Indian Media & Entertainment Industry to touch

INR 1,457 billion by 2016: FICCI-KPMG report

Industry achieves 12 percent Growth in 2011; is projected to
grow at CAGR of 15 percent over next five years
Mumbai, March 10, 2012: In 2011, the Indian Media & Entertainment (M&E) Industry registered a
growth of 12 percent over 2010, to reach INR 728 billon, says the FICCI-KPMG report. The growth
trajectory is backed by strong consumption in Tier 2 and 3 cities, continued growth of regional media,
and fast increasing new media business. Overall, the industry is expected to register a CAGR of 15
percent to touch INR 1,457 billion by 2016.
The report will be formally released at the inaugural session of FICCI FRAMES 2012 on March 14, 2012.
2011 has been a challenging year not just for the Indian M&E industry, or even the Indian economy, but
for the larger world economy. While India is still expected to grow at a healthy pace, growth is projected
to be lower than earlier expectations.
While television continues to be the dominant medium, sectors such as animation & VFX, digital
advertising, and gaming are fast increasing their share in the overall pie. Radio is expected to display a
healthy growth rate after the advent of Phase 3. Print, while witnessing a decline in growth rate, will
continue to be the second largest medium in the Indian M&E industry. Also, the film industry had a
reason to cheer, with multiple movies crossing the INR 100 crore mark in domestic theatrical collections,
and INR 30 crore mark in C&S rights.
Advertising spends across all media accounted for INR 300 billion in 2011, contributing to 41 percent of
the overall M&E industrys revenues. Advertising revenues witnessed a growth of 13 percent in 2011, as
against 17 percent observed in 2010.

Key highlights
Print: The print industry grew by 8.3
percent from INR 193 billion in 2010
to INR 209 billion in 2011. The
growth was slightly lower than our
expectation of 9.5 percent last year
due to the challenging
macroeconomic environment and
reduced advertising spends.

Television: The over-all television

industry is estimated to be INR 329
billion in 2011, and is expected to
grow at a CAGR of 17 percent over
2011-16, to reach INR 735 billion in
2016. The share of subscription to the
total industry revenue is expected to
increase from 65 percent in 2011 to
69 percent in 2016. The TV industry
continues to have headroom for
further growth as television
penetration in India is still at
approximately 60 percent of total
households.
Films: With several high budget
Hindi releases lined up across the
year, 2012 is expected to sustain the
growth momentum witnessed in
2011. The Indian film industry is
projected to grow at a CAGR of 10.1
percent to touch INR 150 Billion in
2016. The industry is estimated to be
INR 93 billion in 2011 indicating a
growth of 11.5 percent vis--vis 2010.

Music: While 2010 was the year of

structural shift from physical formats
to digital ones, 2011 provided users
viable options of music consumption
through different digital platforms.
The Indian music industry achieved
revenues of INR 9 billion in 2011,
registering a growth of 5 percent over
2010.

In terms of performance, 2011 proved to be a year with mixed

results in terms of growth across different sub sectors. The
traditional media businesses experienced a slow down compared to
last year, especially in the second half of the year. However, the
new media segments like Animation and VFX, Online and Gaming
businesses witnessed phenomenal growth rates.
Says Dr. Rajiv Kumar, Secretary General, FICCI The key highlights
are rise in digital content consumption, launch of diverse content
delivery platforms, strong consumption in Tier 2 and 3 cities, rising
footprint of the players in the regional media, rapidly increasing
new media business and regulatory shifts.
According to Mr. Jehil Thakkar, Head of Media and Entertainment,
KPMG in India The Media & Entertainment industry landscape is
undergoing a significant shift. Cable digitization, the promise of
wireless broadband, increasing DTH penetration, digitization of film
distribution, growing internet use are all prompting strategic shifts
in the way companies work. Traditional business models are
evolving for the better as a host of new opportunities emerge.

