b man fact rers/traders on inp t e cl ding s rcharge and cess .
ser ices will be a cost to them, since the wo ld not ha e
an o tp t ser ice ta liabilit towards ta able ser ices. on-residents wo ld not be liable to a higher initial
withholding ta rate of 20 per cent on non-f rnishing
of P , if the conditions to be prescribed are f lfilled.
Customs exemption for inputs used in
manufacturing of STBs 100 per cent ded ction of profits for three o t of fi e
In an attempt to enco rage local man fact ring and deter ears for start- ps incorporated pto 1 March 201 .
imports of s, the go ernment has pro ided c stoms dditional ded ction of 0 per cent allowed for three
d t e emption on import of the parts, components ears with respect to new emplo ees whose total
and accessories for se in the man fact re of ro ters, emol ments does not e ceed I R2 ,000 per month
broadband modems, s for gaining access to internet, emplo ed d ring the ear.
s for , digital ideo recorder R /network ideo
recorder R , etc. n ons mer Premise ipments P s s ch 284
as ro ters, broadband modems, set-top bo es for
gaining access to internet, reception apparat s for
television but not designed to incorporate a video
displa , digital ideo recorder R /network ideo
recorder R , option is gi en to pa e cise d t at
the rate of per cent witho t or 12. per
cent with .
he ser ices b a performing artist in folk or classical
art form of m sic, e cl ding ser ices of artist as
a brand ambassador were o tside the p r iew

of ser ice ta le , b wa of entr in the Mega
emption otification p to limit of I R0.1 million
per performance. he M has proposed to increase
s ch limit to I R0.1 million per performance with
effect from 1 pril 2016.
Conclusion
he Indian M ind str has witnessed tremendo s
growth in the last few ears and the growth moment m
is e pected to contin e. he M landscape is becoming
highl d namic, with the digital segment being among
the fastest growing segments. ho gh there are certain
ta and reg lator iss es as highlighted in this report,
which remain to be addressed b the go ernment.
ith the positi e approach of the go ernment towards
simplification and rationalisation of ta laws in India, the
M ind str can hope for icker resol tion of the
same which co ld enable it to achie e greater heights
worldwide.
285
286
25%
Revenue
assurance for
cable and
satellite television
50% 75%
Introduction
he tele ision ind str in India is broadl segmented into Revenues for distributors are largely driven by growth in
the following categories subscription revenues and carriage/distribution fees.
Content producers The paid C&S TV subscribers (excluding DD FreeDish) are
These are the entities which produce content to be aired expected to grow to 175 million by 2020, representing 87
on TV channels. Broadcasters typically engage TV content per cent of TV households in India1.
producers to produce content for them in a cost-plus Given that Indian subscribers have been used to low
model.1 price points for cable television, cable and satellite
television operators are under pressure to maintain lower
Broadcasters subscription fees. This has resulted in an average revenue
per user (ARPU) of only ~USD4 for C&S TV operators in
TV broadcasting entities who are responsible for India as opposed to an ARPU of approximately USD60
developing content and programing for individual 100 in advanced economies like Europe and U.S..4
channels under their portfolio. These channels are
then provided to Cable & Satellite (C&S) operators for The DTH market in India is prepaid in nature wherein
distribution to subscribers. subscribers balance is deducted periodically. For
subscribers not on long duration packs, this deduction
is done on a daily basis. This further places pressure on
Distributors DTH ARPUs as subscribers often fail to recharge their
Cable operators: accounts before due dates. On an average, 20 to 30 per
cent of the subscribers are off-air for at least three days a
Cable television consists of an ecosystem comprising month on account of not recharging before the due date
of Multi System Operators (MSO) and Local Cable resulting in an opportunity loss of approximately INR3
Operators (LCO). TV signals are received from billion annually.1
broadcasters by MSOs and subsequently relayed to
LCOs. LCOs then provide the feed to end subscribers With a projected increase in subscriber growth and
through cable. Cable continues to be one of the evolving cost models, C&S television operators could
largest route for delivery of television content to Indian turn their focus on enhancing revenues and in turn
subscribers. As part of mandatory digitisation under protecting their margins.
the governments Digital Addressable System (DAS)
policy2, the largely analog cable distribution system
is being digitised, but the process has been delayed
multiple times, with the latest deadline for completion
31 December, 2016.3 More than 60 per cent of the
cable subscribers continue to be analog and digitally not
addressable.1
Direct to Home (DTH) operators (also referred to as

