The Indian Media and Entertainment (M&E) sector grew from Rs 72,800 crore in 2011 to Rs 82,100 crore in 2012, growth of 12.6 per cent, says the Ficci-KPMG report on the subject, issued today during the 14th edition of the annual media and entertainment conclave, Ficci Frames.
The report suggests recent policy measures by the government can pave the way for gradual recovery for the economy. It said with the impetus introduced by digitisation, continued growth of regional media, the coming elections, strength in the film sector and fast increasing new media businesses, the sector is estimated to achieve a growth rate of 11.8 per cent in 2013, to touch Rs 91,700 crore. The compounded annual growth (CAGR) projection is 15.2 per cent till 2017, to reach Rs 1,66,100 crore.
Television
In the television sector, KPMG believes digitisation of cable is expected to bring transparency and raise subscription revenues for multi-system operators (MSOs) and broadcasters. "It is also expected to reduce carriage fees, building a case for the launch of niche channels and investment in content for existing channels. Developments and refinements in viewership measurement systems may affect the way advertising is distributed among channels," it said.
The report said the Rs 22,400 crore print industry grew by only 7.3 per cent in 2012, from Rs 20,900 crore in 2011. KPMG’s expectation was of 8.3 per cent growth last year. The high dependence on advertisement revenues resulted in the growth of print being dampened by the country’s poor macroeconomic performance.
Films
After several years of muted growth, 2012 was an exciting year for the film segment, with the audience returning to theatres. Domestic theatre revenue grew 23.8 per cent y-o-y, contributing 76 per cent to the Rs 11,240 crore sector. Digital distribution played a significant role in increasing the reach. Penetration has begun in tier-II and III markets and in entertaining the unserved population near the bottom of the pyramid.
Radio
The radio segment had muted growth of 10 per cent in calendar year 2011 and reached revenue of Rs 1,270 crore, compared to Rs 1,150 crore in 2011. The overall revenue of listed radio players exhibited a single-digit growth rate during the year.
Music
The report says 2012 was the year of discovering music. Consumers finally showed some indication of broadening the consumption beyond Bollywood, as other genres showed vibrancy.
Technology enabled personalisation in music discovery through various mobile and internet apps, while cloud storage assisted in managing the content swiftly. Social media continued to blur borders and promote music consumption, thereby fostering talent, unlike before. More and more independent artists were able to find an audience and also monetise their content, albeit in a small way. Live music performance also came into its own and provided a platform for audience engagement to established artists and budding talent.
Digital tunes are contributing 57 per cent to the Rs 10.6 bn music segment, which grew 18 per cent y-o-y. “While the TRAI (Telecom Regulatory Authority) guidelines restricting the automated renewal of caller ringback tones (CRBT) dampened the growth momentum, achieving a 16 percent y-o-y growth against our expectation of 18 per cent, the industry is now gearing to take the digital audience to the next level, by offering enhanced and affordable music services online and on mobile devices,” the report said.
Revenues from digital platforms are expected to gradually gain pace and grow at a CAGR of 21.7 per cent over the next five years. By 2017, digital revenues will contribute 72 per cent to the music industry’s revenues. This growth will be on the back of availability of faster broadband speeds and the uptake of subscription-based online music services. Growth in music consumption (both online and mobile) is expected to drive the segment to revenue of Rs 22.5 bn by 2017.
“Digital and broadcast video are driving growth in the music business. Performance licences also saw growth. These will continue to drive the industry forward and over the medium term, more than compensate for the loss of revenue from CRBT and radio revenue,” Thakkar added.
New Media
New media continued its growth trajectory in 2012, albeit slightly slower than the previous years, with estimated growth in advertising revenues of close to 40 per cent over last year. Coming in at approximately Rs 22 bn in revenue in 2012, digital ad spend reached approximately 6.7 per cent of the total M&E sector’s advertising revenue, the report said.
As predicted last year, the mobile story has begun to play out in India, with the user base expanding significantly over last year. The devices are getting cheaper, access is better and time spent longer, leading to significant shifts in content consumption habits of large sections of the audience. This audience, however, remains under-monetised. This is primarily due to a decline in on-deck revenues, sluggish ad rates and under-investment in distribution platforms that allow customers to pay for content effectively.
The report said one of the biggest challenges facing this sector in realising its full potential will be the ability to create distribution platforms with enough critical mass to give users a rich experience and transact seamlessly (even for small-ticket sizes). There is increasing consensus that it is no longer possible to prevent content from being made available online. The recourse for content owners is to invest and create credible platforms where users can consume content effectively and at the same time, work towards effective policing of piracy.
“The New Media segment continues to power ahead. Digital advertising, social media marketing, gaming, etc, are all fast growing markets. With the roll out of 4G in 2013 and increasing penetration of wired broadband, coupled with widespread use of smartphones and tablets, New Media will continue to be an ever increasing part of the overall M&E industry”, Thakkar said.
KPMG FINDINGS
Films
- After years of staying away, audiences returned to theatres in 2012.
- Domestic theatre revenue grew 23.8 per cent y-o-y, contributing 76 per cent to the Rs 11,240 crore sector
- Social media continued to blur borders and promote music consumption. More independent artists were able to find an audience and also monetise their content
- Digitisation of cable to bring transparency and raise subscription revenues for multi-system operators and broadcasters
- The high dependence on ad revenues resulted in the growth of print being slowed by the country’s poor macroeconomic performance