Radio : Owing to increase in

Radio: Overall,
industry
listenership
in boththe
metros
andgrew
15 percentoverall
in CY 2011
to reach
non-metros,
the industry
INRat11.5
billion, in
compared
grew
15 percent
CY 2011to
toINR
10 billion
in billion
CY 2010.
Volume
reach
INR 11.5
compared
increases
in
certain
markets
to INR 10 billion in CY 2010. and
rate increases for the leaders in
New
Media:
Growth
in
metros
drove
growth.
advertising revenues is expected
New Media:
advertising
40percent
over Digital
last year;
online is
expected
to grow
at a CAGR of 30
adspend
reached
approximately
percentoffrom
digital ads
4percent
total2011-16;
M&E industry
spend
reached
approximately
advertising revenue. Growth is 5
percent
of total
M&E industry
largely
driven
by increase
in
advertising
revenue
in
2011.
internet penetration and
Growth is largely
by .
proliferation
of new driven
age devices
increase in internet penetration
Animation
& VFX : Animation,
and proliferation
of new devices.
VFX and Post Production industry
Animation
& VFX:
Animation,
achieved
estimated
revenues
of
Post
industry
INRVFX
31 and
billion
in Production
2011, a robust
achieved
revenues
growth
of 31estimated
percent over
2010.of
INR
31
billion
in
2011,
a
Growth was achieved on therobust
back
growth of contract
31 percent
over
2010.
of increased
work,
higher
Growth
was
achieved2D/3D
on the back
VFX
content
in movies,
of increased
contract work, higher
conversion
projects.
VFX content in movies, 2D/3D
Outconversion
of Home: projects.
The OOH sector
was hit relatively harder by the
Outeconomic
of Home:slowdown
The OOH sector
global
than
wassectors
hit relatively
harder by the
other
of the Advertising
global economic slowdown than

The Media & Entertainment landscape is beginning to change with

national cross media conglomerates emerging and consolidation and
deal making finally picking up the pace, says Rajesh Jain, Head of
Markets, KPMG in India.
Key trends and industry drivers:

Growth in digital content consumption across media

Digital technology continues to revolutionize media distribution be

it the rapid growth of DTH and the promise of digital cable, or
increased digitization of film exhibition - and has enabled wider and
cost effective reach across diverse and regional markets, and the
development of targeted media content.
There has been increased proliferation and consumption of digital
media content be it newspapers and magazines, digital film prints,
and online video and music or entirely new categories such as social
media. Accordingly, online advertising spends have seen a spurt in
growth viz-a-viz spends on traditional media.

Rise of new age user devices

Smart phones, tablets, PCs, gaming devices, etc. all form the
foundation of a new wave in media usage.This is gradually impacting
the way content is being created and distributed as well. Multiple
media including TV, films, news, radio, music etc are being impacted
with this change.

New age consumers adapting themselves to the newer

technologies

As Indian consumers evolve, there is a heightened need to engage them across platforms and
experiences. There is a greater need for integration and innovation across traditional and new media,
with changing media consumption habits and preferences for niche content. Media companies today
have no choice but to provide more touch points to engage with audiences.

Regionalization

Regional television and print continued its strong growth trajectory owing to growth in incomes and
consumption in the regional markets. National advertisers are looking at these markets as the next
consumption hubs and the local advertisers are learning the benefits of marketing their products
aggressively.

An advertising revenue dependant industry

The ARPU (Average Revenue Per User) for television, average newspaper cost for print and average
ticket price for films continue to be low on account of hyper competition in these industries. Segments
like radio and a significant portion of online content are available free of cost to consumers. Owing to
this, the Indian consumer is still not used to paying for content and hence the industry players are
sensitive to the impact of the slowdown which affects the budgets of advertisers.

Awaited regulatory shifts

Lastly, apart from the shifts in consumer preferences, company strategies and business models, one big
change awaited for the next growth wave is the implementation of recently enacted and regulations on
digitisation for cable, implementation of Phase 3 and copyright for Radio and the roll out of 4G. These
shifts are expected to be game changers in terms of how business is being done currently and what
could be the path going forward.
About KPMG

KPMG is a global network of firms providing professional services. We operate in 152 countries and have
145,000 people working in member firms around the world. The independent member firms of the KPMG
network are affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. Each
KPMG firm is a legally distinct and separate entity and describes itself as such.
KPMG in India is the Indian member firm of KPMG International and was established in September 1993. It
strives to provide rapid, performance-based, industry-focused and technology-enabled services, which reflect
a shared knowledge of global and local industries and its experience of the Indian business environment.
KPMG provides services to over 2,700 international and national clients in India and has offices in Delhi,
Chandigarh, Ahmedabad, Mumbai, Pune, Bangalore, Cochin, Chennai, Hyderabad, and Kolkata.
For a copy of the report, log on to www.kpmg.com/in

About FICCI:
FICCI is the rallying point for free enterprises in India. It has empowered Indian businesses, in the
changing times, to shore up their competitiveness and enhance their global reach.
With a nationwide membership of over 1500 corporates and over 500 chambers of commerce and
business associations, FICCI espouses the shared vision of Indian businesses and speaks directly and
indirectly for over 2,50,000 business units. It has an expanding direct membership of enterprises drawn
from large, medium, small and tiny segments of manufacturing, distributive trade and services. FICC
maintains the lead as the proactive business solution provider through research, interactions at the
highest political level and global networking.

For Further Information please contact:

KPMG

FICCI.

Aman Abbas

Taresh Arora

Associate Director Marketing and Corporate

Communications
Mobile : +91 9810341899
Email : indiawebsite@kpmg.com
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