The Indian media and entertainment industry is set to grow at twice the rate of the country's GDP in the coming few years, driven largely by the emergence of regional players, technology and digitisation. A combined Ernst & Young-Assocham study has highlighted that increasing digital content in the media and entertainment industry will lead to sweeping changes in consumption habits and revenue models.

Changes in consumption habits along with regulatory pressures have led the country — the third-largest cable and satellite market in the world — to start migrating to digital platforms. Last year, digital music sales took over traditional physical sales of music for the first time in India. In the rest of Asia as well, digital sales are expected to surpass physical sales by end of 2007-08.

The home entertainment segment is also set to grow significantly. Hollywood makes 78 per cent of its revenues from the home entertainment and television broadcast rights segment while in India, home entertainment accounts for less than 25 per cent of overall revenues from the entertainment business. But it is expected to grow significantly, with additional revenue streams such as video on demand emerging. Revenues from home entertainment, DVD and VCD viewing, digital pay television platforms and broadcasting rights are likely contribute up to 45 per cent of overall total revenues of films. In the television space, 29 per cent of an estimated 100 million pay television households are expected to migrate to digital platforms by 2010.

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