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BY PROF. INDRANI SEN
SIMC18.7.2011
Indian Media Industry
At a Glance
One of the largest media market globallyTotal size valued at $ 10 BnAdvertising revenue accounts for 41%Growing at 23.4% Top 10 media companies accounting for 44 % ofadvertising revenueAdvertising remains underinvested as a % of
GDPAt 0.4% compared to the global average of 1%
Enjoying Steady Growth Till 2008
As per FICCI Reports M&E industry was enjoying steady growth till 2008 Like many other Indian industries, its growth rate
surpassed the performance of Indian economy The global M&E industry recorded single digit growth
rate (6% to 7.5%) during 2006-2008 Indian M&E industry enjoyed much higher growth
rate (12% to 14%) during the same periodIn 2009 the industry growth rate slowed
down clocked at only 1.4%
The Slowdown in 2009
The recessionary pressure was the main reason for the slowdown Highest share of revenue comes from advertising
Higher in case of Print and TV Film, radio and OOH registered a negative growth during 20o9
Aggravated by several internal factors Delay in auctions of phase 3 FM radio and 3G mobile telecom The multiplex strike Lack of quality content on TV
Renewed focus on innovations, creativity and managing costs
Comparative Growth in Ad Spends 2008-2009
Country Growth in Ad spend
US -4.30%
UK -13.90%
Russia -19.00%
Spain -15.90%
Italy -9.80%
China 3.20%
India 0.00%
Source Group M
Source of Revenue for Media Industries In India
Segment Revenues INR billion 2008
Advertising/ Audience
Pay / Content Total
Print 153.75 41.44 195.19
TV 127.57 167.4 294.97
Film 2 124.8 126.8
Internet 11.08 29.37 40.45
Telecom NA 47 47
Events NA NA 22
Music None 27.47 27.47
Outdoor 13.89 None 13.89
Radio 8.4 0.028* 8.43
Total 316.70 437.50 776.19Based on various industry sources,courtesy: Vanita Kohli-Khandekar *Worldspace
subscribers
Estimated Share of Advertising Revenue (%)
TV41%
Print47%
Radio3%
OOH7%
I'net2%
2009
TV40%
Print52%
Radio1%
OOH7%
I'net0%
2005
Source Industry Estimates
Media Spend As % of GDP
India UK US China Japan0.00%
0.20%
0.40%
0.60%
0.80%
1.00%
1.20%
Source Worldwide Media & Marketing Forecasts Group M Summer 2009
World average is 0.80%
India Lags Behind
India is second only to China with 22% share of world population
China’s media spend as percentage of GDP 0.75% is close to the world average 0.80%
India is lagging far behind with only 0.41%
Under-Penetrated Market
India US
ChinaTV Penetration 47.6% 98.2%
92.0%Cable & Satellite 67.8% 85.8%
37.0%DTH 6mn 319mn
539mnBroadband 0.3% 39.3%
4.0%Internet Users 60mn 215mn
162mnLiteracy Rate 68% 99%
90.9%
Potential for Growth
As penetration of media increases and more audiences come into its fold, the gap between India and China will reduce China’s current media spend per capita is almost 8
times that of India Higher penetration of media channels may not result
in higher spend on media from the lower socio-economic strata and rural population
Infrastructural development in China is far ahead of India
Media Spend Per capita
India UK US China Japan0
100
200
300
400
500
600
251
27
US D
4
491
343
Source Worldwide Media & Marketing Forecasts Group M Summer 2009
Penetration of Mass Media
Growing at a slower rate compared to The growth of spends on media The investment on media industries
Focus on the great Indian middle class and the elite upper class Would that approach provide a long term result in
terms of overall development which would get reflected in the macro economic statistics?
