Area of Interest: TV Broadcasting7
Indian Television Broadcasting Industry7
Competition from Substitutes8
Threat of Entry8
Bargaining power of Buyers10
Bargaining power of suppliers10
Effect on Industry structure10
Key success drivers10
Media & Entertainment Industry: India
And in my opinion, entertainment in its broadest sense has become a necessity rather than a luxury in the life. Walt Disney
Indian Media and Entertainment industry in recent years has outperformed the Indian Economy and emerged as one of the fastest growing sectors. But like other sectors, it went through a relatively rough phase due to economic slowdown. The industry as a whole registered growth of 1.4 percent in 2009 compared to 12 percent in 2008 and currently stands at USD12.9 billion. This industry which depends on advertisements for almost 38% of its revenues was hit hard by shrinking ad budgets. The scene has recovered in 2010 given the improved economic growth in India. The projected CAGR for next few years is expected to be around 13% and the industry is expected to reach USD 24.04 billion (INR 1091 billion) by 2014. Industry Profile
The primary constituent sectors are Film, Television, Print, Radio, Music, Animation and VFX, Gaming, Internet and Outdoor. TV and Print are the largest sectors contributing to greater than 70 percent of the revenues. (Exhibit x) Some sectors like Film, Radio and Out of Home, were hit harder than the rest. TV industry along with Internet, Gaming and Animation continued to register growth in double digits. Contribution of TV revenues has been increasing over the years and is expected to continue growing. Where the Film and Print media is expected to contribute lesser, M&E industry is expected to show growth, essentially being propelled by growth in TV sector. Television is expected to grow at 15% over coming years and Film and Print combined would grow at slightly smaller rate of 9% growth.
As of 2009, the industry is estimated to have a size of INR 257 billion, a growth of 6.8% over 2008. The television penetration is increasing as well as the revenues from the advertising. All in all, it is projected to grow at around 15% and reach $521 billion by 2014. The key growth drivers for this segment are expected to be advertising revenue and subscription revenues. At present there are 110m TV households in India out of which 70m are cable and satellite homes and rest are served by the public broadcaster i.e. Doordarshan. There are currently 394 channels with 211 news channels. Film Entertainment:
Indian Film Industry stood at USD 1.96bn in 2009. The industry is projected to grow at CAGR of 9%. Key drivers of growth for this sector are expansion of multiplexes, digital screens, satellite revenues, overseas market and supplementary revenues from DTH, digital downloads and others. Direct-to-Home services continue to drive subscription revenue. Radio
In 2009, revenue of radio sector was USD 171.38 million. The CAGR is projected at 16% over 2010-2014. 248 FM channels were operational as of 2009. Radio still accounts for 3.5% of total ad spends. With Phase-3 de-regulation, a number of new licenses are being put up for auction. Radio is an evolving medium, and is gradually starting to gain acceptance with advertisers. These factors are expected to result in higher ad spends on radio going forward. In Phase 3, most of the new licenses are available in smaller towns leading to a large proportion of listenership and advertising growth coming from smaller towns in long run. Another key contributor to listenership growth is the usage of FM-enabled mobile phones....