Media &

Entertainment
Industry Analysis

Faculty of Management Studies

Delhi

2/5/2011
1 Contents
2 General Trend .............................................................................................................................................. 3
3 Industry Life Cycle........................................................................................................................................ 3
3.1 Television ............................................................................................................................................. 4
3.2 Print ..................................................................................................................................................... 4
3.3 Film ...................................................................................................................................................... 5
4 Key Players................................................................................................................................................... 7
4.1 Television ............................................................................................................................................. 7
4.2 Films..................................................................................................................................................... 7
4.3 Radio .................................................................................................................................................... 8
4.4 Music ................................................................................................................................................... 8
5 New Developments ..................................................................................................................................... 8
6 Government Policies ................................................................................................................................... 9
7 Key Drivers ................................................................................................................................................. 10
8 Future ........................................................................................................................................................ 11
9 Reference................................................................................................................................................... 15
2 General Trend
Digitalization - Availability and penetration of newer distribution platforms like Digital Cable, DTH and PTV,
digitization of newspapers, magazines, films and sale of online and mobile music are some of the ways in
which the industry benefited from digitization Regionalization – Advertisers are increasingly focusing on
regional markets as these are growing pockets of consumption.
Convergence and Impact of new media – New media is bringing about a revolution by merging the
functionalities of customer and end terminal devices. For example, IPTV, Online newspapers and magazines,
podcasts, Wi-Max, new video formats, internet streaming etc. Also digitalization in TV homes through DTH,
cable and IPTV are helping bring in better quality to consumers who can pay for the same.
Innovation – Makes an impact in the increasingly competitive market place. Advent of social networking
sites like Facebook, Twitter and LinkedIn is an innovation that enabled brands and advertisers to attract
attention.
Consumer research - With increasing fragmentation of audiences and competition, companies are increasing
spends on consumer research. Whilst several players do market research, this needs to be taken to the next
level.
Institutionalization of HR function - There are variations in the extent of institutionalization of HR practices
across various sectors in the industry, however the need for organization design and development and HR
function optimization is felt in general.
Growing importance of pay audiences - The growth in ticket prices of movies at multiplexes, increasing
number of Pay TV subscribers, increasing DTH penetration, and introduction of VAS are some examples of
consumers paying for content.

3 Industry Life Cycle

Chart: Segment-wise break up of E&M Industry (2009)

3.1 Television

Many Hindi GECs are going global in order to

target global diasporas. Fiction remains the
key diet for Indian viewers. IPL was a huge
success on the television garnering big TRPs.
Also regional channels are gaining
prominence.

3.2 Print

Some of the key trends affecting the

advertising revenues are:

Geographical reach
Target Population
Ad-Edit Ratio
Strength in the respective geography
3.3 Film

Rise in number of multiplex spread in the

country will help increase domestic box office
collections. There are increasing initiatives by
the Government to curb piracy, decreasing
dependence on rental market and growing
digitization will further boost the industry.
Regional film industry will fuel growth over
the next five years.

With the success of Avatar, 3D cinema in

India has received further impetus. The
number of 3D screens in larger and smaller
towns has leapt and the trend is expected to
flow ahead.
Past Trends:

(Source: http://www.4psbusinessandmarketing.com/30122010/storyd.asp?sid=4318&pageno=1)
According to Ozone Media Performance Users Study (OPUS) (from July 2009 to June 2010), online performance
advertising jumped by 70%, post the slump in 2009-March, April, May 2010 being the recovery months. Real estate,
travel and finance saw a huge increase in consumer demand and interest in the year 2010. Online performance
advertisers received a whopping jump of 238% increase in responses to finance advertisements from July 2009 to June
2010, while in real estate category online advertisers saw a seven-fold increase in response under the period under
review. Online travel advertisers received a substantial jump of 212% year-on-year. The report indicates that online
advertisements continued to receive highest interest from internet users in metros.
(Source: http://www.livemint.com/2011/01/06151045/2010-was-a-turning-point-for-o.html)

