Media Economics & Global Marketplace

Topics: The Times Group, The Times of India, Broadcasting Pages: 5 (1294 words) Published: January 2, 2011
Media Economics & Global Marketplace

Common structures
Monopoly - a single firm dominates production and distribution, either nationally or locally. Eg: a city with one newspaper or tv station. More prevalent at the local level. Oligopoly - just a few firms dominate the industry. e.g. film industry--film studios. Limited competition - aka monopolistic competition - a media market with many producers and sellers but only a few differentiable products within a category. For example, radio stations: there are various independently owned radio channels in India; however, most of these stations feature a limited number of formats, such as latest Bollywood songs, oldies, gags and similar content.

Revenue Generation
Direct payment - media products supported primarily by consumers who pay directly for the product. Consumers communicate their preferences immediately Indirect payment - media products supported primarily by advertisers, who pay for the quantity or quality of audience members that a particular medium delivers. The client is the advertiser, not the end user.

Media spend in India as a percent of GDP is 0.41%, which is much lesser than the world’s average of 0.80%. This indicates the potential for growth in spends as the industry in India matures.

The overall M&E industry size grew from Rs 579 billion in 2008 to Rs 587 billion at a rate of 1.4% percent. The growth rate is expected to increase to 11.2% in 2010, as the industry witnesses a recovery. TV and Print are the largest sectors of the industry contributing to greater than 70% of the revenues.

Traditionally, advertising revenues have had a strong hold in the M&E industry, but increasingly, subscription revenues are becoming important with consumers paying for media services. The media business models in India are undergoing a change with audiences becoming more willing to pay for content and value added services. The growth in ticket prices of movies at multiplexes, increasing number of Pay TV subscribers, increasing penetration of DTH with its user-friendly interface and technology, and introduction of Value Added Services (VAS) by media players are some examples of pay markets gaining importance.

Print Media

The Indian Print Media grew only marginally in 2009 as a decline in advertisement revenues were offset by growth in circulation revenues.

The regime of foreign investment in Indian entities publishing newspapers and periodicals is as follows: -

I. Foreign investment (including FDI) upto 74% in Indian entities publishing scientific/technical and speciality journals, where only Indian editions of foreign journals are being published with no foreign investment being made, the Ministry of Information and Broadcasting will give approvals on a case by case basis subject to prescribed conditions.

II. FDI upto 26% in Indian entities publishing newspapers and periodicals dealing in news and current affairs with suitable safeguards like verification of antecedents of foreign investor, keeping editorial and management control in the hands of resident Indians and ensuring against dispersal of Indian equity.

Television Sector in India

In 2009, television industry stood at $5.65 billion registering a growth of 6.8%. The industry is projected to grow at a rate of 15.5% and reach around $11.45 billion by 2014.

Growth of TV Channels in India: The number of private satellite TV channels grew from 1 TV channel in 2000 to 394 TV channels in 2009.

Foreign Broadcasters: A number of foreign broadcasters are down linking their channels into India. A total of 67 TV channels, uplinked from abroad, have been permitted registration to be down linked in India during the years 2006-2009. Eg WB, Discovery, NatGeo etc.

DTH Service: DD DIRECT+ is India's first and only FTA Direct-To-Home (DTH) service being provided by Prasar Bharati (a public service broadcaster). Apart from Prasar Bharati, Dish TV India Ltd., Tata Sky Ltd, and Sun...
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