India media sector primed for investment

The Indian Media and Entertainment industry registered revenues of $16.3 billion in 2010 and is expected to be in excess of $25 billion in the next four years, according to an Ernst & Young’s report. The study shows that India’s growing digital media consumption and favourable demographics are key drivers for the media and entertainment industry’s future growth.

Enticed by economic liberalisation, near double-digit annual growth, a fast-growing middle class and a huge volume of demand for leisure and entertainment, there has been a surge in investment by global media companies in India. The Indian media and entertainment industry now finds itself at a new turning point – digital media. A surge in mass broadband adoption is expected, led by the launch of 3G and 4G services. By 2015, 90 per cent of India’s projected 187 million broadband subscribers will access the net through wireless devices. This presents global M&E companies with exciting opportunities to develop ‘”anytime, anywhere”‘ content that caters to a new generation of Indian digital consumers.

“The M&E industry in India has been, and will continue to be, one of the biggest beneficiaries of India’s favourable demographics,” said Farokh Balsara, Ernst & Young’s media and entertainment leader for Europe, Middle East, India and Africa. “Having one of the world’s youngest populations, high volumes of content consumption, a favourable regulatory framework and growing digital adoption, makes India an attractive investment destination for global media and entertainment companies.”

Key findings from the report include:
-India’s increasing per capita income, growing middle class and working population are generating huge domestic demand for leisure and entertainment. The country has more than 600 television channels, 100 million pay-television households, 70,000 newspapers and produces more than 1,000 films annually.
– The mandatory digitisation of India’s television distribution infrastructure is driving growth of digital cable and DTH and creating a need for these companies to fund expansion.
– The third phase of radio licence auctions, expected soon, will see radio networks expanding their reach to add around 700 radio stations across the country.

“The growth strategies in most companies in the US and Western Europe are linked to India and other emerging markets,” said John Nendick, Global Media and Entertainment Leader at Ernst & Young. “However, to succeed in India, global media and entertainment companies need to navigate unique challenges in the areas of content localisation, distribution and pricing, regulations and piracy.”

According to the report, the two greatest challenges faced by M&E companies doing business in India are low average revenues, with the Indian average revenue among the lowest in the world; and piracy, which is rampant in India and accounts for over $4 billion per year.

You must be logged in to post a comment Login