Global AD Outlook 2011 to 2013

4 Key Players

4.1 Television
Viacom 18

A 50/50 joint venture between Viacom Inc and the Network18 Group

Colors: Hindi GEC* (Number one GEC with 303 GRP* * between December 13 and December 19,
2009)
MTV —youth channel
Nick —kids channel
VH1—international music and lifestyle channel
Star

Part of News Corporation

Star Plus —Hindi GEC

Star World —English entertainment channel
Star One —Hindi entertainment channel
Channel V —Music channel
Star News —Hindi news channel

4.2 Films
Yash Raj Films

Production of Hindi movies and home entertainment —including marketing and distributing DVDs
and VCDs —music, film distribution and the creation of ad films, music videos, TV software and
documentaries.
Reliance MediaWorks Ltd

Part of Reliance Anil Dhirubhai Ambani Group(ADAG)

The company’s film services include motion picture processing and digital intermediate (DI), digital
mastering, film restoration and studio and equipment rentals. It also operates as a media business
process outsourcing (BPO) entity.
4.3 Radio

Entertainment Network (India) Limited (ENIL)

Part of Bennett, Coleman & Company Ltd (BCCL) and Times Infotainment Media Ltd

Radio Mirchi has a presence in 32 cities across India, including Mumbai, Delhi, Kolkata, Chennai,
Pune, Indore, Ahmedabad, Bengaluru, Hyderabad, Jaipur, Patna and Jalandhar.
Big FM

Part of Reliance Media World Ltd

BIG FM has a 45-station network

4.4 Music

T-Series

The company has rights to more than 2,000 video and 35,000 audio titles, comprising nearly 24,000
hours of music software.
Venus

Venus holds audio rights for various regional language movies, including Hindi, Marathi, Bhojpuri
and Bengali. It also holds video, satellite and cable rights.

5 New Developments
Globally, it is expected that in the next five years digital technology will progressive increase over the next
five years. There are two reasons behind this:

Advances in Technology and infrastructure

Consumer Behavior

Digital spending in India is not increasing at the same pace as that internationally. Primary reason behind this
is the lack of adequate infrastructure and the slow pace of growth.

IPTV

IPTV has a great potential in India as it provides entertainment, internet, telephony, e-governance, and video
streaming boxed together and provided at the consumer door step. The unavailability of broadband is
majority of the household is a hindrance in achieving the required penetration.
Media Barons in Forbes India Rich List

Five media barons are part of the Top 100 Rich List.

Kalanithi Maran at number 17.

His rise in the Rich List is the most spectacular. With a net worth of $4 billion, up by 74% from last
year’s $2.3 billion, he is the biggest gainer in percentage terms.
Bennett & Coleman's Indu Jain is ranked at number 21.
Zee Group's Subhash Chandra is ranked at number 23.
HT Media's Shobhana Bhartia is ranked at 76.
Dainik Bhaskar Group's Ramesh Agarwal is ranked at number 80.

6 Government Policies

TV
In 2004, the Telecom Regulatory Authority of India (TRAI) was appointed as a regulator for the TV
industry.
Up to100 per cent FDI is permitted in TV channels.
The rollout of DTH TV licenses and GoI-mandated digital conditional access systems (CAS) initiated
the digitization process. The recently announced Headend-in-the-Sky (HITS) policy and a
concessional customs duty of 5 per cent on importing digital headend equipment is expected to give
further impetus to the digitization process.

Films

In 2000, the GoI granted industry status to the Indian film industry and permitted FDI of up to 100
per cent in film-related activities.
Various state governments have also provided entertainment tax exemptions to multiplexes.

