Advertising spend across media grew at 9 per cent in 2012 to Rs 32,740, according to the annual FICCI-KPMG report on the media and entertainment sectors. This is a drop from the growth rates of 13 per cent in 2011 and 17 per cent the year before. The report says print media accounted for the largest share, with 46 per cent of total ad revenue.
India’s media and entertainment (M&E) sectors have been projected to grow at 11.8 per cent to reach Rs 91,700 crore at the end of 2013. M&E registered growth of 12.6 percent to Rs 82,000 crore in 2012, from Rs 72,800 crore the year before, according to the FICCI-KPMG. The longer term outlook seems more positive. The sectors are projected to grow at a CAGR of 15.2 percent to reach Rs 1,66,100 cr by 2017.
The individual projections for different segments within media and entertainment are as below:
Uday Shankar, chairman, FICCI M&E committee, said, “2012 has been one of the toughest years in recent times. But, it has also been a landmark year for the media and entertainment sector with significant progress in all verticals. The signs are already evident that digitalisation will fundamentally change broadcasting. Films have scaled up their ambitions; radio and print continue to defy global trends. 2013 promises to be even more disruptive.”
Jehil Thakkar, head, media and entertainment, KPMG, added, “The advertising environment went through one of the toughest years in the last decade. However, the implementation of digitisation, the stellar performance of the film industry, backed by excellent content and digital distribution, the continued growth in regional print and the momentum in new media and the announcement of Phase 3 radio implementation have all finally provided the needed platform to boost the Indian media and entertainment industry.”
Excerpts from the FICCI-KPMG report:
‘Growth in new media
Key beneficiaries are emerging new media segments, which include internet advertising, online classifieds, and gaming, all of which are on a rapid growth path. Going forward, better uptake of 3G connections and the beginnings of the 4G rollout are expected to spur growth further.
Regional markets remain key centres of growth
Advertisers continue to see higher growth in consumption from key regional markets. Hence regional media continues on a strong growth trajectory especially in the print and television sectors. Key media players are focusing on cherry picking acquisitions and expanding their presence in regional markets. Many film studios are building a pipeline for regional films.
Importance of BTL
Activations/events are now increasingly a key facet of radio and print media solutions. Live music events/festivals have been successful in attracting widespread audiences and engaging youth across key cities. Increased consumption of music/radio/video on-the-go via mobile and in cars provides opportunity for real time mobile geo-location advertising. The Out of Home (OOH) advertising sector has also seen higher rates of growth in transit advertising.
Growth in subscription revenue
While the print sector saw some increases in circulation revenues, cover prices are still significantly lower than global counterparts. In the TV sector, digitisation will increase ARPUs and improve the share of subscription revenues to the broadcasters. Increasing subscription revenues is key to the long term stability of the broadcasting sector.
Power of traditional media
India remains a growth market for 'traditional' media evidenced by the growth last year in TV audiences, radio listenership, and footfalls in theatres. India is a a country where print is still a growth market. There is growing overseas demand for quality Indian animation/VFX work at affordable pricing. Traditional media is also increasingly offered on new media platforms. The need of the hour is the development of models for broader reach and monetisation of audiences for traditional media content on these new media platforms.
TV digitisation is likely to be a great catalyst for greater diversity and niche television programming. Digitisation is expected to improve broadcast economics significantly which in turn, could drive more investments in production quality, niche and targeted genres of content in the medium term.
Digitisation of film and TV distribution infrastructure
Digitisation of distribution has brought in the promise of more sustainable and profitable business models across media sectors. The industry has achieved 77 per cent digitisation of screens and expects to be close to 100 per cent digitised in the next 18 months to two years. These developments have resulted in increased ability to invest in differentiated content, marketing, and wider releases, all contributing to greater audience engagement and unprecedented box office success across big and small budget movies.
Regulatory and policy support
There is a need for measures to aid curtailment of piracy and encourage investments to support further growth. Co-production treaties, rationalisation of entertainment tax, government support to encourage formal skill development and training and incentives for animation/VFX and gaming are important areas of policy and regulation that need attention.’