Indian m&e Venkat

8/14/2019 Indian m&e Venkat

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Can Indian Media Be Global ?

Television, Print, Film & Radio


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Entertainment & Media Industry

Growth outperforms the economy One of the fastest growing sectors of the

Indian economy

Current Size : Rs 40,230 Crore

Estimated growth rate : 20 % over the next4 years

Source : PwC analysis


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The Growth Drivers

Consumerisation of urban India

Rising proportion ofyoung population

Increase inincome levels

Changing spendingpatterns

Increase in numberof working urbans

Increase inspending power

Rising aspirationlevels

Consumption of lifestyle items

Source : Lifestyle consumption by Edelweiss Securities Pvt Ltd


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Films Television Radio Media MusicE&M Sector

Content Commercial (Hindi& Regional) Cinema

Art Movies

Cartoon Movies

Commissioned

Programs

News & Current

Affairs

Commissioned

Programs

News & Current

Affairs

Fiction/Non

Fiction Articles

Film Music

Private Albums

Delivery Cinema HallsHome Videos

(Video Cassettes,

VCDs, DVDs,)

Cable

Terrestrial

DTH

IPTV

Public

Broadcaster

FM Channels

Newspapers

Magazines

Books

Cassettes

CDs

Mobile

Phones

Internet

---------- Straight line denotes Traditional Delivery Mechanisms

- - - - Dotted line denotes Converged Delivery Mechanisms

Technology is changing the faceof media industry



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Television


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0

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1992

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2001

2002

2003

2004

2005

2006

No

ofch

annels

New launches & delivery mechanisms lead to

exponential growth in number of channels

An Explosion Of ChannelChoices

Source : TAM


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Industry structure

Television dominates the entertainment &media industry

3 segments : Advertising, Subscription &Software


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Growth Drivers - Subscription

Projected CAGR of 29 % over the next 5 years Current average monthly collection : Rs 130.

Projected : Rs 250 (by 2010)

Larger base of TV households from lower SECs

New regulatory changes & delivery mechanisms (likeCAS & DTH) will result in improved declarations

New technologies will bring in increased revenuesthrough value added services


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Growth Drivers - Advertising Ad spend in India : 0.48 % of GDP ; global average

0.96 %

Growth in disposable incomes: urbanization & consumerism Increased reach of the medium due to expanding delivery

platforms and technology advancements

Higher investment from sunrise sectors. Continued supportfrom traditional categories (FMCG, durables )

Separate viewership measurement for upmarket audience(Elite Panel)

Will result in higher niche channel spends


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Growth Drivers - Software

Sustained growth in this sector Frequent & never ending launch of 24 hour channels

leading to demand for content

Regional channel potential being tapped by nationalplayers. Increased demand for language programming

Better performance of dubbed foreign content (movies,cricket commentary , cartoons) will increase demandfor such services


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Key developments

CAS An addressable system to provide subscribers with a

selective choice of content via the pay mode

Implemented in Zone -1 areas of Bombay, Delhi and

Kolkata from Jan 2007 As per TAMs latest report , 17 % penetration in the

notified areas

IPTV

MTNL offering services in Delhi & Mumbai Around 70 100 channels on offer

Service allows for time-shifted TV : viewers canwatch programs upto a week old


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Key developments

DTH Allowed by Government in 2000 Absence of middle men consumer apathy with

current Local Cable Operators

DTH is 'flexible, it is not connected to the groundinfrastructure

DTH is a National service :same STB can be used inany city

Current players DD Direct, Dish TV and Tata Sky ( Star

+ Tata venture) In the pipeline : Reliance, Sun group

Subscriber nos : Dish TV 20 L, Tata Sky 4 L, DD 50 L


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Can Indian Television Industry

Go Global ?

Some pointers


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Homegrown channels vs foreign

networks Indian channels dominate most of the markets /genres (Zee, Sun , ETV, Aaj Tak , NDTV) Zees improved performance vs Star Plus decline at

national level

Regional channels dominate in TN, AP, Karnataka,Kerala, WB , Maharashtra

News, Hindi movie , music genres dominated byIndian channels

In sports, new entrant Neo Sports takes on ESPN,Star Sports, Ten Sports.


