The Indian M&E industry grew from INR 652 billion in 2010 to INR 728 billion in 2011, registering an overall growth of 12 percent. Backed by strong consumption in Tier 2 and 3 cities, continued growth of regional media and fast increasing new media businesses, the industry is estimated to achieve a growth of 13 percent in 2012 to touch INR 823 billion. Going forward, the sector is projected to grow at a healthy CAGR of 14.9 percent to reach INR 1,457 billion by 2016.
The Indian media and entertainment industry has benefited from some fundamental growth drivers, which have facilitated its double digit growth in the past decade. They are categorized and summarized as follows:
- Evolving socio-economic environment in India – Led largely by a combination of two key macro factors, India has emerged as a growth engine for discretionary consumption products and services, especially media and entertainment. The first one is the favorable demographic composition of the nation, commonly referred to as the ‘demographic dividend’, which essentially implies that a large proportion of the country’s populace is young and in the working age group, thus allowing for greater future consumption upside. Second, since liberalization, the country has witnessed rapid economic growth, which has corresponded with the influx of foreign capital and brands as well as stronger integration with the global socio-economic environment. This has led to the emergence of an ever increasing large consuming class, with rising disposable incomes, which is globally aware and acquisitive in nature.
- Digitization – This is the process of converting analog information into digital formats. This has been a defining trend in the global media industry especially in TV, music and films and now it is becoming evident in India as well. From an enhanced consuming experience for the end-user to greater addressability and monetization potential for the content provider; digitization can be a great value creator across the value chain. Many digital platforms, ranging from digital cable, DTH, IPTV to digitization of films, print and online sales of music now exist. Digital technology continues to revolutionize media distribution – be it the rapid growth of DTH and digital cable, or increased digitization of film exhibition – and has enabled wider and more cost effective reach across diverse and regional markets, and the development of targeted media content. There has been increased proliferation and consumption of digital media content – be it newspapers and magazines, digital film prints, and online video and music or entirely new categories such as social media. For example, the print players are increasingly becoming available on the digital platforms in order to establish a connect with current readers as well as to establish a relationship with new readers
- Regionalization – This is another one of the most significant growth drivers for the industry. Regional television and print continued its strong growth trajectory owing to growth in incomes and consumption in the regional markets. National advertisers are looking at these markets as the next consumption hubs and local advertisers are learning the benefits of marketing their products. In order to tap the increasing regional budgets of the national advertisers and growing interests of local advertisers, media players are in expansion mode to increase their footprint in this regions. Growing importance of new media – Another key trend is the convergence and multi-platform presence of media services in the country. Over the past years, consumers as well as content providers have ensured that the same content is increasingly deployed across platforms, from television to online to mobile and beyond. Whether its epapers or online streaming of shows or mobile based applications, the convergence of content across key “screens” is a defining phenomenon in the industry. Considering the growth in India’s telecom and IT markets especially mobile and wireless market, this wave of convergence is bound to be strengthened. Availability of infrastructure and appropriately pricing content across these new media platforms will be critical success factors for the Indian market.
Source: Network 18 Annual Report