Analysis of Media Sector

The Indian Media & Entertainment (M&E) industry is highly driven by strong consumption in non-metro and small cities, intense emergence of regional media and burgeoning new media businesses and formats.
According to a report jointly prepared by KPMG and an industry body, the industry registered a growth of 12 per cent in 2011 over 2010. While television (TV) retains its top slot as an entertainment medium, segments like animation, VFX, digital media and gaming are up-coming as major mediums. Multiple movies crossed Rs 100 crore (US$ 20.04 million)-business in domestic theatrical collections and Rs 30 crore (US$ 6 million) mark in Cable & Satellite (C&S) rights.
Advertising spends across all media accounted for 41 per cent of the overall M&E industry revenues, aggregating to Rs 300 billion (US$ 6 billion) while advertising revenues witnessed a growth of 13 per cent in 2011.
Television and Digitisation
Television continues to be the most prominent entertainment medium in the Indian M&E industry. As per the report (by KPMG and another industry body), television would account for almost half of the Indian M&E industry revenue and would also be over twice the size of print media (the second largest media sector) by 2015. While the current level of penetration is estimated at around 60 per cent, there is still a lot of room for expansion on Indian TV landscape. The report further estimates that pay-TV subscription revenue will increase from 65 per cent in 2011 to 69 per cent by 2016.
Moreover, TV accounted for Rs 329 billion (US$ 6.6 billion) of revenues in overall M&E industry in 2011 and is estimated to grow at a CAGR of 17 per cent over 2011-16 to touch Rs 735 billion (US$ 14.73 billion) in 2016.
Indian television industry has undergone many changes over the past decade, majorly due to the introduction of digitised modes which include digital cable, direct to home (DTH) and IPTV. This has not only transformed the business...