WCP - Advertising Through Different Media

www.pwc.
comindiu
India Entertainment and
Media Outlook 2012
2 PwC
Contents
Industiygume-clungeis
04
TleE&Mindustiy2011-2016
14
Television
18
Film
26
Piint
33
Wiiedundmobileinteinetuccess42
Wiiedundmobileinteinetudveitising
4S
Guming
49
Rudio
SS
Music
S9
Out-ol-lomeudveitising
62
India Entertainment and Media Outlook 2012 3
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Foreword
Chandrajit Banerjee
DiiectoiGeneiul
ConledeiutionolIndiunIndustiy
Smita Jha
Leudei,Enteituinment&Mediu
PwCIndiu
4 PwC
Industry game-changers
01
TleIndiunE&Mindustiy,witlievenuesolubout80SbillionINR(17.2billionUSD)in
2011,issettogiowiobustlyoveitlenextlewyeuisontlebuckolsteudymucio-economic
giowtl,iisingspendingpoweiundpositivedemogiuplicindicutois.Tleindustiyievenues
uieexpectedtoieucl1,764billionINR(37.6billionUSD)by2016,witluCAGRolubout
17%
1
liom2012to2016.
Cuiiently,Indiuisonlytle14tlluigestE&Mmuiketintlewoildwitlindustiyievenues
contiibutingubout1%olitsGDP.Ontleotleilund,Clinuisulieudytletliid-luigest
muiketintlewoildundislikelytosuipussJupunoveitlenextdecudetobecometle
second-luigestmuiketwoildwide,ulteitleUS.
Sector revenues in selected countries, 2011
S. no Country E&M market
(billion USD),
2011
GDP (billion
USD), 2011
Market as
percentage
of GDP
2011-2016
CAGR (E&M
market)
E&M market
(billion USD),
2016E
1 US 363 15,094 2.4% 6% 490
2 Japan 173 5,867 2.9% 3% 203
3 China 89 7,318 1.2% 14% 168
4 Germany 72 3,571 2.0% 3% 84
5 UK 69 2,432 2.8% 4% 83
6 France 61 2,773 2.2% 4% 75
7 Italy 37 2,195 1.7% 4% 46
8 Canada 35 1,736 2.0% 8% 51
9 Brazil 35 2,477 1.4% 11% 59
10 South Korea 34 1,116 3.1% 5% 43
11 Australia 31 1,372 2.3% 6% 42
12 Spain 22 1,491 1.5% 4% 27
13 Russia 20 1,858 1.1% 12% 35
14 India 17 1,848 0.9% 17% 38
15 Netherlands 17 836 2.0% 4% 21
Howevei,industiystukeloldeisundeistundunducknowledgetlutIndiulustlepotentiul
touclieveputl-bieukinggiowtloveitlenextlewyeuis;possiblytoieuclusizeol100
billionUSD.Tliswilliequiietleentiieecosystemtocolluboiute,conceptuuliseund
executegume-clunginginitiutivestodiiveumulti-loldincieuseinindustiyievenues.
Tleseinitiutivesslouldbepiimuiilylocusseduioundtletlieekeypilluisoltlesectoi
udveitisingspend,consumeispend,undinliustiuctuieundpolicysuppoit.
Key pillars for driving growth
Attuining tlis tuiget will not only benet industiy puiticipunts tlemselves but ulso cieute
otlei spill-ovei benets in teims ol luige-scule employment geneiution (skilled und
un-skilled jobs liom content pioduction to distiibution to customei seivice), signicunt
contiibutiontotlenutionulexclequeiundpiogiessinuclievingIndiusgoultobeu
knowledge-diiveneconomy.
1 Internet access (wired and mobile) included as part of the E&M industry. Excluding internet
access, the CAGR for the Indian E&M industry till 2016, is projected at 13%.
6 PwC
Potential game-changers: Advertising spend
Adveitisingspendintleindustiywusestimutedut279billionINRin2011,contiibuting
uppioximutely3S%oltotulE&Mievenues.Howevei,udveitisingspendusupeicentuge
olGDPisquitelowwlencompuiedwitlotleimujoieconomies,indicutinguligl
potentiulloigiowtl.Foiinstunce,tlesepiopoitionsuie1.1%und0.9%intleUSund
UKiespectively,vis-u-vis0.3%inIndiu.EveninClinuundBiuzil,udveitisingspendusu
peicentugeolGDPisligleitlunIndiu,ut0.S%und0.6%,iespectively.
Global comparison: Advertising as % of GDP, 2011
2
TelevisionundpiintdominutetleudveitisingsegmentinIndiu,witlovei80%sluie
olievenue.Tlesesegmentsuieexpectedtopluyucentiulioleindiivingtleindustiy
towuidsuclievingtlevisionol100billionUSDinievenue.
Advertising revenue 2011: Segment contribution
$BMDVMBUFEBTUPUBMBEWFSUJTJOHSFWFOVFGSPN&.GPSFBDIDPVOUSZBTBQFSDFOUBHFPGJUT(%15IF(%1HVSFTBSFCBTFEPO8PSME#BOLFTUJNBUFT
Advertising spend for television: Key game-changers
Tletelevisionuudienceintlecountiylusbeenonuliglgiowtlputl,enublingudveitiseis
toieuclouttouluigeisegmentoltleIndiunpopulution.Asuiesult,udveitisingbudget
ullocutionlusslowlyslilteditslocusliomotleiudveitisingmeclunismstotlisplutloim.
Howevei,tleiestillexistsusizeublepotentiulloiluitleiexpundingtelevisionsieuclund
vieweislip,wliclcunluveuboostingimpuctontleudveitisingspendontlismedium.
Someoltlekeygume-clungeisincludetlelollowing:
Innovation in te!evision sets reviving audience interests
Tleluunclolliglquulitytelevisionsetslusienewedvieweiinteiestintlemedium,
especiullygiventleimpiovementsinsizeundpictuiequulity,undtleiecentluunclol
ligl-denition content suited to tle device. In tle lutuie, incieusing ulloidubility und
populuiityolligl-endtelevisions,uswellusluitleienluncementsindeviceleutuies,
luvetlepotentiultodiiveligleivieweisliplevelsumonguudiences.
Launch of new channe!s enab!ing advertisers to reach niche viewer segments
Giventlesizeoltletuigetuudience,undwlencompuiedwitlglobuluveiuges,tleie
existsuliglpotentiultoincieusetlenumbeioltelevisionclunnels.Incieusinggiowtl
inclunnels(piojectionsslownbelow
3
)isexpectedtoleudtouvuiietyinpiogiumming,
cuteiingtovuiiedvieweicutegoiiesundtleiebygeneiutingligleiuudienceinteiest
undvieweisliplevels.Tliswillbeluitleilucilitutedbytlelocusondigituldistiibution
meclunisms,enublingdeliveiyoluluigeinumbeiolclunnelstotletuigetuudience.
Projected growth in television channels in India
High potentia! for mobi!e te!evision and advertising
TleligldemundloismuitplonesundtubletsinIndiu,undtleiiincieusingpopuluiity
piovidesuieudyplutloimloitleindustiytodiivegiowtlinmobiletelevision.Tlisis
expected to luve u signicunt impuct on tle uveiuge viewing time, enubling tle uudience
toviewcontentevenwlentleyuieuwuyliomtleiitelevisionsets.Higlusugeolmobile
televisionpiovidesudveitiseiswitluuniqueoppoitunitytocontinuouslyengugetle
vieweitliouglouttleduy,unddeliveiielevuntundtuigetedmessuges.
Potentia! for on!ine advertising for te!evision
Incieusingpenetiutionolbioudbundintlecountiy,coupledwitltlepopuluiityol
web-enubledtelevisionsetsisexpectedtopiovideudveitiseiswitlunulteinute,locussed
meclunismtoieucluttiuctivevieweisegments.Onlinetelevisionudveitisingiscuiiently
utunuscentstuteintlecountiy,undbioudcusteisneedtolocusondeliveiinguwide
iungeolcontentundpiovidingcutcl-upseivices,touttiuctvieweistotlismedium.Tlis
ulsopiovidestleindustiywitlunoppoitunitytoinnovuteundieuclouttoselectviewei
segments,wloseinteiestintiuditionultelevisionmediulusbeeniupidlydeclining.
3 Excludes channels with uplink-only licenses. Projections are based on international benchmarks related to parameters such as channels per 1 million
people and pay TV subscribers, apart from recent trends in growth of licensed and operational channels in India. Sources include Ministry of Information
and Broadcasting and PwC analysis.
8 PwC
Advertising spend for print: Key game-changers
Piintlusbeentlepieleiiedmediumloiuluigepoitionoltlecountiysudveitisei
communitytoieuclouttocustomeis.Tleoveiwlelmingcloiceolnewsduiliesund
muguzines,botlloculundnutionul,unduciossmultiplelunguuges,piovidesulugeiunge
oloptionsloivuiiousudveitiseistoconnectwitltleiipotentiulcustomeis.Someoltlekey
gume-clungeisincludetlelollowing:
Innovation in product qua!ity and advertising techniques
NewspupeisundmuguzinesuieieudbyusizeublepoitionoltleIndiunpopulution
undpiovideulugebuseloiudveitiseistoieuclouttotleiituigetsegments.Howevei,
udveitiseisuieulsolookingtodilleientiuteundcommunicutetleiimessugesinuunique
munnei,inoideitostundoutundbenoticed.Tleieloie,tleieisuneedloioigunisutions
tolocusonpioductinnovutioninpiintudveitisements,tliougltlecieutionolnew
meclunismssuclus3Dudveitising,liglpupeiquulity,etc.
Driving growth in digita! advertising, across devices
Tleie is u signicunt potentiul to diive giowtl in digitul udveitising in tlis sectoi, ucioss
multipleplutloimswletleionline,web-busedoimobile.Newspupeisundmuguzines
needtolocusoncieutinguwuienessumongtleiiieudeisegments,toincieusetle
populuiity und diive tiulc loi tleii web poituls, mobile upps, etc. Cieuting uwuieness
umongstudveitiseisisulsociiticultoincieusetleiilumiliuiitywitltledigitulmedium
und its benets, wlicl will ultimutely leud to incieused spend on udveitising.
Potential game-changers: Consumer spend
Consumeispendonenteituinmentundmediu
4
contiibutesumujoiitysluieintletotul
industiyievenue,undlusbeenincieusingutulustpuceoveitlelustlewyeuis.Tlisgiowtl
luspiimuiilybeendiivenbyiisingdisposubleincomesundtlepiopensityloilouselolds
tospendonenteituinmentuctivities.Tlekeyconsumeispendsegmentsincludetelevision
subsciiption, lm und piint mediu, wlicl togetlei contiibute 94% ol tle oveiull consumei
spendcutegoiy.
Consumer spend 2011: Segment contribution
TlepotentiulloigiowtlinconsumeispendonE&MinIndiustilliemuinsligl,usindicuted
bytleexistingpenetiutionlevelsvis-u-visotleicountiies.Tleuveiugeunnuulspend(pei
cupitu)
S
isestimutedutulow6.6USDin2011,uscompuiedto22USDinClinuund6SUSD
inBiuzil.Wliletleconsumeispendusupeicentugeolincome
6
issimiluiuciossemeiging
muikets, including Indiu; tleie exists u signicunt giowtl potentiul wlen compuied to tle
sluieolwulletloiE&MinmutuieeconomiessuclustleUSundUK.Additionully,iising
louseloldincomesinIndiuisexpectedtodiiveiupidgiowtlinconsumeispendonE&M.
*ODMVEFTTQFOEPOUFMFWJTJPOTVCTDSJQUJPOQSJOUDJSDVMBUJPOCPYPGDFBENJTTJPOTIPNFWJEFPNVTJDBOEHBNJOH
$BMDVMBUFEBTUPUBMDPOTVNFSTQFOEPO&.GPSFBDIDPVOUSZEJWJEFECZJUTUPUBMQPQVMBUJPO5IFQPQVMBUJPOHVSFTBSFCBTFEPO8PSME#BOLFTUJNBUFT
6 Calculated as total consumer spend on E&M for each country, as a percentage of its GDP per capita (total GDP divided by total population). The GDP
QFSDBQJUBBOEQPQVMBUJPOHVSFTBSFCBTFEPO8PSME#BOLFTUJNBUFT
Consumer spend on television: Key game-changers
TelevisionsubsciiptionistleluigestumongstullE&MconsumeispendcutegoiiesinIndiu.
Tlevuiietyundquulityolcontentuvuilubleisencouiugingvieweistospendmoieon
televisionsubsciiption,undtlistiendisexpectedtocontinueluitlei.Someoltlekeygume-
clungeisincludetlelollowing:
Increasing penetration of cab!e and sate!!ite te!evision
Wliletleexistingpenetiutionolcubleundsutellitetelevisionisovei80%oltelevision
louselolds,tleieexistsusizeubledispuiitybetweendilleientstutes.Foiexumple,
locutionssuclusMumbui,Delli,undBunguloieluvecuble&sutellitetelevisionieucling
moietlun90%oltotultelevisionlouselolds,wlileotleislikeOiissuundAssumluveu
ielutivelyloweipenetiution,indicutingpotentiulloiluitleigiowtl.Tlis,coupledwitl
tleiisingpopuluiityolmulti-televisionlouseloldsindicutestlutupenetiutioninexcess
ol 100% cun be potentiully tuigeted; wlicl il uclieved, will piovide u signicunt boost to
tleoveiullconsumeispendintlecountiy.
Pay TV penetration in India (% of TV households)
Average consumer spend on E&M
10 PwC
Increasing ARPU driven by spend on HD and niche channe!s
Risingdigitisutionlevelsundinnovutionintelevisionsetsluveenubledtledeliveiyol
clunnelswitlHDundniclecontent.Tlislusbeenpopuluiwitlselectvieweisegments.
Fuitlei,incieuseindigitisutionundluunclolnewclunnelscunpotentiullydiiveliglei
consumeispendontelevisionsubsciiption.
Pay TV ARPU in India (INR/month)
Driving spend on te!evision from additiona! distribution mechanisms such as
smartphones and tab!ets
Alteinutedistiibutionmeclunisms,suclussmuitplonesundtubletspiovideun
oppoitunitytodeliveicontenttotlevieweiontlemove.Tlisisexpectedtodiive
consumeispendsonuccessingtelevisioncontentontleiimobile.Inoideitoexploittlis
liglgiowtloppoitunity,tleieisuneedtodeliveiliglquulitycontent,witludequute
inliustiuctuie,ulloidubledevices,ellectivebusinessmodelsundconvenientpuyment
meclunisms.
&RQVXPHUVSHQGRQOP.H\JDPHFKDQJHUV
Box olce ievenue uccounts loi u signicunt piopoition ol lm industiy ievenues, und is
u key consumei spend cutegoiy. Wlile box olce ievenues uie liglly dependent on tle
quulity ol lms ieleused und vuiy widely liom one yeui to tle next, tleie exist ceituin
giowtloppoitunitieswliclcunbeexploitedloiincieusingconsumeispendintlissectoi.
Someoltlekeygume-clungeisincludetlelollowing:
Potentia! to drive growth in admissions
Wliletletotulnumbeioludmissionsisontleiise,unIndiunonunuveiugewutcles
only 1.7 lms in u yeui, us compuied to un uveiuge ol ovei loui lms u yeui in tle US.
Diivinggiowtlinudmissionswilliequiielocusonincieusingtlepenetiutionolscieens
in tle countiy. Digitul cinemu will be u key enublei, lucilituting ellective deliveiy ol lms
toscieenslocutedtliouglouttlecountiy,eveninielutivelyiemotelocutions.Also,
impiovingtlepopuluiityoltlemediumundencouiugingvieweistovisittletleutie
moieolten(liomtlecuiientuveiugeol1.7timesuyeui),especiullybeyondweekends,
will luve u signicunt impuct on scieen utilisution und oveiull udmissions.
Increase in average ticket prices by providing an enhanced customer experience
TleuveiugeticketpiicesinIndiuuieoneoltlelowestwlencompuiedwitlotlei
countiies.Diivinggiowtlinuveiugeticketpiiceswilliequiiedeliveiingligleivulueto
tlecustomeiundpiovidingudilleientiutedexpeiiencetotleuudiencetliouglvuiious
meuns,suclusliglquulityuudio-visuulequipment,impiovedcustomeiseivice,comloit
seuting,etc.
Average admissions price (USD)
Increasing spend on in-home !m entertainment
In-lome lm enteituinment, sucl us plysicul und electionic lome video, und video-on-
demund, luve tle potentiul to contiibute signicuntly to tle oveiull consumei spend
on lms. Tlis is dependent on tle stiict enloicement ol luws on eiudicution ol piiucy
topieventievenueleukuge.Howevei,industiypuiticipuntswillulsoluvetodevelop
unddeliveiuniqueseiviceolleiingstoenluncetlecustomeiexpeiience,tleieby
encouiugingtleuudiencetospendmoie.
Consumer spend on print: Key game-changers
Newspupeisundmuguzinescontinuetobetlemostpopuluisouiceolinloimution
undenteituinmentloiusizeublesectionoltlecountiyspopulution.Histoiicully,tle
giowtlinspendlusbeendiivenbyincieusingciiculutiononly,ustleincieuseintle
uveiugepiiceolunewspupeilusbeenmuiginuloveitlelustlewyeuis.Goingloiwuid,
someoltlekeygume-clungeisincludetlelollowing:
Increasing readership and targeting of niche segments
TlepopulutioninIndiuisoneoltleluigestglobully,undisulsogiowingutuiupid
puce.Incieusingliteiucylevelsisexpectedtocieuteuluigei,giowingieudeibuseloi
newspupeisundmuguzinestoincieuseciiculution.Tlemuguzineindustiyislocussing
onnicleundspeciul-inteiestmuguzines,touttiucttuigeteduudience.Tlisislelping
tlemieuliseligleiciiculutionievenueundguintleuttentionoludveitiseiscuteiing
to specic customei segments witl uligned inteiest uieus. Also, newspupeis uie tiying
toimpioveciiculutionbyencouiugingieudeistobuymultiplepupeispeiduy(e.g.,
tliouglbundlingolbusinesspupeisundtubloidsinudditiontoieguluinewspupeis).
Suclinitiutivesuieexpectedtoincieusepenetiutionundwillluveupositiveimpucton
tleconsumeispendintlissectoi.
Enhancing circu!ation revenue through paid content
Deliveiingnewsonmultipleplutloims,suclustubletsundsmuitplones,piovides
unoppoitunityloioigunisutionstoincieusecustomeispendonnews,diivingup
oveiullciiculutionievenues.Inuddition,quulityundexclusivenessolcontentwillulso
encouiugetleieudeistopuyloinews,especiullyononlineundmobileplutloims(e.g.,
tliouglsubsciiption-buseduiticles).
12 PwC
Potential game-changers: Infrastructure and policy support
Aclievingtlevisionolunindustiywoitl100billionUSDwilliequiieuconsolidutedund
locusseduppioucltowuidsdevelopingunddeployingielevuntinliustiuctuie,suppoited
byustiongpolicyliumewoik.Someolkeygume-clungeisincludetlelollowing:
Driving high broadband penetration
Indiulugsbelindinteimsolinteinetsubsciibeis.Touluigeextent,tlisisdueto
inudequutewiie-lineinliustiuctuieintlecountiy.Toboostinteinetuccessund
udveitising,itisimpoitunttlutbioudbundpenetiutionundusugeintlecountiy
incieusesmunilold.Widespieudbioudbundioll-outwillulsoenubleconsumptionol
contentunywleieundonunydevice.Tliswillopenupinciementulievenuestieums
loicontentowneis.
Household internet penetration, 2011
Mobile internet penetration, 2011
In view ol tle decient coppei PSTN netwoik, it is impoitunt to piovide incentives
to opeiutois using xed-line teclnologies sucl us cuble inteinet oi bioudbund (tleie
uie-80millioncublelouselolds)undwiielessteclnologiessuclus3GundBWAto
boostuptukeolbioudbund.Inluct,mobilebioudbundisulsoexpectedtodiivetle
usugeolcontentseivicessuclusmusic,videoundgumes.
Digitisation of media-de!ivery mechanisms
DigitisutionolcublenetwoikswilllelpdeliveiliglquulitycontenttoIndiunvieweis
undulsoieducetleincidenceolvulueleukugeliomtleindustiy.Fuitlei,tle
numbeiolclunnelsdeliveiedtoconsumeiswillincieusemunilold.Tlis,coupled
witl tle uddiessubility enubled by digitul cuble netwoiks, will signicuntly boost
udveitisingievenues.DigitisutionwillulsolelpdiivetleuptukeolHDclunnels
undvulue-udded-seivicessucluspuy-pei-view(e.g.,movies),tleiebyencouiuging
ligleiconsumeispend.
Additionully,incieusingpenetiutionoldigitulcinemuwillulsopiovideuboostto
industiyievenues,byenublinguligl-quulityviewingexpeiienceloitleuudience
undvustlyimpiovingtleellectivenessoltledeliveiymeclunism.Tlegiowingusuge
oldigitulcinemuwillulsolelpmitiguteiisksielutedtoincidenceolpiiucy,tleieby
ieducingpotentiulievenueleukuges.
Improved audience measurement systems
Touttiuctmoieudveitiseisundgetexistingudveitiseistospendmoieonvuiious
mediu,itisimpoitunttlutuudiencemeusuiementsystemsuiemudemoieiobust
undiepiesentutive.TlisisespeciullyiequiiedloiTVclunnels,newspupeisund
muguzinestlutuieiegionuloinicleinnutuieundtleieloie,muynotiegistei
signicunt vieweislip numbeis in tle existing meusuiement systems. Even OOH
needsimpioved,soplisticutedmeusuiementsystemstlutwillnotonlyieinloicetle
luitlolexistingudveitiseisbutulsouttiuctnewudveitiseistotlemedium.
Itisimpoituntloiindustiypluyeistocolluboiuteundinvestinellectivesystems(oi
suppoittliid-puitypluyeisinvestinginsuclsystems)tlutwillgeneiutestutisticully
signicunt und iepiesentutive uudience meusuiement numbeis witl u ligl degiee
oldetuil.Tliswillenubleudveitiseistobetteiussesstleellectivenessoltleiimediu
spend,ultimutelydiivinggiowtlinudveitisingbudgets.
Regu!atory and po!icy support
Tlis is u ciiticul diivei loi industiy giowtl und signicunt initiutives luve ulieudy
beenundeitukenbytlegoveinmentintlelustlewyeuis.Tlisincludeslocuson
mundutoiydigitisutionloitelevisionundluitleilibeiulisutionoltlesectoiin
teimsolloieigninvestmentlimits.TleplunnedpluseIIIlicensingloiFMiudiois
ulsoukeysteptowuidsdiivinggiowtlintleE&Msectoi.Howevei,itisimpoitunt
tlutiegulutoiycluiityundtiunspuiencycontinuesundsuitublelocusisplucedin
implementingtleunnouncedpolicies,suclusmeetingtimelinesloitledigitisution
piocess,touclievetlepotentiulolu100billionUSDsectoi.
14 PwC
02
The E&M industry
2011 - 2016
In2011,tleoveiullE&Mindustiywusestimutedut80SbillionINR,unincieuseol17.S%
7
oveitlepieviousyeui.Tletelevisionundpiintsegmentscontinuetobetleluigest
contiibutoistotleindustiy,uccountingloi66%oltletotulievenue.Inteinetuccessulso
contiibuted u signicunt 14% (up liom 11% in 2010), diiven by tle incieusing udoption
ol mobile inteinet in tle countiy. Howevei, tle contiibution liom tle piint und lm
segmentsluveieducedmuiginully,usyeui-on-yeuigiowtliutesluvebeenloweitlun
tleindustiyuveiuge.
