Wednesday, March 12, 2014

The Media and Entertainment (M&E) industry in India – transforming lives -FICCI Frames 2014 Report(Synopsis)

The stage is set
FICCI-KPMG
Indian Media and Entertainment
Industry Report 2014

kpmg.com/in

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The Media and Entertainment (M&E) industry in India –
transforming lives

2014 is a landmark year for India. An election year that is likely to set the
direction of the country going forward and determine whether we resume
our journey towards our aspirations. As a nation still on a journey to fulfill its
promise and meet the aspirations of its youth, India should aggressively make
an effort to transform itself.
Aspirations and ambition are extremely important in a nation’s journey
towards development. The desire to do better, run faster and go higher
is a critical ingredient to propel us, as a nation, forward. The media and
entertainment industry in India is a big part of sparking this ambition,
widening horizons, and helping transform lives.
The more we, as industry players, can enable the growth of this industry, the
more people across the country can be made aware of issues, be educated
and entertained, see how other parts of the country and world are and connect
with others.
Today, India’s M&E industry reaches millions of people. 161 millionTV
households, 94,067 newspapers (12,511 dailies), close to 2000 multiplexes,
214 million internet users out of which 130 million are mobile internet users
– all these are platforms that could drive change and be transformational
catalysts.
2013 was a tumultuous year for the industry. In the midst of an economic
slowdown, the industry faced several challenges, both business and
regulatory. However, 2013 was a year in which the foundation of the industry
was strengthened to position for growth as the economy improves.
In television, industry structures began the process of realignment, with
MSOs and LCOs in a delicate dance to evolve their relationship.Several
regulations including the ad cap and notifications around aggregators
were announced, that will likely change how the industry does business.
Digitisation has yet to deliver its promise with set top boxes seeded in Phase
I and II cities but with packaging and ARPU increases yet to kick in. The future
though, looks promising, with efforts being made to introduce channel
packaging, implement subscriber management systems and raise the ARPU
– initiatives that are likely to benefit all the stakeholders in the television
ecosystem.
Films had slower growth in 2013, than in 2012 and returned to the mean as
far as growth rates go. Multiplex expansion, ticket prices growth and the
expansion of digital screens are all likely to slow down in the near term
– challenging the industry to find new avenues to maintain momentum.
However, India is a heavily under-screened country and the macro story for
the film industry remains strong.
The print sector had a comfortable year – especially regional print, with
English print struggling on the ad revenue front. Advertising remained steady
© 2014 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved

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.UDAY SHANKAR
CHAIRMAN
FICCI Media and
Entertainment Committee
RAMESH SIPPY
CO-CHAIRMAN
FICCI Media and
Entertainment Committee
KARAN JOHAR
CHAIRMAN
FICCI Frames
JEHIL THAKKAR
HEAD
Media and Entertainment
KPMG in India
in the smaller towns and cities and elections in the Hindi heartland provided
a boost. In 2014, with general elections, the news business is likely to have a
good year.
Radio too, had a good year with better long term prospects. The government
disappointed again on Phase III licensing – which is now likely to come only
after the elections. The industry continues to require regulatory interventions
as it is in dire need of reform. FM radio nevertheless, is now becoming an
integral part of many media plans.
The big hope for the future of the M&E industry continues to be digital.
With a fast growing internet user base of over 200 million internet users,
the potential of the industry to enhance engagement with customers and
generate revenue from digital media is indeed vast. 2013 saw a few tipping
points for digital; the telecom companies began to focus on data as a revenue
driver, as contribution from voice slowed, and the advertising agencies began
a furious competition to acquire digital and social media boutiques. All of
these point to a bright future for this sector.
This year we also cover several new interesting aspects of the M&E sector.
Over the years, live events has been emerging as a robust category. Last year
saw Indian audiences flocking to shows by international DJs, musicians and
comedians. IP driven shows also show record viewership and attendance.
Live events have become a major source of revenue for artistes and a credible
avenue for sponsors. Several companies in this space are heading towards
critical mass and are poised to take the sector forward.
We have covered advertising and the evolution of the agency space. These
stakeholders in the M&E business are influential. We hope that the insights
into the value chain of this part of the media sector will be beneficial for
several users of this report.

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It is time for Indian companies in the M&E sector to begin looking at
opportunities outside India. While several companies have gone overseas in
search of the diaspora dollar, there are opportunities that Indian companies
could begin to explore in mainstream markets overseas. For example,
Africa and the Middle East are some of the fastest growing M&E markets. As
companies in other sectors have shown, the experience of working in India is
an asset when entering these markets – Indian M&E companies could do well
to explore the MEA region.
This is the 15th year of FICCI Frames – a milestone for a forum that is the
M&E industry’s premier gathering to debate issues, discuss ideas, study
benchmarks and most importantly initiate action!
As we take stock of business issues at this year’s Frames, we should also
focus on the role that Media plays in influencing, driving and being an agent
of positive change.

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