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M&E industry grows 11.8% to Rs 918 bn in 2013: FICCI-KPMG report
MUMBAI: In a year when the overall growth rate was subdued, GDP growth had slowed down and the rupee remained weak, the Indian media and entertainment (M&E) industry registered a general growth of 11.8 per cent from Rs 821 billion in 2012 to Rs 918 billion in 2013, according to the FICCI-KPMG M&E 2013 report titled ‘The Stage is Set’.
The report predicts that the industry is estimated to grow just above 1 per cent in 2014 to touch Rs 1,039 billion by the end of 2014. Meanwhile, it is expected to grow to Rs 1,786 billion by 2018, clocking a CAGR of 14.2 per cent over 2013-18.
Television: While the television sector will continue to be dominant, other sectors such as films, radio, gaming, animation & VFX and digital advertising are expected to show strong growth.
The report said that industry began to see some benefits from the digitisation of media products and services, and growth in regional media.
Incidentally, gaming and digital advertising were the two prominent industry sub-sectors which recorded a strong growth in 2013 compared to the previous year, albeit on a smaller base. For projections till 2018, digital advertising is expected to have the highest CAGR of 27.7 per cent while all other sub-sectors are expected to grow at a CAGR in the range of 9 to 18 per cent.
“The Indian M&E sector showed some resilience and began to grapple seriously with some structural issues it has long talked about but not engaged with. These include TV and print industry measurement, advertising volumes, inventory and rates, actions to see digitisation through and reap its benefits, working out the MSO-LCO relationship, copyright laws and operational efficiency. Many of these remain alive and will take a few years to sort through. Others like Phase III of radio are still pending regulatory action,” the report said.
Print: The print sector continued to buck the global slowdown trend. The sector grew at a CAGR of 8.5 per cent this year to touch Rs 243 billion. Regional markets performed exceedingly well on the back of steady advertiser spends, the state election impact and new launches.
However, with the validity of IRS data called into question by the industry majors, the sector in the short term suffers from the lack of a robust measurement system, critical for decisions on media planning and allocations.
Films: The film industry recorded a double-digit growth, albeit slower than in 2012, with multiple movies scoring big on box-office collections. Approximately 90–95 per cent movie screens are now digitised in the country, with a shift in focus to Tier II and III cities. Going forward, multiplex growth is expected to slow down, in line with the overall delays and future expectations for retail sector and commercial real estate development, impacting box-office growth in the short term.
Music: Streaming and download services continued to see growth, with the growth in mobiles, in particular smartphones, contributing significantly to increased consumption of music on-the-go but monetisation of this reach is still a challenge.
Nonetheless, with the continued decline in physical sales, compounded by the significant fall in ring-back tone revenues (following the backlash of TRAI guidelines issues in 2012), the sector saw an overall fall in size by 10 per cent in 2013. Going forward, digital revenues are expected to drive growth in the sector, backed by increased collaborations across devices and platforms, and gradual uptake in subscription services. Furthermore, the vibrant live events sector is expected to continue its role as a catalyst for driving growth in artists’ fan-base, and public performance royalties.
Radio: The radio industry outperformed all other traditional media segments by clocking a growth of 15 per cent. Currently, clients are being forced to re-evaluate their media mix as their advertising budgets are constantly under pressure. There has been a tendency to shift focus from nationwide pure brand-building to more tactical, local, focused promotional targeting. This has played in radio’s favour as it enables local reach to advertisers who are increasingly looking to target specific audiences and at affordable pricing. Although Phase III of radio frequencies auctioning remained elusive in 2013, with its implementation in 2014, industry players could establish their presence in over 290 Tier II and tier III cities.
Animation/VFX: 2013 was an important year for the animation and VFX industry. The most expensive Indian animated movie ‘Mahabharat’ costing around Rs 500 million received global kudos. The production work was done in India and the industry woke up to the promise of VFX. VFX is now being used in most films, whether to add characters, landscape, background, or to simply correct the skin tone of an actor. 2013 also saw the introduction of policies by a few state governments to boost the sector. VFX also began to get used in TV.
New media: The total internet user base in India grew to approximately 214 million by the end of the year, with almost 130 million going online using mobile devices. Mobile internet users dominated the total internet user base, capturing an overall share of 61 per cent.
With the dramatic growth in mobile usage, content providers and advertisers are seeking opportunities to get their messages across on this preferred medium of the masses. Digital media advertising grew 38 per cent faster than any other advertising category. Mobile, social and video emerged as star categories in advertising owing to the proliferation of smartphones, 3G and off-deck mobile apps.
The FICCI-KPMG report also highlights opportunities that could come from tapping international markets with a special feature on opportunities in the Middle East and Africa region. It also covers the live events market as well as the advertising market separately, along with an overview of the advertising services market in India.