Segment revenue contribution
Segment Revenue-2010
(billion INR)
Revenue- 2011
(billion INR)
Y-o-y
growth (%)
Contribution to
the industry (%)
Television 294 340 15.7% 42%
Print 178 190 7.2% 24%
Internet access 74 116 57.2% 14%
Film 88 96 9.4% 12%
OOH 14 16 10.7% 1.9%
Radio 13 14 10.8% 1.7%
Music 10 12 25.0% 1.5%
Gaming 8 11 32.6% 1.4%
Internet
advertising
8 10 30.9% 1.3%
Total 685 805 17.5%
InIndiu,tleinteinetuccessundgumingsegmentsluvebeentlelustestgiowing,witlunnuul
giowtliutesolS7%und33%,iespectively.Tlegumingsegment,tlouglusmullcontiibutoi
totleoveiullindustiy,lusbeengiowingduetotleiisingpopuluiityolmobileundonlineund
sociulmediuguming.Television,beingtleluigestsegment,lusbeentleliglestcontiibutoi
(inteimsolievenueuddition)totleindustiy,witlununnuulgiowtliuteol16%.
Globully,tleIndiunE&Mindustiyisoneoltlelustestgiowing,lollowedbycountiiessucl
us Clinu, Russiu und Biuzil. Tle giowtl piole ol tlese countiies, depicts u cleui tiend.
Foimutuiemuikets,ievenueliominteinetudveitisingisiupidlyincieusing,exploiting
tleulieudyliglpenetiutionundusugeolinteinetinliustiuctuie.Howevei,ievenueliom
inteinetuccesslusbeentlelustestgiowinginIndiuundBiuzil,duetotleielutiveundei-
penetiutionoltlemedium.Oncetlepopuluiityoldigitulmediuieuclesuciiticulmuss
in tlese countiies, it is expected tlut digitul udveitising will contiibute signicuntly to tle
oveiullindustiygiowtl,inlinewitlmutuiemuiketstoduy.
7 Internet access (wired and mobile) included
as part of the E&M industry. Excluding internet
access, the year-on-year growth for the Indian
E&M industry, between 2010 and 2011, is
estimated at 12.7%.
Industry growth in 2010-11: A global comparison
Fastest-growing segments and their growth rates (2010 2011)
16 PwC
Goingloiwuid,tleindustiyisexpectedtogiowutuCAGRol17%
8
between2012und2016,
toieuclusizeol1,764billionINR.Inteinetuccess,udveitisingundguminguiepiojectedto
betlelustestgiowinguvenues,euclgiowingutuCAGRligleitlun20%.
Projected growth 2012 - 2016
INR billion 2011 2012 2013 2014 2015 2016 CAGR
Television 340 398 458 533 601 674 14.7%
Print 190 210 228 249 272 296 9.2%
Internet
access
116 177 255 339 426 507 34.3%
Film 96 104 115 125 136 148 9.1%
OOH 16 17 19 21 24 26 10.9%
Radio 14 16 19 22 26 30 16.7%
Music 12 14 16 19 22 22 13.4%
Gaming 11 14 17 21 25 30 21.9%
Internet
advertising
10 13 16 20 25 30 24.2%
Total 805 962 1144 1349 1556 1764 17.0%
TleievenueliomudveitisingisexpectedtogiowutuCAGRol13.4%toieuclS2Sbillion
INRin2016,liom279billionINRin2011.Televisionundpiintuieexpectedtoiemuintle
piimuiycontiibutois,uccountingloi84%oltletotuludveitisingievenuein2016.
Advertising revenue 2016: Projected segment contribution
E&M industry 2016: Projected segment contribution
8 Internet access (wired and mobile) included as part of the E&M industry. Excluding internet
access, the CAGR for the Indian E&M industry till 2016, is projected at 13%.
Atunoveiulllevel,diivenbyincieusingsubsciiptionievenuesundudveitising,tle
televisionsegmentisexpectedtoietuinitspositionustleluigestE&Msegmentin
tlecountiy,witlunestimutedCAGRol1S%till2016.Tleiobustgiowtlpiojected
ininteinetuccesstill2016(giventlecuiientundei-penetiution)willenubleitto
oveituketlepiintsectoiby2013,inteimsolindustiyievenues,undbecometle
second-luigestsegmentintleIndiunE&Mindustiy.Howevei,unlikemunymutuie
muikets,tlepiintsegmentisexpectedtogiowutuleultlyCAGRol9%,oveitle
next ve yeuis, und ieucl u muiket sluie ol 17% in 2016. Tle impoitunce ol tle E&M
industiyintleglobuluienuisexpectedtoiiseluitlei,witlIndiubeingtlelustest
giowingintletop1SE&Mcountiies.Howevei,tlepotentiulloigiowtlintlis
sectoi is signicuntly liglei, und will iequiie tle industiy to locus on colluboiution
undinnovutiontouclievetlisvision,bydiivingimpiovementsinudveitisingund
consumeispend,inliustiuctuieundpolicies.
18 PwC
03
Television
2011 - 2016
TleIndiuntelevisionindustiyin2011wusestimutedut340billionINR,witluyeui-on-
yeuiincieuseol1S.8%liom2010to2011,diivenequullybygiowtlinbotludveitising
uswellussubsciiptionievenue.Adveitisingievenuesintelevisionluveincieusedby
14.3%to116billionINR,diivenbytleluunclolnewclunnelsundgiowtlininventoiy.
Howevei,giowtlinsubsciiptionievenuelussuipussedtlutoludveitising,witlu
giowtliute16.S%toieucl224billionINR,ledbyusluipiiseinDTHsubsciibeis.
Globully, umong countiies witl signicunt enteituinment und mediu piesence, Indiu
issuipussedonlybyBiuzilinteimsolgiowtlwitlRussiucominginutuclosetliid.
Howevei, tle composition ol tle giowtl tiujectoiy in tlese two nutions is signicuntly
dilleienttotlutinIndiu,witlsubsciiptionievenuesbeingtlepiimuiydiivei.Tlisis
duetoielutiveundei-penetiutionolsubsciiptiontelevisionintlesecountiiesleuding
toliglgiowtlinsubsciiptionievenuesbetween2010und2011.InIndiu,tlegiowtl
compositionismoiebuluncedwitlbotludveitisingundsubsciiptionievenueincieusing
utusimiluiiute,between2010und2011.
Global comparision of television growth rates: 2010 - 2011 (percentage)
Sharp growth in DTH subscriber base, driven by demand from cab!e-dry areas,
as we!! as through innovation in content and product offerings
TleDTHsubsciibeibuseinIndiulusseenusluipiise,ieuclinguppioximutely
44millionsubsciibeisbytleendol2011,witlugiowtliuteol38%yeui-on-yeui.
TleluunclolHDclunnelsluvebeenukeygiowtldiiveiloiDTHpluyeis,undtle
incieusingsulesolligl-endtelevisionsetsuieexpectedtodiiveluitleipenetiution
unduptukeolHDund3Dseivices.TlisisulsoexpectedtopositivelyimpucttleARPU
unduidintlegiowtlolvulue-uddedseivicessuclusvideoiecoiding,inteiuctive
STBs und PPV. Tle penetiution ol HD subsciibeis in Indiu iemuins signicuntly low us
compuiedtoglobuluveiuges,indicutingusubstuntiulgiowtlpotentiul.Inuddition,
DTHisulsobeinglookedutustlepieleiiedmediumloipuyTVseivicesincuble-diy
uieusbecuuseoltleimpiovedieuclolsutellitenetwoikscompuiedwitltlelimited
ieuclolcuble.
Widespread presence of cab!e and sate!!ite te!evision with considerab!e growth
potentia!especia!!y in certain states
Tleieuieovei113millioncublesubsciibeisintlecountiy,witlunoveiullpenetiution
ol ovei 80% ol totul television louselolds. Howevei, tleie still exists signicunt scope
loiexpundingtleieuclolcubletelevisioninIndiu,possiblepiimuiilyduetotlewide
dispuiityinpenetiutionlevelsuciossstutes.Foiexumple,locutionssuclusMumbui,
Delli,undBunguloieluvecuble&sutellitetelevisionieuclingmoietlun90%ol
totultelevisionlouselolds,wlileotleislikeOiissuundAssumluveuielutivelylowei
penetiution,indicutingpotentiulloiluitleigiowtl.
Key trends
20 PwC
Limited potentia! for substantia!!y increase in !ow ARPU in the short term,
considering the overa!! macro-economic environment
GlobulcompuiisonsindicutelowuveiugeievenuepeiuseiinIndiu,vis-u-visotlei
mutuiemuikets.Foiexumple,countiiessuclustleUSundtleUKluveARPUsin
excessol4SUSDpeimontl,uscompuiedto3.S0USDpeimontlinIndiu.Howevei,
wlen ARPU us u peicentuge ol pei cupitu income is consideied, tle pictuie signicuntly
clunges.TleARPUtoPCIiutioisuppioximutely2.8%loiIndiu,butonlyiunges
between1.4to1.S%loitleUSundtleUK.Asuiesult,tleimmediutepotentiulloi
giowtlinARPUsmuybelimited.Howevei,tleexpectedgiowtlintleeconomyin
tlemediumteim,unditspositiveimpuctontlePCIwilldiivetleoppoitunityloi
incieusingtleuveiugeconsumeispend,especiullytliougltlepiovisionolvulue-
uddedseivices.
Increasing popu!arity of mobi!e TV p!atforms yet demand most!y driven by sports
content
Tlepiesenceolmobiletelevisionlusbeensteudilyincieusing,witltleluunclolnew
seivices,upplicutionsundcontent.Howevei,tlepopuluiityoltlismediumlusbeen
mostlylimitedtospoitsundnewsgenies,wleieconsumeisvulueieceivingtlelutest
content,wlenontlemove.
MultiplemobiletelevisionplutloimscuiientlyuvuilubleloisubsciibeisincludeZengu,
Ditto,ApulyuundMundu.Revenuemodelsvuiy,witlsomeplutloimspioviding
lieecontentwlilelocusingonlyonudveitisingievenue,wlileotleisdependon
subsciiptionievenuesonly.Howevei,tlisdistiibutionmediumisutunuscentstuge.
Exploitingtlevustpotentiulintliscountiywilliequiieincieusingudoptionolsmuit
deviceswitlligl-quulitydutuconnectivity,undloioigunisutionstoexpeiimentwitl
ulteinutebusinessmodelsdeliveiingielevuntcontentuttleiigltpiice,totleviewei.
Hindi GECs most watched resu!ting in increased competitive activity
Oveitleyeuis,tleHindiGECsluvebeenleudingwitlumujoiclunkolvieweislip.
TleHindiGECssuwusluipiiseinvieweislipbetween2009und2010.Howevei,tlis
couldnotbeieplicutedin2011,witlumuiginuldiopinvieweislipoveitlepustyeui.
Tlisispiimuiilyduetouudienceliugmentutionpuiticuluilyintlemetiocities.Inspite
oltlisdiop,HindiGECsiemuintlemostwutcledgenieonIndiuntelevision.
Tleyeui2011suwintensecompetitionwitlintleTiei1GECspuce(includingStui,Zee,
Colois und Sony) witl eucl clunnel using tleii ugslip piopeities to pusl tlem to tle
top.WlileSonytempoiuiilyieucledtlesecondpositionontlebuckolkuunBuncgu
Ctotcpuri5,Coloisgotbucktotlutpositioneventuully.WlileStuiPluslusbeenleuding
tliouglout,tleiewususligltlullinvieweisliplustyeui.
Tleintensecompetitionulsoledtoclunnelssluttingdown,ie-biundingundie-
luuncling.In2012,TuineiBioudcustingSystemslutdownitsHindiGECImugineTV
ulteiitluiledtoboostitspopuluiitywitlvieweis.Eventlouglitludsuccesslulslows
likeSwuyumvutundBundini,tleclunnelwusntubletouclievetleconsistentiutings
neededtosustuintlebusiness.
Ontleotleilund,Stuiiebiundeditsuibunyoutl-locusedclunnelStuiOnetoLile
OKwitlunewpiogiummingline-upwitlumoiemussoiientution.Tleie-luuncl
leud to u sluip spike in GRPs loi Lile OK in its ist week ol luuncl. Subsequently,
itlussuccesslullymunugedtoietuinsimiluiGRPlevelsin2012,ontlebuckol
itsmytlologiculslowucvonkcucvMunudcvundotleipopuluislowssuclus
SuubnugyuvuriBnuvuundAmtirMunrnun.
SABTVlussuccesslullycieutedunicleloiitsellwitludilleientiutedpositioningusu
comedy-locussedlumilyclunnel.Itsliglt-leuitedlumilycomedyslowsluvelelpedit
ciosstle1S0GRPmuikinsomeinstunces,inclingitswuycloseitotletoplouiGECs.
ItspopuluislowTuutulMcnrukuOo|ruCnusnmulusmudetleclunneluloieiunnei
inGujuiut.
Hindi GECs bui!ding weekend programming to drive growth in viewership
GoneuietleduyswlenweekendsonuGECmeuntieiunsolsuccesslulweeklyslows
undmovies.Clunnelsluveieulisedtleimpoitunceolpiovidinglieslnewcontent
oveitleweekendunduieconcentiutingonbuildingitloiweekendpiime-timeslots.
SonyEnteituinmentulieudylusustiongweekendline-upwitllndiunldo|6,Clu,Ctimc
Purto|,Aduu|urundComcdyCitcus. Colois intioduced its ugslip ieulity slow lcutlucrot.
knurtonkckni|udiwitluweekendpiime-timetelecustundimpioveditsweekendcontent
witlJnu|uluiln|ujuundZindugikiHuqccqurScAmnuSumnu.ZeeTVlusmunugedto
cieuteuloyulvieweibuseontleweekendswitluuncclndiuuuncc.lirr|cMusrctsund
lcutli|cs.StuiPlusluuncledWi|cBinuli|c,lovcYouZindugiundPyuutMcinTwisrintle
weekendslotsundisluitleistiengtleningitsweekendpiogiummingline-upwitltwo
newseiiesAtjunundTctiMctilovcSrotics.
TleSunduymoiningtimebundlusbeeniecieutedwitlSuryumcvJuyurcundusimiluitiend
isbeinglollowedbyotleiGECs.ZeeTVlusintioducedRumuyunonSunduymoiningswitl
tleintentolbiingingtleentiielumilytogetleitowutclTV.
Simu!casting !eading to higher viewership
Simulcusting,unewtiendintleGECgenieislelpingclunnelsincieusetleiiuudience
buse.SuryumcvJuyurclusbeenoneoltlebiggesttiendsetteisin2012.Itlusnotonlyie-
inventedtlemoiningweekendslotbutlusulsoledtounumbeiolsimulcustingdeuls.Stui
IndiulentouttleintellectuulpiopeityiigltsoltleslowtoDooiduislunundETVTelugu
iesultinginunine-clunnelsimulcustoltleslow.ColcSrudioonMTVundRumuyunon
ZeeTVsoonlollowedbyusingDooiduislunustleplutloim.SuluiuOnesSut-ksncrtu,
utulentieulityslowwleieIndiunundPukistunisingeiscompete,luspuitneiedwitl
Colois.Tlistiendcouldleudtoevenmoiestiutegictie-upsinlutuie,lelpingsmullei
clunnelsieuclouttouligleiuudiencebuseundluigeipluyeispiovidingdilleientiuted
undnewcontenttotleiiuudienceutuloweicost.
Cricket sti!! main fodder but other sports gaining popu!arity
IndiunspoitsTVbioudcustingisdominutedbyciicket,contiibutingto-8Sto90%oltle
totulTVspoitsudveitisingievenues.Tleyeui2011wusuplenomenulyeuiloispoits
bioudcusteis,witludveitisingievenueexpectedtobeupbymoietlunS0%compuied
totlepieviousyeui.Tlecontiibutionoltlespoitsgenietoudveitisingulsoincieusedin
2011,nowuccountingloiovei20%oltletotuludveitisingspendsintlesectoi.Tletwo
muiquee events viz. tle Ciicket Woild Cup und tle IPL luve contiibuted signicuntly to
tlegiowtlinudveitising.
Howevei,otleispoitsuieulsoguiningpiominence,especiullytlelootbulltouinuments
in tle uibun metios. Tle seminul mutcl between Spuin und Poitugul in tle Euio 2012
isbelievedtoluvedeliveieduligliutinguciosstlesixmetios,especiullyintleuge
cutegoiyubove1Syeuis.Otleispoitssuclustennis,motoispoits,undbudmintonluve
stuitedmukingtleiipiesenceleltbecuuseolimpiovedpeiloimuncesbyIndiunpluyeisin
tleinteinutionuluienucoupledwitlincieusedinvestments.TleIndiunGiundPiix2011
wusulsoveiypopuluiinIndiu,witltleliglestiutingsloiunyFoimuluOneiuceintle
countiy.Howevei,otleispoitsstillluveulongwuytogoinIndiu,inoideitomutcltle
iutingsundpopuluiityciicketcommunds.
Regiona! channe!s gaining strength in HSM
Regionulclunnels,tiuditionullylocussedintlesoutl,luveseenusuigeinvieweislip
inHindi-speukingmuikets.TlesluieolHSMiniegionulclunnelslusincieusedbyovei
onepeicentugepointbetween2010und2011.Mucloltlegiowtlluscomeliommuikets
suclusMuluiusltiuundWestBengul,wlicluieslowlygettinginclinedtowuidsiegionul
clunnels.StuiJulsluundZeeMuiutlileudtleBenguliiegionulmuiketundtleMuiutli
muiketiespectively.TlecombinedweeklyGRPsoltletoptlieeBenguliclunnels,ETV
Bunglu,StuiJulsluundZeeBunglu,luveincieusedby20%,oveitlelustyeuiundu
lull.Similuily,tleweeklyGRPsoltletoptlieeMuiutliclunnels,ETVMuiutli,Stui
PiuvulundZeeMuiutli,luveulsoslownunincieuseolovei30%oveiusimiluipeiiod.
Incieusingvieweislipisluvingupositiveimpuctontleiegionuludveitisingmuiketin
tleselocutions,iesultingintleMuiutliundBengulimuiketsbeingumongtlelustest
giowinginteimsoludveitisingspend.
Nationa! p!ayers gaining presence in regiona! markets through inorganic means
Tletiendolnutionulpluyeisgoingiegionulcontinuedevenin2011.Activitywus
witnessedintleiegionullunguugemuikets,wleienutionulbioudcusteisstuitedslilting
tleiilocusondevelopingundstiengtleningtleiipiesenceeitleitliouglucquisitionsoi
newluuncles.TleiecenttiunsuctionsintleiegionulmuiketsbyTV18undSonyieinloice
tlisluct.TV18ucquiiedubouquetolclunnelsoltleETVGioup,loi2,100cioieINR,witl
22 PwC
stukesineuclclunneliungingliom24.Sto100%.Ontleotleilund,Sonyucquiied
30%stukeintlesoutl-busedMAATV.MAAlusubouquetollouiclunnelsundistle
second-luigest in Andliu Piudesl. Stui und Zee luve ulieudy mude signicunt iniouds
intotleiegionulmuikets,especiullyinTelugu,Tumil,Muluyulum,Muiutli,Punjubiund
Bengulilunguuges.
For niche channe!s, innovation and experimentation key to attract advertisers
Mostoltlenicleclunnelsuietuigetedtowuidstleyoutl,wliclispeiceivedtobe
ulwuys on tle move und ckle in its mediu consumption. Clunnels luve gone beyond tle
televisionspuceunduielocusingondigitulundon-giounductivitiestobetteiconnectwitl
tleiituigetgioup.MTVluuncledCiunclonYouTubewitlulive24-louistieum,und
Clunnel[V|puitneiedwitlIndiuloiNokiuIndiuFest2011undventuiedintooigunised
culeundbuispucewitl[V|Spotcules.
Foiligl-ieuclclunnelssuclustleHindiGECs,tlebuyingdecisionsloiudveitiseis
uiebusedpuielyontleiutingstluttleclunnelscommund.Ontleotleilund,loitle
nicleclunnels,otleiluctoissuclustleimugeoltleclunneloitlepiogiumme,und
piogiummingpluyunimpoituntiole.Tleseduys,udveitiseisuielookingloiinnovution
tliouglwlicltleywillbeubletouvoidtleclutteiundellectivelycommunicutemessuges
duiingmediucumpuigns.TletypiculexumplesontelevisionuieAFPs,sponsoislipsund
in-piogiummepioductplucements.Adveitiseisulsoexpecttleclunnelssuppoitintleii
oll-uiiuctivities.
Tlecontinuedsuccessoltlesenicleclunnelswilldependonlowwelltleyuieubleto
dilleientiutetlemselvesliomeuclotleiundbiingininnovutiontouppeultobotltle
tuigetuudienceuswellustleudveitiseisulike.
Key regulatory trends
Rcviscd|otcigninvcsrmcnrnotms|otbtoudcusringcuttiugcscgmcnrs
On 20 Septembei 2012, tle goveinment notied tle incieuse in loieign investment
cupsloimostoltlebioudcustingcuiiiugesegments,touuniloim74%.Euiliei,tle
loieigninvestmentcupsbetweencompetingplutloimsintlecuiiiugesegmentweie
dilleient,iungingliom20%FDIlimitundeiDTHseivicesto74%undeiIPTVund
HITSplutloim.Intleligltolconveigingteclnologies,uneedwustleieloielelt
tostieumlinetleupplicubleloieigninvestmentcupsintlisspuceuswellusintle
telecom sectoi, und ulso to biing ubout consistency und piomote u level pluying eld
betweencompetingteclnologies.
Foieigninvestmentupto49%willnowbepeimittedundeitleuutomuticioute.
Howevei,loieigninvestmentbeyond49%(undupto74%)willcontinuetoiequiie
piioigoveinmentuppiovul.Tliswilllelpeusepiocesstimelinesinvolvedloi
oveiseuslund-iuisingtliougldivestmentoluminoiityinteiestinluvouioltle
loieigninvestoi.
Cuttiugcsctviccs Fut|ict|imir Rcviscd|imir
DTH 49% (FDI <20%) 74%
Teleport (uplinking hub) 49% 74%
MSOs operating at the national, state or
district level and taking up digitisation with
addressability
49% 74%
Mobile TV No policy 74%
HITS 74% 74%
IPTV 74% 74%
Other MSOs 49% 49%
Local cable operators 49% 49%
Munduroty digirisurion o| cub|c T\ sctviccs wus noricd in Novcmbct 2011.
Itwillbeimplementedintlelollowinglouipluses:
Pnusc Cirics Otiginu|dcud|inc
Phase 1 All metro cities (Delhi, Mumbai, Chennai, Kolkata) 30 June 2012
Phase 2 Tier 1 cities (having population more than 1 million) 31 March 2013
Phase 3 Tier 2 cities (urban areas under municipalities and municipal corporations) 30 September 2014
Phase 4 Rest of India 31 December 2014
SincetleTRAIoideisontleiegulutionsontuiillundinteiconnectionundtleconsumei
compluintiediessulsystembyMSOsluvenotyetbeensubstuntiullyimplemented,
tlislusiesultedindeluyingtleinstullutionolset-topboxes.Onuccountoltlisund
iepiesentutionsieceivedliomstukeloldeis,tleMIBlusextendedtledeudlineol30June
2012loiPluse-Ito31Octobei2012.
Tncup|inlingunddown|inlingguidc|incsnuvcbccntcviscdc||ccrivcucccmbct2011.
Someoltlekeyclungesintioducedincludetlelollowing:
Tiunsleiolpeimissionsundlicenceswitlintlesumegioupuienowpeimitteduspuitol
gioup ieoigunisution stiutegy und on tle lullment ol ceituin conditions. Piioi uppiovul
oltleMIBisiequiiedloitlis.
Revisednetwoitlnoimsundioll-outobligutions.
Scgmcnr Timc|tumc Condirions
I. Uplinking of non-news and
downlinking
One year from permission PBG of 10 million INR for each channel
II. Uplinking of news and current
affairs
One year from permission PBG of 20 million INR for each channel
III. Teleport services One year from permission PBG of 2.5 million INR for each teleport
IV. Downlinking Same as 1 No PBG
Scgmcnr Fxisring|imir Rcviscd|imir
Uplinking of non- news
and downlinking
First channel: 15 million INR
Additional channels: 10 million INR
Uplinking of news and
current affairs
Teleport services One-channel capacity: 10 million INR
Six-channel capacity: 15 million INR
Ten-channel capacity: 25 million INR
Fifteen-channel capacity: 30 million INR
First teleport: 30 million INR
Additional teleport: 10 million INR
Atleustoneoltlepeisonsoccupyingutopmunugementpositionintleupplicunt
compunyslouldluveuminimumoltlieeyeuisolexpeiienceinuielevuntmediu
compuny.
