ANALYSIS OF MEDIA AND ENTERTAINMENT SECTOR

7/29/2019 ANALYSIS OF MEDIA AND ENTERTAINMENT SECTOR

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Sector Analysis- Media &

Entertainment

- Saurabh Panthary 66

Nilesh Shukla 95

Anju Singh 99

Swati Singh 106


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Sector Overview

New age technology and the rapid rise of digital media

Spends on leisure and entertainment greater than the

economic growth

The advertising sector contribute almost 80% in the total

revenue pie

Among the top 15 markets in the world


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Sector Overview (Contd.)

Contribution of various mediums to the M & E industry:

Medium Contribution (in billion)

Advertising 300

Print media 139

TV 116

OOH 17.8

Digital advertising 15.4

Radio 11.5


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Sector Overview (Contd.)Key factors driving the growth of the M&E industry :

Rise in digital content consumption

Launch of innovative content delivery platforms

Higher penetration in tier II and tier III cities

Greater reach of regional media

Regulatory shifts


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Segmentation


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Segmentation (Contd.)

Television

146 million households with a penetration of 60 %

Largest medium for media delivery in terms of revenue with

45% of total media industry 3rd largest TV market after USA and China

Cable and Satellite (C&S) penetration of television

households is close to 80 percent.


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Print

Driven mainly by growth in the regional markets due to

increasing literacy rate

Estimated growth of 10 per cent is anticipated till 2015


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Radio

36 FM radio operators

Market size is around Rs 365 crore, growing at the highest

CAGR of 22% E-auctions plan by the Government

All India Radio (AIR) proposes to set up 385 new FM

transmitters, under the Twelfth Plan, to provide FM coverage

to 90 % of the population


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Digitisation

Flourishing DTH, cable digitisation and launch of new digital

platforms for content delivery

Changed face of media distribution over the last 5 years Digital advertising is expected to grow at a CAGR of 30 %

during 2011-16


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Major Players

Prominent content creators are UTV, Balaji, Sri Adhikari

Brothers, Television Network Limited, Creative Eye Ltd

National broadcasters are Star Plus, NDTV, Sony, Colors andZee TV

Main television distribution companies are Digicable,

Hathway, DEN, Tata Sky, Big TV and Bharti Airtel


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Market Share


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Growth

Expected to reach Rs 1,457

billion by 2016 as per the FICCI-

KPMG report. The industry

achieved a growth of 12% in2011 and is projected to grow

at a CAGR of 15% over the next

five years.


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Growth (Contd.) Internet advertising would be the fastest growing segment

with a growth of 43%

Print media is expected to witness a growth of 13% to Rs

23,200 crore

Out-of-home advertising is poised to grow to Rs 2.15 crore in

that time, growing at a CAGR of 17%


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Growth (Contd.)

Indian animation industry is all set for an enhanced

outsourcing pie from global players. A large amount of 2D-to-

3D conversion is being done by indigenous studios

Convergence between entertainment, information and

telecommunication is increasingly impacting Indias overall

media and entertainment industry


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Growth (Contd.) Ratio of advertising expenditure to GDP is about 0.41%. This is

substantially lower in comparison to the developed

economies as well as developing economies.

As the Indian economy continues to develop and the media

reach increases, the advertising expenditure to GDP ratio is

expected to increase over the next 5 years


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Growth (Contd.)

Radio is anticipated to see a spurt in growth at

a CAGR of 16.6% over the period 2012-2017


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Strengths

Most booming sectors due to its vast customer reach

Growing middle class with higher disposable income

Change in the lifestyle and spending patterns


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Strengths (Contd.)

Indian film industry is 2nd largest in the world

& largest in terms of the films produced and

tickets sold

Good return on investment


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Weakness

Highly fragmented

Lack of cohesive production & distributioninfrastructure

Lack of efforts for media penetration in lowersocio-economic classes


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Opportunities

The concept of crossover movies, such as Bend it like

Beckham has helped open up new doors to the crossover

audience

Increasing interest of the global investors in the sector

The media penetration is poor among the poorer sections of

the society, offering opportunities for expansion in the area


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Opportunities (Contd.) The nascent stage of the new distribution channels offers an

opportunity for development

Rapid de-regulation in the industry

Rise in the viewership and the advertising expenditure

Technological innovations like multiplexes, new distribution

channels like mobiles and internet have opened up the doors

of new opportunities


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Threats Piracy, violation of intellectual property rights

Lack of quality content has emerged as a major concern

because of the 'Quick- buck' route being followed in the

industry

With rapid technological innovations, the media sector is

facing considerable uncertainty about success in the

marketplace


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Government policies

Competition amongst broadcasters is expected to increase

further with government approving 75 licenses for launch of

new channels or re-launch existing channels in HD after a

freeze of two years

Cable TV digitisation, pushing for self-regulation of media and

liberalising the licensing of tv stations and radio


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Government policies (Contd.) 100% FDI in the advertising sector & film industry

FDI in media & entertainment rises 72% in 2011-12

Revived in 2011-12 on the back of Disney's big stake buy in

UTV, after sagging in the previous year

Union Cabinet has approved e-auction of licences under the3rd phase expansion of FM radio


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Government policies (Contd.)

FDI in teleport hubs, direct-to-home, cable

networks, and multi-system networks is

proposed to be raised to 74% from current49% if they undertake to upgrade and digitise

their systems with addressability


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Budget ImpactHike in duty on Set Top Box negative for DTH

Players


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Challenges

Stifled freedom of expression

In business and creative terms, the Indian M&E

sector still remains much smaller than it should be in

a country of 1.2 billion people The growth of M&E has not been supported by

policy and regulatory initiatives


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Conclusion

This industry is an economic enterprise, which is

capable of creating employment and wealth much

faster than most other sectors and with the ability to

be a force multiplier, like it is in most countries


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ANALYSIS OF MEDIA AND ENTERTAINMENT SECTOR

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