satellite television operators)
DTH is an alternate platform for delivering television
content to subscribers. In a DTH environment, content
is delivered to the end subscriber directly by the DTH
operator. The personal dish antenna at the subscribers
premises enables the receipt of channels transmitted by
satellites operated/leased by DTH operators.
The size of Indian television industry is estimated
at INR542 billion in 2015 and expecting to grow at a
compound annual growth rate (CAGR) of 15 per cent to
reach INR1,098 billion in 2020.1
Revenues for broadcasters are largely driven by growth
in advertising revenues and subscription revenues.
288
01. KPMG in India s anal sis 2016 based on data collected from ind str disc ssions 0 . ill et i s entr shake p the Indian market , ele ision Post, http //www.tele isionpost.
02. otified in o ember 2011 com/special-reports/will-net i s-entr -shake- p-the-indian-ott-market accessed on 26 ebr ar
2016
0 . MI notifies new deadline, Phase and e tended, ele isionpost.com, 1 eptember 201
Ecosystem for cable and satellite television industry
The Future: now streaming | Revenue assurance for cable and satellite television
Fig: able and satellite tele ision ecos stem
289
he tele ision operators in India ma foc s on the (QoS) degradation, denial of Service and unauthorised
following components of the ecos stem to potentiall access to confidential information.
gain competiti e ad antage
Evaluate the benefits of various support models
Content procurement before deciding on system integration vendors and
Gain content at competitive prices from channel contract structure.
broadcasters and Value Added Service (VAS)
providers. Customer services
Negotiate carriage fees from channels with lesser Strengthen capabilities in subscriber analytics to:
viewership. Improve channel packaging and pricing.
Enhance subscriber service experience.
Transmission
Ensure availability of requisite satellite transponder Regulations
capacity, efficient compression and transmission
technology. Cable and satellite television is a highly regulated
industry. It is paramount that operators are abreast
with the latest regulations and comply with them to
Technology avoid any regulatory penalties.
Forecast and procure a healthy mix of various
categories of Set Top Boxes (STB) based on the latest Revenue and cost elements
technology and subscriber preferences.
he tele ision operators in India ha e indi id al
Adopt emerging technologies (e.g. Over the Top departments that o ersee the f nctioning of processes
services) that can enable easier distribution of within its department. owe er, there is a need to
content to wider audiences. o ersee processes that c t across m ltiple departments
so as to ha e a single iew of the al e chain. his co ld
Sales and distribution enhance organisations abilit to pre ent re en e and
cost leakages.
Attain an efficient mix of digital and traditional
channels to augment subscriber reach. ome of the ke so rces of re en e and cost for cable
and satellite operators are as nder
Implement robust processes to convert upsell and
cross sell opportunities.
Revenue
Field services Subscription fees
Introduce mechanisms to address subscriber Re en e from s bscriptions contin e to remain the
installation and service requirements in a prompt and primar so rce of re en e for cable and satellite
efficient manner. tele ision operators. bscription re en es can be
f rther s b di ided into the following categories.
Incentivise field agents to increase first time
resolutions and limit repeat complaints.
Recurring charges
These are monthly charges paid by the subscribers for:
IT systems and support
Invest in IT systems (CRM, Billing system, Subscriber Linear content (content on which viewer has no
Management System etc.) that cater to the operators navigational control. For example: TV shows, movies,
subscriber base and business objectives. etc.
Review existing Service Level Agreements (SLA) and Nonlinear content (interactive content such as video
Turn Around Times (TAT) with IT vendors to align with games, self-paced computer based training).
industry leading practices. Value Added Services such as HD access, recording
Build a robust IT security framework capable of features etc.
protecting attacks directed at the Quality of Service
290
Non-recurring charges Content cost
These are charges paid by subscriber for: Content payout is one of the highest contributor towards
costs incurred by C&S television operators. Content
Service activation fees. prices are currently negotiated with broadcasters based
Long duration packs. on number of subscriptions than actual viewership.
Content costs have been observed to be on an increasing
Relocation and other work order related fees. trend for the past few years.5
One of the challenges faced by operators is the