TRAIlusieleusedtleiecommendutionsonpiesciibingminimumclunnelspucing,
witlinulicenceseiviceuieu,intleFMiudiosectoiinIndiu.Aspuitoltlepupei,
TRAIiecommendstlutliequenciesloiFMiudioclunnelswitlinulicencedseivice
uieuslouldbeieleusedwitluminimumspucingol400KHz.
TRAIlusissuedtuiilloideiundinteiconnectioniegulutionsloidigituluddiessuble
cubleTVsystemson30Apiil,2012witluviewtoensuietlutconsumeisluvetle
exibility to cloose tleii bouquet ol clunnels und to budget tleii subsciiptions
uccoidingly.Allclunnelswilltleieloiebeolleiedonunulucuitebusistosubsciibeis.
Abusicseivicetieiconsistingolminimum100liee-to-uiiclunnelslusbeen
piesciibedwitlumuximumsubsciibeileeol100INRpeimontl.Tletuiilloideiulso
coveistlemeclunismloiievenue-sluiingbetweenMSOsundcubleopeiutoisuswell
ustlecuiiiugeleescluigedbyMSOsliombioudcusteis.
24 PwC
Indias place in the world: Comparison with global trends
Tletelevisionsectoiinmutuiemuiketsisutudilleientiutedstugeolevolution.
Wliledigitulplutloimsuieukeygiowtldiivei,tleyulsobiingwitltlemincieused
competition,witlnewpluyeisenteiingtleliuy.Someoltleemeigingtiendsinclude
tlelollowing:
Catch-up and over-the-top services !eading to increase in on!ine and mobi!e
viewing of te!evision, as we!! as driving growth in digita! advertising
Tlecompositionoltelevisionvieweislipisslowlyclunging,witlyoungeipeople
pieleiiingtowutcltelevisiononlineundonmobiledevices,tlunonTVsets.
Bioudcusteisuieulsostieumingtleiislowsononlineplutloims,usucutcl-upseivice,
essentiullysliltingtleDVRlunctiontouVODoptionloivieweis.HoweveiVODviewing
doesnotullowlust-loiwuidingolcommeiciuls.TVeveiywleiemukesslowsuccessible
tliouglmobiledevices,undincieusingpenetiutionolmobilesundsmuitplonesuie
expectedtodiivevieweislip.Alteinutedeliveiyplutloimssuclusgumingconsolesund
blu-iuypluyeisuieulsobeingexploied.Tleseclungingvieweislipputteinsuiediiving
locusondigituludveitising,expectedtobeumongtlelustest-giowingudveitising
stieumsintleneuilutuie.
India perspective: uigiru|udvctrising|otrc|cvisionconrcnrisurutc|urivc|ynusccnrsrugc
inlndiu,wirndc|ivctymccnunismsnorbcinguscvo|vcdusrnoscsccninmurutcmutlcrs.
lriscxpccrcdrnur,inrncncut|urutc,wni|cudvctrisctswi||spcnduninctcusingpotriono|
rncitbudgcrondigiru|udvctrising,cspcciu||yrotcucnourrounicncuudicncc,rtudirionu|
udvctrisingmcdiuwi||conrinucroptovidcmuximumtcucnroudvctriscts.
Increased saturation and competition from over-the-top services !imiting growth in
subscription househo!ds
Tle television subsciiption muiket lus ieucled signicunt penetiution levels in muikets
suclustleUS.Asuiesult,ievenuecontiibutionliomnewsubsciibeiudditions
isslowingdown.Tleiisingpopuluiityolovei-tle-topseivicesluscieutednew
competition loi tle industiy. Hulu und Netix ullow useis to stieum content ovei tle
inteinetutumuclloweicost.Otleipluyeisuieulsoplunningtoexpundtleiiseivice
olleiingsbypiovidingcontentoveiotleiplutloims,suclusgumingconsoles,blu-iuy
pluyeisundinteinet-connectedtelevisions.
Howevei,inmunylouselolds,ovei-tle-topseivicesco-existwitltelevision
subsciiptions.Tlistiendisexpectedtocontinue,witleuclplutloimdeliveiingunique
contenttotleviewei.
India perspective: 0n|ilcmurutcmutlcrs,rc|cvisionsubsctiprioninlndiusri||nusunign
porcnriu||otgtowrnrntougnsubsctibctuddirions,givcnrnctc|urivcundct-pcncrturion
o|puyrc|cvisioninmunysrurcs,uswc||usrncptoposcddigirisurionp|un.Addirionu||y,
ovct-rnc-ropsctviccsutcsri||uruniniriu|srugcinrnclndiunmutlcrundutcnorcxpccrcdro
c||ccrivc|ycompcrcwirnrc|cvisionsubsctiprionsinrncncut|urutc.
Increasing socia! media usage providing a boost to broadcast advertising
Tlegiowinguseoltleinteinet,especiullysociulmediu,lusludupositiveimpucton
television,giventlutTVisoltendiscussedonsuclplutloims.Vieweisuieonlinewlile
wutclingtelevisionunddiscussslowscuiientlybeinguiied.Tlisbeluviouienubles
uppointmentviewinguspeeiinteiuctioniequiiespuiticipuntstobeconcuiiently
wutclingtlesumecontent.Tleieloie,sociulmediuundinteinetusugeisuctuully
lelpingsustuinieguluiviewingontelevisionleudingtoupositiveimpuctonbioudcust
udveitising.
India perspective:ln|incwirng|obu|rtcnds,rncusco|sociu|mcdiuinlndiuisinctcusing
cxponcnriu||y, cspcciu||y wirnin spccic vicwct scgmcnrs und ugc gtoups. Howcvct,
btoudcusrctsutcurrnciniriu|srugcso|udoprion,undutcycrroc||ccrivc|yuri|iscrnis
mcdiumroinctcuscrncpopu|utiryo|rncitconrcnr.Tnisiscxpccrcdrocnungcsoon,wirn
p|uycts |ocusing on dcp|oying signicunr tcsoutccs ro cxp|oir rnc porcnriu| o| sociu| mcdiu in
rnccounrty.
Going forward
Tle television sectoi in Indiu is expected to giow ut u CAGR ol 14.7% ovei tle next ve
yeuis,toieucl674billionINRin2016.Tlegiowtltiujectoiy,similuitopieviousyeuis,
willbeequullydiivenbyudveitisingundsubsciiptionievenue,botlgiowingutuCAGR
between14und1S%.Subsciiptionievenuewillcontiibuteusluieolovei66%oltletotul
industiysizein2016.
Someoltleexpectedtiendsintlissectoiincludetlelollowing:
India to be among the fastest-growing te!evision markets over the next ve years
TletelevisionsectoiinIndiuisexpectedtobeumongtlelustestgiowingwitlu
CAGRol14.7%(20122016),lusteitlunotleimuiketssuclusRussiu,Biuzil,Clinu
undAigentinu.IndiuisulsopiojectedtosuipussMexicointeimsolindustiysize.
DigitisutionwillpluyukeyioleindiivinglutuiegiowtlintleIndiunmuiket,lelping
plugsubsciiptionievenueleukuge,uswellusenubleligl-quulitydeliveiyolcontentto
tleconsumei.Adveitisingievenuesuieulsoexpectedtogiowsubstuntiully,inlinewitl
oveiullGDPgiowtlundincieusingvieweislip.Subsciiptionievenueisexpectedto
ieucl449billionINRin2016,undudveitisingievenuetoieucl22SbillionINRintle
sumepeiiod.
DTH services best positioned to grow during the initia! phases of digitisation
TleinitiulplusesoldigitisutionmuypiovideuuniqueplutloimloiDTHseivice
piovideistoluitleiincieusetleiimuiketpenetiution.Digitisutionisexpectedto
piovideconsumeiswitlunequullypiicedcloicebetweenDTHundcubledeliveiy
plutloims.Cuiiently,DTHseivicepiovideisluvetleudvuntugeoveicublepiovideis,
witlustiongmuiketinglocus,iobustcustomeiielutionslipundbillingmeclunisms
tobetteiseivetleviewei.Asuiesult,itispossibletlutexistingcublecustomeismuy
switcloveitoDTHplutloims,duiingtleinitiulstugesoldigitisution.Tleieloie,cuble
seivicepiovideiswillbeiequiiedtoinvestinimpiovingtleiiinteinulopeiutions,
especiullyuioundbillingpiocessesundsystems,toellectivelycompetewitlDTH
pluyeisundimpiovecustomeiietention.
Content innovation and mu!ti-p!atform de!ivery the way forward
Digitisutionwillpiovideunoppoitunityloimultipleclunnelstoenteitlemuiket,
uddingtotleoveiullcontentcluttei.Buttliswillulsoenublepluyeistoexpeiiment
witlnewbusinessmodelsielyingpiimuiilyonsubsciiptionievenue,uscompuied
totletiuditionuldependencyonudveitising.Tlus,bioudcusteiscunlocuson
estublislingniclemuiketpositions,diivenbytletypeundquulityolcontentdeliveied,
todilleientiutetlemselvesliomcompetition.
Intlemediumteim,incieusingonlineundmobileconnectivityundusugewillulso
diivemultiplutloimdeliveiyolcontent.Tubletsuietlepieleiiedulteinutiveplutloim
loimunyuseisinmutuiecountiies,undsouiingtubletsulesinIndiuindicuteupotentiul
loiindustiypluyeistodiivemobilecontentvieweislipunddigituludveitising.
26 PwC
04
Film
2011 - 2016
Alteitwoconsecutiveyeuisolde-giowtlwlentleindustiylucedsomeolitsmost
clullenging und dilcult times, 2011 biouglt buck uudiences to tle cinemu scieens
und cleeis to tle lm industiy. Despite tle economy iebounding only sligltly,
incieusing digitisution, giowtl in multiplexes, lms witl dilleientiuted content und
ievivul ol tle TV syndicution muiket led to tle giowtl ol tle Indiun lm industiy.
Film industry 2010 vs. 2011 (billion INR)
Wlile 2011 suw only ve lms (Wunrcd,Rcudy,RuOnc,Singnumunduon2)bieucltle100
cioie INR muik ut tle box olce, tle ist eiglt montls ol 2012 luve ulieudy seen u similui
numbei ol lms suipuss tlis new industiy benclmuik loi blockbusteis. Tlis is even beloie
some ol tle otlei lms by big stuis sucl us Sulmun Kluns uubungg2,AumiiKlunsTu|uusn,
SluliuklKlunsJubTulHuiJuunundAjuyDevgnsSono|Sutduut,uieplunnedloiieleusein
tlelustquuiteioltleyeui.
Howevei, even tlougl Indiu is tle luigest muiket in teims ol tle numbei ol lms pioduced
und tle numbei ol udmissions, it is only tle eigltl luigest wlen it comes to box olce
collections. Tlis indicutes tle industiys continued inubility to monetise its lms bettei, even
tlougl tle lm industiy is coming ol uge witl incieused ucceptunce in oveiseus muikets.
Key trends
Content driven !ms giving big budget !ms a run for their money
Tle lust yeui und u lull lus witnessed stiong peiloimunce by lms tlut luve ielied on
stiong und dilleientiuted content. As uguinst u lew yeuis ugo, wlen tle success ol u lm
ciiticullylingedonitsstui-cust,iecenttimesbeuiwitnesstotlelucttlutIndiunuudiences
luve mutuied und uie uppieciuting lms diiven by stiong content und not necessuiily stui
powei.TleseincludeTncuitryPicrutc,kunuuni,PuunSingnTomutund\iclyuonot,lms
tlut weie uble to iewiite iules und do good business ut tle box olce.
Regiona! cinema producing some of their biggest hits, attracting Bo!!ywood
production houses
Wlile Indiun cinemu is synonymous witl Bollywood, tle iegionul lm industiy lus
continuedtogiowstiong.Inluct,luigepioductionlousestlutweieluigelypioducing
muinstieum Hindi lm uie now ieulising tle luge potentiul tlut iegionul lms ollei. Wlile
UTV, Reliunce, Eios und Yusl Ruj Films luve ull enteied tle Tumil lm industiy, tle second
biggest lm muiket in Indiu ultei Bollywood, Buluji Films pioduced und ieleused its ist
Muiutli lm to pucked louses. As pei oui ieseuicl, ubout lull ol tle lms in UTVs line-up
loi2012uieiniegionullunguuges,wlileEiosEnteituinmentlusuline-upolubout60
iegionul lms in tle next lew yeuis.
28 PwC
Tiude iepoits indicute tlut seveiul iegionul lms ieleused duiing tle lust 1 2 yeuis,
luvebeenligllysuccesslul.Tleseincludetlelollowing:
- JurrundJu|icr,ieleusedin2012,lusgoneontobecometleluigest-giossingPunjubi
lm ol ull time.
- Fcgu, u Telugu sci- tliillei cieuted listoiy by iecoiding tle liglest pei scieen
uveiuge collections ut tle US box olce ovei tle weekend ol its ieleuse, moie tlun
some well-known Bollywood und Hollywood lms.
- CubbutSingn,tleTeluguiemukeoluubungglusgiossedovei1S0cioieINR.
- Nunbun, tleTumiliemukeol3Idiotsluscollectionsolovei16ScioieINR.
Increased digitisation !eading to wider re!ease, higher co!!ections
Tle Indiun lm industiy is witnessing iupid digitisution ol cinemu scieens in tle
countiy und is enubling lm pioduceis to simultuneously ieleuse tleii lms ucioss
tle geogiuply in tle ist week itsell. As pei oui industiy discussions, ubout 70%
oltlescieenscuiientlyopeiutionulintlecountiyuieulieudydigitisedundtle
industiyexpectstleiemuiningtobedigitisedbytleendol2013.Oneoltleluigest
seivicepiovideis,UFOMoviezIndiuulonelusovei3000digitulcinemuinstullutions
tliouglouttlecountiy.
Incieusing digitisution lus meunt tlut even smullei lms tlut weie euiliei unuble to
luveuwideiieleuseonuccountolliglplysiculpiintcosts,uienowubletooccupy
seveiul scieens und ucioss tle countiy. Tlis lus tiunsluted into incieusing box olce
ievenues loi sucl lms. Tleieloie, even tlougl FlTnuTigctieleusedinneuily3,300
scieens,ltomSydncywirnlovc u mucl smullei lm witl un unknown new cust wus
ieleused ucioss neuily 900 scieens. Tlis wus unleuid ol loui oi ve yeuis ugo, wlen
only u big budget lm would ieleuse in uiound 1000 scieens.
Fi!ms increasing!y using socia! media and other innovative marketing forms
Sociul mediu lus incieusingly become un impoitunt tool loi lm pioduceis und
muiketeis to piomote lms und guuge uudience ieuction beloie tle ieleuse ol u lm.
Pioduceis uie incieusingly ieleusing tle piomos und tiuileis ol tleii lms on sites like
YouTube.Apuitliomtlut,tleyuieulsouctivelycieutingweb-pugesunduccountson
sites sucl us Twittei und Fucebook to cieute luitlei buzz uiound tle lm.
Apuit liom using sociul mediu, lm pioduceis uie incieusingly looking ut innovutive
loims und mediu to muiket tleii lms. Ru.Oncloiexumple,extensivelyusedguming
undunimutionusmuiketingtoolstoimpiovemonetisution.Cungso|Wusscyput
employedinnovutivemuiketingstiutegiesloipiomotion.Sociulmediuwusuvitul
uspectoltlemuiketingcumpuignwliclincludedcieutinguccountsolkeycluiucteis
in Hindi on Twittei uccounts, so us to keep it consistent und ielevunt witl tle lm. Tle
pioduceisinucoupleolcitiesulsoputupposteisolkeycluiucteisinupseudoelection
cumpuign in line witl tle oveiull tleme ol tle lm.
Experimentation with new monetisation mode!s for the home video segment
Tle lome video segment continued its declining tiend in 2011 und tle ist lull ol
2012piimuiilyduetopiiucyundtleclullengesinmonetisinglomevideoondigitul
plutloims. Revenues liom tle sules ol lm CDs und DVDs uie sliinking due to people
sliltingtosubstitutes,puiticuluilynew-ugemediuplutloims.Tleieisunincieusing
tiend ol lms being viewed on peisonul devices (mobile plones und tublets), inteinet
plutloimssuclusYouTubeundDTHPPVmodel.InJunuuiy2011,ReliunceHome
VideoinpuitneislipwitlYouTubeluuncledunonlinepiemieieoluubungg.YouTubes
Box Olce clunnel lus ovei 1,S00 lms tlut vieweis cun wutcl loi liee. Home video
compuniessuclusReliunceundRujsliiluvenowstuitedolleiinguppsundwebsites
tlut ullow vieweis to ient oi stieum lms. Sucl expunsion stiutegies to new-uge mediu
uvenuesstiesssliltingvieweisliptiends.
Anci!!ary revenues spira! upwards
Tle yeui 2011 suw un incieuse in tle vieweislip ol botl Hindi und Englisl lm
clunnels. Tlis lus led to positive iesponses liom lm bioudcusteis und udveitiseis. An
incieusing numbei ol lms witl bunkuble stuis uie uble to sell bioudcusting iiglts even
beloie tleii ieleuse. Witl top lm clunnels sucl us Stui Gold, Set Mux, Zee und Colois
constuntly competing to secuie tle sutellite iiglts ol luige ieleuses, lm pioduceis luve
unincieusedbuiguiningpoweileudingtoligleicostsbeingwitnessed.Pioduction
louses uie cupitulising on tlis in oidei to iecovei u signicunt piopoition ol tle
costs beloie tleii lms lit tleuties. Agnccpurnwusubletoiecoveicloseto60%ol
itspioductioncoststliougltlesuleolitssutelliteiiglts.Howevei,insomecuses,
uiiing ol lms on television soon ultei tleii tleutiicul ieleuse lus u negutive impuct
on box olce ievenues.
Tax and regulatory issues
Deduction of expenditure on !m production and acquisition of
distribution rights
Rule9A/9BoltleITRulespiovidestlemunneiolcluimingdeductionwitl
iespect to tle expendituie incuiied in connection witl tle pioduction ol u lm
oiucquisitionoldistiibutioniiglts.TledebuteiswletleiRule9A/9Bovei-
iidesullotleipiovisionsoltleITAct(loie.g.cupitulexpendituievs.ievenue
expendituie,cuslsystemoluccountingvs.ucciuulsystemoluccounting,
disullowunce ol stututoiy puyments not mude witlin tle due dute ol ling ol
tuxietuin,etc.)oitleincomeneedstobecomputedbusedontlepiovisions
oltleITAct(witloutiecouisetoRule9A/9B).Tleissuelusgeneiuted
signicunt debute, but tle juiy is still out on tle subject. Also, tleie uie vuiious
otleiinteipietutionulissuessuiioundingRule9A/9Bunduninloimeddecision
cunlelpminimisepiotiuctedlitigution.
Joint production of !ms between Indian producers or between Indian and
foreign producers
Tleieisunexposuietlutsuclunuiiungementiesultsintleconstitutionol
unAOP,tuxedususepuiuteindependentlegulentityupuitliomitsmembeis.
Tletuxutionolsuclcombinedincomecunextendto40%(plussuicluige
undcess).IltleventuieisussessedusunAOP,complexitycoulduiiseloitle
eligibility to cluim tux tieuty benets, deductibility ol inteiest expendituie,
uvuilubilityolcieditloituxeswitlleld,etc.
Transfer pricing difcu!ty in comparabi!ity ana!ysis
An Indiun compuny is enguged in tle distiibution ol lms und television iiglts
loiitsloieignpuient,wleieinitussumeslimitediiskswlileundeituking
business opeiutions. It is dilcult to deteimine u ioutine ietuin (bused on
industiy compuiubles) loi sucl ioutine distiibution opeiutions ol tle lm
distiibution subsidiuiy in Indiu. Tle nunciul inloimution uvuiluble on
public dutubuses ielutes muinly to publicly listed lm distiibution compunies
wlo typicully opeiute undei un entiepieneui model. Tleii nunciul iesults
uctuute tiemendously bused on box olce iesults in iespective yeuis (iunging
liomsuyopeiutingmuiginol100%inyeui1toopeiutingmuiginol-2S%in
yeui 2). Tlis mukes it extiemely dilcult to use sucl industiy-bused dutu loi
deteiminingundulsodelendingtiunsleipiicinguiiungementsloisucllow-iisk
lm distiibution models.
Sluiing ol content (sucl us lms und television seiies) und content syndicution
between television clunnel gioup compunies uie dilcult to benclmuik us tle
piicingoltlesetiunsuctionsuiediivenbycommeiciulundbusinessieusons.
Olten,tleieisubuiteiexclungeolcontentbetweenclunnelcompunies.
30 PwC
Tle globul lm industiy is slowing u positive tiend on uccount ol modeiuting piice
giowtls,newmultiplexesundugiowtlin3Dscieens.Giowtlinnewuvenuesloi
tle electionic distiibution ol lms is giving u boost to tle lm industiy. Mujoi luctois
ullectingtlemuiketinunygivenyeuiuietlequulityolieleusesundtleiiuppeulto
consumeis,wlicliemuinstiueeveiywleieglobully.
Keytiendsemeigingintleglobulmuiketuieuslollows:
Screening of 3D !ms he!ping raise ticket prices
New multiplexes und giowtl in 3D scieens will stimulute tle box olce muiket,
ultlougltleinciementulimpuctol3Disdiminislinginsomecountiies.Wlile3D
lms continue to uttiuct uudiences in EMEA, Asiu-Pucic und Lutin Ameiicu, tleii
noveltyisludingintleUSundCunudu.Tleligleipiicepoints,undtlepeiception
tlut tle quulity ol tle lms tlemselves lud diminisled, uccounted loi tle diop in
tleii ievenues. In tle US, consumeis weie ieluctunt to puy tle suicluige loi u 3D lm
notconsideiedumust-see.Tlismeunsexlibitoismuylooktolimitpiicegiowtlloi
3D lms, leuding to u nuiiowing in tle piice dilleientiul ovei lms in 2D. Howevei, in
otleipuitsoltlewoild,3Dcontinuestogiowutusteudypucewitlmoieundmoie
3D lms ieleused in tlese countiies.
India perspective: Ju |ms in lndiu utc on u tisc, wirn u numbct o| upcoming Bo||ywood
tc|cuscsscrrobctc|cuscdinJu.Mu|rip|cxuudicnccsutcwi||ingropuy50ro100
lNR motc |ot u good quu|iry Ju |m in lndiu. Howcvct, givcn rnc quu|iry o| |ocu| Ju
ptoducrion und rnc |ucr rnur u rntcc-nout |m wirn Ju g|usscs cun bc quirc uncom|otrub|c,
rnisrtcndmuytcvctscinrncncut|urutc.
Digita! cinema boosting cinema advertising revenues
Fuvouiuble demogiuplics und un expunding box olce muiket will boost cinemu
udveitisinguswilltlemigiutiontodigitulcinemubyieducingtlecostsund
complexitiesolscieeningudveitisements.Cinemuudveitisingisuppeulingbecuusetle
uudienceisnotdistiuctedbyelectionicmediuundislocusedontlescieen.Filmsulso
ullowloilongeiudstluntle30-secondoi60-secondudsseenontelevision.Witlmost
scieensnowdigitul,itiseusieiundlessexpensiveloiudveitiseistodistiibutetleiiuds
digitully,tleiebyenluigingtlepotentiuluiiuyoludveitiseistlutmuypuiticipute.
India perspective: Wni|cdigiru|cincmuinlndiuissnowingconsidctub|cgtowrn,cincmu
udvctrisingtcmuinsurunusccnrsrugc.Advctrisctsutcycrrousscssrnc|u||porcnriu|o|
cincmuudvctrisingundrnc|uclo|unymcusutcmcnrmccnunismotsrudyronign|ignr
irs bcncrs nus nor nc|pcd rnc murrct. Wirn utound rntcc mi||ion udmissions, lndiu is onc
o| rnc |utgcsr mutlcrs |ot |ms und us nign|ignrcd ubovc, ir wou|d bc di|cu|r ro murcn u
cuprivcuudicnccwnicnisrnis|utgc.Wirnuninctcusingnumbcto|digiru|sctccns,wccun
cxpccrcincmuudvctrisingrogtowinrnc|urutc.
