India is the third largest television market in the world today. There are over 112 mn television households in India, which comprise only about 60% of the total households in the country. Of the approximately 112 mn television households, there are an estimated 70 mn pay TV households in India; cable households account for 68 mn of these, with the remaining 2 mn Direct-to-Home (DTH) households. This translates into a penetration of about 56%. As per the data released by industry estimates and a PwC analysis, the rate of growth of cable households hovers around 4-5% per annum over the next five years whereas the DTH households are expected to grow by 43%. Thus, the combined pay TV households are expected to reach 113 mn by 2011 with the cable presiding over the greater part of the share. Hence, the tremendous potential for growth augurs well for the future of the television industry. The chief area of growth in the Indian television industry is cable and satellite services, and especially in the rural and semi-urban areas. The buoyancy of the Indian economy will drive homes, both in rural and urban (second TV set homes) areas to buy televisions and subscribe for the pay services. The prime avenues for the growth of television homes comprise of rising disposable income, which leads to an increase in the number of households above the threshold income level and simultaneous rise of first-time buyers. Pay revenues will be the primary growth driver for subscription revenues in the semi-urban and rural areas. Further, there is also a high potential for conversion of the non-cable and satellite households into cable and satellite households. Due to an increase in the upper middle class population and growing aspirations, the demand for multiple TVs per household is also expected to increase. With the market getting laden with newer models every other weekend, the average shelf life of a TV has also registered a significant decrease lending further credence to the ever-increasing growth rate of the industry. Moreover, with an increasing number of families making the jump to higher income brackets, the demand is triggered further. The Indian television subscription market is estimated to around Rs 11,700 crore followed by advertising revenues of Rs 6,600 crore and sale of TV software contributes around Rs 800 crore. Within a small purview, growth is projected at 14%, primarily from the number of cable and satellite households. Subscription revenues are projected to be the key growth driver for the Indian television industry over the next five years .The subscription revenues have been boosted and the subscriber base broadened with the arrival of new distribution platforms like DTH and IPTV. The gradual increase in pay TV homes combine with enhanced subscription rates contribute effectively to the subscription revenues. Landmark growth is projected in the television software segment at a compound rate of 16% over the next five years. Despite over 300 channels being beamed across Indian skies the

investment ventures for more keep coming. Emphasis on content is the pre-dominant factor affecting future policy decisions. The position of television as a mass medium for dissemination of information remains untouched. It still can't be argued that television as a medium has immense potential to reach a larger number of people which no other medium can match. Nowadays, the majority of free channels being beamed across our homes ranging from alpha Bengali to Oriya TV gathering news from the nooks and corners of India are hard to miss. A prime time share of 24% speaks volumes about their capability as a viewer intensive service. When all channels of Star TV went into exclusive Hindi programming two years back, the demand for local language content was proved beyond doubt. The same phenomenon applies today to vernacular languages.

Key Players  Doordarshan  Balaji Telefilms  NDTV  Nimbus  Sahara India  Sony Entertainment  Sun Television  UTV Software  Zee Telefilms Limited  CNBC-TV 18  Discovery  ESPN Star Sports  MTV India  STAR India  TEN Sports India Opportunities abound in the Indian television industry.  Short-term growth is projected at 14% for the TV subscription industry.

 India currently spends less than 0.5% of its GDP on advertisements. This is relatively low in terms of the advertising spends in developed countries (1% of their GDP). This reflects a huge potential for television advertising market that exists in India.  High growth is expected in the television software segment at a compound rate of 16% over the next five years. The increasing number of channels and consequent increase in content spectrum will primarily fuel this segment.  SWOT Analysis of Media And Entertainment Industry

STRENGTHS: 1. Media And Entertainment is one of the most booming sectors in India due to its vast customer reach. The various segments of the Media And Entertainment industry like television and film industry have a large customer base. 2. The growing middle class with higher disposable income has become the strength of the Media And Entertainment industry. 3. Change in the lifestyle and spending patterns of the Indian masses on entertainment. 4. Technological innovations like online distribution channels, web-stores, multi- and megaplexes are complementing the ongoing revolution and the growth of the sector. 5. Indian film industry is second largest in the world and the largest in terms of the films produced and tickets sold. 6. The low cost of production and high revenues ensure a good return on investment for Indian Media And Entertainment industry WEAKNESSES: 1. The Media And Entertainment sector in India is highly fragmented. 2. Lack of cohesive production & distribution infrastructure, especially in the case of music industry. 3. The lack of efforts for media penetration in lower socio-economic classes, where the media penetration is low OPPORTUNITIES: 1. The concept of crossover movies, such as Bend It Like Beckham has helped open up new doors to the crossover audience and offers immense potential for development. 2. The increasing interest of the global investors in the sector. 3. The media penetration is poor among the poorer sections of the society, offering opportunities for expansion in the area. 4. The nascent stage of the new distribution channels offers an opportunity for development. 5. Rapid de-regulation in the Industry 6. Rise in the viewership and the advertising expenditure. 7. Technological innovations like animations, multiplexes, etc and new distribution channels like mobiles and Internet have opened up the doors of new opportunities in the sector.

THREATS: 1. Piracy, violation of intellectual property rights pose a major treat to the Media And Entertainment companies. 2. Lack of quality content has emerged as a major concern because of the 'Quick- buck' route being followed in the industry. 3. With technological innovations taking place so rapidly, the media sector is facing considerable uncertainty about success in the marketplace. Future plans The recent announcements are adding more fun to all this. Most of the leading production houses and media houses are busy announcing and launching new niche channels for viewers viewing pleasure. As many as 100 new TV channels are slated to launch in next 12 months or so. Is anyone going to have time to watch all these channels ? Have a look at some of the channels that are planned to launch in coming days. And this is only a partial list of channels that will get launched in coming months.

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First and foremost is, The Reliance – Anil Dhirubhai Ambani group (ADAG), who are widening its foray into media and entertainment sector with announcement of more than a dozen channels in Entertainment and Non-Entertainment space. These channels will be launched as early as Jan 2008. UTV Software Communications is planning to launch a news channel soon, having launched a youth channel last month. It has plans to launch multiple channels in different languages in India and Southeast Asia by next year end. INX Media will launch 12 channels in entertainment and news. In the first phase, INX plans to launch music, Hindi entertainment and a news channel each. In the second phase, it will launch three regional channels, three regional music channels and three city-specific news channels. TV18 and Viacom’s joint venture Viacom18 will roll out a Hindi entertainment channel in addition to several niche channels. TV18 will launch a Marathi news channel (IBN Lokmat). BAG Films & Media is planning entertainment and lifestyle channels under BAG Glamour and news channels under BAG Newsline. NDTV has announced a few non-news channels, starting with Hindi General Entertainment and expanding into movies, regional, youth and kids programming.

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