Usage-based charges unavailability of the feedback mechanism built into STBs.
These are charges paid by subscriber for: The current STBs in the market, limits cable and satellite
television operators ability to measure actual viewership
Video on Demand (VoD). patterns - which could play a significant role in price
Operator initiated content/channels. negotiations with broadcasters. The newer Wi-Fi enabled
boxes are however expected to reverse this trend.
Carriage fees
Subscriber Acquisition Cost (SAC)
ith rapid progression in the n mber of new channels,
tele ision operators are e pected to generate With subscriber acquisition costs ranging from INR 1600
re en es on acco nt of carriage fees. arriage fees for to INR2500, the breakeven period is estimated to be four
e isting channels are e pected to remain stable o er the years6. However, the competitive nature of the industry
ne t two to three ears. he increasing n mber of new contributes to high churn, limiting average lifetime of
channels being carried b each M is e pected to res lt subscribers to approximately two years.
in carriage fee contin ing to increase b 10 to 1 per cent STBs are capitalised and not sold to subscribers.
for M s6. ith the increase in satellite transmission However, subscribers perception of having purchased
bandwidth, operators are also in a position to the asset limits C&S operators ability to retrieve these
monetise carr ing of channels with lesser iewership b STBs from the market, thus lowering asset utilisation.
le ing carriage charges.
As per industry reports, 62 per cent of the total subscriber
base is revenue generating. This implies that at least
Cost 38% (considering one STB per subscriber) of STBs are
The cost structure of the DTH industry makes it even not generating any revenue for the operators6. Asset
more challenging for operators to enhance margins. Few refurbishment and the management of reverse supply
key cost elements of cable and satellite operators are chain are some of the other challenges which limit the
listed below: operators from utilising the assets to their full potential.
Further, payouts to dealers towards commissions for
Operating costs new connections and installations are also factored in the
subscriber acquisition cost.
The C&S TV industry has high operational expenditure. In
addition to license fees, the cable and satellite television
industry is also subjected to numerous taxes and levies. Dealer and Distribution costs
Additionally, new subscriber is provided with a Set Since a majority of the Indian satellite television industry
Top Box (STB) and dish antenna. This results in very is prepaid, network of dealers and distributors are
high supply chain costs mainly driven by inventory, incentivised to promote the sale of operators recharge
warehousing and logistics. Average landed cost per STB cards. The commission structure usually varies depending
is approximately INR2000 which today is mainly driven by on sale channel (IVR, digital, physical cards, etc.).
Standard Definition (SD) STBs5. However, as subscribers
shift towards High Definition (HD) STBs, this cost is
estimated to increase exponentially.5
291
0 . KPMG in India s anal sis 2016 based on data collected from ind str disc ssions
06. hats eating operators, li emint.com, http //www.li emint.com/ pinion/
rjf1j b e k0Ms GhP/ hats-eating- -operators.html accessed on 0 Ma 201
Need for revenue assurance Incorrect governance mechanisms resulting in re-use
of recharge vouchers.
comple ind str al e chain and d namic technolog
en ironment makes the ind str s sceptible to m ltiple Fraudulent distribution of recharge PINs.
operational, legal, s bscriber lifec cle management and
fra d related risks that can impact operators re en es Excess payout of commissions to dealers &
and margins. distributors.
Fraudulent credit & rebates.
Operational risks
The cable and satellite television industry has a very Legal risks
complex operational structure and is subject to several Risks related to non-compliance to regulatory norms laid
operations risks. Few examples include: out by the governing bodies
Mismatch between services configured in Conditional Non-compliance to pricing regulations laid out by TRAI.
Access System (CAS) and Subscriber Management
System (SMS) resulting in delivery of channels free of Non-adherence to free to air channel transmission.
cost. Discretionary bundling of channels leading to
Incorrect configuration of price plans in SMS resulting exclusion of broadcasters.
in undercharging.
Provisioning of discounted packs to in-eligible Subscriber lifecycle management risks
subscribers. Risks related to managing subscriber across lifecycle
Overcharging by channel partners such as Dealers, with the operators
Distributors and Installation Service Providers (ISPs). Opportunity loss on account of delays in new
In-correct dunning of subscribers. subscriber activation.
Failure in service deactivation for subscribers opting Non availability of set-top boxes resulting in lost sales.
for Long Duration Packs (LDP), post expiry of contract Ineffective complaint/dispute handling.
period.
MSOs face additional risks associated with managing
Cost leakages on account of incorrect declaration of Local Cable Operators (LCO). Since the MSO primarily
subscription figures, commission payouts, partner drives a B2B model with LCOs, they have very limited
settlement etc. control on key subscriber touch points and subscriber
experience delivery. MSOs have very limited visibility on
Fraud risks subscriber billing and service provisioning. Additionally,
LCOs often under report subscription figures to MSOs
Risks associated to abuse and exploitation by leading to revenue leakages.
stakeholders, internal or external to the organisation
The ability of an operator to effectively control these risks
Cloning of smart cards/viewing cards. can directly impact revenue and margins.
Exploitation of IT systems on account of weak cyber
security measures.
292
Introducing Revenue assurance as a function
Fig: R framework
A robust revenue assurance framework is built on three Improve top line by identifying revenue enhancement
key components: opportunities.
Enablers Increase bottom lines through cost saving measures
Right people, efficient processes and relevant technology and margin enhancements.
continues to form the basis of the Revenue assurance
framework Methodology
This defines the Revenue assurance operating
Orientation framework, providing guidance from governance to
