Media industry to cross Rs 1 lakh cr by 2013: study

The Rs 58,400 crore Indian Media and Entertainment industry grew at 12.4 per cent over the previous year. It is expected to grow at a compounded annual growth rate (CAGR) of 12.5 per cent over the next five years to become a Rs 1,05,200 crore industry by 2013, says a Ficci & KPMG report on the sector release today.

The report also highlights the increasingly challenging market environment for the sector, on the back of economic slowdown and the consequent slowdown in advertising revenues, especially in the last quarter of 2008. Sectors like TV, print, radio and outdoor which depend on advertising revenues were largely affected and this is estimated to continue into the current year too.

Advertising spends grew at CAGR of 17.1 per cent in the past three years. Going forward, it is expected to exhibit a robust growth rate CAGR of 12.4 per cent over the next 5 years. Potential upsides could take this higher.
 
Growing acceptance of the digital TV distribution technology, entry of DTH players the success of many small budget movies, and the rising competition in the regional market were some of the key highlights of the previous year. However, it was IPL which proved that innovation in traditional formats resulted in runaway success.
 
Dr Amit Mitra, secretary general, Ficci says, "India is one of the few countries where economic growth will be led by domestic consumption. With a low advertising spend to GDP ratio of 0.47 per cent, a growing consumer class, and middle class, young population, low media penetration and increasing discretionary spending; India continues to be an attractive market for Media & Entertainment".
 
Commenting on the highlights of the report, Rajesh Jain, head (Information, Communication & Entertainment), KPMG India said, "Media companies are under pressure to change, innovate and re-examine their existing business models. Players need to draw upon new capabilities to survive in this environment. In the immediate future, media corporates are likely to focus more on operating margins, and assess opportunities for consolidation, while building on core strengths".
 
Ficci-KPMG report highlights

• Media & Entertainment Industry projected to grow at 12.5 per cent over next five years to Rs 10,520 crore

• Advertising spends down from CAGR of 17.1 per cent in last 3 years to 12.4 per cent CAGR for next 5 years

• Television industry at Rs 24,100 crore recorded a growth of 14.2 per cent over 2007. It is projected to grow at the rate of 14.5 per cent over 2009-13 and reach a size of Rs 47,300 crore

• The filmed entertainment sector is projected to grow at the CAGR of 9.1 per cent over the next 5 years and reach the size of Rs 16,860 crore by 2013. The industry clocked revenues of around Rs 10,930 crore in 2008, a growth of 13.4 per cent over 2007

• The Indian Print Media industry grew at 7.6 per cent in 2008  to be a Rs 17,260 crore industry. It is projected to grow at a CAGR of 9 per cent over the next five years and reach around Rs 26,600 crore by 2013

• Radio ad spends have doubled from 2 per cent in 2004 to 4 per cent of the total advertising spends in India today.  Over 2009-13, radio ad industry will grow at a CAGR of 14.2 per cent to be a Rs 1,630 crore industry

• The size of the Indian music industry was estimated at around Rs 7.3 billion in 2008, down from Rs 8.3 billion in 2005, implying a degrowth of 4.8 per cent during the period

• OOH performance was affected in the second half of the year owing to the overall economic slowdown. The media has grown at a CAGR of 17.3 per cent over the past 3 years and is projected to grow at a compounded rate of 12.8 per cent over the next 5 years. It will be around Rs 2,930 crore industry by 2013

• The Indian animation industry has been growing rapidly with an estimated CAGR of 20.1 per cent in 2006-08. It is estimated to reach a size of about Rs 3900 crore by 2013

• In 2008, the Indian console gaming segment registered total revenues of Rs 410 crore which is expected to go up to Rs 940 crore in 2013