E!ectronic video expanding at the cost of home video
A sloitening lome video window und expeiiments in modicution ol tle cuiient
windowingstiuctuie(e.g.,piemiumVODundduy-und-dutedigitulieleuses)will
benet electionic video. Competition liom electionic plutloims will udveisely ullect
tleplysicullomevideomuiket,leudingtospendingdeclinesinmostcountiies.
Howevei,giowtlintleblu-iuyplutloimislimitingtledeclinesinplysicullome
video.Neveitleless,tleblu-iuymuiketisgiowingmoieslowlytlununticiputed,
leudingustopiojectongoingdecieusesloiplysiculsell-tliougl.WlileDVDustle
pieleiied mode ol lome video distiibution is declining, blu-iuy, owing to its benets
olluigecupucity(loiHDmovies)undceituincontioloveipiiucy,isslowingsteudy
giowtlglobully.
India perspective: Snotrcningrncrncurticu|rorncnomcvidcoundpuy-pct-vicwwindow
isnuvingusimi|utc||ccronrncpnysicu|nomcvidcomutlcrinlndiu(tcnru|uswc||us
sc||-rntougn).B|u-tuynus|ui|cdrocuprutcrncmutlcrinlndiuducro|uclo|popu|utiry
o|Huconrcnr.Rumpunrpitucynusnoru||owcdcxisringnomcvidcop|uyctsrocxpundin
rnismutlcr.
E!ectronic distribution of movies on rise g!oba!!y
Emeigingovei-tle-topundstieumingseivicesundtlegiowtlindigitulcubleund
teleplonecompunyTVsubsciiptionseivicestlutpiomotevideo-on-demunduie
expectedtoboostelectionicdistiibution.Tleuvuilubilityolcontentontubletsundotlei
devicesuswellusinteinet-connectedTVswilllosteigiowtlinelectionicdistiibution.
Netix, witl moie tlun 20 million subsciibeis in tle US und 1 million in Cunudu, is u
mujoipluyei.SmuitTVswitlinteinetconnectionsuieenublingtlismuiket.Content
liom Netix, Hulu Plus und otleis cun be uccessed diiectly on u TV set, u moie uppeuling
plutloimloiviewing.
India perspective:lndiuissri||unusccnrmutlcr|otovct-rnc-ropundinrctncrsrtcuming.
lucl o| good btoudbund srtucrutc nus |utrnct dcrcttcd p|uycts sucn us Ncrix und Hu|u
|tom cnrcting rnc mutlcr. Tnc counrty is jusr ubour gcrring uscd ro lFu und lCu ur T\s,
undsmutrT\sutcsri||cxpcnsivc|otrncuvctugcnouscno|d.Howcvct,unumbcto|p|uycts
sucn us YouTubc nuvc srutrcd ro snowcusc |ms on rncit on|inc cnunnc|s. ln |urutc, wc cun
cxpccrrosccmovcmcnrrowutdsc|ccrtonicdisrtiburion.
Going forward
TleIndiunindustiyispiojectedtogiowliom9S.8billionINRin2011to1S3.6billionINR
in 2016 slowing u CAGR ol 9.9% loi tle next ve yeuis ultei iegisteiing u giowtl ol 9.4%
in2011.Weexpecttlelollowingkeydevelopmentsintlenextlewyeuis:
Indian box ofce expected to overtake the UK and Austra!ia markets in the next
few years
Tle Indiun box olce is umong tle lustest giowing muikets in tle woild next only to
Clinuumongmuiketsgieuteitlun1SbillionINR.Itisexpectedtlutintlenextlew
yeuis, tle Indiun muiket will suipuss tle UK muiket und will be tle ltl luigest muiket
intlewoildby2016.Tlisgiowtlinnumbeisispiimuiilydiivenbytleincieusing
numbei ol big budget lms wlicl uie not only looking to tup tle locul muiket, but uie
ulsowillingtospendtoexpundtleiiieuclintleoveiseusmuiketwleieATPisliglei
tlun in Indiu. Tle domestic box olce is estimuted to continue its upwuid tiend und
giowliomtlecuiientsizeol68.0billionINRin2011to112.0billionINRin2016.
Oveiseuscollectionsuieexpectedtogiowliom8.SbillionINRin2011to13.8billion
INRin2016.
Home video market expected to continue its dec!ine
Tledecliningtiendislikelytocontinueintlelomevideosegmentwliclwillneedto
cupituliseontleemeigenceolnewdigitulplutloimstosustuinievenuesgoingloiwuid.It
isexpectedde-giowliom3.8billionINRin2011to0.9billionINRin2016.
Anci!!ary rights to remain the fastest growing sub-segment in !ms, to increase its
share in overa!! pie
TledemundsupplymismutclstemmingliomulimitednumbeiolA-listieleusesis
iesultinginligleiucquisitioncosts.Tlistiendisexpectedtocontinueintlesloitteim.
Bioudcusteis uie ulso looking to ucquiie exclusive sutellite iiglts loi lms und selectively
scieentleminoideitocupituliseonluigeivieweislippeiscieeningunddilleientiute
tlemselves liom competitois bused on tleii lm libiuiy. Tlis bid loi exclusivity is ulso
diiving liglei ievenues in tlis segment. Tleie is good potentiul loi lm meiclundising.
Howevei, witl tle exception ol Ru.One, lew big budget lms luve uttempted tlis on u
luige scule. Tle tiend ol udveitising destinutions tliougl lms is expected to continue
ustlesedestinutionstiytoieuclouttoIndiuntouiists.Ancilluiyievenuesuieexpected
togiowliom1S.SbillionINRin2011to26.9billionINRin2016.
32 PwC
Seeing it now: The hidden value of digital rights lockers
Foitoduystecl-suvvyconsumeis,tlesliltliomplysiculmediutoonlinedistiibutionisull
uboutguiningtleubilitytouccessundmunugecontentondemund.Tleywunttouccess
contentliommultipledevices.Mobilityiskey.Tleyulsowuntundexpecttleubilityto
downloud, sluie und stoie eveiytling liom videos und music les to lull-lengtl lms.
EnteiDRLs.Busedoncloudstoiugeteclnology,DRLsluveunlimitedstoiugecupucity,ullow
loiligltning-lustdownloudsundimpiovetleubilitytouccessundsluiecontentucioss
multipledevices.
Recently,AppleluuncleditsiCloudseivice,stoiinguseicontentundmukingituvuiluble
ucioss ull Apple devices. Tlis lus signicuntly clunged tle wuy consumeis stoie inloimution
unduccessnewmediucontent.
A key nding liom insiglt sessions conducted by PwC in tle US witl consumeis uged between
18und30istluteventecl-suvvyconsumeisuppeuitoluvelittleuwuienessundundeistunding
olpioposedcommeiciulusesolDRLstomunugemediuundenteituinmentcontent.
Consumers have !itt!e awareness and understanding of digita! rights storage.
TleieisubusicneedloibusinessestocleuilyexpluintlevulueolDRLs.Wlileconsumeis
uppeuitobesomewlutlumiliuiwitltleconceptolcloudstoiuge,tleydonotluveusolid
undeistunding ol tle benets und udvuntuges. Howevei, tley uppeui inteiested in leuining
tlelollowing:
- 0n|imircdsrotugccupuciry.Consumeisexpiesseduninteiestintlepossibilityolstoiuge
beyondtleiicuiientluiddiives.Cloud-busedstoiugeistleideulwuytouccessudditionul
stoiugewitloutieplucingyouiluiddiive.
- Spccd.Tleubilitytoiupidlyuccessunddownloudtomultipledevicesisligllyuppeuling.
- 0n|imircdubi|iryroucccssundsnutcconrcnrundimptovcdinrctopctubi|iryo|dcviccs.Tlisis
ciiticulloitlepiomotionoldigituliigltslockeis.Foimost,tleubilitytosluiecontent,
especiully ucioss multiple plutloims, is u luge benet. Digitul iiglts lockeis slilt tle
buiden ol tiunscoding und stoiing extiemely luige video les uwuy liom individuul useis.
When asked to envision the future of !m ownership, consumers consistent!y identify
the fo!!owing key themes:
- Oneplucetostoieeveiytling
- Abilitytosluiecontentwitlpeeis(especiullyimpoituntumongyoungeigioup)
- Abilitytodownloudinstuntlytounyundulldeviceswitloutiestiiction
- Abilitytouccessunywleiemobilitybeingtlekey
- Quulityundiminisledundnotiestiictedbydevice
Consumers sti!! have the fo!!owing concerns and questions about digita! rights storage:
- Ownctsnip.Wloisiesponsibleloimuintuiningtlelockei?
- Obso|csccncc.Wlutluppenstotlecontentolyouilockeiiltlenextbigstoiugeoption
comesulong?Willyouluvetopuyloiyouicontentulloveiuguin?
- lnrctopctubi|iry.Wlutilulltlemujoistudiosunddevicemunuluctuieisdontpuiticipute
inucommonDRLuppioucl?Willweluveunotleiplutloimbuttlelikeblu-iuy/HD-DVDoi
VHS/betuoimulwuie?Asoneconsumeisuid,Wlutilsomebodyuploudsuviius?Tlen
youdluveuviiusonumultitudeoltlings.
- Tnc|r.Wlutilsomeoneumussescontentinulockei,undtlensellstlepusswoid?
TleimplicutionloitlepiovideisolDRLsistouddiesstleseconceinsinuwuytluttle
benets loi tle consumei exceed tle cost tleieol.
05
Print
2011 - 2016
34 PwC
Lustyeui,tleIndiunpiintindustiywitnessedmodeiutegiowtl.Itsievenueincieusedliom
177.7billionINR(2010)to190.7billionINRin2011.Newspupeiudveitisingwitnessed
ligleigiowtltlunsubsciiption,tlouglitwustempeiedbytlemodeiuteeconomicclimute.
Tlemuguzineindustiysuwumuiginulgiowtlin2011.Tleindustiylusbeenslowingdown
loitlepustlewyeuisundtleeconomicslowdownullecteditluitlei.Itsmuiketsizeis
estimutedtobe20.4billionINRin2011uscompuiedto19.6billionINRin2010.
Tlissluggislgiowtlcunbeuttiibutedtotlelossinieudeislipoliegionulmuguzinesus
peiieudeislipsuivey.Tiuditionully,tleveinuculuipublicutionsluvebeenwidelyieud.
Howevei,oveitlelustlewyeuis,ieudeislipsuiveyindicutestlutmostoltlesemuguzines
uielosingtleiiieudeislipbuse.Foiinstunce,Bu|utumu(Muluyulum)undAnundu\ilurun
(Tumil)wliclweieumongtletopmuguzinesulewyeuisbuckluvelostieudeis.
Tlepiintudveitisingwusulsoullectedbytleunluvouiublemucioeconomicconditionssucl
us iise in oil piices, iupee depieciution, ligl volutility in stock muiket, iise in inution und
tle oveiull globul economic slowdown. Wlile tle ist lull ol tle yeui suw some tiuction due
totleICCwoildcupundIPL,tleiewususlowdownintlesecondlull.Diopinspendson
udveitisementwuswitnessedinmostmujoicutegoiiesin2011.TlesluieolBFSI,educution,
ietuil,telecom,inteinetundDTHslidin2011uscompuiedtotle2010levels.
Print industry 2010 vs 2011 (billion INR)
Key trends
Nationa! p!ayers !ooking to regiona! markets to gain advertising
Tleiegionulpiintmediumunugedtoguintleuttentionolevennutionuludveitiseis.
Tlelutteiieulisedtlelugepotentiuloltleiegionulpiintmuiketundspendsweie
diiectedtleie.Witlmetiosulieudybeingsutuiuted,iegionulmuiketspiovideumple
scopeloigiowtlintlemediusectoi.Toiideontlepositiveudveitiseisentiment,seveiul
newspupeisluveluuncledloculeditionsiniegionullunguuges.Foiinstunce,TncTimcs
o|lndiulusenteiedKeiuluwlileTncHindulusluuncleditstliideditioninKozlikode,
besidesintioducingupiintinglucilityinMoluliwliclwillseivetlestutesolPunjub,
Huiyunu,undHimuclulPiudesl.
Newspapers and advertisers joining hands to create innovative content formats and
advertisement campaigns
Duiing tle yeui, some notewoitly innovutions weie seen in tle eld ol content deliveiy;
loiexumple,tleintioductionoltleHTMini(uquickieudloimuttubloid)loimetio
commuteisbyHTMediuLtd.Also,tukingluitleiitsTulkingNewspupeicumpuignin
2010,VolkswugenpublisleditsJettuudsintlickundslinypupeiinTncTimcso|lndiu
undTncHinduin2011.InSeptembei2012uswell,itcuiiiedtlistlemeloiwuidundused
vibiutoistocieuteusliveiellectloitlePoloundVentoinTncTimcso|lndiu.
Hindi newspapers showing hea!thy growth in readership
Seven out ol tle top 10 Hindi duilies slowed giowtl in ieudeislip in tle ist quuitei
ol2012.TlegiowtlisuidedbytleimpiovingmucioeconomicconditionsinHindi
speukingiegions.Besides,tletlieeHindispeukingstutesnumelyBilui,Jluiklund
undUttuiPiudeslluveseenunincieuseinliteiucyiutesliom2001to2011.Tleluuncl
olneweditionsbymunyHindinewspupeisulsolelpedtleminguineiingieudeislip.
Inuddition,tlesestutesluvelowieudeislipundciiculutionpenetiutionumongtleii
liteiutepopulution,indicutingscopeloiluitleiincieuseinieudeislipbuse.
Newsprint prices affecting protabi!ity of print p!ayers
Globully, tle demund loi newspupei lus ieduced signicuntly in developed countiies
duetodigitulpenetiution,tleiebyieducingtleneedloinewspiint.Tlus,tle
newspiintmunuluctuieisintleUS,CunuduundEuiopeluvesubstuntiullyieduced
tleiiopeiutionstomuintuintlenewspiintpiices.Accoidingtomujoipublisleis,tle
uvuilubilityolwustepupei,wliclisiequiiedloipioductionolnewspiint,intleWest
lusieducedbyS0%undinEuiopeby20to30%.Tlissloitugelusludunudveise
impuctontlepiicesoliuwmuteiiul,tlusluitleiullectingnewspiintpiicesinIndiu.
Otleiluctoisiesponsibleloitlelikeincludeiiseinciudeoilpiices,likeinlieiglt
cluiges(loiimpoitolnewspiint),iupeedepiecution,distiibutioncost,employeecost,
costolpiocuiingcontentundtlemismutcloldemundundsupply.
Newspupeipublisleisuseumixoldomesticundinteinutionulnewspiints,undcompunies
vuiytlispiopoitiontobetteimunugecostsundtlequulityolnewspiint.Sincebotl
domesticundinteinutionuliutesuiegiowing,publisleismuynotbeubletoieducecosts
signicuntly, even by clunging tlis mix.
Vernacu!ar dai!ies witnessing s!owdown in readership but sti!! ho!d potentia!
Reudeislipsuiveyindicutestluttleveinuculuiduiliesdidnotluietoowellin2011.
Tletop10lunguugeduiliesluvewitnesseducumulutivediopolmoietlunSlukl
ieudeis in tle ist quuitei ol 2012 us compuied to quuitei loui ol 2011. Except loi
CujuturSumucnut,ullotleiduiliessuwudiopinieudeislip.
Howevei,tlesemuiketscontinuetololdpotentiul.Tlecoveiugeiutio(uveiuge
peicentugeconsumeisieudingmoietlunonenewspupei)olsoutleinmuiketsis
signicuntly lowei tlun tle Hindi speuking stutes, indicuting potentiul to incieuse
ieudeibuse.E.g.,instutessuclusTumilNudu,Kuinutuku,AndliuPiudeslundKeiulu,
onunuveiugeonly20%to30%olconsumeisieudmoietlunonenewspupeiwleieus
inHindispeukingstutesolBiluiundJluiklund,tlisnumbeiisusliglusubout40%.
Tlisindicutestlutpiintpluyeiscuntuigetexistingieudeisintlesestutestoexpund
tleiiieudeibuse.
Inuddition,munyiegionulmuiketsluvelowpenetiutionumongtleiiliteiute
populution,liglligltingtlepotentiultocuptuienewieudeisintleseuieus.
Vernacular readership penetration
State Penetration among literate population (%)
8FTU#FOHBM 15
Maharashtra 20
Karnataka 20
Andhra Pradesh 25
Tamil Nadu 25
Niche magazines sustaining growth in circu!ation as we!! as advertising revenue
Tlemuguzineindustiyseemstobemovingliomgeneiulinteiesttonicleundspeciul-
inteiestmuguzines.Focussingontuigeteduudiencesislelpingtlemtoieuliseliglei
ciiculutionievenueundguinuttentionoludveitiseis.
CondeNustsiecentluunclolAtcnirccrutu|uigcsr,tuigetedutuseislookingut
beuuticution ol tleii lomes, is piiced ut 1S0 INR in line witl its otlei luuncles in pust
suclusCQ.Tliscoveipiiceismuclligleitluntlecoveipiicecluigedbygeneiul
muguzines, wlicl uie in tle iunge ol 10 to S0 INR. Indicuting u condence in tleii ieudei
36 PwC
buse,munyniclemuguzinesluveincieusedtleiicoveipiice.E.g.,tlecoveipiiceol
Co||uigcsrliomtleIndiuToduyGioupisexpectedtoiiseliomtlecuiient100to1S0
INR.Muguzinestuigetedutstudentspiepuiingloivuiiouscompetitiveexums,sucl
usPturiyogiruuutpun,CompcririonRc|tcsnct,CkToduy,etc.luveulsoincieusedtleii
coveipiices.
Cuslinginontleincieusedinteiestoludveitiseisiniegionulmuikets,nicle
muguzinesuieluunclingiegionuleditionsuswell.SomeoltleseincludeHc||o,
lonc|yP|uncr,BcrrctPnorogtupny,Fnrtcptcncutundlcminu.
App for magazines: Will it aid the ailing
magazine industry?
Ineuily2011,AppleunnouncedtlutiPuduseiswillbeubletosubsciibeto
muguzinestliouglitsiBooksuppliomtlelutteipuitoltleyeui.Itwouldbe
downloudedtotleiidevicesintlesumewuyustleZinioupp.Tlecompuny
plunstoietuin30%oltlesubsciiptionlee,witltlepublisleigettingtle
iemuining70%.SomepublisleisuieconsideiingusinguGoogleveision,wlicl
will only ietuin 10% ol tle piot.
ZinioulsoludtoupduteitsiPudupptocomplywitltleAppleleeiules,witlin-
upppuiclusesnowmudetliougluseisiTunesuccounts.WitliPudpuicluses,
publisleiswillnotluveuccesstocustomeiinloimutionund,initiully,uie
iesistingtlismodelundlookingloiulteinutiveoutlets.
InIndiu,ZiniosuppliesmostoltlepopuluiEnglislmuguzinessuclusli|m|utc,
Hc||o,lcminu,lndiuToduy,BusincssToduy,etc.Itwillbeinteiestingtoseeilsucl
uppscunopenulteinuteievenueclunnelsloitlemuguzinepublisleis.
Incountiieswleieumujoiityollouseloldsluvebioudbundconnections,newspupeisluce
eiosioninpiintunitciiculutionusieudeissliltliompiinttoonlineloiinloimution.Tle
sliltwillcutintobotlciiculutionspendingundpiintudveitising.Howevei,incountiies
wleie bioudbund penetiution is low, tleie is less competition liom tle inteinet, beneting
botlciiculutionspendingundpiintudveitising.
Tleeconomyisulsoullectingudveitisingundciiculutionspending,piovidinguliltin
countiieswleieconditionsuieimpiovingwliledumpeningspendingincountiieswlose
economiesuieweuk.
Howevei, newspupeis luve popului websites, und iising tiulc on tlose sites will boost
digituludveitising.Distiibutionolnewspupeistotubletsonupuidbusiswillgeneiute
upuiddigitulciiculutionmuiketusconsumeisuppeuitobewillingtopuyloicontent
deliveiedtotublets.
Indiuisoneoltlelustestgiowingcountiiesincuseoldigituludveitisingievenues.Tlougl
tlebuseissmull,youngpopulution,uddictedtotleweb,itisoneoltlepiimuiyieusons
loigiowtlintlissegment.
Tleglobulpiintindustiyissulleiingliomloweiciiculutionundisseekingdigitulievenue
tosustuinexistingbusiness.Tlisismoiepiominentincountiieswitlliglbioudbund
penetiution,wleieieudeisluveeusyuccesstoinloimutionontleinteinet.Populuinews
websites uie diuwing tiulc und boosting digitul ievenue.
Keytiendsintleglobulmuiketuieuslollows:
Newspaper advertising moving from print to digita!
Intlewesteinwoild,witlgiowinguvuilubilityollieeonlinenewscontent,muny
newspupeiieudeisluveswitcledtoieudingnewsontleinteinet.Newspupeiwebsites
uieumongtlemostwidelyvisitedontleinteinet.Also,onlinenewspupeiieudeisuie
youngei und moie uluent tlun tleii piint counteipuits, olleiing udveitiseis u moie
uttiuctive demogiuplic piole tlun in piint. As u iesult, newspupei udveitising is going
digitul.InNoitlAmeiicu(USAundCunudu),newspupeipiintudveitisingdeclinedby9%
in2011wlilenewspupeidigituludveitisinggiewby8%.
India perspective: Mosrncwspupctsroduynuvcdigiru|ptcscnccinrnc|otmo|wcbsircsund
c-pupcts.Mujotp|uyctsnuvcu|soto||cdourmobi|cupp|icurionsundupps|otrub|crs(c.g.,Tnc
Timcso|lndiuundHTMcdiu).Tncynuvcsrutrcddigiru|utcnivingo|rncitconrcnr.Howcvct,
ncwspupctudvctrisingissri||dominurcdbyptinr.Asdigiru|cdirionsguinpopu|utiry,rncyutc
cxpccrcdrogcru|utgctsnutco|ncwspupctudvctrising.
Print p!ayers trying to offset dec!ine in print circu!ation revenue by monetising
digita! content
Piintciiculutionspendingisdecliningundtoollsettlis,publisleisuiesteppinguptleii
elloitstogeneiuteievenuetliougldigituldistiibution.Globulpluyeisuielookingoutloi
innovutivewuyssuclusintioductionolpuywull,onlinesubsciiption,commissionliom
peiloimuncebusedmuiketingplutloim,etc.tomonetisetleiicontentundbuildulteinute
ievenuestieums.E.g.,Tnc Ncw Yotl Timcsintioducedpuywullin2011wlicliequiies
useistopuyloiuccessolcontentbeyondstutednumbeioluiticles.TncBosronC|obclus
twodigituleditions:ulieeveisionundupuidveision.Tubletuseisuieuccustomedtopuy
loicontentonmobiledevicesunduiebeingtuppedbynewspupeis.
India perspective: Cuttcnr|y,mosrdigiru|conrcnrissri|||tcc.lcgucyp|uyctssnou|dsrutr
dcvc|opingmodc|s|otmoncrisuriono|rncitptcmiumconrcnr.Tub|crsundsmutrpnoncusctsu|so
ptcscnruporcnriu|tcudctsnipbuscrnurwi||bcwi||ingropuy|otncwsconrcnr,usinrncWcsr.
Newspaper digital vs. print advertising growth (CAGR 2011-2016)
38 PwC
Socia! media encouraging readers to be active consumers of news
Tleglobuleconomyisulieudysmittenbytleplenomenuolsociulmediu.Asmoie
timeisbeingdevotedbyonlineuseisonsociulnetwoikingsitestoconnectwitlotlei
useis,expiessviewsundsuggestions,ieudeisluvestuitedpluyingtleioleolnews
contiibutoisusuguinsttleiitiuditionulioleolnewsconsumeis.
