Indian M&E industry to achieve 11.8% growth in 2013: FICCI-KPMG report

08 Mar,2013

By A Correspondent

 

The Indian M&E industry grew from INR 728 billion in 2011 to INR 820 billion in 2012, registering an overall growth of 12.6 percent. While, 2012 was a challenging year for the industry, with some improvement likely in the global economy in 2013 and India’s real GDP expected to be in the region of 6.1% to 6.7%, the prognosis for the Industry looks much better going forward. Given the impetus introduced by digitization, continued growth of regional media, upcoming elections, continued strength in the film sector and fast increasing new media businesses, the industry is estimated to achieve a growth of 11.8 percent in 2013 to touch INR 917 billion. Going forward, the sector is projected to grow at a healthy CAGR of 15.2 percent to reach INR 1661 billion by 2017, says the FICCI – KPMG Media & Entertainment 2013 report.

 

The report noted that television continues to be the dominant segment; however, it also boasts a strong growth by new media sectors, animation/ VFX and a comeback in the Films and Music sectors on the back of strong content and the benefits of digitization. Radio is anticipated to see a spurt in growth at a CAGR of 16.6 percent over the period 2012-2017, post the rollout of Phase 3 licensing.

 

Total advertising spend across media was INR 327.4 billion in 2012. In light of continued economic slowdown, advertising revenues saw a growth of 9 percent in 2012 as against 13 percent in 2011 and 17 percent in 2010. Print continues to be the largest beneficiary, accounting for 46 percent of the advertising pie at INR 150 billion.

 

Uday Shankar

Speaking about the findings of the report, Mr. Uday Shankar, Chairman, FICCI M&E committee said, “2012 has been one of the toughest years in recent times. But it has also been a landmark year for the media and entertainment sector with significant progress in all verticals: the signs are already evident that digitalization will fundamentally change broadcasting, films have scaled-up their ambitions, and radio and print continue to defy global trends. If anything, 2013 promises to be even more disruptive. I am certain that the insights and findings from this report will provide a comprehensive and useful lens for all of us in the industry.”

 

According to Jehil Thakkar, Head of Media and Entertainment, KPMG in India, “2012 though a challenging year for the M&E industry, was a year in which important foundations for future growth were laid. The advertising environment went through one of the toughest years in the last decade. However, the implementation of digitization, the stellar performance of the film industry backed by excellent content and digital distribution, the continued growth in regional print and the momentum in new media and the announcement of Phase 3 radio implementation have all finally provided the needed platform to boost the Indian Media & Entertainment industry.”

 

Key trends and themes for growth

 

Digitization of film and TV distribution infrastructure:

Digitization of distribution has brought in the promise of more sustainable and profitable business models across media sectors. It has enabled the films sector to make a comeback this year. The industry has achieved 77 per cent digitization of screens and expects to be close to 100% digitized in the next 18 months to 2 years. These developments have resulted in increased ability to invest in differentiated content, marketing, and wider releases – all contributing to greater audience engagement and unprecedented box office success across big and small budget movies alike. Overall, digital technology is expected to drive the M&E sector’s growth in a challenging macro environment, by spurring on end-user spending and transparency.

 

Growth in new media:

The rapid increase in mobile and wireless connections continues to drive the growth of internet penetration in India. With better access, through cheaper and smarter devices, audiences (especially the youth) are consuming more content and are getting increasingly engaged.

 

Key beneficiaries are emerging new media segments, which include internet advertising, online classifieds, and gaming, all of which are on a rapid growth path. Going forward, better uptake of 3G connections and the beginnings of the 4G rollout are expected to spur growth further.

 

Regional markets remain key centers of growth:

Advertisers continue to see higher growth in consumption from key regional markets. Hence regional media continues on a strong growth trajectory especially in the print and television sectors. Key media players are focusing on cherry picking acquisitions and expanding their presence in regional markets based on higher rates of advertising revenue growth, and better insulation from the slowdown than in metros, which may be close to saturation in many cases.

 

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One response to “Indian M&E industry to achieve 11.8% growth in 2013: FICCI-KPMG report”

  1. shahid says:

    In India, events experiences should elevate instead of a high crowd puller to a leisure activity.

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