A Revenue assurance function at an operator level has management reporting.
the following objectives: Key activities that can be performed by the Revenue
Prevent revenue exposure. assurance function in the DTH environment are listed
below:
Detect revenue leakage.
293
Revenue leakage detection exploitation. Focus on subscriber fraud is relatively low in
Given the complexity of the value chain, IT systems the cable and satellite industry.
and interfaces, RA function can assist in reconciling
data from multiple sources against an event to identify Accounting and reporting assurance
completeness and accuracy of revenues. Similarly, such
an analysis could help identify opportunities for revenue The Revenue assurance function also performs controls
enhancement by looking at the entire value chain to help ensure the accurate reporting of revenues in
and processes that cut across multiple functions and operators financials. Since a majority of DTH operators
departments. As part of their responsibilities, they can are prepaid in nature, there are several complex
provide subscriber and service provisioning assurance, accounting rules pertaining to revenue recognition.
validate accuracy of balance depletion, validate
accurate and timely service de-provisioning of de-active Measurement and KPIs
subscribers etc.
The Revenue assurance function also tracks and
measures Key Performance Indicators (KPI) including
Cost assurance daily new connections, recharges, package subscription
Apart from protecting business from revenue leakages, trends, de-active subscriber trends etc. This is done via
the RA function also plays an important role in validating customisable dashboards with user specific access
cost payouts to assure/enhance margins. They could having features to alert relevant stake holders in case any
validate payouts to broadcasters and VAS partners, KPI is breached. This function is pivotal in monitoring the
validate commissions/incentive payouts for dealers and overall business health of DTH operators.
distributors, help ensure tax-efficient contracts etc. Although the concept of Revenue assurance as a function
is being gradually accepted by DTH players, adoption of
Product assurance Revenue assurance as a function in the cable television
industry is still in a nascent stage. This is because in an
Price changes and new product launches involve MSO environment, subscriber lifecycle management
configuration/updates on multiple systems including including onboarding, installation, repairs and payment
Subscriber Relationship Management (CRM) system, collections are being carried out by LCOs. Since these
Subscriber Management System (SMS), Conditional processes vary among operators and with an MSO
Access Systems (CAS), Self-care systems, Billing having very limited visibility on the activities performed
Systems etc. RA teams can validate business cases by LCOs, Revenue assurance as a function is yet to gain
to help ensure profitable margins and align product traction in the cable industry.
configurations to original business intent. Few interesting
products include The MSOs on their part have adopted the following
Loan service where subscriber can request some approach to streamline efficiencies that can help to
balance from operator for a nominal service fee if he/ introduce Revenue assurance as a concept:
she runs out of balance and didnt get an opportunity
to recharge before the due date Introduce prepaid cable
Post a TRAI directive (No. 16-2/2012-B&CS dated
Live TV services where subscribers can view channels 02-December-2013), MSOs have been experimenting
in their subscription package by via internet. with the concept of prepaid cable. This is expected to
increase transparency in dealings with LCOs and assure
Subscriber analytics MSOs their rightful revenues.
The Revenue assurance function can also perform
activities providing insights into subscriber usage and Support LCO operations using MSO staff
preferences. This information can be used to analyse In a bid to reduce costs for LCOs, MSOs have entered
product profitability and open avenues for Below the into agreements where traditional LCO operations are
Line marketing. conducted by employees of MSOs without any financial
implication to the LCO.
Fraud management
The Revenue assurance function can also execute
controls to detect fraudulent activities by dealers with
special focus on any system/commission structure
294
Challenges faced by the Revenue Way forward
assurance function he Indian tele ision ind str is set to contin e
ltho gh the rele ance and importance of Re en e to migrate from sched led tele ision and packaged
ass rance f nction has been accepted b major programming ser ices to a more on-demand and tailored
operators, there are still areas for impro ement that co ld tele ision en ironment. actors in encing this change
f rther e tend the effecti eness of this f nction. are listed below
ew of the challenges are listed below Digitisation in TV distribution.
Need for institutionalisation of the Revenue Explosion in the type and quantity of available content.
assurance function Shifting subscriber preferences often leading to
Operators need to integrate RA into the organisations shorter content lifecycles.
culture and structure. This can be done by formalising Progression in TV technology (HD, UHD, 4K, Internet
a RA charter which clearly outlines the roles and enabled) and increase in television penetration has
responsibilities, SLA & TAT, operation scope and introduced various distribution channels for content
escalation matrix. internet, mobile applications, etc.
In a scenario of s ch rapid change, cable and satellite
Adoption of cognitive technology tele ision operators are increasingl dependent on data
The RA function currently in place is designed to primarily dri en insights to help monitor performance, impro e
be a detective function. Operators may consider monetisation and optimise costs. Re en e and margin
investing in technologies that involve self-learning and ass rance is e pected to be a ke differentiator and
pattern recognition to transform RA into a preventive operators who implement and tilise this effecti el
function. Introduction of such technology can enable are e pected to ha e distinct ad antage o er their
the resources to save time from performing mundane competitors.
activities and invest time in expanding revenue assurance
activities in other areas.
Consider RA as a part of the team rather