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Attracting strategic and financialinvestors

Television segment open to FDI 49 % for cable & DTH; 26 % for news channel

Indian channels / media groups attracting foreigninvestment

Reuters, UK takes equity stake in Times GlobalBroadcasting

Blackstone invests $275 Mn in Eenadu CNN IBN: partnership between Turner International and

TV18

Tata Sky : alliance between Tata & Star for DTHoperations in the country


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Barriers to growth

Price regulation TRAI recommendations stifle broadcasters attempt to

fix prices based on market dynamics

Cross media ownership rules

Government yet to evolve clear rules in this regard

Potential investors unable to plan their long-termstrategy for the market

Lack of empowered regulators

Many TRAI recommendations still not fully acted upon Eg: Addressability in distribution, digitalisation of

cable TV, privatisation of terrestrial broadcasting etc

Yet to enact broadcasts bill; Content code (BRAI)


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Print


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Growth in titles

49145

58469

44000

46000

48000

50000

52000

54000

56000

58000

60000

2001 2003-04

Registered publications

Source : RNI


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Industry size & growth potential

978010900 12100

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15300

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5000

10000

15000

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25000

2004 2005 2006 E 2007 F 2008 F 2009 F 2010 F

INRCrore


Industry projected to grow at an annual compounded

rate of 13% per annum over the next 4 years


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Growth drivers

Booming economy resulting in increasedjob creation

More number of household with highspending power - service sector boom

Rural / lower SECs provide vastopportunity for print players

IT advancements will lead provide easyaccess to rural areas


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Growth drivers

Opening up of the sector for FDI Upto 100 % permitted in publishing / printing scientificand technical magazines

Upto 26 % in news and current affairs (newspaper)category

Increased ad spends In line with economic growth

Increased activity from sunrise sectors like Retail, Telco

Publications rapidly increasing number of colour pagesand supplements

Launch of specialized magazines providing focusedreach among niche segments


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Key trends

Tapping the reading population : The readership of print media currently stands at 27 %

Growth will be driven by increase in literacy levels

7 dailies in India have readership over 1 Cr: Dainik Jagran,

Dainik Bhaskar, Eenadu, Lokmat , Amar Ujala, Hindustanand Daily Thanti

Building a pan-India presence Publications drive growth through geographic expansion

Eg: HT launch in Mumbai, Deccan Chronicle in Chennai,Midday in Bangalore, new editions from Dainik Jagran,Bhaskar, Business Line in Mumbai

Source : NRS


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Key trends

According to World Association of Newspapers(WAN) Indian newspaper sales increased 7 % in 2005 (vs

0.56 % worldwide) and 33 % during 2001-05 (vs 6 %

worldwide) India is the 2nd largest newspaper market with 7.8 Cr

copies daily (China 9.6 Cr)

Indian newspaper advertising revenue increased

23.2% over 2004 (vs 5.7 % globally)


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Can Indian Print Media Go Global

?

Some pointers


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Targeting the NRI population

Online editions Almost all the lead dailies (English & language)

have internet editions providing free access to

the latest news Internet editions used by advertisers to reachIndians living abroad

Many dailies provide epaper versions with

search options Monetized by dailies like Hindu

Free access in the case of TOI, HT


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Targeting the NRI population

Overseas editions for many dailies Sandesh weekly Chicago

ABP fortnightly US

Malayala Manorama daily Bahrain, Dubai Madhyamam daily Bahrain, Dubai

Gujarat Samachar weekly New York

Divya Bhaskar fortnightly New York


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Barriers to growth

Low literacy levels Most of the big media houses are family run

Wary of external / foreign investment

Follow conservative growth strategies

Lack of uniform media policy for foreign investment Content : News (26%) and non-news (100%)

Growing younger population and their increasing

internet affinity poses new challenges Mushrooming 24 hour news channels undermine

the agenda setting function played by newspapers


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Films


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5650

68007900

9700

11300

13200

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2004 2005 2006 E 2007 F 2008 F 2009 F 2010 F

