M&E CAGR 2014-19: 13.9 %, as per FICCI-KPMG

30 Mar,2015


India is taking its place on the global stage as a market with tremendous growth potential — and a country with exciting investment opportunities.


Offering the world’s largest youth workforce, an expanding middle-class that constitutes one of the biggest consumer bases, and a robust, well-functioning democratic system, India, along with its pro-reforms government, is now scripting a turnaround story. The global economy is struggling to gain momentum, as China suffers a slowdown, the Euro-zone slips into deflation, and Japan’s economy is too soft to absorb the fiscal consolidation plan. Despite its shaky global economy, India is performing relatively well, with a stable macro-economic environment (inflation eased while the current account deficit came under control) bolstering the economic outlook. The Indian economy is on a strong footing, with an estimated growth of 7.4 per cent in the Financial Year 2015, while growth is pegged at between eight and 8.5 per cent in FY16.


As a result, there is a marked shift in investor sentiment towards India. Global investors are increasingly beginning to view the country with renewed interest and optimism, thanks to the government at the Centre and its reform agenda. The government’s recent Budget announcements underpinned this sentiment further. An improved business climate, together with policy reforms, could boost the country’s long-term growth potential.



This growth story then extends itself across the Media and Entertainment sector. We estimate that the Indian market is poised to grow at a CAGR of 13.9 per cent, to increase from Rs 1026 billion in 2014, to Rs 1964 billion by 2019 — a growth rate that is almost double that of the global media and entertainment industry.


The growth in popularity of digital media continued to surge in 2014, with a significant increase of 44.5 per cent (over 2013) in digital advertising. At the same time, traditional media continued to exhibit healthy growth rates as well, with the television sector continuing on its path to cable digitization; advertising across media buoyed by the spends during the 2014 Parliamentary elections, and the emergence of e-commerce as a significant new category. Advertising revenues in 2014 grew at a rate of 14.2 per cent over 2013, to reach Rs 414 billion, of which print (43 per cent) and television (37 per cent) captured the lion’s share.


The media and entertainment sector in the country is poised for exciting times, powered by the growth in digital media consumption, and the supporting environment created by regulatory reforms. The new digital ecosystem, however, brings with it a new set of challenges, like an increasingly-fragmented and on-the go audience and hurdles to monetise digital platforms. To seize the opportunities, front-runners are expected to continue to place consumers, both domestic and global, at the heart of their strategies for content and access channels.


Collaboration across players may remain the key to success. Efficient and transparent measurement systems at an industry level, and focus on big data analytics at a stakeholder level, can be critical to measure and monitor performance. The momentum generated by regulatory reform needs to be underpinned by strong implementation on the ground, and partnership across the value chain.


And then a ‘global superpower’ may be a not-too-distant reality.


Extracted from #shootingforthestars. The FICCI-KPMG  Indian Media and Entertainment Industry Report 2015


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