Mass Media Reach (U + R): 2006 to 2008
Source IRS 2008 R2
The Potential of Press
Some of the largest print titles in the worldMostly concentrated in top 15% of the
population in urban India Currently Press Reach is 221 mn adultsThe literates( education of class V onwards)
constitute 495 mn adultsA potential of 274 mn readers to be added! Expecting a 5% circulation growth y-o-y in
next 3 years
Need for Focus on Rural Area
As per IRS 2007 to 2009 Literacy rates growing steadily Working female population increasing steadily Movement towards smaller household sizes
Rapid urbanization escalated The total working population Growth in the extreme ends of the strata SEC A and
SEC E Rural India is emerging as potential market for
many product categories In 2009 advertisers pulled back on their ad spends but
continued with their rural initiatives
Urban & Rural Population
5%
4%
7%
Source IRS 2008 R2
Mass Media Reach by Urban/ Rural
Source IRS 2008 R2
Uneven Media Penetration & Reach
An analysis of media reach by urban and rural highlights the inadequacy of media reach in villages The gap between urban and rural reach is lowest for radio
and highest for satellite TV
Technically footprint of TV covers the entire country but in reality 20% of urban and 60% of rural population are still outside its reach
On an average a person in urban area spends almost 90 minutes per day on different media related activities while a person in rural area spends almost 60 minutes
Share Of Media - Urban
All figs. Minutes / Day
89.5 min / day
Source: IRS 2008 R2
Share Of Media - Rural
All figs. Minutes / Day
61 min / day
Source: IRS 2008
A closer Look at Media Reach in Urban Sector
Urban Media Reach by SEC
A1 A2 B1 B2 C D E1 E20
20
40
60
80
100
8574
64
52
41
2621
8
97 94 92 89 8678
73
58
9083
79 7569
58 5340
4435
28 25 25 22 201413
97 7 6 5 5 4
31
17 116 4 2
1 0
Press TV Sat TV Radio Cinema Internet%
Urban Population Distribution by SEC
The Great Indian Paradox
M&E industry targeting only 50% of the urban audience in upper socio economic strata
The penetration of media goes down significantly as we go down the population strata
Left to the mechanism of the market driven industry, it may take decades before this anomaly is corrected
Pop-strata wise Media Reach
Mass Media & Marketing
Stage I : Marketing led expansion of mass media
Stage II : Media led growth of mass marketing
Stage III : Consumer led media segmentation
In India , all three stages are existing at different socio-economic and demographic segments
Uneven Media Penetration & Reach
An analysis of media reach by urban and rural highlights the inadequacy of media reach in villages The gap between urban and rural reach is lowest for radio
and highest for satellite TV
Technically footprint of TV covers the entire country but in reality 20% of urban and 60% of rural population are still outside its reach
On an average a person in urban area spends almost 90 minutes per day on different media related activities while a person in rural area spends almost 60 minutes
Infrastructure: A Major Issue
Electricity is one of the main issue which is slowing down the rate of broadcast media consumption Serious issues exist in the production and distribution
of electricity across the countryAccessibility is another issue which has
improved a lot over the last two decades Road and train links have opened up new markets Villages have come closer to towns
On Highways and railroads Connected by regular transport
TV is The Opium
Sweeping across social clustersAlmost 82 million TV homes with a viewing
population of more than 400 million TV penetration higher than cooking gas
Access to about 175 channels with 90% of TV sets accessing 12-16 channels only 3 hours of daily escape on TV
170+ channels available in India today Yet, top 6 channels account for 70 % of the TV
advertising revenues Dominating emphasis on media buying
Top TV Networks
Channel TVR Share SUN NETWORK 2.6 18 STAR NETWORK FINAL 2.3 17ZEE NETWORK 2.1 15CABLE 1.4 10SONY NETWORK 1.1 8DD NETWORK 0.5 4ETV NETWORK (EENADU) 0.5 4INDIA TODAY NETWORK 0.3 2TV 18 NETWORK 0.1 1NDTV NETWORK 0.1 1INX NETWORK 0.0 0Others 3.0 21Any Channel + 14.2 100
Emerging Trends in TV
Glut of TV channels leading to slowing down in the growth of revenue
A gradual opening up of the Pay TV marketUnregulated growth of cable and satellite homesKu-band DTH TV stalled by vested interestRegional TV is growing across the country Accelerated growth of C&S penetration
Penetration up from 33% to 63% in 7 years Proliferation of mass, niche and regional satellite
channels
Size of Key Regional TV Markets 2009
Language Ad spend INR Crore Estimated Growth
Telegu 700 20%
Malayalam 350 15%
Kannada 300 20%
Tamil 900 20%
Bengali 400 25%
Marathi 320 20%
Source Industry Estimates
Looking at Future
Will internet be the medium of delivery? A lot of hype has been created around the broadband
internet delivery of television to Indian TV or computer homes
It appears that TV will continue to be delivered via terrestrial and satellite transmission
What will be the role of Doordarshan as a Public Broadcaster as against the private channels ? Indian Government review the existing policy
Cinema: the great Equalizer
Industry estimates Rs.6800 cr ( USD 136 mn) in 2008
Estimated to be Rs15300 (USD 306 mn) by 2012
Bollywood going global Global investment by Indian players in film
industry Global film studios eyeing Indian market
Emerging Trends in Cinema
Associative marketing Integrating content along with brand communication is a
growing trend Advertiser Funded Programmes/ Entertainment In Serial placements of brands In film placements of brands
Celebrity endorsements dominate advertising content More and more brands trying to identify with famous
personalities In-film advertising opportunity
Including meet & greet by stars
Activations at multiplexes
Radio Realities
A single broadcaster market till 2002 Three channels / 203 stations
AIR covers 89.8% of the geographical area and 90.3% of the population of the country through AM broadcast AIR’s ‘Home Service’ programmes are beamed from 203
transmitters for over 5lakh hours every year AIR caters to all the important cultural and linguistic
regions Radio covers 40% of the population in 25% of the
geographical area through FM broadcastPrivatization has given radio a second life
Localization of content and advertising accelerated the growth of FM radio in India
Global Media Participation in FM Radio
A Canadian Financial Institute picked up 20% stake in Radio Mirchi
GW capital picked up 75% stake in radio City in 2005
Astro Asia joined hands with NDTV and value Labs to buy India Today’s Red FM in 3 cities in 2006
BBC along with a private investor picked up an undisclosed stake in Mid day West
Bright Future for Radio
Radio advertising has been growing steadily touching Rs 10 million in 2009
More licenses are expected to be given Multiple frequencies ? News broadcast?
