Media and Entertainment Industry in India

Through this year’s report, Federation of Indian Chambers of Commerce and Industry (FICCI) and research firm KPMG have tried to unravel the tremendous potential of the Media and Entertainment Industry in India, where the report slated a growth at a compounded annual growth rate (CAGR) of 13 percent by 2014 in the Media and Entertainment industry.

The key drivers which have lead India to the tremendous growth of the Media and Entertainment Industry are:

• Economic growth of the country in general and rising disposable income levels in particular
• Gradually liberalizing attitude of the Government
• Greater interface with international companies
• Privatisation and growth of the radio industry
• Advancement in technology
• Favorable regulatory initiatives
• Liberalized foreign investment regime

The exponential development which has been witnessed in recent years in the media and entertainment industry has made them one of the most rapidly performing sectors in the Indian economy. While the mainstream sectors such as print, television and film entertainment continued to grow robustly, various emerging segments such as animation, gaming and visual effects, radio, out-of-home advertising, digital advertising and mobile marketing grew faster, although on a much lower base.

The report forecasts sustained growth for the next five years, estimating that the industry will grow to an overall size of Rs1.16 trillion by 2012.

Future Outlook

The Indian Film Industry is said to be one of the world’s largest industry with more than 1000 movie releases and over 3 million movie goers annually. It is also noted that the number of pay DTH subscribers is estimated to grow to around 28 million households by 2013.

The main reason noted which ensures an attractive market for entertainment is India's demographic composition (70% below 35 years). While steady economic growth and increasing cable TV penetration continue to boost the growth of TV advertising, the studies have proved that TV’s share of the ad pie, which in 2007 was 42%, will come under threat in the long run from the growth of out-of-home media, radio and online advertising. It said advertising on TV will grow at an average annual rate of 19% between 2007 and 2012 to reach $3.5 billion and further to $6.3 billion by 2017.