The Indian entertainment and media industry to grow by 13.2% cumulatively over 2011 to 2015 to reach Rs 1,19,900 crore, forecasts PwC. As per PwC’s latest report titled ‘India Entertainment & Media Outlook 2011’, the industry grew 11.2% in 2010 on the back of improved economic conditions and rebound in advertising spend.
The report predicts that with sustained growth in advertising as well as consumer spending, the industry is likely to achieve double digit growth in the forecast period. While significant revenues continue to be non-digital, there is a good growth in digital spends as well. Infrastructure in India has been cited as the biggest roadblock to the growth of digital consumption and revenues.
The PwC report estimates that the Indian media and entertainment industry recorded one of the highest growth rates in the world growing at 11.2% in 2010. This was largely due to rebound in consumer spend, advertising spend and most importantly in the media and entertainment spend. The industry grew a little slower than expected largely due to the downturn in the film segment, while all other segments grew as predicted last year.
With rebound in overall advertising, internet advertising too is projected to grow by 25.5% over the next five years and reach an estimated Rs. 2,400 crore in 2015 from the present Rs. 770 crore in 2010. Meanwhile, the estimated size of Out of home (OOH) advertising spend is Rs. 1,400 crore in 2010, which is projected to reach Rs. 2,400 crore in 2015.
The film sector is projected to grow at a CAGR of 9.3% over the next five years, reaching Rs. 13,650 crore in 2015 from the present Rs. 8,750 crore in 2010, while the music sector is projected to grow at a CAGR of 17.6% over 2011-15, reaching Rs 2,140 crore in 2015 from Rs. 950 crore in 2010. Animation, gaming and VFX industry is expected to maintain its growth pace and is projected to grow at a CAGR of 21.4% to Rs. 8,260 crore in 2015 from its current size of Rs. 3,130 crore.
The report indicates that advertising spends has registered high growth of 14.3% in 2010 as compared to negligible growth in 2009. Internet advertising, with 28% growth, remained the fastest growing segment as an increasing number of advertisers are using online platform to connect with the youth. The annual PwC report estimates that the next five years will see digital technologies increase their influence across the industry and rapid change in technologies and consumer behaviour will continue across all media and entertainment segments. However, the pace of change will continue to be slower in India as compared to other territories.
On the way forward, Timmy S Kandhari, leader – entertainment and media practice, PwC India said, “The buoyant advertisement spend will have to be supplemented with subscription growth for sustainable profitable growth in media and entertainment revenues. Addressable digitisation in the broadcast space and focus on good content across sectors will go a long way in achieving this objective.”
On the migration to digital consumption, Marcel Fenez, global leader - entertainment and media practice, PwC added, “The Indian consumer is yet to reap the benefits of the enhanced digital experience seen in other markets where smart devices and enhanced bandwidth speed prevail. This is an issue highlighting the need for future infrastructure investment and the overall affordability of devices.”
The report summarises that India, like the rest of the world, will have to contend with rising demand from consumers for digital experience. It added that this demand is adding new complexities for the media and entertainment industry in terms of delivery and monetisation, and many of these will need to be addressed by collaboration across the digital value chain.
On the challenges facing the industry, Kandhari concluded, “While there is good revenue growth, the challenge for the Indian industry would be how to make the growth profitable in all its constituents. Favourable government policies will help but the industry does need to look at their own operating model such that sustained investment in the media and entertainment sector becomes possible.”
