Ad spend growth pushes media industry profit: Ficci-KPMG

Domestic media and entertainment industry will touch Rs 73,500 crore in 2011.

Domestic media and entertainment industry will touch Rs 73,500 crore in 2011

Having registered a 11 per cent growth in 2010 after falling in 2008 due to the global financial meltdown, the domestic media and entertainment industry (M&E) will touch Rs 73,500 crore in 2011. Last year,the M&E industry registered a growth of 11 per cent over 2009 to cross Rs 65,000 crore mark. This was possible due to a 17 per cent growth in the advertising spends on media so as to reach Rs 26,600 crore in 2010. The advertising industry accounts for 41 per cent of the overall M&E industry,says the latest Ficci-KPMG report on the media and entertainment sector.

According to the report,in next five years the Indian M&E industry will become Rs 1.27 lakh crore in size.

The Ficci-KPMG report is important because it is widely accepted by the government and the private sector as the official word on the Indian M&E sector. The report was formally released on Wednesday in Mumbai at the inaugural session of Ficci-FRAMES 2011,the annual global M&E summit.

The report said the television and print media continued to dominate the M&E industry however,sectors such as gaming,digital advertising,and animation VFX grew at a faster rate and hold tremendous potential in the coming years.

Contrary to most other markets in the world that continue to witness an erosion of the print media industry,in India,the sector witnessed a growth of 10 per cent last year (over 2009) and is expected to continue to grow at a similar pace over the next five years, the Ficci-KPMG report said.

Rising literacy levels and low print media penetration offer significant headroom for growth. Television meanwhile saw a tremendous increase in the net DTH subscriber base totaling to 28 million at the end of 2010.

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Backed by growth in advertising and subscription revenues,the television industry grew by 15.5 per cent in 2010 and is expected to grow at a CAGR of 16 per cent to touch Rs 63,000 crore by 2015,it said. Television is expected to account for almost half of the Indian M&E industry revenues,and more than twice the size of print,the second largest media sector, the report said.

Commenting on the report,Amit Mitra,Secretary General,Ficci said: The key industry highlights are the growing potential of the regional markets,increasing media penetration and per capita consumption and increasing importance of New Media driven by changing media consumption patterns. According to Rajesh Jain,head of M&E,KPMG,The resurgence in advertising,growth in subscription revenues,thrust on digitisation,and emerging avenues for content monetisation were the key growth drivers for the Indian Media & Entertainment industry in 2010. However going forward,it will become imperative for media companies to reset their business models and build greater focus on profitability and changing consumer preferences.

MARQUEE SIGNAGES

Television: TV households to surge to 156 million by 2015; Advertising and subscription revenues to touch Rs 21,400 crore and Rs 41,600 crore respectively

Print: Overall print industry to see a CAGR of 10 per cent to touch R31,000 crore in five years. Regional print expected to grow at a higher rate of 12 per cent

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Radio: With increase in scale,expected changes in regulation from phase III and music royalty structure,the industry is expected to grow at 20 per cent per annum and become profitable.

Films: 2010 was a challenging year for the industry. However with better content,increase in multiplexes, investment in research and continued cost corrections,the industry is estimated to grow from Rs 83,000 crore to

Rs1.32 lakh crore by 2015

OOH: With economic resurgence,advertising on this medium bounced back with a growth of 21 per cent in 2010 and is expected to reach a size of Rs 3,000 crore in 2015