than an audit function
Operators must position RA as a business partner rather Revenue assurance is not about
than an audit function. This can help enable a more open transactions covering the Technical
and honest working relation with other functions within and Business Support systems while
the organisation. connecting them and finding leakages
but more about the Strategic Output
that this area allows one to Provide to an
Equip RA with resources having relevant Organisation. Since access to RA is from
skills and the right tools Basic acquisition to data tracing across
the customer life cycle to write-offs
Resources in the RA function should be technically adept while stitching various analytical points
having a strong business understanding, knowledge of like a central nervous system it enables
systems and big data analytical capabilities. Further, they effective ecision making.
must be supported with the right analytical tools that can
Bharat Pandit
be leveraged to provide operators with valuable insights.
Assign the right reporting framework Senior VP, Revenue assurance

Effectiveness of Revenue assurance is enhanced by a and Business Intelligence
reporting structure that assists in the prompt resolution Tata Sky
of issues identified. This function has traditionally
reported to CFO and in many communications industries,
the reporting is enhanced by exposure to the Audit
Committee and the Board of Directors7. Operators need
to evaluate the correct fit for Revenue assurance as a
function in their organisations.
295
0. ntering a new era, KPMG Re en e ss rance r e -2012
296
We acknowledge the efforts put in by:
Aashruti Kak Karan Dasaor Rohan Lobo
Aditya Rath Madhavan Vilvarayanallur Rugved Raje
Aman Mehta Madhur Mangal Safwan Rais
Aniruddha Abhyankar Manigandan G Sameer Garg
Ankit Redkar Neha Narain Sameer Hattangadi
Apoorva Chhabra Neha Pevekar Sathish Gopalaiah
Arjun Kariyal Nikhilesh Shetty Sharon Dsilva
Ashwini Hegde Nikita Rastogi Sharvin Bhatt
Avichal Joshi Nimit Soni Shashvat Garg
Chintal Patel Nirvi Desai Sheekha Panwala
Darshini Parikh Nisha Fernandes Shilpa Taneja
Dev Khandwala Pankhuri Dave Shruti Gupta
Diamond Antoo Prashanth Rao Shveta Pednekar
Divya Ganapathy Pratik Chawla Smita Jain
Gavin Remedios Pratima Parab Soumo Ganguly
Girish Menon Prince Arora Sriram C
Harsimar Singh Priyanka Agarwal Suchitra Laxman
Harshit Desai Radhika Goel Vivek Jala
Hussain Rahat Rahil Uppal Yogita Negi
Jaijit Bhattacharya Ritika Parasrampuria
Special thanks to Prasanto K Roy for his contribution towards the segment Tomorrow begins
We would also like to thank:

