Technological innovations such as Internet TV, direct-to-home channels, digital distribution of films, and downloadable music and films are seen as the growth drivers of the Indian entertainment industry.
A report by the Confederation of Indian Industries and KPMG says multiple delivery platforms will lead to the need for customised content.
Rajesh Jain, national industry director, information, communications and entertainment, KPMG, said, "The digital growth coupled with the new delivery platforms is going to offer newer modes of revenue for content developers irrespective of the industry."
The Indian television software sector is estimated at Rs 2,800 crore (Rs 28 billion) in 2004. With the digital offerings, the television content will continue its expansion and reach Rs 37,100 crore (Rs 371 billion) by 2010.
However, the report forecasts that newer mediums would compete for the ad-pie, which is currently at Rs 11,800 crore (Rs 118 billion) and will grow corresponding to the rise in consumer spends.
The Indian film industry also will have newer modes of revenues with increasing digitalisation.
According to Jain, while downloads of music and films cannot be done away with completely, the film industry can offer movie downloads at a price.
This would help the film industry reach out to the three million non-resident Indian population effectively.
For example, if a Subhash Ghai movie is available for download at Rs 100, an estimated Rs 30 crore (Rs 300 million) can be made straight off an internet download, according to Jain.
The radio industry in India is still a loss-making venture.
India has an estimated 180 million radio sets reaching over 99 per cent of the population, but the ad spends for this medium are less than two per cent, the report said.
With the introduction of private FM players, the trend of radio-on-the-move is catching on but the FM stations are burdened with the licence fees.
According to KPMG, unless regulatory interventions assuage radio industry, its potential to have 25 per cent growth increase in its revenues by 10-12 per cent would be a difficult one.
Apart from the forecasts for the industry, the report also points a list of things that the film industry as well as the regulator need to do to ensure profitability and growth in the sector.
These include improving governance standards and developing newer markets for the film industry to constitute a unified regulator and a national media and entertainment policy from the regulatory side.
