Media and Entertainment Industry

Latest update: October, 2017

• The entertainment industry continues to be dominated by the television segment, with the segment accounting for 44.24 per cent of revenue share in 2016, which is expected to grow further to 48.18 per cent by 2021.
• Television, print and films together accounted for 79.54 per cent of marketshare in 2016, in value terms.
• Print media would be the 2nd largest sector in the overall entertainment industry in India, following which sectors of Out of Home (OOH) and Radio are expected to contribute almost 2 per cent each to the entire industry by 2021.
• Indian print media industry generated revenues worth US$ 4.51 billion in FY2017(till December 2016).

Note: FY - Indian Financial Year (April to March)
Source: KPMG – FICCI Report 2017, Economic Times

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Last Updated: October, 2017

 ENTERTAINMENT SECTOR REPORT | OCTOBER, 2017

Introduction

The Indian Media and Entertainment (M&E) industry is a sunrise sector for the economy and is making high growth strides. Proving its resilience to the world, the Indian M&E industry is on the cusp of a strong phase of growth, backed by rising consumer demand and improving advertising revenues.

The industry has been largely driven by increasing digitisation and higher internet usage over the last decade. Internet has almost become a mainstream media for entertainment for most of the people.

Market Dynamics

The Indian media & entertainment sector is expected to grow at a Compound Annual Growth Rate (CAGR) of 13.9 per cent to touch Rs 2.42 trillion (US$ 37.57 billion) by 2021, while revenues from advertising is expected to grow at 15.3 per cent to Rs 1.08 trillion (US$ 16.74 billion).

Over FY 2016-21, radio will likely grow at a CAGR of 16.1 per cent, while digital advertising will grow at 30.8 per cent. The largest segment, India’s television industry, is expected to grow at a CAGR of 14.7 per cent, while print media is expected to grow at a CAGR of 7.3 per cent.

India is one of the highest spending and fastest growing advertising market globally. The country’s expenditure on advertising is expected to grow at 12 per cent to Rs 61,100 crore (US$ 9.47 billion) in the year 2017.Television segment, which continues to hold highest share of spending, accounts for 41 per cent of the total market share, and is expected to grow by 10.3 per cent in 2017. The advertising spending over the print medium is expected to grow by 5.7 per cent.

The Foreign Direct Investment (FDI) inflows in the Information and Broadcasting (I&B) sector (including Print Media) in the period April 2000 – March 2017 stood at US$ 6.49 billion, as per data released by Department of Industrial Policy and Promotion (DIPP).

Recent development/Investments

• PVR Cinemas plans to add around 75 screens across India during FY 2017-18, thereby raising its capacity to 650 screens and has a target to achieve 1,000 screens in India by 2020.
• Hotstar, a digital streaming platform owned by Star India Ltd, has entered into a partnership with Zapr Media Labs, a media tech company based in Bengaluru, to perform analysis on mobile audience that can be leveraged by brands to create personalised communication.
• Bigtree Entertainment Pvt. Ltd, which owns Bookmyshow, has acquired a 75 per cent stake in Townscript, an online event registration and ticketing platform based in Pune.
• PE major Warburg Pincus has purchased 14 per cent stake in India’s largest multiplex chain PVR Ltd for Rs 820 crore (US$ 123 million).
• ITW Consulting, a global sports consulting and management company, has forayed into the Indian market by launching its entertainment, media and communication arm, ITW Playworx, which will be based in Mumbai with offices across Delhi, Bengaluru, Chennai and Kolkata.
• Carnival Cinemas, the third largest cinema multiplex chain in India, has partnered with Odisha government to build 30 entertainment centres or recreation zones over 1-1.5 acres of land in tier-II or tier-III locations of each district.
• Dekkho, an online video streaming platform, has raised US$ 1.2 million in a seed round from seven angel investors, which will be used for scaling its technology infrastructure and invest in content licensing.
• Amazon has launched its Prime Video service in India at a competitive annual subscription price of Rs 499 (US$ 7.48), with a one-month free trial, including range of Hollywood as well as international movies, TV Shows and nine Indian original shows, in its content library.
• Reliance Capital, part of Anil Ambani-led Reliance Group, has announced the sale of its radio and television broadcasting businesses under Reliance Broadcast Network to the Zee group for Rs 1,900 crore (US$ 285 million).

Government Initiatives

Mr M Venkaiah Naidu, Minister for Information and Broadcasting, Government of India, has stated that the Indian Media and Entertainment industry, mainly the broadcasting sector, is on the peak of a strong growth phase led by the recent government initiatives like Make in India, Skill India, Digital India and Goods and Services Tax (GST).

The Government of India has supported Media and Entertainment industry’s growth by taking various initiatives such as digitising the cable distribution sector to attract greater institutional funding, increasing FDI limit from 74 per cent to 100 per cent in cable and DTH satellite platforms, and granting industry status to the film industry for easy access to institutional finance.

Road Ahead

The Indian Media and Entertainment industry is on an impressive growth path. The industry is expected to grow at a much faster rate than the global average rate.# TV advertising sector is expected to grow at a CAGR of 11.1 per cent during 2016-21, as against the global average of 2.8 per cent. Cinema in India is estimated to grow at 10.4 per cent compared to global average of 4.4 per cent. Internet video sector is expected to grow at a CAGR of 22.4 per cent while the global average is estimated to be 11.6 per cent. TV subscription will grow at CAGR of 11.6 per cent as against the global average of 1.3 per cent.

Exchange Rate Used: INR 1 = US$ 0.0155 as on June 20, 2017