India’s Entertainment and Media sector is expected to grow steadily over the next five years as per CII-PwC’s latest report titled ‘India Entertainment and Media Outlook 2012’. The industry is expected to exceed INR 175,000 crores growing at a CAGR of 17%1 from 2012 to 2016.
Advertising segment in India is dominated by the television and print sectors with combined contribution of over 80% in the total revenue pie. Both these segments are expected to continue to be dominant in the next five years.
The Indian E and M industry is among the top 15 markets in the world and the fastest growing one, followed by China, Russia and Brazil. This growth is largely coming from the burgeoning internet segment which has the potential to outshine the print sector by 2014.
The Potential Game Changers in this area are going to be the Advertising Spend, Consumer spend, infrastructure and policy support.
The advertising spend contributes approximately 35% of revenues in the E and M industry. However, compared to other countries, the advertising spend as a percentage of GDP is very low at 0.3%. We expect that with entertainment content being accessed through different mediums and innovation in digital content will drive the advertising spend.
The key consumer spend segments include television subscription, film admissions and print circulation. The average annual spend per capita is at a low of USD 7 in as compared to USD 22 in China and USD 65 in Brazil. Rising disposable incomes in India in combined with macro economic stability will drive rapid growth in consumer spend on E and M.
Achieving the vision of E and M industry worth USD 100 billion will require a consolidated and focussed approach towards developing and deploying relevant infrastructure, supported by a strong policy framework. High broadband penetration, improved audience measurement mechanisms and regulatory support will provide the necessary impetus to future growth
“Working to attain the target of USD 100 billion in the coming years will not only benefit industry but also create large scale employment, and help achieve India’s goal of being a knowledge driven economy through effective media” said Mr Chandrajit Banerjee, Director General, Confederation of Indian Industry.
“Increased advertising and consumer spend will take the industry to desired heights. This will be fuelled by technological innovation leading to better quality of media content being consumed. Internet access will be a key enabler in driving growth.” Said, Smita Jha, Leader – Entertainment and Media Practice, PwC India
In 2011, the overall entertainment and media industry is estimated to be INR 80,000 crore, an increase of 17.5% over the previous year. The television and print segments continue to be the largest contributors to the industry, accounting for 66% of the total revenue. Internet access also contributed a significant 14% (up from 11% in 2010), driven by the increasing adoption of mobile internet in the country. However, the contribution from the print and film segments have reduced marginally, as year-on-year growth rates have been lower than the industry average.
Internet access and gaming segments have been the fastest growing, with annual growth rates of 57% and 33% respectively. The gaming segment, though a small contributor to the overall industry, has been growing due to the rising popularity of mobile and online and social media gaming. Television, being the largest segment, has been the highest contributor (in terms of revenue addition) to the industry, with an annual growth rate of 16%.