Radio

Following the opening of FM radio broadcasting to private players in March 2000, the rollout of the
second phase of the FM radio licensing policy in 2005 provided a thrust to the sector.
In radio companies, FDI is limited to 20 per cent of the company’s paid-up equity capital.
7 Key Drivers
Television:
The growth will be driven by a rise in subscription and advertisement revenues for the industry. DTH would
be another key driver. DTH will continue to grow fast to reach 50 million households in 2014.
Film
Growth drivers for the sector would include expansion of multiplex screens resulting in better realizations,
increase in number of digital screens facilitating wider releases, higher C&S revenues, improving collections
from the overseas markets and ancillary revenue streams like DTH, digital downloads etc which are expected
to emerge in future.
Print Media
Growth in the Print media industry is achievable through sustained growth in advertisement revenues due to
increased advertising spends from emerging sectors such as Education, Organized Retail and Telecom,
improving literacy levels in the country, optimization of cover prices leading to improved penetration and
growth in sales volume, increasing importance of regional print etc.
Radio
Increase in the number of radio stations in Phase 3, expected regulatory reforms that are likely to improve
profitability and stimulate foreign investments, enhancement of current measurement systems and growth
in locally targeted advertising are some of the growth drivers for the sector.
Music
One of the primary reasons for this growth was the increased acceptability of different digital distribution
models, acceptability of music genres other than the Indian film industry, and broadcast and public
performance licensing revenues, all of which compensated for declining physical sales and are expected to
drive growth going forward.
OOH (Out of Home)
Till now, the growth has been centered largely in Tier 1 towns but a noticeable trend in 2009 was increased
investments in Tier 2 and 3 cities. Currently, top 6 metros account for ~60% of OOH spends but only 30% of
consumption presenting a tremendous latent potential for growth.
Animation & VFX
The growth is going to be triggered by the increased consumption of animated content, focus on IP creation
and growth of 3D formats. The growth in gaming sector will be backed by the increase in number of casual
and active games, arrival of 3G, availability of localized content, growth in ad funded gaming platforms and
greater awareness of products and services.
Other growth drivers

 Favorable demographics: Apart from being home to the second-largest population in the world,
India is among the world’s youngest nations, with more than 52 per cent of its population below 25
years of age.
 Increase in disposable income: With consumers’ disposable income rising, spending on leisure and
entertainment has increased.
 Changing consumer landscape: Growth in consumer spending is expected to accelerate growth in
advertising expenditure.
 Urbanization: The proliferation of organized retail outlets and malls is facilitating the rapid expansion
of multiplexes across the country.
 Supportive regulatory framework: FDI is permitted in almost all segments of the industry, with 100
per cent

8 Future
Future Projections: Global Ad Outlook: 2011-2013
1. Growth to remain below 6%
2. Television leads from the front

3. Being environmentally conscious

 4. Migrating to online platforms

5. Tapping online ad market

Segment Wise Projection:

Television:

The television industry is projected to grow at the rate of 15 percent over 2010-14 and reach a size of INR
521 billion in 2014.
Film

Over the next 5 years, the industry is projected to grow at the CAGR of 9 percent and reach the size of
INR137 billion by 2014.

Print Media

The industry is projected to grow at a CAGR of 9 percent over the next five years and reach around INR269
billion in size by 2014.

Radio

It is expected to grow at a CAGR of 16 percent over 2010-14 and reach a size of INR 16.4 billion by 2014.

Music

The size of the Indian music industry was estimated at around INR 8.3 billion in 2009, up from INR 7.3 billion
in 2008, implying a growth of 14 percent during the period. Overall the music industry is expected to grow at
a CAGR of 16% over 2010-14 to reach INR 17.2 billion.

OOH (Out of Home)

OOH media has grown at a CAGR of 5 percent over the past 3 years, and is estimated to have reached INR
13.7 billion in size in 2009, a de growth of 15 percent over 2008. It is projected to grow at a compounded
rate of 12 percent over the next 5 years and reach a size of around INR 24.1 billion by 2014.

Animation & VFX

The industry is expected to grow at a CAGR of 18.7 percent in the coming years to reach INR 46.6 billion by
2014.

The E&M industry as a whole will continue to be dominated by TV, print and films by 2014. This is not very
different from the current structure.
 Chart: Segment-wise break up of E&M Industry (2014)

9 Reference
 Indian Entertainment and Media Outlook 2010, July 2010, PricewaterhouseCoopers
 Media & Entertainment Industry Report at FRAMES, 2010, KPMG
 Entertainment, April 2010, IBEF report, www.ibef.org
 Five media barons in 2010 Forbes India Rich List, Oct 4, 2010,
http://www.campaignindia.in/Article/234199,five-media-barons-in-2010-forbes-india-rich-list.aspx