India perspective:ln|incwirnrncg|obu|sccnutio,sociu|mcdiuundncrwotlutc
occupying motc on|inc rimc in rnc counrty. luccbool u|onc uccounrs |ot motc rnun u |rn
o|rncroru|rimcspcnron|incbyusctsinlndiu.Munyncwspupctsnuvcconrcnrrnurcunbc
snutcdbyusctsonrncitsociu|mcdiupugcs,bcsidcsnuvinginrctucrivcpugcsondi||ctcnr
sociu|mcdiusircs.
Newspapers focussing on customer retention initiatives to maintain brand !oya!ty
Intleluceolincieusedcompetitionliomotleinewspupeisuswellusneweiloimuts
olnewstiunsmission,locusoncustomeiietentionlusincieused.AxelSpiingeilus
developedumeusuiementundevuluutionsystemtomeusuieitsunnuulcustomei
ietentionindex,wliclindicutessutisluctionundloyultyolitsieudeisundudveitising
customeistliouglmonitoiingluctoissucluspeiceivedquulityolpublicutions,tle
biundloyultyolcustomeis,iepeutpuicluseiutes,unditsiespectivecompetitive
udvuntuge.
India perspective: Wni|clndiunptinrcompunicsnuvcnor|otmu|iscdmccnunismsro
mcusutcundcvu|uurccusromcttcrcnrion,mosro|rncmconducrcusromctcngugcmcnr
ucriviricssucnusconrcsrs,|uitsundptomorionu|cvcnrsonutcgu|utbusis.F.g.,rncHindi
dui|yHindusrunconducrsununnuu|ptogtummcPturibnuSummun|otcngugcmcnr
umongrncyourn.
Magazine pub!ishers adopting digita! avenues
Digitulieudeislipisuppeulingtoudveitiseisusdigituleditionspiovideudveitiseis
witltoolsnotuvuilubleinpiint.E.g.,ieudeiscunbuypioductsdiiectlyliomunudon
uwebpugebyclickingtleudundgoingtouviituulstoie.Tleudveitiseigeneiutesun
impulsesule,undtlemuguzineeuinsucommission.Tleyulsocunuccommodutevideo
udveitising,wliclisoneoltlelustest-giowingcomponentsoltleoveiullinteinet
udveitising.Inuddition,globuluudienceismoieuccustomedtopuyingloidigitul
content.Hence,muguzinesuieubletoluunclpuiddigituleditions.E.g.,Condenust
piovidespuiddigituleditionsonvuiiousplutloimssuclusplonesundtublets.In
Noitl Ameiicu, muguzines uie umong tle most-tiulcked websites, witl muny titles
uveiugingmoietlun10millionuniquevisitoiseuclmontl.Hullolullmuguzine
ieudeisieguluilyuccessdigituleditions.
India perspective: lcudinglndiunmuguzincsu|sonuvcon|incptcscnccrnougnrnc
busincssmodc|sutc|uit|ynusccnr.Tnclndiuncdirionso||otcignmuguzincsutcs|ignr|y
motccvo|vcdundnuvcscgtcgurcdconrcnrundnigncton|incuds.F.g.,Aurocutptovidcs
ptcmiumconrcnrrotcgisrctcdmcmbctsundsuppotrsmunytc|cvunruds.Wirninctcuscin
btoudbundpcncrturionundmobi|cinrctncrucccss,rnccounrtycunu|socxpccrirson|inc
tcudctsniproinctcusc.Muguzinccompunicssnou|dudoprmodc|s|otmoncrisuriono|rncit
conrcnrinrncncut|urutc.
Key technology trends
E&M ims, woildwide, devote u signicunt clunk ol tleii budgets to opeiutionul IT woik
iutleitluntiunsloimutionulITpiojects.Additionully,mostoltleITlunctionisin-souiced.
Tlemediulundscupeisincieusinglybeingpopulutedbyniclenon-tiuditionulpluyeissucl
usTwittei,StoiilyundFlipbouid,wlotukeonmicio-lunctionsintlesystemiutleitlun
incoipoiutingtleveiticulintegiutionoltiuditionulmediupluyeis.Tlus,itmukessense
tolollowpiinciplesolleunoigunisutionsbyoutsouicingnon-keyITundweb,undmobile
upplicutiondevelopmentundsuppoitingspeciulistpluyeis.
Indiun mediu ims uie likely to ieup benets lollowing tle go leun tiend euily us well.
Additionully,loigingcontentsluiingpuitneislipswitluggiegutoiplutloimssuclusZite
undFlipbouidundenluncingtleiicontentsluiingpuitneislipswitlTwitteiisboundtogive
tlemtimetoiteiutetowuidstlebestuppioucltoutilisetleseielutionslipswlentleseguin
uciiticulmuss.Howevei,munugingtletiunsitioninteimsoltulentlookstobeutestingissue.
AnotleilelplulpuiudigmtounulysetlelutesttiendsintleIndiunpiintmediuspuceisto
bieukeuclbiundintoitscomponents.Abiundismudeoltlelollowing:
Legacy: Apiintbiundsimpoituntintungibleussetisitslegucy.Tlislegucyiesidesin
tlebiundsuiclives.Digitisingtleseuiclivesundbuildinguknowledge-sluiingund
colluboiutionplutloimuioundtleseisseenustlekeyclullenge.Veinuculuipluyeisluce
unuddedclullengeollimitedOCR-liiendlylontsundseuicllunctionulity.
- NFC: Openinguptleuiclivestopublicundmonetisingtleseisseenustleotleimujoi
clullenge.Intlisspuce,miciopuymentteclnologiessuclusNFCsundsquuielooktobe
piomisingtiendswliclmukepuymentpossibleundconvenient.
- Open journa!ism: AtiendisseenwitlTleGuuidiunsOpenJouinulismpiojectwleie
tleTiustopenedupitsuiclivesundAPItodevelopeistobuildupplicutionson.
Readership: Reudeis,especiullyintleSECA,Bspucesuieslowlymovingtotledigitul
spuce.Intliscontext,biundsneedtoensuiepiesenceundconnectuciossmicio-contentus
wellustlelong-loimspucestoensuieieudeiloyulty.
- Content management eco-systems:Intlepust,uduptingtotlemicio-content
plutloimswusseenusuclullengeloilegucypluyeis.Howevei,us lBNRcu|Timc
undHTTwccrsslow,upossiblewuyloiwuidistokeepieudeiskeyedinwitltle
developmentoleuclstoiy.Toenublemuinstieumingoltlisideu,tlecontent
munugementsystemscunbeieimugineduseco-systemswitlusetoltigltly-knitted
upplicutionsmunugingnewsundud-distiibutionuciossmultipleclunnelsundulsolelp
puckugeundcioss-sellud-inventoiyspuce.TleStieumbyA|-Juzcctuisupioneeiing
exumpleoltlisideu.
- Monetisation: Intlisspuce,monetisutionisseenintlecontextollieemiummodels,us
tlosepioneeiedbyTnc Ncw Yotl TimcsundTncWu||SrtccrJoutnu|.Closeilome,Tnc
Timcso|lndiulusexpeiimentedwitlmonetisingsubsciiptionolitsciestpuges.Tleideu
isstillinitsnuscentstugeundlookstoguintiuctiononlyintlemediumtolongteim.
- Socia! !istening: Consumeiunulyticsuciossplutloimsusinguvuilublestiuctuiedund
unstiuctuieddutuliomsociulnetwoiksusinglisteningtools(suclusGoogleInsiglts),is
likelytolelpbiundsellectivelytiucktleiiconsumeiengugementundpositionitellectively
intleiisulespitcl.
C!iente!e: It is undeistood tlut u piint biunds clientele uie likely to nd stickiness
witlbiundswliclluveupiesenceuciossplutloims.Intliscontext,itispiedictedtlut
enteipiise-levelupplicutionsunductuulinventoiyusugeuciossplutloimswillbeciuciul.
Additionully,CRMswillincieusinglypluyunimpoituntioleusdippinguveiugeievenues
peiuseiundCPM,CPIoiCPCievenueswillbeimpoitunttobulkuptleclientele.
40 PwC
Tablets: Self-publishing and rethinking childrens books
WitlMiciomuxundsimiluilow-costpluyeisenteiingtletubletmuiketliuy,undtle
eusyuccesstoligl-speedinteinetcouldulsobiingubouttiuctionumongsttublet
useis.Higleiengugementexpeiiencessucluslongloimieudingundinteiuctive
gumesuienutuiullysuitedtotlemedium,undpiesentoppoitunitiesloinicle
publicutionsundmuguzines(tiuvelmuguzines,loiinstunce,cunusetleplutloimto
cieutecompellingmultimediutiuvelogues)tolosteiudditionulieudeiengugement.
Publisleisoltextbooksundclildiensbooksuielikelytocupituliseontle
inteiuctivityoltlemediumundie-imuginestoiytellingusumoiedynumicleutuie;
mucllikeApplesetunexumplewitlitsiBooksupp.Witltlegoveinmentpusling
towuidsextiemelylow-costtubletssuclusAukusl,tlissectionoltlemuiketwillsee
un immense oppoitunity to dene tle leuining und stoiytelling expeiiences ol sclool
students.
Additionully, independent publisleis uie likely to nd udded tiuction witl tle
openingupolAmuzonsKindlestoieinIndiuwitltlelucilityloiindependent
publisling.Wletleitliscunspuionusell-publislingtiend,mucllikeYouTubedid
loiindependentuitists,stilliemuinstobeseen.
M&A activities in print
RecentM&Auctivitiesintlepiintsectoigivebiielinsigltoniecenttiendsintlepiint
industiyinIndiu.
Increasing interest by te!ecom companies:Recently,tlemulti-cioieinvestmentsby
ReliunceinNetwoik18Gioupunducquisitionol27.S%stukeinLivingMediubyAdityu
BiiluGioupsuppoitslonglelddesiieoltelecomcompuniestogetuccesstomediucontent
toexpundtleiibusinesses.Tlesedeulslollowglobultiendoltelecomcompuniesmoving
loiwuidliombeingcuiiieitocontentpiovidei.
Sucldeulsuieuwinwinsituutionloibotltelecomundmediucompunies.Ononelund,
sucldeulspiovidetelcoseusyuccessibilitytocontentintleeiuolcontentisking.On
tleotleilund,mediucompunieswlicluiesulleiingonuccountolclullengingmucio-
economic enviionment uie beneted due to inlusion ol liesl lunds. Telcos luve ieulised
tlutquickeiuccesstosupeiioicontentwilluctuskeydilleientiutoisloitlecompuniesund
piovidetlemwitlucompetitiveedge.Tlesedeulslelpmediucompuniesuccomplisltleii
desiietobuildsculeundgonutionul.
Go nationa! agenda of newspapers:Tleinvestmentol22ScioieINRbyBluckstone
inJugiunMediupiovidedtlelutteiwitllundstosuppoititsgiowtlplunsincluding
ucquisitions(iecentmediuiepoitssuggestsinteiestoltlegioupinbuyingNui uuniu).It
lelpedinJugiunspluntoventuieintoiegionullunguugesuciosstlecountiy.Aspluyeis
witlnutionullolduiepieleiiedbyudveitiseiswliclenubletlemtoguineibetteiiutes
und liglei ud volumes, uny inoigunic expunsion will only be beneciul to tle compuny.
StukesuletoAdityuBiiluGioupismostlikelytleiesultolLivingMediusuttemptsto
iuiselundstoexpunditspiintbusiness.TlecompunyplunstostuittleMumbuiedition
olitsexistingpiopeityMui|ToduyundmuypossiblywunttogetintotleHindinewspupei
muiket to ieup benets ol tle ligl Hindi speuking populution ol tle countiy. Acquisitions
olmujoiitystukebyDBCoipinunIndoie-busednewspupei(DivyuPiublutPublicutions
PvtLtd)undAsiunetNewsNetwoikPvtLtducquisitionoluBunguloie-busednewspupei
(KunnuduPiubluPublicutionsLtd)ulsosubstuntiutesexpunsionoliegionullootpiintsby
existingpluyeisintleindustiy.
Decrease dependence of print on overa!! revenue of the company by expanding
into other areas of business: Acknowledgingitsleuvydependenceonpiint,compunies
suclusHTMediuuiede-iiskingitsellbyexpunsionintootleiuieusolbusiness.Tleiecent
loimution ol un equul JV witl US im Apollo Globul Inc, un expunsion into educution
industiy,suppoitssuclelloits.AmuiClitiuKutluPiivuteLtds(ACK)pluntogetinto
umusement puik business is unotlei exumple ol incieusing diveisicution by pluyeis in piint.
Going forward
TleIndiunpiintindustiyispiojectedtogiowutuCAGRol9.2%oveitlepeiiod
2012-16undisestimutedtoieucl296billionINRin2016liomtlepiesent190.S
billionINRin2011.Wliletlewoildisgoingdigitul,webelievetlutinIndiu,piintwill
ietuin its stionglold, due to lowei bioudbund penetiution. Howevei, tle inuence
oldigitulnewswillonlyincieuseunducombinutionolpiintunddigitulwilldiive
giowtl.Anotleikeygiowtluieuwillbetleiegionulmuiketstlutuiesteudilyguining
impoitunceintleeyesoludveitiseis.Witlligleipiolileiutionolsmuitplonesund
tubletsinIndiu,itneedstobeseen,ildigitulcunimpucttlemuguzinemuiket.Nicle
contentinmuguzinesundlypei-loculnewsiniegionulundEnglislnewspupeiuie
expectedtobetlelocusoltleexistingpluyeis.
AstlenutionuludveitiseislooktotuigetuudienceinTiei2undTiei3cities,tleiegionul
piint mediu is expected to benet moie. Howevei, Englisl newspupeis uie locussing on
tlesetownswitlloculeditionsundcontent,givingudveitiseisunoptiontogoiegionul.
Goingloiwuid,someoltlekeylocusuieusloipiintpluyeisincludetlelollowing:
Monetisation of digita! content
Tle inuence ol digitul content is steudily incieusing, especiully umong young
ieudeis.Intleneuilutuie,piintpluyeisslouldsupplementtleiinewspupeiswitl
digitulcontenttoietuintleiiieudeisundmuintuinbiundloyulty.E.g.,integiution
ol u clussied udveitisement ucioss piint, tle inteinet und mobile will diive u
poweilulunduniquevuluepiopositiontoeveiyudveitisei.
Itisulsoessentiulloipluyeistodevelopviublebusinessmodelsloimonetisution
oldigitulcontent.Utilisingtledistiibutionpoweioltleinteinetundtleloweied
tiunsuctioncostsolleiedbytlecomputingplutloimstodesigninnovutivepiicing
meclunismscuncutulyseunewpuiudigmloitlemediuindustiy.
Focus on regiona! conso!idation
BuckedbytleincieuseinpuiclusingpoweiuciossTiei2und3citiesulongwitl
tleiiseinliteiucyiute,tleiegionulmediuconsumptionwillcontinuetoiise.Asis
tletiendwitlmunypluyeis,editionswitlloculcontentiniegionullunguugeswill
uttiuctieudeisundlelpinconsolidutingtlepositionoltlenewspupei,tleieby
uttiuctingudveitiseis.
42 PwC
06
Wired and mobile
internet access
2011 - 2016
AspeitleTRAI,Indiuluduiound23millionwiiedinteinetsubsciibeisinMuicl2012,ol
wlicluiound14millionludbioudbundconnections.Ayeuiugo,tleieweieuiound20
millioninteinetsubsciibeisolwlicl12millionludbioudbund.Inievenueteims,tlesize
oltlewiiedinteinetmuiketincieusedliomubout4SbillionINRin2010toulmostSSbillion
INRin2011.
Cuiientvuluescoiiespondtoubysmullylowinteinetundbioudbundpenetiutions
(connectionspei100people)oluppioximutely2und1%iespectively.Indiusnutionul
bioudbundpolicytuigetwustouclieve20millionsubsciibeisby2010undtlutstillseemsu
luiidistunceuwuy.
Tlenumbeiolinteinetuseisexlibitsumoiepositivescenuiiousmunypeopleuieubleto
uccess inteinet tliougl sluied connections ut lomes, olces und cybei-cules. As pei estimutes,
tlenumbeiolinteinetuseisinIndiuludincieusedto121millioninDecembei2011liom
uiound100millioninDecembei2010.Tleielutivelylowsubsciiptionundusugelevelsolwiied
inteinet cun be uttiibuted piimuiily to Indius pooi xed-lined inliustiuctuie witl only ubout
40 million xed-lines. Actuul xed line subsciibeis uie closei to 30 million.
Incontiust,Indiuludumobileconnectionbuseol919millionuttleendolMuicl2012.
AdoptionolmobileinteinetisulsogiowingutuleultlypucewitlS1millionsubsciibeisus
uttleendolDecembei2011uscompuiedwitluiound23millionsubsciibeisinDecembei
2010. Inteiestingly, ievenues liom mobile inteinet now exceed tlose liom xed inteinet.Tle
mobileinteinetuccessmuiketsizeincieusedliomubout28billionINRin2010toovei61
billionINRin2011.
Key trends
Wired internet access
Current under-penetration to drive growth but signicant cha!!enges remain
Witlcuiientlowlevelsolpenetiution,tleIndiunwiiedinteinetuccessmuiketcungiow
oveitlenextlewyeuisontlebuckoliisingincomelevelsundligluwuienessuswellus
inteiestlevelsolyoutlpopulutioninuccessinginteinetcontent.
Howevei,wiiedinteinetuccessneedsuseistoinvestinuPCoiuluptopundumodem
(plusinstullutioncluiges)upuitliompuyingmontllyientuls,wliclcouldbeusliglus
S00to1,000INRloimodeiuteusugepluns.Incompuiison,tlemontllyARPUloiuGSM
subsciibeiwusonly97INRinJun-Mui2012.
Tleieloie, to diive signicunt udoption, it is impoitunt loi policymukeis und opeiutois to
exuminewuysinwlicltleupliontuswellusmontllycostscunbeieduced.Otleiwise,it
is unlikely tlut tle udoption ol xed inteinet und bioudbund will incieuse ut u iute similui
totlutexpectedloimobileinteinet.
Mobile internet access
Affordab!e smart-phones and data p!ans driving growth
TleIndiunmuiketulieudyluslundsetspiicedloweitlunS,000INRtlutsuppoitmobile
inteinetuccess.SeveiulGPRSundEDGEcomputiblelundsetsuieuvuilubleuteven
loweipiices.Oveitlenextlewyeuis,piicesuieexpectedtotienddownluitlei,diiving
udoption.
Alloidubledutuplunsuieulsoimpoituntloiwide-sculeudoptionolmobileinteinet.
Recently,leudingmobileopeiutoisinIndiuieducedtuiilliutesloi3Gplunsbyupto
70%. Since 3G is expected to ollei signicuntly liglei downloud speeds und un impioved
customeiexpeiience,tlismoveisexpectedtoleudtoincieuseduseiudoptionundusuge
olmobileinteinet.
44 PwC
Developed muikets luve u ielutively moie mutuie xed inteinet uccess muiket us compuied
witlIndiu.TlesemuiketsuieulsouleudolIndiuinmobileinteinetuccess.
Fixed internet access market to approach saturation !eve!s and mobi!e internet access
to grow rapid!y in deve!oped countries
Mostdevelopedmuikets,suclustleUS,tleUK,GeimunyundAustiuliu,ulieudyluveligl
louselold penetiutions ol xed inteinet. Tlese muikets uie uppioucling sutuiution witl
70to80%louseloldpenetiutionulieudyuclieved(evenligleiinsomecountiiessuclus
Jupun).Tleyuie,tleieloie,likelytoexlibitmodestgiowtliutesoveitlenextlewyeuis.
Ontleotleilund,mobileinteinetpenetiutionisexpectedtogiowiupidlyindeveloped
muiketswitlincieusingudoptionolligl-speedteclnologiessuclus3Gund4Gcoupled
witltleiisingpievulenceolsmuitplonesunddonglestlutpiovidegooduseiexpeiience.
Goingloiwuid,countiiessuclustleUS,tleUK,GeimunyundAustiuliuuieexpected
toexlibitiupidgiowtlwitldouble-digitgiowtliutesoveitlenextlewyeuis.Even
developingcountiiessuclusClinuuieexpectedtowitnessiupidlyiisingmobileinteinet
penetiution us wiieless teclnologies lelp tlem leupliog ovei tle deciencies ol pooi xed
lineinliustiuctuie.
India perspective:A|rnougnlndiuswitcdinrctncrucccssmutlcriscxpccrcdrosnowmodcsr
gtowrnovctrncncxr|cwycuts,irisun|ilc|yroupptoucnsuruturion|cvc|sovctrncmcdiumrctm
ducroinudcquurccxisringin|tusrtucrutc,inudcquurcncwinvcsrmcnrsundcosrsussociurcd
wirnusingwitcdinrctncr.Howcvct,rniswi||bccompcnsurcdrougtcurcxrcnrbyrnctising
pto|i|cturiono|mobi|cinrctncr,dtivcnbyinctcusingsmutrpnoncpcncrturionundtc|urivc|y
|owctroru|cosrs(c.g.noinvcsrmcnrinPCsot|upropstcquitcd)o|mobi|cinrctncrucccss.
Going forward
TleIndiunwiiedinteinetuccessmuiketisexpectedtogiowiupidly,uguinliomulowbuse,
liomuboutSSbillionINRin2011touppioximutely149billionINRin2016.Indiusmobile
inteinetuccessmuiketisexpectedtogiowevenmoiestionglyundincieusemulti-loldliom
ubout61billionINRin2011touppioximutely3S8billionINRin2016,iepiesentinguCAGR
olovei40%.
Someoltleexpectedtiendsininteinetuccessincludetlelollowing:
India to continue to be a !aggard in xed internet penetration despite reasonab!e growth
Going loiwuid, tle Indiun xed inteinet uccess muiket is likely to giow ut u ieusonuble
pucewitltlenumbeiolinteinetlouseloldsincieusingtouiound43millionin2016liom
ubout20millionin2011,iepiesentinguCAGRolovei16%.Consequently,louselold
inteinetpenetiutionisexpectedtoincieuseliomubout9.2%in2011touppioximutely
17.3% in 2016. Tlus, Indiu is expected to lug belind developed countiies by u signicunt
muiginoveitlenextlewyeuis.
Rapid growth expected in the Indian mobi!e internet access market
TleIndiunmuiketisexpectedtogiowutulustclip,witlmobileinteinetsubsciibeis
giowingliomuboutS1millionin2011touppioximutely400millionin2016,iepiesenting
uCAGRoloveiS0%.Tleconvenienceolpeisonulised,unytime,unywleieinteinetuccess
und luck ol good xed-line inliustiuctuie, coupled witl iising populuiity ol web-bused
upplicutionssuclusemuilundsociulnetwoikswillpiopeltlemuiketloiwuid.
07
Wired and mobile
internet advertising
2011 - 2016
46 PwC
Wiiedinteinetudveitising,ultlouglsmulleitlunitsTVundpiintcounteipuits,is
emeigingusunimpoituntplutloimloiieuclingconsumeis,especiullytledigitullysuvvy.
Industiyievenuesioseliom7.7billionINRin2010to10billionINRin2011,tleieby
demonstiutingugiowtliuteolovei30%,ulmosttwicetlegiowtliuteexlibitedbyTV
undpiintudveitisingsegments,ulbeitliomuloweibuse.
Mobileinteinetudveitising
9
is piesently in u edgling stute witl ievenues ol only 0.1
billionINRin2011.Howevei,itslouldbenotedtluttlemuiketgiewbyulmost100%us
compuiedto2010.
Key trends
Wired internet advertising
Increasing internet user base driving strong growth
Aspeiestimutes,tlenumbeiolinteinetuseisinIndiuludincieusedliomuiound100
millioninDecembei2010to121millioninDecembei2011.Tleincieusingnumbeiol
inteinetuseis,ulongwitltlegiowingliequencyoluseundtimespentpeibiowsing
session, uie diiving inteinet tiulc (e.g. numbei ol webpuges viewed) und piopelling
tlegiowtloltleinteinetudveitisingmuiket.
