The entertainment and media industry is poised to register 19 per cent compound annual growth rate to reach Rs 83,740 crore (Rs 837.4 billion) by 2010 from the present Rs 35,300 crore (Rs 353 billion), according to Ficci-PricewaterhouseCoopers report.
Authored by Deepak Kapoor, India leader - entertainment & media practice, PWC, the report states that the industry has outperformed the Indian economy and is one of the fastest-growing sectors in the country.
"The buoyant economy is one of the factors that have driven the sector's growth. It has given a fillip to the consumer's income and has, in turn, increased the disposable income that the consumer spends on media and entertainment," said Kapoor.
The other key factor is the liberalised foreign regime, the most recent being foreign direct investment permitted in the two important sectors -- print media and radio. Films, TV and other segments are already open to foreign investment.
Areas that were pointed out as having untapped growth potential are penetration into lower socio-economic classes and ad spends. Media penetration is poor in lower SECs, so efforts to increase the penetration level even slightly in these are likely to deliver much higher results.
On the other hand, the domestic ad spend as a percentage of GDP stands at 0.34 per cent, which is extremely low compared with other developing countries.
The television industry continues to occupy the lion's share in the entertainment sector, which stands at over 42 per cent. Subscription revenues are projected to be the key growth driver for the domestic television industry over the next five years owing to a rise in the number of pay TV homes as well as subscription rates.
Also, emerging distribution platforms such as DTH (direct-to-home) and IPTV (internet protocol television) will expand the subscriber base and push up subscription revenues.
In 2005, television grew 15 per cent and is poised to grow at a CAGR of 24 per cent for the next five years.
On the films front, the industry is becoming more corporatised with several film production, distribution and exhibition companies coming out with public issues. Digital cinema, which took off in 2005, will gain more momentum, leading to increased box office revenues and controlling the issue of piracy.
The film segment is set to grow at 15 per cent a year for the next five years, with areas like overseas markets, domestic box office revenues, ticket prices and home entertainment consumption seeing growth.
With literacy levels on the rise and more people in rural and urban areas reading newspaper, the print industry is projected to grow at 12 per cent a year for the next five years. As foreign investors are showing increased interest in the local print sector, demand for more Indian content is on the rise.
Radio, on the other hand, with the second-phase licences being issued, will result in rising need for content and professionals. The medium will make a comeback in lifestyles and is estimated to grow four-fold cumulatively over five years.
The music segment has, on the contrary, continued to incur losses. However, the emergence of mobile music and licensed digital music is expected to come to its rescue.
On the emerging segments, live entertainment is estimated to grow at 18 per cent, mobile entertainment at 67 per cent, Internet advertising at 50 per cent and out-of-home advertising to reach Rs 1,800 crore (Rs 18 billion) by 2010.Do you want to discuss stock tips? Do you know a hot one? Join the Stock Market Investments Discussion Group
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