FICCI-PWC report: Indian M&E set to grow by 18 per cent

According to the report, the technological advancements and policy initiatives taken by the Indian Government that are encouraging the inflow of investment, and initiatives by private media companies will prove to be the key drivers for the E&M industry.

Commenting on the future of the industry, Timmy Kandhari, Executive Director & Leader, Entertainment & Media Practice, PWC, said, “Convergence will continue to play a crucial role in the development of the Indian entertainment and media industry where consumers will increasingly be calling the shots in a converged media world. With more favorable policy initiatives expected to be introduced by the government in the near future, a move towards a better intellectual property rights regime, growing investment from big Indian as well as foreign companies, and the deluge of technological advancements, there is only one direction for the Indian E&M industry to go - Up!”

The FICCI-PWC Report has defined 2006 as a year of start of convergence for the media industry. The services available through different network platforms promote consumers to the top of the value-creating hierarchy, allowing them to enjoy the all-new social media experience -- ‘Lifestyle Media’. The report believes that the importance of accurate audience measurement will be greater than ever before and media consumption models will gain significant importance.

Forming of Media Powerhouses
A number of collaborations between value chain partners are encouraging the diversification of several media companies across different segments of the industry. Companies such as Reliance’s Adlabs, Bennett, Coleman & Co. Ltd and Zee Group have presence across several segments of the E&M industry, ushering the dawn of ‘media conglomerates’ in India.

Advertising spends
Indian advertising spends in 2006 registered a growth of over 23 per cent to reach Rs 163 billion. “While today the low ad spends may seem like a challenge for the Entertainment and Media industry, it also throws open immense potential for growth,” points out the report. This potential can be estimated by the fact that “even if India was to reach the global average, the advertising revenues would at least double from the current level of around Rs 163 billion.”

Foreign investment
The year 2006 saw the maximum flow of foreign investment to the industry. Around 22 FDIs for media proposals are under the scrutiny of the Ministry of Information and Broadcasting, while as many as 13 proposals were cleared in 2006 itself. Overall, in the last three years, the industry has secured foreign investment of over Rs 4 billion.

Key Findings

The current size of the Television industry is estimated at Rs 191 billion, with a projected figure of Rs 519 billion by 2011 at a CAGR of 22 per cent. Last year, the major developments included the implementation of CAS in selected cities, launch of IPTV services and the entry of the second DTH player. These new distribution platforms are expected to increase the subscriber base and thereby making subscription revenues a key growth driver for the Indian television industry over the next five years.