Distinct benets over other media a!so boosting internet advertising
Wiied inteinet udveitising olleis tle duul benet ol ieucling uudiences und meusuiing
cumpuigniesponsesellectively.Itulsomukesitpossibletoleveiugedemogiuplicund
geogiuplic inloimution to tuiget specic customei segments und delivei customised
uds.Inteinetudveitisingcunulsobeligllycost-ellectiveloiSMEsundSOHOstouttiuct
tuigetcustomeisundbuildtleiibiunds.
Moieovei,witlpeople,especiullytleyoutl,spendinggieuteitimeonsociulnetwoiking
sites, inteinet udveitising cun be leveiuged to delivei ielevunt messuges to specic
customeisegments.Aspeiustudy,Indiuninteinetuseisspent2S.2%oltleiitime
onlineonsociulnetwoikingsitesinJune2012uscompuiedto24.4%intlepievious
yeui.Adveitisingexpendituieonsociulnetwoiksisexpectedtogiowontlebuckol
continued ulliution ol Indiun inteinet useis witl sociul netwoiking sites.
Search advertising dominates other formats
Seuicl, displuy, clussied und video uie tle loui key types ol wiied inteinet
udveitisements.In2011,seuicludveitisingtoweieduboveotleicutegoiieswitlubout
47%muiketsluieund4.7billionINRinievenue,iepiesentingovei30%yeui-on-yeui
giowtl. Seuicl udveitising olleis tle distinct benet ol enubling udveitiseis to convey
messuges wlen consumeis uie looking loi specic inloimution. Tleieloie, tlese
messugesuiemoielikelytoelicituiesponseliomconsumeis.Moieovei,suclsell-
selectionistypicullynotuvuilubleinotleimediu.
Displuy und clussied udveitisements compiised uppioximutely 26 und 2S% muiket sluie
witlievenuesol2.6billionINRund2.SbillionINRiespectivelyin2011.Moieovei,tley
continuedtogiowiupidlywitlyeui-on-yeuigiowtliutesol27und29%iespectively.Video
udsuiestillnuscentinIndiuwitlubout2%muiketsluieund0.2billionINRinievenues.
9 The mobile internet advertising segment includes advertisements that are delivered on consumers mobile handsets through SMS,
apps or browsers (while accessing the internet through mobile devices).
Components of the India wired internet advertising market,
billion INR, 2010-2011
Lack of adequate vernacu!ar content proving to be a hindrance
Wiiedinteinetudveitisingcuiientlysulleisliomuluckolubilitytoieucluwidei
uudienceduetolunguugebuiiieis.Foiinstunce,mostoltlewebcontentinIndiuisin
Englislundtleieisunuigentneedtomukeveinuculuicontentuvuilubletolosteiwidei
uptukeundusugeolinteinetumongpeopleuciosstlecountiy.
The need to seam!ess!y integrate advertisements with on!ine content
Anotleiconceinistlutuseiscunignoiedispluyudveitisementsunddonotlikeuttempts
bypublisleistoloicetlemintoviewingoiclickingudveitisements.Inluct,seuicl
udveitisementsuieviewedmostpositivelyundcommunduliglmuiketsluiesincetley
uie deemed liglly ielevunt to consumeis specic inloimution needs.
Tlus,itisimpoitunttlutpublisleispuygieuteiuttentiontotledesignolweb-pugesund
ulsosmuitlyintegiuteudveitisementswitlon-scieencontent.Adveitiseisulsoneedto
ensuietluttleiimessugesstundoutunduppeultoconsumeistliougltleiiielevunce.
Mobile internet advertising
Increasing adoption of mobi!e internet and smartphones driving growth
TleiisingudoptionolmobileinteinetbyIndiunconsumeisispiovidingustiongboost
totlemobileudveitisingmuiket.Additionully,smuitplonepenetiutioncontinuestoiise
steudily,especiullyumongtleyoutl.Smuitploneuseistendtouccesstleinteinetmoie
liequentlytliougltleiimobiledevices.Aspeiestimutes,tleieweieubout27million
smuitploneuseisinuibunIndiuinJune2012,iepiesentinguiound9%oltleuibun
mobileuseibuse.SmuitploneudoptioninIndiuisexpectedtoincieuseluitlei,diivenby
lullingpiicesundincieusingconsumeiucceptunce.
In Muy 2012, mobile inteinet usuge exceeded xed inteinet usuge loi tle ist time in
Indiu,undtlistiendisexpectedtocontinue.Tleieloie,udveitiseisundudugencieswould
bewell-udvisedtonotignoietlegiowingimpoitunceoltlismedium.
Importance of de!ivering high!y re!evant ads to sma!! screen sizes
Inspiteolliglmobilepenetiution,tlemobileinteinetudveitisingmuiketlucestle
clullengeolsmullscieensizes,especiullywlenbiowsei-busedudveitisementsuie
consideied.Tleielutivelysmulleidispluysizesolmobileplonesiestiicttlenumbeiol
udveitisementstlutcunbedispluyedulongsideseuicliesultsoiinwebpuges.
Tleincieusingudoptionolsmuitploneswitlielutivelyluigeiscieensizeswilllelpdiive
tlegiowtlolseuiclunddispluyudveitisementsonmobilelundsets,undtleieloieitis
necessuiytomukesucllundsetsmoieulloidubleloitlemusses.Itisulsoimpoitunttlut
udveitisingnetwoiksundpublisleisuieubletodeliveiligllyielevuntudstoconsumeis
consideiingtlelimitutionsontlequuntityoludstlutcunbedispluyed.
48 PwC
Tle inteinet udveitising muiket is ut u signicuntly evolved stuge in developed muikets us
compuiedtoIndiu.
G!oba! internet advertising market poised for strong growth
Countiies sucl us tle US, tle UK, Jupun und Clinu uie signicuntly uleud ol Indiu in
wiiedinteinetudveitising.Inluct,inmunydevelopedcountiies,tlesizeoltlewiied
inteinetudveitisingmuiketiscompuiubletotletelevisionbioudcustudveitisingmuiket.
Tlisisduetoligllouseloldinteinetpenetiutionsundinteinetusugeuciossulmostull
sectionsoltlesociety.
AlmostulltlekeymuiketssuclustleUS,tleUK,JupunundClinuuieexpectedto
exlibit stiong giowtl iutes us consumeis continue to spend signicunt umounts ol tleii
timeonline.
Similuily,inmobileinteinetudveitising,tledevelopedcountiiesuieluiuleudolIndiu,
wlicl only lus u edgling muiket ut tle moment. Fuitlei, witl smuitplones incieusingly
becomingtlenoimundudoptionol3Gund4Gexpectedtoincieuseluitlei,tlemobile
inteinetudveitisingmuiketisexpectedtocontinuetogiowutuiupidpuceoveitlenext
lewyeuisindevelopedcountiies.
India perspective: A|rnougnrncsizco|lndiuswitcdinrctncrudvctrisingmutlcriscuttcnr|y
|owuscomputcdwirnvutiousinrctnurionu|pccts,iriscxpccrcdrogtow|usrctrnunmunyo|
irspcctsovctrncncxr|cwycuts.Tncdtiving|ucrotsinc|udcinctcusingudoprionundusugc
o|inrctncr|tomu|owbuscundtisinginrctcsr|cvc|so|udvctriscts.lndiusmobi|cinrctncr
udvctrisingmutlcriscxpccrcdrogtowcvcnmotctupid|yusrncg|obu|rtcndo|inctcusing
udopriono|smutrpnoncsundnign-spccdmobi|cduruucccssisbcingwirncsscdinlndiuuswc||
undrniswi|||cududvctrisctsro|o||owrncmonrnisp|ur|otm.
Going forward
Indiuswiiedinteinetudveitisingmuiketisexpectedtogiowiobustlyundieuclulmost
29billionINRin2016,iepiesentinguCAGRolovei23%.Tlemobileinteinetudveitising
muiketisulsoexpectedtogiowstiongly,ulbeitliomulowbuse,oveitlenextlewyeuis,witl
ievenuestoucling1.4billionINRin2016,iepiesentingCAGRolovei70%.
Search advertising to continue its domination, video ads to grow the fastest
Seuicludveitisingwillcontinuetodominutetlewiiedinteinetudveitisingmuiketund
ieuclulmost14billionINRinievenuesby2016,iepiesentinguCAGRolulmost24%,u
littlelusteitluntlegiowtloltlebioudeimuiket.
Tlelustestgiowtlwillbewitnessedinvideouds,wliclwillexceed1billionINRin
ievenuesby2016.Howevei,tleywillcompiiseonly4%(uppioximutely)oltletotul
muiket,wliclisstillmoietluntleiicuiientsluieolubout2%.
Displuy und clussied udveitising will ulso exlibit stiong giowtl, ultlougl less tlun
tlebioudeimuiketgiowtl,undieuclievenuesol7billionINRund6.7billionINR,
iepiesentingCAGRoluppioximutely22%und21.S%iespectively.
08
Gaming
2011 - 2016
50 PwC
TleIndiunmobilegumingindustiywusestimutedut6.8billionINRin2011.Itistlelustest
giowinggumingsegmentwitlupiojectedCAGRol22.2%till2016.Tlegumingindustiy
compiisestlelollowinglouikeysegments:
PCguming
Mobileguming
Consoleguming
Onlineguming
Key trends
Sharp growth in mobi!e gaming driven by massive mobi!e subscriber base
Witlumussivemobilesubsciibeibuseolulmost920millionuseis,iiseindisposuble
incomes,luvouiubleyoungdemogiuplics,udventolpoweilulsmuitplones,giowing
inuence ol tublets, incieusing bioudbund penetiution und iise ol 3G netwoiks, tle mobile
gumingplenomenonispoisedloiexponentiulgiowtl.
Socia! media and on!ine gaming continues to grow
TlelollowingluctoisluveledtotleiiseolonlineguminginIndiu:
- Popu|utiryo|sociu|ncrwotlingwcbsircs.TlenumbeiolFucebookuseisinIndiulusiisen
diumuticullyliomubout2millionin2010tooveiS0millionin2012(August).Tle
Indiungumingcompuniesuiecupitulisingontlispopuluiitytomukeuvidgumeisoutol
tleseuseisbyintegiutingtleiigumeswitlsuclwebsites.
- Ptorub|c busincss modc|. RumpuntpiiucyintleIndiunPCgumesindustiydoesnot
muke tlis industiy un uttiuctive muiket loi developeis liom u nunciul viewpoint. On
tleotleilund,tleemeigenceolulteinuteievenueclunnelssuclusudveitising,micio
tiunsuctions,subsciiptionleeintleonlinegumingindustiyluvegiubbedtleuttention
oldevelopeis.WitlneuilylulloltleIndiunFucebookuseislullingundeitle18to24
ugecutegoiyin-gumeudveitisingiemuinsuloimidublemuiketingloiceloibiundsliom
sectoisusdiveiseusFMCG,uppuiel,insuiunce,bunking,IT,telecom,etc.toieucltleii
tuigetuudience.
- Hignctinrctncrpcncrturion.TleiisingnumbeiolIndiuninteinetuseis,wliclcuiiently
stundsutubout10%oltletotulpopulution,willlueltlegiowtloltleonlineguming
industiyintlelutuie.
Conso!e gaming on a rise
Consolegumesieleitotlosegumeswlicltypicullyiequiieunoutputdevice(computei
oitelevision)unduninputdevice(contiollei).TlepopuluigumingconsolesintleIndiun
muiketuiePluyStution3(Sony),Xbox360(Miciosolt)undWii(Nintendo).Witltle
mujoiityoltlepopulutionundeitleugeol3S,tledemogiuplicsmukeunuttiuctivecuse
loitleconsolegumingindustiy.Fullingpiicescoupledwitliisinguwuienessundeusy
uvuilubilityolconsolegumesuiegoingtobetlemujoigiowtldiiveisoltlisindustiyloi
tlenextlewyeuis.
Affordab!e prices key to 3D gaming growth
3Dgumingisunewlyevolvedcutegoiybutulogiculpiogiessionintlegumingspuce.
Itiequiiesu3DTVloiimmeisiveexpeiienceundmujoivendoissuclusSonyuie
ulieudyiunningubundlesclemewitlitsPluyStution3undtleBiuviu3DTV.Wlile
someindustiyexpeitsuiebettingon3Dgumingustlenextgume-clungei,piolibitive
luidwuiecostsuiegoingtokeeptlissegmentoutolieuclloimostcustomeis.Unless
teclnologiculudvuncementensuiesulloidublepiicesintlenextlewyeuis,3Dguming
willcontinuetobeiestiictedtouniclesegment.
Piracy key hurd!e in growth in video games
SoltwuiepiiucyiutesintleIndiunmuiketuiecloseto70%.Duetoeusyuvuilubilityol
illegulCDsintlegieymuiket,tleietuilsulesolgumesuiedeteiioiutingiupidlyunduie
luitingtlissegment.Tledilleienceinpiicebetweenoiiginulgumesundpiiutedveisions
isulmost10times,incentivisingtleuseitobuytlepiiutedveisionutucleupeipiice.
Tlegoveinmentlusplunstointioducenewluwsundcontiolstotucklepiiucybuttilltlut
luppens,piiucywillcontinuetoiemuinumujoiclullengeindiivinggiowtlintleietuil
gumesegment.
Low internet qua!ity making high-end gaming unviab!e
Slowinteinetspeedsundlimitedbioudbundpenetiutionmukeligl-endguming
unviuble.Ovei3S%oltleinteinetconnectionsinIndiuluvespeedsol2S6kbpsoi
less. Tle countiys xed bioudbund louselold penetiution wus 6% in 2011, mucl
loweitluntleoveiullpenetiutioninemeigingmuikets.TleNutionulTelecomPolicy
(NTP)2012,uppiovedbytlecubinet,piomisesbioudbundloiullwitluminimum
downloudspeedol2megubits.
Limited !oca!ised content a cha!!enge for gaming pub!ishers
Tleluckolloculgumingcontentisuclullengeloigumingpublisleis.Gumesinspiied
byBollywoodundciicketuccountloiuluigepiopoitionolloculgumes.E.g.,Ibibos
Mumbui Undeiwoild gume is bused on tle undeiwoild tleme in Hindi lms, wlile,
lust yeui, tle gume Ru.One Genesis wus ieleused just beloie tle luuncl ol tle lm
usupuitolitsoveiulldigitulmediustiutegy.Gumes2winluuncleditsTuiboCiicket
gumeontleAndioidmuiketinmid-2011wlileMungoGumesiecentlyluuncledDon
inspiiedbytleeponymousBollywoodliunclise.
Untilnow,veiylewoltleonlinegumestlutcuteiedtotleuudienceincoipoiutedlocul
tlemesundcluiucteis.AnonlinegumeinIndiuculledAngiyBiides,liglligltingtle
pioblemolilleguldowiydemunds,lusuttiuctedmoietlun270,000luns.
52 PwC
Animation
TleIndiununimutionindustiy,in2011,wusestimutedut28billionINR.Tleindustiy
lusseveiulsegmentsnumelye-educution,webdesigning,unimutionenteituinment
lms (2D, 3D), visuul ellect (VFX), TV, bioudcust, diiect to DVD, etc.
Key trends
Animation moves from an offshore mode! to a co-production mode!
As tle cost ol pioducing unimution lms is ligl, muny compunies opt loi co-
pioductionwleiebybotltleiisksundtleievenuesuiesluiedbetweentle
conceinedpuities.Tlelollowinguiesomeexumples:
- Disney und UTV uie co-pioducing un unimuted epic lm Atjun.TncWuttiotPtincc.
- Tle lm A|pnuundOmcguwusunimutedbyCiestAnimutionStudiosinpuitneislip
witl Lionsgute, u leuding independent lmed enteituinment studio. Ciest is one ol
tle ist Indiun pioduction compunies to muke u Hollywood unimution lm.
- BusedontleliluiiousescupudesolCluilieCluplin,Cnup|inundCoisuco-
pioductionbetweenHydeiubud-busedDQEnteituinmentundFiunce-bused
MetlodAnimution.ItwusdevelopedinconsultutionwitltleCluplinlumily.
- AmuiClitiuKutlu(ACK)Mediu,co-ownedbyFutuieVentuiesundElepluntCupitul,
lusenteiedintouco-pioductionugieementwitlleudingkidsclunnelCuitoon
Netwoik to pioduce its ist leutuie lm titled Sonso|RumHctocswi||Risc.
Newer avenues for animation continue to evo!ve
- E-leuining:Seveiuleducutioninstitutesuietiyingtoenluncetleiileuining
expeiiencebypiovidingeducutiontliouglunimution.
- Mobile:Allloimsolgumingusemultimediuinunextensivewuy.Tleintioduction
ol3GundiisinginteinetsutuiutionuswellustleyoungIndiundemogiuplicwill
leudtoluitleigiowtloltlegumingundunimutionindustiy.
- Licensing:Compuniesluvetiedupwitllicensingcompuniesolleiingvuiious
oppoitunitiesintleelectionicmediu,videogumes,mobileundmeiclundisingin
tleunexploieduieusolunimution.Intlepiocess,tleunimutioncompunygets
ievenueliomtleconceinedcompunybysellingunimutedpioductsundtleii
muiketingiiglts.Tlemeiclundise-licensingbusinessinIndiulusbeengiowingut
moietlunS0%y-o-yintlelusttlieeyeuisundtletotulsulesuieestimutedutS00
cioieINR.
- Adveitising:Itisestimutedtlutmoietlun7S%oltleudveitisementsmudetoduy
useVFXindilleientwuysundpiopoitions.VFXisuselultoieducetlebudgetol
tleudveitisement.
Moving up the va!ue chain
InIndiu,compuniesengugedinVFXpostpioductionluvebeenengugedinlow-end
woiksucluswiieiemovulsundcleun-upsloiulongtime.Howevei,tleindustiylus
beenmovingtowuidsliglei-endussignmentsollute.
Also,tleluckoludequutedemundliomtledomesticmuiketlusiesultedin
dominuntpluyeisintleVFXspucescouiingloioppoitunitiesubioud.Compunies
luvetoluid-selltleiiexpeitise,sincenoteveiypioductionstudiointleUSoitle
UKmuybecomloitublewitloutsouicing.Tleinudequucyoldomesticwoikisulsoun
impedimentloidomesticVFXcompuniesinslowcusingtleiicupubilitiestoclientsin
developedmuikets.
Going forward
Tlevulueoltleunimutionindustiyestimutedut28billionINRin2011isexpected
toieucl66billionINRbytleyeui2016utuCAGRol18%.Tlisincomewillmuinly
geneiuteduetotlegiowingiepututionolIndiuusuquulitydestinutiontooutsouice
unimutionwoik.TleIndiununimutionindustiyiscuiientlyuminuscule0.6%oltle
woildwideunimutionmuiket,tlusindicutingulugescopeloigiowtl.
Globully,tleslilttoonlineundmobilegumeswillluittleconsolegumemuiketintleneui
teim.TlemuiketloiPCgumeswillcontinuedeteiioiutingusconsumeistuintleiiuttention
toneweiteclnologies.
Keytiendsemeigingintleglobulmuiketuieuslollows:
G!oba! conso!e games in a phase of s!ow growth
Globulconsolegumesconstituteuppioximutely48.6%oltleoveiullvideogumesindustiy,
estimutedut27.SbillionUSDin2011.Tlisisexpectedtogiowto30.SbillionUSDwitl
upiojectedCAGRol2.1%by2016.Deteiioiutingsulesolgumesuieluitingietuilstoies.
Iltlisputteincuusessomeietuileistoclose,itwillluitleiexuceibutetledeclineintle
muiketloiconsoleundPCgumes.
The Indian perspective: Conso|cguminginlndiucomptiscson|y16.1%o|rncvidcogumcs
mutlcrinrnccounrty.TncptojccrcdCACRo|27.5%(ri||2016)isdcccprivc|ynignducrornc
buscc||ccr.ln|incwirng|obu|rtcnds,conso|cgumingisbcingtcp|uccdwirnon|incundmobi|c.
G!oba!!y, on!ine taking over the next phase of gaming
AspeiPwCunulysis,globully,onlinecompiises29.7%oltleindustiyundispiojected
togiowutuCAGRol13.3%till2016.Incieusedbioudbundpenetiutionulongwitltle
giowingdigituldistiibutionolcontentwilldiivetlegiowtloltleonlinemuiket.Tle
migiutionolmunyMMOGsliomtleiisubsciiptionmodelstouliee-to-pluybusinessmodel
isincieusingtlenumbeiolpluyeiswoildwide.Tlegiowtlolmicio-tiunsuctionsispioving
uboonloitleindustiy.Cusuulgumesundsociulnetwoikgumesuieimpoituntcomponents
oltleonlinemuiket,lelpingexpundtledemogiuplicbuseundstimulutespending.
TleIndiunpeispective:InIndiu,mobileistukingoveitlenextpluseolguming.It
compiised61.4%oltleindustiyin2011undispiojectedtogiowutuCAGRol22.2%
(till2016).Indiulusoneoltleluigestmobileconsumeibuses(itlusumobileinteinet
subsciibeibuseolulmost8S0million)intlewoild,undtlepeicentugeolpeople
downloudinggumesisexpectedtogiowdiumuticully.InIndiu,tlemobilegumesegment
oltlemuiketdominutestlevideogumeindustiybecuusemobileplonesuiewidespieud.
PC games continue to dec!ine
AccoidingtoPwCunulysis,globully,PCgumeswillcontinuetodeclineut1.9%CAGR
(2016)usconsumeistuintleiiuttentiontoneweiteclnologies.PiiucyolPCgumes,
pievulentinceituinmuikets,lusulsolumpeiedtlegiowtloltlesegment.Tlegiowtl
olMMOGs,wliclusuullyiequiieietuilpuicluseoluPCgume,continuestosuppoittle
ietuilPCgumemuiket.
The Indian perspective: lnlndiu,PCgumcs,u|bcirsmu||(7.2%o|rncindusrtyin2011),
utcsri||gtowingundutccxpccrcdrogtowuruCACRo|10.5%ri||2016.Tncgovctnmcnrnus
p|unsroinrtoduccncw|uwsundconrto|srorucl|cpitucy.Tncmurctiu|isuriono|rncsc|uws
wi||gtcur|yboosrrncgtowrno|rncPCgumcsscgmcnr.
Video game advertising, nascent and emerging as an additiona! revenue stream
Globully,videogumeudveitisingcompiisesusmullpieoltlevideogumesindustiy(3.7%),
butisgiowingiupidlyundispiojectedtogiowutuCAGRol11.2%(2016)uspeiPwC
unulysis.
Tlegiowtlolsociulnetwoikundlieegumesisdiivingvideogumeudveitising.Cloud
seiviceswillulsoluveupositiveimpuctonudveitisingbecuuseudscunbeeusilyupduted
in tle cloud. E.g., u billbouid piomoting u lm cun be upduted us new lms get ieleused.
Intliswuy,tleudveitisingwillulwuysbeliesl.Additionully,udveitisingcunbetuigeted
geogiuplicully. Tle messuges cun be piogiummed loi deliveiy ut specic times in u duy.
Sinceonlinegumesuieuttucledtotleinteinet,itisulsopossibletotiuckbotltlenumbei
oltimesugumeiisexposedtoudsuswellustleumountoltimeudsuppeuiontlescieen.
The Indian perspective:ln|incwirng|obu|rtcnds,vidcogumcudvctrisinginlndiucomptiscs
usmu||pctccnrugco|rncindusrty(1.7%)burisgtowingtupid|yundisptojccrcdrogtowur
uCACRo|14.9%(ri||2016).Advctrisingwi||gtowusmotcudvctrisctstcu|iscrncguming
indusrtys porcnriu| ro tcucn spccic uudicnccs.
54 PwC
Going forward
TleIndiungumingindustiylusslowntiemendousgiowtlintlepustunditsgiowtl
willcontinueintlelutuie.PwCestimutestlutliom11.1billionINRin2011,tle
gumingindustiywillbewoitl29.8billionINRby2016,suigingutuCAGRol23.6%.
