India’s media & entertainment sector will be worth $100 billion, according to a new report by Boston Consulting Group (BCG) and Confederation of Indian Industry. The sector, currently valued at $17.85 billion, has grown 10 per cent annually in the past five years. It has the third largest TV audience, second largest print circulation, and produces the highest number of films worldwide. The report points out that while contributing 1.7 per cent of the country’s gross domestic product (GDP), the media & entertainment segment employs nearly five million people directly and indirectly. Unlike in the West, India’s markets retain vast absorption capabilities for new products and businesses.
The report notes the sector in India has been underperforming with advertising providing 0.33 per cent of the GDP compared to the global average of 0.64 per cent. It also falls far behind the immediately larger market of China, which has reached a ‘billion media hours a day’. It urges businesses to leverage new consumer and digital trends, pointing to changing patterns of consumption, advertising and operation.
According to the report, there has been a shift in media distribution from conventional television and movie theatres to some 250 million digital screens (smartphones, tablets, laptops and PCs). This number is projected to reach 600 million by 2020. The report warns that new consumption behaviours characterise optimum availability and seamless on-demand, pick-where-you-left models. This will affect advertising.
Advertisements constitute two-thirds of revenue for the print media, which witnessed a six per cent annual growth in the past five years. The report also says the Rs 27,000-crore sector is also disproportionately becoming dependent on regional language circulation, which represents 80 per cent of circulation revenue. Indian markets are reflecting the global trend with the time spent on reading newspapers coming down over the years. Globally, the fall between 2010 and 2014 was 25 per cent. Less than 15 per cent of consumers in developed markets use print as the main source of news, as they compete with social networks.
Without this, there could be a yearly contraction of five per cent.
Broadcast news dominates both access and viewership. Having grown by 10 per cent in the past five years, it currently stands at Rs 60,000 crore. Subscription revenues grew at 10 per cent while advertising income rose nine per cent.
Over-the-top and direct-to-home services offered by companies will also change the revenue structure, the report notes. Among the major hindrances are complicated entertainment tax regime and bitter-sweet relations between the industry and regulators.
Currently, Indians spend 21 hours a week on live television, nominally less than the global average. The report suggests greater investment on content and digitisation.
The report takes note of the sheer volume of user-generated content, which is cheap and challenging. The report places stress on collaboration rather than the dismissive attitude major media establishments have portrayed against them.
Among the sub sectors, the film sector has been made to stand out with relatively brighter prospects. Currently estimated at about Rs 13,000 crore, the sector has grown at the rate of 13 per cent a year in the past five years.
Expansion of screens, increasing multiplexes as well as cable and satellite rights have been cited as the prime reasons for growth. Screen density in India is amongst the lowest in the world (nine per million versus China’s 15 and US’ 125) indicate potential for further growth, it says.
The report is, however, silent on the growing competition from international news and entertainment media outlets, which have been the first to position themselves in the digital space in the absence of Indian competition.
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2014 The Global Indian New Network (TGINN)