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1. Indian Entertainment Industry
2. The Role of Music in Indian Films
3.
How is the Indian entertainment industry using mobile?
Mobile Squared Roadshow: Asia
6 May 2010
Presented by:
Jonathan Dotan
Monty Munford
1. Overview of the Indian Entertainment Industry
2. Role of Music in Indian Films
3. Ground Realities
4. The Future
1. Indian Entertainment Industry
THE INDIAN OPPORTUNITY
14.6
15.2
6.32.0 (1.2)
1.6 (2.4)
(10.9)
(91.3)
(101.1)
(3.3)
(5.5)
(55.1)
(106.0)
(74.1)
2005 2015 2025
2.6 (49.9)
(93.1)
(94.9)
(33.1)
(9.5)
3.8
3.8
Globals
Strivers
Seekers
Aspirers
Deprived
Aggregate Disposable Income, by annual income bracket
Middle Class
Source: McKinsey and Co. 2006
3/4 of India's consumer market in 2025 doesn’t exist today.
About $1.32 trillion-a-year in future purchases is up for grabs.
A Picture of India in 2025:
Continuing rise in personal incomes will spur a ten-fold increase, enlarging the middle class
to about 583 million people, or 41% of the population.
India's wealthiest citizens will total 24 million (larger than the current population of
Australia) and account 20% of national private consumption
Primary Figure: Aggregate Disposable Income, in trillion INR
Bracketed Figure: Number of Households, in millions
30.6
13.7
20.9
21.7
5.4
11.4
3.1
INDIAN DOMESTIC BOX OFFICE
Indian film goers account for half of the world’s ticket admissions,
but have some of the lowest ticket prices in the world.
Source: Goldman Sachs Research 2009
INDIAN FILM INDUSTRY
The most prolific filmmakers in the world and a large number of
screens across the country.
Source: Goldman Sachs Research 2009
INDIAN ENTERTAINMENT LANDSCAPE:
2006-2009e
In billions Rs 2006 2007 2008 2009e CARG
Domestic Theatrical 62.1 71.5 80.2 68.5 3.30%
Overseas Theatrical 5.7 8.7 9.8 6.8 6.20%
Home Video 2.9 3.3 3.8 4.3 13.10%
C&S Rights 5 6.2 7.1 6.3 7.90%
Ancillary Streams 2.5 2.9 3.5 3.5 12.90%
Total 78.2 92.6 104.4 89.4 4.60%
Source: KPMG-FICCI FRAMES REPORT 2010
INDIAN ENTERTAINMENT LANDSCAPE:
2006-2009e
USD 2009e
Domestic Theatrical 1,475m
Overseas Theatrical 144m
Home Video 91m
C&S Rights 134m
Ancillary Streams 74m
Total 1,893m
Source: KPMG-FICCI FRAMES REPORT 2010
INDIAN ENTERTAINMENT LANDSCAPE:2010p-2014p
In billions Rs 2010p 2011p 2012p 2013p 2014p CARG
Domestic Theatrical 73.3 79.3 85.8 93 100.8 8%
Overseas Theatrical 7.3 7.9 8.6 9.3 10.1 8%
Home Video 4.7 5.2 5.9 6.6 7.4 11%
C&S Rights 7 7.9 9 10.1 11.4 12%
Ancillary Streams 4.1 4.7 5.4 6.2 7.1 15%
Total 96.4 105 114.7 125.2 136.8 8.90%
Source: KPMG-FICCI FRAMES REPORT 2010
PRODUCER REVENUE STREAM
Domestic
Theatrical Sales
(50%)
Sale of
Overseas
Rights
(15%)
Other Sources
(35%)
Cable and Satellite
Rights
(16%)
Home Video Rights
(9%)
Physical Music
Rights
(5%)
Product Placement
/ Merch
(2%)
Digital Rights
(3%)
Source: Crisil, Nirmal Bang Research
2. Role of Music in Indian Films
KEY ROLE OF MUSIC IN
INDIAN FILMS
• 3-4 song and dance
numbers per film
• Music launch event first
exposure to film
• Music videos core of film
trailers
• Music videos cut into TV
promos
MUSIC PLATFORMS: INSTALL BASE
• At peak, cassette players 40 million
• At peak, CD players 40 million
• Current broadband connections: 16 million
VS
Source: Estimates from Sony BMG India
500 million+ mobile phone
subscribers(20m subs added in March 2010)
60 million mobile Internet-enabled handsets(Despite lack of 3G still 8-10% Y-Y growth)
THE RUB: REVENUE SHARING AGREEMENTS
Operator
Rationale:
• High Data Costs
• Marketing costs
• No sustainable
advertising revenue
• Not enough
spectrum
• Legacy of bad deals
30% 70%
TURNING POINT: AIRTEL - SAREGAMA
Rs million Q1-2009 Q2-2009 Q3-2009 Q4-2009
Saregama 288 305 286 Awaited
*Airtel Music Revenue
(40%)
4007 4385 4496 4813
Airtel Non-SMS VAS
Revenue
1602 1754 1798 1925
May 2009:
Airtel proclaims its has overtaken in revenue
India’s largest music company Saregama.
Source: Analysis by Medianama
PERCEIVED VS PRACTIVAL VALUE
MATRIX
ROLLOUT OF VAS FEATURES:
Source: Boston Analytics MVAS Report 2007
SNAPSHOT OF MOBILE MUSIC
FORMATS• Full-track downloads (FTDs) have yet to find a market:
• Slow mobile connection speeds
• Low penetration of music-capable handsets
• Piracy
• Whereas, piracy-free sales of RBTs have grown rapidly.
– In 2008 accounted for 70% of entertainment VAS revenue.
– 35% CAGR
– Market share for RBTs will shrink, but will continue to prosper:
• Easy consumer access to content 36 via shortcodes
• Premium SMS
• IVR portal servicesPopular with India rural population (40% illiterate)
3. Ground Realities
CONTENT OWNER: T-Series Music Label
Best relationships with filmmakers:
• Preemptively buys rights
• Pays big
• Contributes massive advertising
– Retains blocks of ad revenue on hand
– Cornered radio stations with MGs
– Gets TV networks to license songs to use in reality shows etc.
• Excellent distribution:
– Still 35% in physical packaged media sales
Founder Gulshan Kumar
DIGITAL AGGREGATOR: Bollywood
Hungama
• 2003: Signs back-to-back deal for all digital rights handling for T-Series.
• The advantage that Hungama provides:
– Hassle-free expertise
– International contacts
• Conflicting Interests?
– The carrier has to justify ROI per product
– Hungama is in a marketshare game.
– Content owners?
Founder Neeraj Roy
CBRT PLATFORM: OnMobile
• Right place, right time.
– Operators realize WAP investments hadn’t lived
up to expectations
– 85% to 93% of total subscriptions are pre-paid
– ARPU from peer-to-peer (P2P) SMS is expected
to dip in the medium term as voice becomes
relatively cheaper than SMS.
• Became default CRBT provider since 2004
4. The Future
• New technology providers:– Operators renegotiating contracts
– New nimble operators/MVNOs
• New formats:– IVR
– Text based premium packages
– Gaming
• New role of social media– 1.5m Twitter users
– 8mFacebook users
– 15m Orkut users