Convergence of gaming anytime anywhere across devices
Guming-on-tle-gouciossunydeviceispoisedtoexplodegiventleplenomenul
giowtlolmobilesundtleincieuseinpiocessingpoweiolneweismuitplonesund
tublets.Howevei,mobilegumes,iutleitluncunnibulisingtletiuditionulconsole
undonlinegumingexpeiience,willuctuullyseiveusucomplementuiyguming
ulteinutive.Tleubilitytosuve,uccessundcontinuepluyingtlesumegumeonuny
luptop,mobile,tubletoismuitTVwillclungetlewuygumingisviewed.Witl
tleiiseol4GnetwoiksundtleiupidgiowtlolsmuitplonesundtubletsinIndiu,
uccessingtlesumegumeuciossdevicescouldsoonbeuieulity.
From motion contro! to virtua! rea!ity
Motioncontiolcumeiusuiebecomingincieusinglypoweilulutieudingeveiynuunce
olmotiontlutmuybeubletoieudyouilipswitloutunyvoicecommund.Leup
Motion,unewstuit-up,lusiecentlydevelopedunewmotioncontioldevicetlutis
sensitivedownto1/100olumillimetieubout200timesbetteitlunotleisensois.It
detectsmotionviuinliuiedwitlinlouicubicleetuieuvolumeinliontoluscieenund
isonlydoubletlesizeolupendiive.ScleduledtoluunclinDecembei2012,itwill
mukemotioncontiolteclnologyuvuilubletotlegeneiulpublic.Tledemonstiution
oltlenewHullLile2piototypebytleFouitlDimensionDispluysuttleGume
DevelopeisConleiencein2012lusslowntlutitisquitepossibletocieuteuviituul
enviionmentbypositioningu1080pHDdispluyulewinclesinliontoleucleye
uciossunuieuwliclmeusuieslesstlununincldiugonullyundcieutingunulmost
3D ellect scieen coveiing moie tlun 100 degiee eld ol vision in liont ol you.
GooglesPiojectGlussisunotleipoweilulpiototypewliclleutuieslutuiistic
tiunspuientglussesulewinclesinliontolyouieyewitlsensoisundudutu
connectiontoboot.Alllunctionsolusmuitplonecunpotentiullybepeiloimed
tliougltleglussesmukingitbieuktliouglteclnologywliclcunlelpievolutionise
tlegumingexpeiience.
09
Radio
2011 - 2016
56 PwC
FiomAIRtwodecudesugoto24Sopeiutionuliudiostutionsucioss86citiesinIndiu,iudio
toduylusbecomeoneoltlemostellectivemeunsolieucltliouglloculisedcontent.Tlis
diumuticgiowtlisluigelyduetopiivuteFMstutions.
Despitetleslowdownin2011undtleunceituintyuboutiecoveiy,estublisledpluyeisluve
leldontotleiiudveitisementiuteswlilesmulleipluyeisolleieddiscountsloiudslots.Tle
iudiosectoigiewbyulmost10.4%liom12.SbillionINRin2010to13.8billionINRin2011.
Incieuseiniudiolisteneisliplusbeentlemujoigiowtldiiveiwitlconsumeislisteningto
iudiotliouglnewmediumslikemobileplonesundliveinteinetstieuming.
Key trends
Advertisers yet to rea!ise radios fu!! potentia!
It wus duiing tle slowdown tlut eveiyone discoveied tle elcucy ol iudio us u medium.
But,udveitiseisuieyettocompletelyucknowledgeitslullpotentiul.Wlileiudio
incieusinglyguineisucceptunceumongudveitiseis,itisexpectedtoiesultinligleiud
spends.Adveitiseisuieulsolocusingincieusinglyonnon-metiomuikets,giventleiising
puiclusingpoweioltlesemuikets.
Tle cost pei ieucl ol iudio is signicuntly bettei tlun television us tle loimei lus liglei
potentiultopenetiuteiuiuluieus.Higlgiowtliutesintlesulesolconsumeicommodities
in tlese uieus slould uttiuct ims inteiested in incieusing iuiul muiketing locus, us tle
mediumpiovidesuneusieiundellectivewuytouclievetlis.Rudioulsotypicullyuttiuctsu
mujoiityoludveitiseistlutuieexclusiveontlosemediumsunduieloculinnutuie.Tlese
loculietuileisundiestuuiuntsseeunudvuntugeinudveitisingtleiipioductsundseivices
inloculnewspupeisoiiudiousopposedtotelevision.
Internet radio gaining popu!arity
Tlestieumingoliudiopiogiummesontleinteinetbybotltiuditionuliudiobioudcusteis
uswellusinteinet-onlybioudcusteisisontleiise.Bystieumingtleiipiogiummes
online,stutionopeiutoiscunwidentleiiieuclbeyondtleiisignuluieuundincieusetleii
potentiultoselltonutionuludveitiseis.Mostclunnelsuieuvuilubleunywleieunytime
RudioMiicli,RudioCity,VividlBluiti,etc.
Wi-Fiiudiosenubleconsumeisunwillingtopuyloisutelliteiudiobutwuntingmoietlun
tlelimitedselectiononteiiestiiuliudio,touccessinteinetstutions.Mobileuppsenuble
consumeiswitlsmuitplonestolistentoiudioliomuioundtlewoildontleiilundsets.
Sincemostoltleseuppsuieud-suppoited,tleyuielieetodownloudloiconsumeislike
TuneInRudio,PundoiuInteinetRudio,etc.
Myopustudioisupopu|utinrctncrtudiosrurion|otinrctnurionu|
musicrnururrtucrsubourrntcc|ulnuniquc|isrcnctsumonrn.
Tncsrurion,srutrcdinBungu|otc,wunrcdroptovidcup|ur|otm
rolndiunmusiciunsundbundsrosnowcuscrncitsongsundtcucn
u|utgctbusco||isrcncts.Wirnrntcccnunnc|scuttcnr|y,rncy
utc|oolingurncwwuyso|mutlcringusinginrctncrtudio.Tncy
u|soctcurccusromiscdmusicso|urions|ottcrui|our|crs|otrncit
in-srotcmusic.
Anotleistiengtlolinteinetiudioistlutopeiutoisknowexuctlylowmunylisteneis
tleyuiegettingusopposedtoteiiestiiuliudioswlicluseuppioximutions.Studies
loiteiiestiiuliudiosussumetlutucuiusuullylusuboutlouilisteneis.Tlislelpsin
customisutionolcontentunduttiuctingmoieudveitisements.
Tlebiggestclullenge,lowevei,loiinteinetiudiosisnuvigutingioyultiesloimusic
compuniesundiecoidlubels.TlisseemstobepluguingonlineiudiogiuntPundoiu.
InIndiu,musicontledigitulmediumisstillnewundiecoidlubelsuiestilltiyingto
guie out ievenue models loi stieuming music. Also, low bioudbund penetiution ucts
usulindiunce.
Socia! media he!ping engage with !isteners
Witliisingcompetition,itlusbecomingciiticulloiiudiopluyeistogobeyond
tiuditionulmetlodstogiubulisteneisuttention.Tleyuiewukinguptotlelucttlut
tleyneedtodesigncontentunductivitiesmoieintunewitlconsumeiexpectutions.
Toduy,weuiewitnessingmunyiudioclunnelstuketlesociulmediuioutetoenguge
witltuigetuudiences.Witludilleientpugeloieuclcity,tleynotonlyinteiuctwitl
lunsbutulsopiovidetlelutestgossip,sluievideosundpictuies.
Also,eucliudiopluyeiseemstobetuigetinguceituinsegmentolpopulution.Rudio
One lus now become u lull-edged Englisl music clunnel lling tle void in tlis spuce
loiuppei-clusssegments.
E-auction for Phase III of !icensing
TlegoveinmentlusdecidedtluttleullocutionolFMlicenceswillbedonetliougl
tlesimultuneoususcendinge-uuctionpiocesslollowedloi3GundBWAuuctions.One
oltleleutuiesoltlepioposede-uuctionsistlutulllicencesinucityuieuuctioned
loitleexuctsumepiice.Tlismuyluveunimpuctontlepositioningolclunnels
undtleiicontentlocus,undmuylimitgiowtlinniclepiogiumming.Fuitlei,itis
pioposed,tluttleieseivepiiceincitieswleieupiivutebioudcusteiulieudyexists
toduy(uspuitolPluseII),tleliglestbidieceivedinPluseIIwouldbecometlebuse
piiceloitlePluseIII.
58 PwC
Adveitisingiepiesentsuioundtwo-tliidsolglobuliudioindustiyievenues,tle
iemuindeibeinglundedtliouglpublicbioudcustsubsciiptionsundindividuul
subsciiptionlees.
Radio p!ayers seek additiona! revenue streams
Teiiestiiuliudiobioudcusteisuieseekingudditionulievenuestieumstliougltle
intioductionoldigituliudioundonlineiudio,wliclexpundlisteneisoptions.
Howevei, tlose teclnologies uie not expected to udd signicunt ievenues in tle
neuilutuie.
India perspective:Rudiop|uyctsutcycrrocvo|vcbusincssmodc|srnurcunmoncrisc
|ivctudiosrtcumingo|cxisringcnunnc|srntougnrncinrctncr.PnuscJo||iccnsing
wi||dcrctmincrncsucccsso|digiru|tudioinrtucscnscwirnmotcvuticryuvui|ub|cro
|isrcncts.
HD Radio
HDRudioisupiopiietuiytiudemuikedteclnologydevelopedbyiBiquityDigitul
Coipoiution.Neuily8S%oltleUSiscoveiedbyubout2000stutionsbioudcusting
HDRudio.ItenublesAMundFMstutionstobioudcustdigitulsignulsulongside
tleiiunulogsignuls.HDRudiosIBOCteclnologycundeliveibetteisoundquulity
witloutinteileience.Inuddition,HDRudioenublesstutionstobioudcustudditionul
clunnelsviutlesumespectium.
India perspective: Hutudiorccnno|ogyisycrrocurcnupinlndiu.Tccnno|ogicu|
udvunccmcnrinrnctudiobtoudcusringspuccnusbccn|imircdsinccrncindusrtyissri||
inrncdcvc|opmcnrpnusc.
Going forward
RudioudveitisingievenuesinIndiuluveslownleultlygiowtlintlepustonuccount
oltleexpunsionoliudioteclnology,includingdigituluswellusinteinetiudio.Indiu
is expected to giow ut u compounded iute ol 16.7% ovei tle next ve yeuis liom 14
billion INR in 2011 to 30 billion INR in 2016, tle lustest giowing countiy in Asiu Pucic.
Weexpecttlegiowtltocompoundwitltleioll-outolPluseIIIwleietlelicence
peiiodlusbeenincieusedliom10to1Syeuisloitleiudioindustiyielievingtle
piessuieolliudiocompunies.TleTRAIlusulsoieleuseditspupeionPtcsctibing
MinimumCnunnc|Spucing,wirninuliccnccSctviccAtcu,inlMRudioSccrotinlndiu.As
puitoltlepupei,TRAIiecommendstlutliequenciesloiFMiudioclunnelswitlinu
licensedseiviceuieubeieleusedwitluminimumspucingol400KHz.Witlmultiple
liequenciesbeingullowedtoubioudcusteiintlesumecity,weexpectiudioclunnels
tolocusonniclecustomeisegmentsundolleiquulitycontenttoexistinglisteneis.
10
Music
2011 - 2016
60 PwC
Wlile2010wustleyeuiolustiuctuiulsliltliomtleplysicultotledigitul,2011piovided
useiswitlviubleoptionsolmusicconsumptiontliougluvuiietyoldigitulplutloims.In
Indiu,digitulmusicpluysuvitulioleintleindustiywitlulloidublesmuitplones,dutupluns
undbetteibioudbundconnectivity.Also,witllicensedmusicieudilyuvuilubleloidownloud,
peopleuiesliltingtotledigitulloimutloiquulityexpeiience.Musicindustiyievenuesliom
digitulplutloimsluvegiownliom4.SbillionINRin2010to7billionINRin2011iegisteiing
uwloppinggiowtlol60%yeui-on-yeui.TleoveiullIndiunmusicindustiylusgiownto12
billionINRin2011liom10billionINRin2010witlplysiculsulesolmusicbeingstugnuntut
3billionINR.
Key trends
Access to music becomes easier
TleconsumptionolmusicinIndiuisgiowingusitisincieusinglyuvuilubletliougldilleient
mediumstoconsumeis.Eusyuccesslusmudetlisdilleiencebeittliouglmobileupps,
inteinetiudio,sociulsluiingoitiuditionulmusicCDs.Itisnowulsoeusieitosluiemusic
witlotleistliougldilleientnetwoikssociulundmobile.UibunIndiulusmoietlun27
millionsmuitploneuseisund121millioninteinetuseisuspeiiecentestimutes.
Music promoted across country, socia! media p!aying a vita! ro!e
MTVsCokeStudioinpuitneislipwitlRedClilliesIdiotBoxluuncledinIndiu,lollowing
itssuccessinBiuzilundPukistun.ReliunceEnteituinmentlusloimeduJVwitlUS-bused
Tulentlouse,unonlineplutloimloiuitists.InIndiu,Tulentlouseulieudylusuuseibuse
olovei10,000uitistesundussociutionswitluppioximutely3S0cieutivesclools.
Sociulmediulusbecomeunellectivemediumolsluiingmusic.PioolbeingtleTumil-
Englislsongko|uvctiuiwliclbecumeunoveinigltiugeundcieutedlistoiyusbeingtle
mostwutcledIndiunvideoonYouTube.TlevideolusgeneiutedmoietlunS3million
viewsundlusbecomeuviiulplenomenon.
Efforts taken to curb music piracy
PiiucyludnegutivelyimpuctedtlesulesolplysiculmusickeepingCDpiicesstugnunt.
Also,tledigitulmusicindustiyisonitsputltoguintiuctionusIndiutigltensitsunti-
piiucyluws.
Tlegoveinmentlusenloicedputentluws,blockedillegulmusicwebsites,positioned
piiucyusuciiminuluctundlussetupupiiucylotlinetoenublepiiucyiepoiting.
Awuienesscumpuignstliouglcinemucluins,etcuieulsobeingiolledoutinoideito
dissuudepeopleliomconsumingillegulmusic.
Digital music is in!
8IBUXBT 8IBUJT
q Songs are unbundled and can be bought
without downloading the entire album.
q Micro transactions enabled services are
available for digital music downloads.
q The mobile phone can store and play music
while on the move.
q 8JUITNBSUQIPOFTJOUFSOFUBOEBQQT
allow the buying of music and creating
personalised playlists.
Companies tie-up with various te!ecom operators to provide mobi!e music
WitltlegiowingVASmuiketloimobileplones,itcomesusnosuipiisetlut
compuniesuienowcolluboiutingwitlmusicclunnelsundtelecompiovideisin
oideitobiingmusicontleploneutucost.HungumuMobileluspuitneiedwitl
enteituinmentundmusicclunnelVl1toolleiudiul-inmusicseiviceonAiitels
mobilenetwoik,RudioGugu.AseivicesuclustlisonewillbeubletocuteitoIndius
giowinguudienceloiinteinutionulmusic.Musicundenteituinmentclunnel9XMlus
puitneied witl Hungumu, wlicl lus u cutulogue ol 1,00,000 tiucks, lm tiuileis und
oiiginulvideos,inoideitoluunclunonlineundmobilemusicstoiewleieuseispuy
99INRpeimontltodownloudunlimitedvideosundsongsumongotleitlings.
Tleglobulmusicindustiygiewmuiginullyusgiowtlinconceitsundmusiclestivuls
ollsetumodestdeclineiniecoidedmusic.Beginningin2013,giowtlindigitulspending
willollsettleongoingdeclineinplysiculspending,leudingtouieboundinoveiull
spendingoniecoidedmusic.
Streaming services to boost digita! spending
Newstieumingseiviceswilluddlueltotlegiowingdigituldistiibutionolmusic.Tlis
willbeuccentuutedbyincieusingbioudbund,smuitploneundtubletpenetiution.
PopuluimusicstieumingseiviceSpotilyinEuiopeenteiedtleUSmuiketin2011witl
ulieemiumpuckuge.Alimited-uccessudveitisei-suppoitedoptionisuvuilubleloiliee
touseis.
India perspective:Sincclndiudocsnormurcnrnccxrcnsivcbtoudbundin|tusrtucrutc
o|rncwcsr,srtcumingsctviccsnuvcpiclcdupmuin|yinmcrtocirics.Wirnimptovcd
cupubi|iricsrntougnmotcdigiru|dcviccsundconnccriviry,rniswi||dtivcgtowrninrnc
lndiundigiru|musicmutlcr.
Growth in music festiva!s to prope! spending on !ive music
Tle muiket benetted in 2011 liom lewei but bettei piomoted conceit touis. Aveiuge
uttenduncelusincieusedpullingtleuveiugegiossesup.Lubelsunduitistsuie
enteiingintolull-seiviceoi360deulstlutincoipoiutetouiingundmusicsulesinu
singlepuckuge.
India perspective: Agtowingcconomy,tisingdisposub|cincomcsundugtowinguppcrirc
|otwot|dmusicnus|cdrouboominrncnumbcto|music|csrivu|sbcingnc|dcucnycut
inlndiu.Sunbutn,rnc|utgcsrmusic|csrivu|inlndiunusnowsptcudromotcciricsundis
nc|dmotcrnunonccdutinguycut.
Going forward
TleIndiunmusicmuiketisexpectedtogiowliom12billionINRin2011to22billion
INR in 2016 witl CAGR ol 12% ovei tle next ve yeuis. Tle digitul spending on music is
expectedtoincieusecontinuullyunddominuteoveiullindustiyievenuesby2016,wlile
contiibutionliomplysiculdistiibutionwillslowlydeclinetonegligiblelevels.
New revenue mode!s to emerge for mobi!e music
WitlmobileplonesbecomingtlepiimuiydiiveisloimusicuccessinIndiu,content
ims get only S to 1S% ol tle totul mobile enteituinment ievenue pie. Ol tle totul
ievenue,between1Sund20%isspentonuggiegutionundbuck-enductivities,
teclnology,puymentsystemsundudveits.Between60und70%isietuinedby
telecomopeiutois.InEuiope,Jupunoiotleipuitsoltlewoild,contentcompunies
getubulkoltleievenues.Foilong,itwuspiedictedtlututelecomopeiutoiwould
betlenewmediugiuntoltlelutuie.Witltleiiubilitytomuiketundbillloimobile
enteituinment,telcosluvedoneugieutjobinlelpingtlemuiketgiowliomulmost
notlingin2000toovei10,000cioieINRin2011.
Phase III radio !icensing to create opportunities
Pluse3oliudiolicensingcouldbeusedbyiecoidlubelsundmusiccompuniesto
stiengtlentleiiloldontleiiiigltsintleindustiybydemundingluigeipeicentuges
ol piots. Also, tle giowing tiend ol iudio clunnels pluying music ol u specic genie oi
lunguugetoduywillmukecompuniesowningmusicliomtlosegeniesmoiedesiiuble.
Tliscouldlelpguineimoieievenuesundioyultiesliomtleiespectiveclunnels.
Accotdingrotcscutcn
by\lSA,musicputcnusc
consrirurcd24%o|
c-commctccucriviryinlndiu.
Tnisiscvidcnrwirnl|iplutr,
rncc-commctccwcbsirc
vcnrutinginrorncdigiru|
spuccwirnrnc|uuncno|irs
digiru|musicsrotcl|yrc.Tnc
srotcwus|uuncncdwirnovct
umi||ionrtuclswirn150,000
u|bumsinovct55|unguugcs
und700gcntcsundsub-
gcntcso|music.Tncwcbsirc
u||owsusctsroputcnuscu
sing|crtuclurunuvctugc
pticc o| 6 lNR und u|bums
ur 100 lNR upptoximurc|y,
u||owing cxibi|iry ro rnc
cusromct.Tnccompunyis
doingunuvctugcdown|oud
o|S,000rtuclsdui|ycoming
mosr|y|tomrncmcrtosbur
cxpccrsdcmundinrncnon-
mcrtosrotiscuswc||.
62 PwC
11
Out-of-home advertising
2011 - 2016
Iniecentyeuis,tleOOHmediumlusuttiuctedcompuniesliomtleFMCG,enteituinment
undmediuundleultlcuiesectois,wliclluvemultiplebiundsundulocusedtuiget
gioup.Emeigingcutegoiiessuclusieulestute(especiullyinTiei2undTiei3cities)und
e-commeiceluveulsocontiibutedtotlegiowtloltleOOHudveitisingindustiy,wlicl
iegisteieduleultlygiowtlol10.7%in2011,ulbeitlesstluntleuggiessive12%giowtl
seenin2010.Tleindustiysizewusestimutedtobe1S.SbillionINRin2011uscompuiedto
14.0billionINRin2010undiepiesentedS.4%oltleIndiuudveitisingmuiket.
Key trends
New advertisers reaching out to focussed target groups
Witlmultipleclunnelsundlocutions,tleOOHmediumcunlelpieucltuigeted
customeisegmentsloitleiiuninteiiupteduttention.Initiully,OOHwusiestiictedto
billbouidudveitisingundwususedbymussmediu.Howevei,utpiesent,evenupmuiket
biundsuieusingittotuigetHNI.
Innovutionundcustomisutionluvelelpedudveitiseisieuclouttotuigetgioups.As
u iesult, sectois sucl us uuto, telecom und nunciul seivices luve become tle biggest
udveitiseisinOOHmediu.OtleisectoissuclusFMCG,enteituinmentundmediu
undleultlcuieuieulsoincieusingtleiiexpendituieonOOHudveitising.Iniecent
times, tle OOH industiy is ulso benetting liom tle ieul estute boom. Initiully, tlis
sectoiudveitisedinOOHmediupiimuiilyintlemetiosundtleiisubuibs,butnowtle
uttentionlusmovedtoTiei2undTiei3citiesuswell.
Fuitlei,e-commeicecompuniesluveiecentlybeenslowingulotolinteiestinOOH
udveitising.Tluslui,tleyweieuddiessingutuigetgiouptlutwusinteinet-suvvyund
wusuwuieoltlenuuncesolonlineslopping.Now,tleyintendtotukeonlineslopping
touwideiuudienceespeciullyconsumeisliomnon-metioswlopeilupsluvent
expeiiencedonlinesloppingutull.
Improvement in infrastructure driving growth
Newclunnelslikebusslelteis,LEDbillbouidsundstieetluinituieuienotbeingusedus
widelyinIndiuusinotleicountiies,wleietleyuccountloiusmuclus30to40%oltle
totulindustiy.Oneoltlepiimuiyieusonsloitlisistlepooiinliustiuctuie.Howevei,tle
situution is impioving lust, witl muny new commeiciul spuces including mulls und olce
buildingscomingup.Tlesebuildingspiesentusecuiedenviionmentwleieclunnelssuclus
LEDscieenscunbeinstulledwitlouttleleuioltlembeingstolenoibeingvundulised.Tle
pilluisoltlemetioiuilnetwoikintleNutionulCupitulRegionuieulsoemeigingusumujoi
destinutionloiOOHudveitising,sincetleyuiesituutedontlebusiestioudsintleiegion.
Digita! OOH advertising raising the creative bar
TlepieviousyeuiwitnessedumoveuwuyliomtiuditionulOOHudveitisingtodigitul
udveitising,wliclislustbecomingtlepieleiiedcloiceumongcompuniesliomtle
BFSI, oil und telecom sectois. Digitul signuge piovides tle desiied exibility in ieul time,
wlicl is extiemely dilcult loi otlei udveitising mediums.
Growth of mobi!e internet and penetration of smartphones to drive digita! OOH
in India
Tleintegiutionoltleoutdooimediumwitlnewmediuluspiovidedtiemendousscope
loiinnovution.Intleugeolsmuitplonesundmultiplemediuclunnels,unyinnovution
inOOHudveitisinglusuiippleellectonotleimediu.Acuptivutingdispluymigltbe
plotogiupled,tweetedundtulkedubout.OOHudveitisingdiivesseuiclundisun
ellectivemediumwlentuigetedutupuiticuluiuudienceinupuiticuluidestinution.Tle
integiutionoldigitulcontentwitlOOHisulsoleudingtolocution-busedcustomisutionol
messuges,wlicllusledtotlegiowtlinlocution-busedudveitising.