Anant Goenka, Indian Express (Director & Head - New Media)
Rajiv Makhni, Managing editor, NDTV
Raju Narisetti, Senior VP News Corp
Sree Srinivasan, Chief Digital Officer, Metropolitan Museum
Sruthijith KK, Editor-in-chief, HuffPost India
Vikram Chandra, Group CEO, NDTV
for their valuable contribution towards the aforementioned segment.
KPMG in India contacts: FICCI contact:
Nitin Atroley Leena Jaisani
Head Sales and Markets Sr. Director and Head
T: +91 124 307 4887 FICCI Media & Entertainment Division
E: nitinatroley@kpmg.com E: leena.jaisani@ficci.com
T: +91 22 2348 7505
Jehil Thakkar
Head Media and Entertainment Federation House
T: +91 22 3090 1670 Tansen Marg
E: jthakkar@kpmg.com New Delhi - 110001
F: +91 11 2332 0714 / 2372 1504
Aneesh Vijayakar T: +91 11 2373 8760 / 70
Partner Transaction Services
T: +91 22 3090 2131
E: aneeshvijayakar@kpmg.com fi i-frames om
Anthony Crasto
Partner Governance, Risk and
Compliance Services
T: +91 22 3090 2490
E: acrasto@kpmg.com
Naveen Aggarwal
Partner and North Tax Head
T: +91 124 307 4416
E: naveenaggarwal@kpmg.com
Santosh Dalvi
Partner Indirect Tax
T: +91 22 3090 2685
E: sdalvi@kpmg.com
Varun Gupta
Partner Transaction Services
T: +91 22 3090 2132
E: varungupta1@kpmg.com
KPMG.com/in
Follow us on: Download the KPMG India application:

kpmg.com/in/socialmedia
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to
provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in
the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.
The views and opinions expressed herein are those of the interviewees and do not necessarily represent the views of KPMG in India.
2016 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative (KPMG International), a Swiss entity. All rights reserved.
The KPMG name and logo are registered trademarks or trademarks of KPMG International.
Printed in India. (056_THL0316)

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The Future: now streaming

1. http://www.nasdaq.com/markets/crude-oil.aspx accessed on 19/3/2016

While India continued to become a telecom superpower

The year 2015 did see a host of new services being

UDAY SHANKAR RAMESH SIPPY JEHIL THAKKAR

Awaiting the digital dawn

Live events 243

ri ing these changes are a coll sion of factors s ch as

India is now characterised b e tremel high mobile penetration, and er high

01. G M Mobile conom India Report 201

Mobile will continue to be the primary medium of internet access

Mobile telephon is 20 ears old in India, compared with o er 1 0 ears of the

he n mber of ni e sers is important beca se not onl does it gi e s

oda s o er 00 million ni e sers are likel to to ch aro nd 1. billion

0 . G M Mobile conom India Report 201

treet kids spend some n G called igital nother G called

What are Indias top apps?

1 WhatsApp 2 UC Browser 3 Hotstar

4 Facebook 5 SHAREit 6 Messenger

7 Cricbuzz 22 Wynk 30 Gaana

06. ielsen estimates

Organisations not yet

0. pp nnie India rankings

he sharing of media in a hats pp gro p is a

ireless access is Entertainment, Pro iding free or cheap access

06. http //articles.economictimes.indiatimes.com/2016-01-22/news/6 6 1

Some key innovations impacting the M&E sector

Idea Cellular Five south Indian states and plans to launch

Vodafone Five circles of Kerala, Karnataka, Mumbai,

Tikona Digital Planned rollout in 5 circles and 30 cities

Airtel 15 major cities and is expected to expand

Rollout of 4G will be a key enabler in providing

Internet users (million)

Source: KPMG in India anal sis and disc ssions

Government initiatives can supplement

Progress in IPv6 Implementation13

1 . KPMG India nal sis 2016

In addition, mobile internet connections are e pected to

Apps install category Q2-2015

Source: InMobi he tate of Mobile pp ownloads 201

Source: ielsen Mobile Panel, India

Entertainment on the go: As smartphones become

Source: ielsen Mobile Panel, India

Source: ielsen Mobile Panel, India

Source: ielsen Mobile Panel, India

According to Nielsen Mobile panel, 99 per cent of consumers

Source: ielsen Mobile Panel, India

Smartphone as the mobile wallet: Finally, the surest

Source: ielsen Mobile Panel, India

Source: ielsen Mobile Panel, India

These trends will get amplified as every device in the world

statistics, and latest standings while o are watching li e

1. Global Economic Prospects, A World Bank

Overall industry 2010 2011 2012 2013 2014 2015 Growth

Total 652 728 821 918 1,026 1,157 12.8%

Advertising revenues: Size

Overall industry 2010 2011 2012 2013 2014 2015 Growth

Radio 10.0 11.5 12.7 14.6 17.2 19.8 15.3%

Total 266 300 327 363 414 475 14.7%

Total 1,315 1,502 1,724 1,980 2,260 14.3%

Advertising revenues: Projections

Total 547 637 739 860 994 15.9%

01. milestone ear for media, he Mint, 1 ecember 201