Media & entertainment industry to touch $28 bn by 2015

Buoyed by increasing media intake and strong recovery in advertising spends, the Indian Media & Entertainment (M&E) industry is expected to grow at a CAGR of 14% to touch Rs 1,27,500 crore ($28 billion) by 2015, a FICCI-KPMG report today said.

According to the report, in 2010, the Indian M&E industry registered a growth of 11% over 2009 touching Rs 65,200 crore in revenue and is estimated to achieve a growth rate of 13% in 2011.

The report will be formally released at the inaugural session of FICCI FRAMES 2011 on Wednesday.

"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 (online media) driven by changing media consumption patterns," FICCI Secretary General Amit Mitra said.

In 2010, advertising spends grew by 17% to Rs 26,600 crore and accounted for 41% of overall industry size.

Revenues from television advertising and subscription are expected to touch Rs 21,400 crore and Rs 41,600 crore respectively during 2015, the report said.

The year 2010 was a challenging year for the industry. However, with better content, increase in number of multiplexes, investment in research and continued cost corrections, the industry is estimated to grow from Rs 8,300 crore to Rs 13,200 crore by 2015, the report said.

"Going forward, it will become imperative for media companies to reset their business models and build greater focus on profitability and changing consumer preferences," KPMG Head of Media and Entertainment Rajesh Jain said.

Sectors such as gaming, digital advertising and animation VFX also grew at a faster rate and show tremendous potential in the coming years, the report said.

In 2010, social media gained significant popularity as a marketing and gaming platform.

"Social media offers advertisers and content owners the opportunity to directly connect with their consumers/ audiences.

Businesses are now beginning to understand the power of this tool and integrating it into their core marketing plan to reach out to their target audience," Jehil Thakkar, Executive Director, Media & Entertainment, KPMG said.