India ranks among the top five economies of the world in terms of purchasing power parity, while its GDP ranks eleventh in absolute terms. Combined with the fact that India has the second largest population in the world with over a billion people, this makes India one of the most exciting marketplaces for any consumer products or services industry. Given the average Indian’s cultural affinity for entertainment, the Indian entertainment industry’s growing contribution to the economy cannot be understated.
KPMG and CII have come together to create this vision document on the sector which aims to provide a critical evaluation of the Indian entertainment industry, with in-depth analysis of its constituent segments – television, films, radio and music.
Media, the fourth estate, when entwined with the entertainment component represents an effective facet of consumers in India. Technology has played a key role in influencing the entertainment industry.
The Indian Media and Entertainment (M&E) industry stood at US$ 12.9 billion in 2009 registering a 1.4 per cent growth over last year, according to a joint report by KPMG and an industry chamber. Over the next five years, the industry is projected to grow at a compound annual growth rate (CAGR) of 13 per cent to reach the size of US$ 24.04 billion by 2014, the report stated. Additionally, the gaming segment is expected to be the fastest growing sector in the M&E industry. The sector showed a 22 per cent growth in 2009 and is expected to grow at a CAGR of 32 per cent to reach US$ 705.2 million by 2014, while the animation segment is expected to record a CAGR of 18.7 per cent in the next five years as per the joint report.
Television
Anil Dhirubhai Ambani Group’s company, Reliance MediaWorks (RMW) has signed a memorandum of understanding (MoU) with IMAGICA Corp of Japan for film processing services. Under this alliance, RMW, on behalf of IMAGICA, would provide film restoration, image processing and enhancement and high definition (HD) conversion services to the Japanese clients. IMAGICA Corp would work with RMW’s Los Angeles-based subsidiary Lowry Digital, which has handled projects for leading studios like Walt Disney, Paramount Pictures, MGM and 20th Century Fox. RMW would be doing the processing job for IMAGICA either in India or in California in the US.
Music
The music industry is a vast entity and over the years it has witnessed change significantly. The potential of the Indian music industry can be better understood from its size estimated at around US$ 182.9 million in 2010, up from US$ 160.9 million in 2008, portraying a growth of 14 per cent during the reporting period. It is expected to grow at a CAGR of 16 per cent over 2010-14 to reach US$ 379.1 million.
Radio
Radio is considered a mass medium. It ideally suits the Indian environment – leveraging its twin advantages of wide coverage and cost effectiveness. Currently, the sector generates annual revenues worth US$ 49.5 million and is growing at around 20 percent annually, according to the joint report by KPMG and an industry chamber.
VedantiNET, the Broadband and application service provider of Guwahati promoted by SM Computer Consultants Pvt Ltd, has launched the service of first Internet Radio of Assam, ‘Radio Assam’, in the city.
A few instances of rising content diversity are:
Newer programming categories like reality television,
Crossover content in music and films,
Niche programming on radio like sports and comedy,
Newer genres like lifestyle television, religion channels, etc.
New delivery platforms and technological breakthroughs:
Increasing content variety: