It is not very difficult to figure out what will happen to the Rs 80,000 crore media and entertainment sector (M&E) in 2013. Television digitisation, third phase of radio licensing, more money in DTH, the opening of India’s first theme park and the Times Group IPO are some of the things that the ‘stars’ foretell for 2013 among other things.
The real difficulty is visualising the impact of these changes.
ZeeQ is a good example. The kids channel launched by Zee in November this year, focusses on edutainment based on insights from the 1,000 odd schools that the Essel Group, Zee’s holding company runs across India. To this, research from IMRB and Taleem was added along with insights from academicians and child care experts who have helped shape the programming for ZeeQ. Shubhdarshi Tripathy, business head, ZeeQ, reckons that it will be more or less dependent on pay revenues. He has not factored in ad revenues in his business plan. At Rs 77 a month, ZeeQ is as expensive as a business or IT magazine.
| THE BIG EVENTS IN 2013 | THEIR IMPACT |
| Digitisation of TV Phase 2, 38 towns | Consolidation in distribution, release of roughly Rs 8,000 cr into the system as pay revenues |
| Issue of radio licenses Phase 3 - 839 stations | Will help double the ad market for radio |
| Times Group IPO likely | Realigning the media market; Expect major takeovers |
| The takeover of ESPN- STAR Sports by Star India | Could make STAR the largest media company in India |
| The cross-media paper from TRAI | Could cause breaking up of some of the larger groups |
It is also a manifestation of the biggest change that the Indian television industry will see in 2013. The rise of pay revenues and their use in creating smaller, specialised, realistically priced channels offering content that many in urban India have been hankering for. As digitisation of television, almost through in the four metros, wounds its way to the next 38 towns, the releasing of Rs 8,000 odd crore in leaked pay revenues, back into the system will free broadcasters from the vagaries of advertising.
| UP, UP AND AWAY The future looks promising for the sector | |||||||
| Projected growth 2012 - 2016 Rs billion | |||||||
| 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | CAGR (%) | |
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Most of the top five broadcasters — STAR, Sony, Zee, Sun and Network18 — have spent the last few years bolstering network strength with more channels in the anticipation of this future. Imagine a TV industry where there are no fights with cable operators, revenue sharing is even and the money actually goes into improving content!
Here is another one with an impact that is difficult to envisage. When phase three of radio licensing happens, India could have over 1,000 radio stations instead of the current 245 private channels. And companies will be allowed to broadcast news and own more than one station per city. That alone could kick-start a race for offering more differentiated content, bringing much-needed variety into play.
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There are several other changes coming. There should be a new law on cross-media norms soon and the effect of changes in the Copyright Act last year should kick in giving artistes a better stake in music revenues. With any luck more money should come into DTH and cable, after the upping of foreign investment limit to 74 per cent in late 2012. And advertising will continue to grow at 13 per cent says PricewaterhouseCooper’s report.
Almost all these changes impact the economics of how we are informed or entertained, positively. Sit back then for a year of discovering the hidden talents in the M&E sector.