Lack of a unied common measurement p!atform hampering the industry
ReliubleieseuiclisciuciulloitleOOHindustiy,buttleielusnotbeenmucl
developmentintlisuieu.Anuttemptwusmudesomeyeuisugowitltleintioductionol
tleIOSinpuitneislipwitlMRUC,uieseuiclugency.Howevei,tlemeusuiementsystem
lusnottukenoll.
TleclullengeindeteiminingtleROIisinpuitonuccountoltleunuvuilubilityolu
piicingtool.CostingisumujoiissueloibotltleudveitiseiuswellustleOOHindustiy
ustleROIloitleudveitiseicunnotbedeteimineduccuiutelybecuusetleudveitisei
64 PwC
usuullyudveitisestliouglulostolmediu,includingpiintundtelevision.Tle
costingdonebytleOOHcompunyulsotukesintouccountunumbeiolluctoislike
tlecustomeisegmentsbeingtuigeted,uttentionspunundvisibility.Itbecomes
veiy dilcult to uiiive ut u stunduid costing meclunism, wlicl cun tlen be ieluted
totleROI.
InEuiopeundtleUS,consideiublewoiklusbeendoneondevelopingglobul
guidelines loi OOH ieseuicl, wlicl tle Indiun muiket cun piobubly benet liom
und use to its udvuntuge. Tle Tiulc Audit Buieuu loi Mediu Meusuiement (TAB)
intioduceditsiutingsmeusuiingsysteminovei200muiketsintleUS.Tlesystem
combines TABs OOH tiulc uudits witl visibility-udjusted indexes to estimute
tlenumbeiolpeoplewlonoticebillbouidsundlowlongtleyuieexposedto
tlebillbouids.Tlesystemmeusuiestleuctuulnumbeiolpeopleviewingunud
iutleitluntlepotentiuluudience,tleiebymukingitmoieconsistentwitltlewuy
otleimediuuiemeusuied.TlisenublesmediuplunneistobetteievuluuteOOH
udveitisinguguinstotleimediu.
Fragmentation of the market posing hurd!es for advertisers wanting to
reach nationa! audiences
TleOOHudveitisingindustiyiscluiucteiisedbyunoigunisedpluyeis,low
investmentsundpooidispluyquulity.Smulludveitiseisuieusuullynotgivenpiime
slotsbyestublisledmediulousessincetleypieleitogivetleseslotstobiggei
pluyeis.Tlisisbecuusecontiuctswitlmujoiudveitiseisuielong-teim.Moieovei,
ilubigpluyeiudveitisesinuslot,tlentlecompetitoiuimsloiucompuiubleslot
undtlismeunsmoiebusinessloitlemediuownei.Tlisluctoipieventssmull
udveitiseisliomudveitisingwitlestublisledmediulouses.
Integration of media driving up OOH spends
TleintegiutionolOOHudveitisingwitlotleimediulusledtounincieuseinits
impoitunce.Tlislusiesultedinunintegiutedmediuuppioucl,undudveitiseis,
especiullyluigecoipoiutelouses,uiegivingtleiiudveitisingcontiucts(including
OOHudveitising)totleselouses.AiitellusgivenitsmediucontiucttoMudison
wleieusPeiceptislundlingtlemediucumpuignsloimujoigioupslikeTutu
MotoisundMulindiu&Mulindiu.
TleglobulOOHudveitisingindustiyismigiutingliomtiuditionultodigitul
billbouids,wliclexpundtleOOHinventoiybecuusemultipleimugescunbe
piojectedontlesumedispluyuieu.Adveitiseisuiebecomingincieusinglyuwuieol
tlevulueolOOHudveitisingbecuuseimpiovedmeusuiementteclniquespiovide
tleieuclundliequencyoldutucompuiubletotloseolotleimediu.Keytiends
emeigingintleglobulmuiketuieuslollows:
Traditiona! bi!!boards constitute the bu!k of the inventory in the industry
Tiuditionulbillbouidsstilliemuintlemostpopului.Butnewteclnologiesuie
emeiging to muke tlem moie elcient. Foi exumple, digitul piinting ol billbouids
lus u signicunt impuct on ieducing costs. Oltentimes, posteis uie pluced in u
liumewitlnoneedloigluing,tlusieducinginstullutiontimeundcosts.
India perspective: ln|incwirnrncg|obu|sccnutio,rtudirionu|bi||boutdsdominurc
rncindusrty.Ttudirionu|punc|sinlndiuutcnowu|mosru||viny|wirndtyposring.
Fragmentation of the market has made it difficu!t for advertisers that want
to reach nationa! audiences
Wliletleindustiyisliugmented,ongoingconsolidutionslouldmuketlemedium
uneusieibuyloiudveitiseis.Additionully,uggiegutoissuclusSeeSuwund
Adcentiicityenubleudveitiseistomukepuiclusesuciossnumeiousnetwoiksut
onetime,tleiebymukingpuiclusingeusiei.
India perspective: lnlndiu,rncOOHindusrtyisnign|y|tugmcnrcdducrornc|ow
cnrtycosr|otbi||boutdopcturots.Tnisptcvcnrsudvctriscts|tomc||ccrivc|ytcucning
ourrounurion-widcuudicncc.
IPO and deals
Tncindusrtyissnowinggtcurptomiscund|oolspoiscd|otsubsrunriu|gtowrn.Hcncc,ir
isurrtucringrncurrcnriono|bigp|uyctsundrncsccrotissutcrosccconso|idurioninrnc
|urutc.Rcccnr|y,SixrnF|cmcnrAdvctrisingwus|otmcdbyrncco||uboturiono|Punc-buscd
OOHmcdiunouscsAsnuPub|iciry,CuprionsOurdootAdvctrisingundHu||mutlOurdoot
Advctrising.Howcvct,rncindusrtynusnorsccnunyornctmujotdcu|.Tnisisptimuti|y
bccuuscrncsccrotisnign|yunotguniscd.Tnus,p|uyctswnoutcnoruputro|rncindusrtydonr
sccirusuporcnriu|invcsrmcnroprion,wnctcusindusrtymujotp|uyctsutccuttcnr|ynor|utgc
cnougnro|oolinrnisditccrion.
Regulatory environment
Tnctciscuttcnr|ynotcgu|urotypo|icyotbody|otrncOOHindusrty,u|rnougnrncnccd|ot
irnusbccn|c|rundcxp|icir|ydiscusscdurvutious|otumsbyudvctrisctsuswc||usindusrty
p|uycts.Tnistcgu|urotybodyistcquitcdrocnub|cusing|cscro|pun-lndiusrundutds,undu||
srulcno|dctsnccdrobcputro|ir.Tnc|uuncno|SOPsurrncOurdootAdvctrisingConvcnrion
(OAC)inmid-2011wusunurrcmprinrnisditccrion.Tncindusrtyisu|soucrivc|ycxp|otingrnc
oprion o| nuving u sc||-tcgu|uroty body simi|ut ro rnc Ncws Btoudcusring Srundutds Aurnotiry,
scrupbyT\ncwscnunnc|s.
Technology
Tccnno|ogyisundwi||conrinucrop|uyupivoru|to|cinrncOOHudvctrisingindusrty.Ar
rnc|tonrcnd,rccnno|ogy|ilcOOHrc|cvisionundlFusctccnsisbcinguscdinubigwuyby
mcdiu.Tncscutcrutgcrcdptimuti|yurSFCAcusromctsundutccuttcnr|ybcinguscdon|yby
ptcmiumbtunds.lndusrtyp|uyctsbc|icvcrnurdigiru|mcdiuisrnc|urutco|OOHudvctrising
undmotcundmotcudvctrisctsundOOHcompunicswi||uscdigiru|mcdiuinrnc|urutc.
Arrncbuclcnd,rnctcisunutgcnrbusincssnccd|otuuromuringrnccnritcinvcnroty-rtucling
ptoccss und inrcgturing ir wirn rnc nunciu|s ro uttivc ur rnc ptorubi|iry uctoss scgmcnrs.
Tncrutgcrnccdsrobcrotcduccmunuu|inrctvcnrionsusmucnuspossib|c.Tniswi||cmpowct
busincssusctsromunugcuncctruinrics,idcnri|yncwgtowrnmutlcrsund,urrncsumcrimc,
lccp u rub on rnc ovctu|| cosr und gcr u c|cut picrutc ubour ptorubi|iry. Tnis wi|| cnub|c scniot
munugcmcnr ro idcnri|y und mup busincss srturcgics ro c|cicncy und c||ccrivcncss mcrtics und
|inl rncm bucl ro busincss bcncrs. Tnc su|cs rcum, wnicn is on rnc gtound, cun u|so curcgotisc
rncinvcnrotybycosr,|oor|u||,crc.
A growing digita! !andscape driving innovation
Tledeploymentoldigitulbillbouidsundtleexpunsionoldigitulnetwoiksuiespuiiing
innovutionintleOOHudveitisingmuiket.Altlougldigitulteclnologiesstilluccount
loiusmullpoitionoltleoveiullmuiket,tleyuieexpectedtogiowinimpoitunceovei
tlenextlewyeuis.TlemovetodigitulisiuisingtlecieutivebuiloiOOHudveitising.
Inteiuctivedispluysuiebecomingpopuluiwitludveitiseisbecuusetleyengugepusseis-
by.BunkolAmeiicuinstulleduninteiuctiveudutTimesSquuie,wliclullowedpeople
topuiticiputeinpollsusingtleiismuitplones,witltlebillbouidupdutingtleiesultsol
tlepoll.
India perspective: lndiuncompunics,roo,utcrulinginnovurionssctious|yundsomc
norcwotrnycxump|cswctcsccn|usrycut.Mumbui-buscdFnRourcMcdiu,inconjuncrion
wirnFusyCubs,|uuncncdl|o,unin-ruxidigiru|OOHudvctrisingncrwotlrnur|curutcs
sound-cnub|cdroucn-sctccndisp|uys.
Going forward
Tle Indiun OOH udveitising industiy is estimuted to giow ut 11% in tle next ve yeuis
undieucl26billionINRin2016.
Globully,ontleteclnologyliont,digitulsignugeluscomeoluge,movingliomtle
expeiimentulundintotlemusspioductionpluse.Howevei,inIndiu,udveitiseisuie
knowntobescepticuluboutinvestingintlemediumduetotleluckolunellective
meusuiementsystem,wliclisseenustlesingle-biggestclullenge.Ontleotlei
lund,tlegiowtlolmobileinteinetundtlepenetiutionolsmuitplonesinIndiuuie
expectedtodiiveinnovutioninudveitisingundboosttlepopuluiityoltlemedium.
66 PwC
References
PwCGlobulEnteituinment&MediuOutlook2012-2016
(www.pwc.com/outlook):lnc|udcsconrcnr|tomPwCsC|obu|
FnrctruinmcnrundMcdiuOur|ool.2012-2016,uurnotcdby
Wi|lo|slyCtucnAssociurcslnc.,uptovidcto|g|obu|tcscutcnund
unu|ysiso|rncmcdiu,cnrctruinmcnr,undrc|ccommunicurions
indusrtics.www.wi|lo|slygtucn.com
Seeingitnow:Tleliddenvulueoldigituliigltslockeis
TncSpccdo|li|c.Consumctinrc||igcnccsctics,PwC0nircdSrurcs
MinistiyolInloimutionundBioudcusting,Indiu
TelecomRegulutoiyAutloiityolIndiu
CensusolIndiu2011
WoildBunk
Industiyuiticlesundiepoits
Compunyunnuuliepoits
Tlisiepoitlusbeenpiepuiedontlebusisoldiscussionsundinloimutionobtuined
liomselectindustiypluyeis,tiudeussociutions,goveinmentugencies,tiude
publicutionsundvuiiousPwCundindustiysouices.
TlisdocumentispiovidedbyPwCloigeneiulguidunceonlyunddoesnot
constitutetlepiovisionolleguludvice,uccountingseivices,investmentudvice,oi
piolessionulconsultingolunykind.Tleinloimutionpiovidedleieinslouldnot
beusedususubstituteloiconsultutionwitlpiolessionultux,uccounting,legul,oi
otleicompetentudvisois.Beloiemukingunydecisionoitukingunyuction,you
slouldconsultupiolessionuludvisoiwlolusbeenpiovidedwitlullpeitinent
luctsielevunttoyouipuiticuluisituution.
Tleinloimutionispiovidedusis,witlnoussuiunceoiguuiunteeolcompleteness,
uccuiucy,oitimelinessoltleinloimutionundwitloutwuiiuntyolunykind,
expiessoiimplied,includingbutnotlimitedtowuiiuntiesolpeiloimunce,
meicluntubility, und tness loi u puiticului puipose.
Outlookcontentmustnotbeexceipted,used,oipiesentedinunypoitiontlut
would iendei it misleuding in uny munnei oi tlut luils to piovide sulcient context.
AFP Adveitiseilundedpiogiumme
AOP Associutionolpeisons
ARPU Aveiugeievenuepeiusei
AIR AllIndiuRudio
ATP Aveiugeticketpiice
BWA Bioudbundwiielessuccess
CAGR Compoundunnuulgiowtliute
CRM Customeiielutionslipmunugement
CPM Costpeimillion
CPI Consumeipiiceindex
CPC Costpeiclick
DRL Digituliigltslockei
DTH Diiect-to-lome
DVR Digitulvideoiecoidei
DVD Digitulvideodisc
EMEA Euiope,tleMiddleEustundAliicu
E&M Enteituinmentundmediu
FDI Foieigndiiectinvestment
FMCG Fust-movingconsumeigoods
GEC Geneiulenteituinmentclunnel
GRP Giossiutingpoint
GDP Giossdomesticpioduct
GSM Globulsystemloimobile
GPRS Geneiulpucketiudioseivice
HD Higl-denition
HSM Hindispeukingmuiket
HITS Heudend-in-tle-sky
HNI Higlnet-woitlindividuuls
IPL IndiuPiemieiLeugue
IPTV Inteinetpiotocoltelevision
IBOC In-bundon-clunnel
IOS IndiunOutdooiSuivey
INR Indiuniupee
LED Liglt-emittingdiode
LCD Liquidciystuldispluy
M&A Meigeisunducquisitions
MIB MinistiyolInloimutionundBioudcusting
MMOG Mussivelymultipluyeionlinegume
MSO Multi-systemopeiutoi
MRUC MediuReseuiclUseisCouncil
NFC Neui eld communicution
OAC OutdooiAdveitisingConvention
OOH Out-ol-lome
PCI Peicupituincome
PPV Puy-pei-view
PSTN Publicswitcledteleplonenetwoik
PBG Peiloimuncebunkguuiuntee
ROI Retuinoninvestment
SME Smullundmediumenteipiise
SOHO Smull olce, lome olce
STB Set-topbox
TRAI TelecomRegulutoiyAutloiityolIndiu
USD Ameiicundollui
VAS Vulue-uddedseivice
VOD Video-on-demund
VHS Videolomesystem
List of abbreviations
68 PwC
PwC ims lelp oigunisutions und individuuls cieute tle vulue tleyie looking loi. We uie u netwoik ol
ims in 1S8 countiies witl close to 180,000 people committed to deliveiing quulity in udvisoiy, tux und
iegulutoiyseivices.
InIndiu,ouicompielensivepoitloliooludvisoiy,tuxundiegulutoiyseivicespiesentsubusketol
nely dened deliveiubles. Pioviding oigunisutions witl tle udvice tley need, wleievei tley muy be
locuted, oui liglly quulied, expeiienced piolessionuls, witl sound knowledge ol tle Indiun business
enviionment,listentodilleientpointsolviewtolelpyousolvebusinessissuesundidentilyundmuximise
tleoppoitunitiesyouseek.Ouiindustiyspeciulisutionullowsustolelpco-cieutesolutionswitloui
clientsloitleiisectoiolinteiest.
TleEnteituinmentundMediu(E&M)piucticeolPwClusdeptlundbieudtlolexpeiienceuciosssectois
sucl us television, lms, piint, iudio und digitul mediu. We ollei insiglts guined liom yeuis ol expeiience
woikingwitlubioudiungeolindustiyclientsonunextiuoidinuiybieudtloludvisoiy,tuxundiegulutoiy
seivices,upuitliomutigltlywovenglobulnetwoik.
Ouiteumolexpeitscunlelpyouindiveiseuieussuclusmuiketussessment,stiutegyloimulution,
business plunning, nunce tiunsloimution, pioject munugement, iisk munugement, ievenue iecognition
undsupplycluinmunugement.Weulsopiovideseivicesuioundmeigeisunducquisitions(M&A),post-
M&A integiution, nunciul und commeiciul due diligence, vuluution und tux-ellective iestiuctuiing
solutions.Weulsolelpmunugeintellectuulpiopeitydisputesupuitliomcontentundlicencemunugement
intlisneweiuolconveigencewitlcontentbeingdeliveiedoveinewplutloims.
Oui combinution ol top-iglt quulicutions, industiy expeitise, globul ieucl, tlouglt leudeislip und
ubilitytodeliveicompielensive,industiy-locusedseivicesmukesPwConeoltleleudingudvisoistotle
EnteituinmentundMediuindustiy.
Contacts
Smita Jha
Emuil:smitu.jlugin.pwc.com
Tel:+911244620111
Sandeep Ladda
Emuil:sundeep.luddugin.pwc.com
Tel:+912266891444
Mansi Bansal
Emuil:munsi.bunsulgin.pwc.com
Tel:+912266691SS2
Press Enquiry
Nandini Chatterjee
Emuil:nundini.clutteijeegin.pwc.com
Tel:+9112446207S6
Sonali Mitra
Emuil:sonuli.mitiugin.pwc.com
Tel:+911244620791
About PwC Entertainment and Media Practice
For their valuable contribution, we would like to thank the following
people from PwC India:
AblijitClukiuboity,AdityuGiovei,AdityuRutl,AdityuSluimu,AmitAguiwul,AmitGJuin,
AnunjunMitiu,AnkitPAgiuwul,AnsluluBuksli,AiituGoyul,AtulMeltu,BluvinVoiu,CliiugNungiu,
DeepikuBedwul,DuslyuntSingl,GuuiuvMittul,GuutumRustogi,IteslClumudiu,
JuneSequeiiuKumui,KuitikSolunki,KuuslulVuidyu,KiitikuTewuni,KunulDeepBlugut,
KunulNugui,MulvikuSingl,MunislSubluiwul,MunpieetSinglAluju,MilunSlul,MolitSluimu,
MuditAguiwul,MunjulAlmoulu,NeluAioiu,NidliMSluimu,NisluntWuglelu,NiipendiuSingl,
PiuKlunnu,PoojuTosniwul,PoonumPiublu,PiusudPuidiwulu,PuneetKokiu,RicluSinglu,
RitikuSingl,RolitRuy,SulilGuptu,SundeepPuii,SeemuPuikui,SiikuntlKlimuvut,
SlyumTekiiwul,SidluituSiicui,SudeepRustogi,TejulMeltu,VyomuTlukkuiundYogeslDlupui
70 PwC
About CII
Contacts
TleConledeiutionolIndiunIndustiy(CII)woikstocieuteundsustuinunenviionmentconducive
totlegiowtlolindustiyinIndiu,puitneiingindustiyundgoveinmentuliketliougludvisoiyund
consultutivepiocesses.
CII is u non-goveinment, not-loi-piot, industiy led und industiy munuged oigunisution, pluying
upiouctiveioleinIndiusdevelopmentpiocess.Foundedovei117yeuisugo,itisIndiuspiemiei
businessussociution,witludiiectmembeislipolovei7100oigunisutionsliomtlepiivuteuswellus
publicsectois,includingSMEsundMNCs,undunindiiectmembeislipolovei90,000compuniesliom
uiound2S0nutionulundiegionulsectoiulussociutions.
CII cutulyses clunge by woiking closely witl goveinment on policy issues, enluncing elciency,
competitivenessundexpundingbusinessoppoitunitiesloiindustiytliougluiungeolspeciulised
seivicesundglobullinkuges.Itulsopiovidesuplutloimloisectoiulconsensusbuildingund
netwoiking.Mujoiemplusisisluidonpiojectingupositiveimugeolbusiness,ussistingindustiyto
identilyundexecutecoipoiutecitizenslippiogiummes.Puitneislipswitlovei120NGOsuciosstle
countiycuiiyloiwuidouiinitiutivesinintegiutedundinclusivedevelopment,wliclincludeleultl,
educution,livelilood,diveisitymunugement,skilldevelopmentundwutei,tonumeulew.
Tle CII Tleme loi 2012-13,Reviving Economic Giowtl: Reloims und Goveinunce,uccoids top
piioiitytoiestoiingtlegiowtltiujectoiyoltlenution,wlilebuildingGlobulCompetitiveness,
InclusivityundSustuinubility.Towuidstlis,CIIudvocucywilllocusonstiuctuiulieloims,botluttle
Centie und in tle Stutes, und ellective goveinunce, wlile tuking elloits und initiutives in Alimutive
Action,SkillDevelopment,undInteinutionulEngugementtotlenextlevel.
Witl 63 olces including 10 Centies ol Excellence in Indiu, und 7 oveiseus olces in Austiuliu,
Clinu,Fiunce,Singupoie,SoutlAliicu,UK,undUSA,uswellusinstitutionulpuitneislipswitl223
counteipuitoigunisutionsin90countiies,CIIseivesusuieleiencepointloiIndiunindustiyundtle
inteinutionulbusinesscommunity.
Atreyee Talapatra
Diiectoi
ConledeiutionolIndiunIndustiy
MuntoslSondliCentie
23,InstitutionulAieu,LodiRoud,
NewDelli110003
Plone:+91114S771000
Emuil:utieyee.tuluputiugcii.in
Website:www.cii.in
PwC ims lelp oigunisutions und individuuls cieute tle vulue tleyie looking loi.
Weie u netwoik ol ims in 1S8 countiies witl close to 169,000 people wlo uie
committedtodeliveiingquulityinussuiunce,tuxundudvisoiyseivices.Telluswlut
mutteis to you und nd out moie by visiting us ut www.pwc.com.
InIndiu,PwC(www.pwc.com/Indiu)olleisucompielensivepoitlolioolAdvisoiy
und Tux & Regulutoiy seivices; eucl, in tuin, piesents u busket ol nely dened
deliveiubles. Netwoik ims ol PwC in Indiu ulso piovide seivices in Assuiunce us pei
tleielevuntiulesundiegulutionsinIndiu.
Piovidingoigunisutionswitltleudvicetleyneed,wleieveitleymuybelocuted,
oui liglly quulied, expeiienced piolessionuls, wlo luve sound knowledge ol tle
Indiunbusinessenviionment,listentodilleientpointsolviewtolelpoigunisutions
solvetleiibusinessissuesundidentilyundmuximisetleoppoitunitiestleyseek.
Ouiindustiyspeciulisutionullowsustolelpco-cieutesolutionswitlouiclientsloi
tleiisectoiolinteiest.
Weuielocutedintlesecities:Almedubud,Bunguloie,Blubuneslwui,Clennui,
DelliNCR,Hydeiubud,Kolkutu,MumbuiundPune.
About PwC
No part of this publication may be excerpted, reproduced, stored in a retrieval system, or distributed or transmitted in any form or by any means
including electronic, mechanical, photocopying, recording, or scanningwithout the prior written permission of PwC.
Requests should be submitted in writing to Mansi Bansal at mansi.bansal@in.pwc.com outlining the excerpts you wish to use, along with a draft
copy of the full report that the excerpts will appear in. Provision of this information is necessary for every citation request to enable PwC to assess
the context in which the excerpts are being presented.
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information, and must not form the majority of sourced information.
pwc.com/indiu
2012 PricewaterhouseCoopers Private Limited. All rights reserved. In this document, PwC refers to
1SJDFXBUFSIPVTF$PPQFST1SJWBUF-JNJUFEBMJNJUFEMJBCJMJUZDPNQBOZJO*OEJBXIJDIJTBNFNCFSSNPG
1SJDFXBUFSIPVTF$PPQFST*OUFSOBUJPOBM-JNJUFE1X$*-FBDINFNCFSSNPGXIJDIJTBTFQBSBUFMFHBMFOUJUZ
MS 404-October 2012 em version 2 .indd
Designed by:PwC Brand and Communications, India
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