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INTRODUCTION TO INDUSTRY

The media industry in India consists of many different segments under


its folds such as television, print, and films. It also includes smaller
segments like radio, music, OOH, animation, gaming and visual effects
(VFX) and Internet, advertising. Media industry in India has registered an
explosive growth in last two decades making it one of the fastest growing
industries in India because backed by rising consumer demand and
improving advertising revenues. The industry has been largely driven by
increasing digitisation and higher internet usage over the last decade.
Internet has almost become a mainstream media for entertainment for
most of the people.

The Foreign Direct Investment (FDI) inflows in the Information and


Broadcasting (I&B) sector (including Print Media) in the period April 2000
December 2016 stood at US$ 6.3 billion, as per data released by
Department of Industrial Policy and Promotion (DIPP).
The government has liberalised FDI norms for various segments of
Media and Entertainment industry. 100% FDI is permitted under
automatic route in teleports, Direct to Home (DTH), Mobile TV, Cable
networks and headend-in-the-sky broadcasting service (HITS).
Print Media: According to Registrar of Newspapers in India (RNI), the
country had105,443 registered publications in March 2015.The print
industry is expected to grow rapidly in future as literacy rates and
disposable incomes growth in India. Print media growth will be driven by
tier II and tier III. The print media segment is projected to grow at CAGR
of 8% till 2019.
Broadcast Media: The broadcast industry in India already has around
800 satellite television channels, 242 FM channels and 100 operational
community radios. To strengthen the broadcasting ecosystem in the
country, the Ministry of Information and Broadcasting (I&B) has launched
various phases of digitisation across the country. India had 168 million
TV households in 2014, which makes it the third largest television
market in the world. The number of TV households will reach to 196
million by 2019 along with 175 million Cable & Satellite (C&S) subscriber
base, indicating the 90% penetration in TV households.
Films: In 2015, India produced 1827 digital feature films, according to
the report by the Central Board for Film Certification (CBFC). India
maintained its position as a top film producer. The CAGR of 10% in film
industry till 2019 will be driven by tier II and tier III cities of India.
Animation and visual effect: Animation, Visual Effects (VFX) and
Production segment is the newly emerging area in India which offers
opportunities in both domestic and foreign markets. Indian VFX industry
is already known for its top-quality work and cost efficiency. It has the
market size of USD 670 million. The government of India has also
acknowledged the potential of the industry. It plans to establish the
National Centre of Excellence in Animation, Gaming and Visual Effects
in Mumbai
NEW INITIATIVE AND VISION BY THE GOVERNMENT:

The government of India launched Digital India with an aim to transform


the country into a digital empowered society and knowledge economy.
India is the worlds fastest growing smartphone market, as per the data
by International Data Corporation (IDC). It is also the worlds second
largest smartphone market with 220 million unique smartphone users.

The high smartphone penetration will help Digital India and media
segments to grow. The Digital India campaign will strengthen the
industries such as video streaming, online music services and gaming in
India by increasing the internet penetration. The World Bank and the
International Telecommunication Unions data indicate that 26% of the
population has access to the internet in India with number of internet
users likely to cross 500 million by end of 2016. The launch of video
streaming services such as Netflix, Hotstar and Voot shows the high
growth potential of digital entertainment services in India.

I&B Ministry is working on to transform India into a global hub of Media


and Entertainment industry by improving the ease of doing business in
the sector. Other government initiatives such as National Communication
Policy will further compliment the growth of the sector.

The Government of India has supported Media and Entertainment


industrys growth by taking various initiatives such as digitising the cable
distribution sector to attract greater institutional funding, increasing FDI
limit from 74 per cent to 100 per cent in cable and DTH satellite
platforms, and granting industry status to the film industry for easy
access to institutional finance.

The Government is planning to set up a National Centre of


Excellence for media, which will provide training to the industry
professionals, and has also decided to fund movies, including Bollywood
and regional films, for participating in foreign film festival.

The Union Budget 2016-17 has proposed basic custom duty exemption
on newsprint. The customs duty on wood in chips or particles for
manufacture of paper, paperboard and newsprint has been reduced to 0
per cent from 5 per cent.

Ministry of Information & Broadcasting, outlined the Ministry's plans of


introducing a National Communication Policy and stated that the
government has allocated Rs 100 crore (US$ 15 million) to revive
community radios stations across the country.

The Union Cabinet has approved the model Shops and Establishment
Act, aimed at generating employment prospects by allowing cinema
halls, restaurants, shops, banks and other such workplaces to remain
open round the clock

Future prospectus
According to the FICCI-KPMG Report 2016, the industry is expected
to grow to Rs 2,260 billion by 2020 at a CAGR of 14.3% during 2015-
2020, which is more than double the rate of growth of global media
Industry.
Currently, advertising revenue in India contributes less than 0.5% of
the GDP, compared to the average 1% contribution across most
developed economies. It is expected that advertising will increasingly
contribute a higher share to the GDP in the coming years and is
projected to double to Rs 994 billion by 2020 growing at a CAGR of
16% during 2015-2020.
The fortunes of the media industry are linked to the growth of the
economy. India is set to grow at a rate of at least 6-7% over the long
term. Rising incomes in the hands of people encourage them to spend
more on discretionary items like media and entertainment. However,
the trend is shifting more towards the online medium.
The demographic profile of India also favours higher spend on
entertainment, with the consuming class forming a sizeable chunk of
the country's total households. Thus, this could lead to the emergence
of a huge consumer base for the various products and services
(including entertainment).
New distribution technologies like DTH, Conditional Access System
(CAS) and IPTV, hold the future of the media industry as increasing
digitization will radically alter the ways in which consumers receive
channels. The mandatory digitization all over India will bring in more
subscription revenues for the broadcasters as opposed to under
reporting of numbers by cable operators at present. Also, continued
growth of regional media and growing strength of the filmed
entertainment sector will also boost growth of the media industry.
The advent of digital platforms will require industry participants to
invest in constant innovation in products and services. Thus, going
forward, innovation will be the key to attract more consumers and
deliver relevant content and services that are profitable too.
With metros, already being saturated, regional markets provide ample
scope for growth in the media sector. In print media, newspapers are
being published in vernacular language. In television, newer channels
are introduced in local languages. Tier II and Tier III cities and towns
are set to drive the Indian consumption story in the next few years.