 "TV to ride the media & entertainment boom")
India's media and entertainment sector will remain among the fastest growing markets in the world thanks to rising income levels and better economic prospects, says a just-released study by PricewaterhouseCoopers (PwC). The sector's growth rate in India, it says, is expected to be 10.3 per cent from 2016 to 2020 versus the global average of around 4-5 per cent.
But the key takeaway from the report is that television as a medium will grow at a compounded annual growth rate of over 13 per cent in the next four years. This, says the report, will be aided by regulation-driven addressability, increase in cable and satellite homes, and slower than expected cannibalisation by the digital sector.
At an overall level, India's media and entertainment (M&E) industry will touch $41 billion by 2020, while the global M&E industry will be a $2.1-trillion market by then.
Specifically, the report says that TV advertising in India will grow at 11.7 per cent per annum to a size of $5.54 billion by 2020, compared to a size of $3.19 billion in 2015. The pace at which TV's reach has increased is seeing a shift in overall advertising budgets towards television, the report says, contributing to growth.
Paid search Internet advertising revenue is, and will continue to be, India's largest Internet advertising sub-component over the forecast period. It grew 26.7 per cent year-on-year in 2015, touching revenues of $0.21 billion.
With a forecast of 18.5 per cent per annum in the next four years, paid search Internet advertising revenue will rise to $0.49 billion by 2020. Online spend on display ads in India has witnessed strong growth in the historic period and revenue has almost tripled since 2011, reaching $0.2 billion in 2015, the report said.
Frank D'Souza, partner and leader, entertainment & media, PwC India, says, "What would be interesting would be how rapidly India catches up with global trends, where traditional media is finding it hard to remain relevant, and the digital sector is leading growth with continuous disruption. That will all depend on how quickly the Indian digital and broadband ecosystem matures, and how Indian players adapt and drive business models."
D'Souza adds that one of the impediments for internet advertising revenues could be the audience measurement systems, or rather the lack of them. Internet advertising, comprising paid search and display, depends heavily on data analytics and with consumers becoming increasingly aware of cyber privacy, there could be a situation where brands while knowing the importance of digital, may not know where to deploy funds, the study says.
The report says that magazine revenues are expected to grow at the rate of 3.9 per cent and book revenues will grow at the rate of 5.5 per cent per annum over the forecast period. The report also notes that average daily unit circulation of newspapers will reach 156.9 million in 2020 from 138.1 million in 2015.
Cinema too has buoyant projections. India is currently the biggest cinema market in the world when it comes to admissions or footfalls. According to the outlook, it will remain so until the end of the forecast period, although neighbour China may be close to overtaking it at that point.
In 2015, footfalls were at an estimated 2.04 billion, and in 2020, they are predicted to be 2.8 billion, growing at a rate of 6.6 per cent per annum. Box office revenues in India, on the other hand, stood at an estimated $1.64 billion in 2015 and will rise to $2.74 billion in 2020, growing at a rate of 10.9 per cent per annum.
Headroom for growth lies in the fact that India remains under-served in terms of multiplexes. At the end of 2014, there were around 11,200 screens in the country as a whole - a small number given the population and the appetite for cinema-going.