Distribution platforms hold huge scope Mobile Internet or streaming radio Satellite radio Radio over broadband (offered by DTH operators) New trends
Hybrid digital radio (expensive) Podcasting (through i-pods)
Scope of cross media buys (BCCL etc) Educational institutes and NGOs in India encouraged to
come up with their own stations
The Magic of OOH
Largely fragmented, unorganized –many opportunities unauthorized! Monitoring and maintenance an issueEntry of large media houses :
Reliance, Star Network and Bennett & Coleman & Co to increasing
professionalism Technology coming in : 3M, LED,Interactive, store TV Coexistence of high end opportunities to rural
wall paintings
Emerging Trends: Mobile
Mobile phones becoming ubiquitous: most dynamic mobile market in the world
90 %penetration by 2014
Mobile ownership growing @ 12%
The New Media for New generation
Rising penetration of internet Current online penetration stands at: 55 Million Current Broadband penetration stands at: 6.22 million Net users growing at the rate of 30% y-o-y
Increased use of search enginesSocial networking and life streamingJobs, marriage uniquely Indian
Naukri.com 12 mn users Shaadi.com 10 mn users
Live/micro BloggingFacebook /Twitter Video viewing on the web: U TubeSignificant access in upscale youth- however media
optimality is still a challenge
Emerging Trends: Regionalization
Regionalization is likely to be one of the significant factor driving the growth in television National broadcasters are looking at the scope of
adding regional channels to their portfolio Demand for regional content is increasing OOH spends are increasing in tier 2 and 3 towns Newspapers are publishing editions from smaller
towns
Regionalization will help to increase media penetration in small towns and villages
Extending The Media Platform
Prosperity of smaller towns are drawing in media UFO Movies, the country’s largest digital theatre
chain has 80% of its 1080 screens in tier 2 and 3 cities NDTVKhabar.com was launched to cash in on the
traffic from small towns Big spending in retail is visible in smaller towns
adding to the crush for action in retail outlets Playing commercials on LCD screens in malls is a
prominent trend coupled with physical space
English & Metro Bias
Advertisers and agencies have an English and Metro bias for many years 30% of the Rs 20,000 odd crores of ad spend in 2008
was blown up on Mumbai-centric media 60% of the ad spend is concentrated on six top metros
Marketers have started focusing on small towns and beyond which will impact the media value chain
Other Emerging Trends
Sports & Gaming are emerging as strong Entertainment platforms providing scope for cross media deals
Engaging in consumer’s ecosystem Brand experience along with a shopping experience opening new
opportunities in retail sector Activation and ambient advertising
Music & Home Entertainment are growing rapidly Branding DVD or CD covers Placing ads in between the films
Innovations across product/ process/ marketing/ distribution model
Investment in talent and focus on HR within the industry
Hot Destination for World Media
Emergence of Media Conglomerates
This trend has started from the turn of the centuryHome grown media conglomerates
Network 18 (television, Internet, filmed entertainment, mobile content and allied
business) Pyramid Saimira
(filmed entertainment with focus on animation & gaming segment) UTV Group
(film production, film distribution, television production and broadcasting, animation and allied business …. Disney has 32% investment in the company)
NDTV Group (television, news and entertainment, media software, labs, emerging markets
business and media process outsourcing) Star Group
(television, national and regional, filmed entertainment with sister company Fox, new media and internet
Network 18: A Full Play Media Conglomerate
Network 18 TV18 – CNBC TV18 & CNBC Awaaz Web 18 Newswire 18 Through Global Broadcast News
CNN-IBN & IBN7 Homeshop18
Online and on-air retail venture Studio 18 Viacom 18
Channels managed by MTV Strategic alliance with Jagaran Prakashan for foray into
Growing in Size
In six years since 2003, almost every one of the top 10 media companies has grown twice if not three to four times in size The Times Group, Zee Group, Star India Group,
Network 18 Group, Reliance(ADAG), Ht Media, Living Media Group, Sony Group, Prasar Bharati Corporation, Sun Network, Deccan Herald Holdings, Jagaran Prakashan, Kasturi & Sons
Most of these media houses have multi media presence
200638.2
Rs bn
200743.13 Rs bn
200843.5 Rs bn
Investment in Media & Entertainment
Courtesy: Vanita Kohli Khandekar
Trends for Next Five Years
The M&E industry is expected to recover in 2010 and increase @ 11.2% The CAGR from 2006 to 2009 has remained at 10%
The expected growth rate for the industry for next five years is 13% TV and Print will continue to dominate the industry
with 70% share of the revenue TV is expected to grow @ 15% Subscription revenue of both Print and TV will
continue to grow @ 12% to 13% Internet and gaming will show very high growth due
to small revenue base
After one year, it is going to be an exciting time for all of you in the M&E
industry…..