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G th d i


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Growth drivers Advancements in technology helping the

industry in film production, exhibition andmarketing Corporatisation of the film industry

Many exhibition companies (PVR, Shringar, Inox)have gone public

Entry of the largest industrial house in the E & Mindustry Reliance acquired majority stake in Adlabs

Corporates also forayed into film distribution eg. UTVsoftware

Increased marketing spends Corporatisation also resulted in innovative marketingactivities : microsites, blogs, contests, mobiledownloads etc

Centralised marketing and promotion activities


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Growth drivers

Derisking through portfolio approach (multiplereleases with multiple revenue streams) Companies getting associated through in film brand

placements, endorsements etc

Mobile companies :selling ringtones and wallpapers atpremium rates

Merchandising catching on in a big way

Growing number of multiplexes

Incentive for low-budget, niche films and experimentalcinema

Higher admission rates : account for 60 % of Box Officerevenues


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T i k t


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Tapping overseas markets

Growing collection from overseas markets

Indian films are becoming increasingly popular evenwith the non Indian community

More number of prints being released abroad

Overseas revenues estimated to account for 10 % oftotal earnings by 2010

In 2006, films like Kabhie Alvidha Na Kehna, Fanaa,Rang De Basanti emerged blockbusters in UK andNorth America.

Forbes magazine estimates : Dhoom-2 ($18.4 million)Fanaa ($17.7 million) and KANK ($17.5 million)

Regional language movies (Telugu, Tamil) alsopopular abroad


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International co-productions

Increased corporatisation has resulted in Indiancompanies doing more co-productions UTV tie up with Fox , Will Smiths Overbrook ,

Porchlight (animation)

Viacom plans co-production with local film makers Percept Picture Company joined hands with Further

Films and Sahara One to produce Tree of Life


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Barriers to growth Low capital / investment levels

Producers unable to invest in a large number of printsand marketing initiatives

Digitalization will change the scenario

Piracy Most of the credible efforts to combat piracy initiated

by industry bodies

Current copyright act dated in terms of technology

improvements


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FM opportunities

Investments Need for financial investments as well as technical and

operating experience to run the stations

Content boost Average requirement expected to be 5000 content

hours per annum per radio channel

Potential to reach local markets Only 22 of the 338 channels are in the four metro cities

Huge potential to target the smaller cities

I d t i & th t ti l


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Can Indian media companies go


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Can Indian media companies goglobal ?

Acquiring / taking a stake in local companies NDTV and SE Asian news broadcasting company Astro

Broadcast have tied up to do business in Malaysia and

Indonesia UTV , Astro JV to launch channels in Hindi, Regional,Indonesia and Malaysia Bahasa

Astro and Sun TV have formed a joint venture to

generate and distribute TV programs/channels for globalaudience

More acquisitions likely as companies go publicand have access to funds


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Can Indian Media Be Global ?

Yes the foundation has been laid


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Yes the foundation has been laid

Large Indian companies will take over foreign

entities Zees acquisition of Ten Sports an indicator of things to

come

Synergies, access to funds, regulatory mechanism will

set the pace

TV, Films & Radio have already gone global Potential for further growth through technology

advancements & relaxed trade agreements

Huge talent pool creative & technical will drive thisgrowth

Print will catch on soon


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Print

Internet and epaper versions already available More international editions once the base population

crosses threshold figure

Increased interest in India will create huge demand for

Indian content More syndication arrangements in the offing

Print will catch onsoon


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Thank you


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Appendix


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Cable TV penetration

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Austra

lia

Phillippin

es

Japan

S.Korea

Chi

na

Singapo

re

India

Germany

Canada

US

Taiw

an

Source : Worldscreen, Morgan Stanley Research

Advertising spend split by


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Advertising spend split bymedium

OOH

8%

TV

41%

Cinema

0%

Radio

3%

Print

47%

Internet

1%

Source : groupM estimates

Year : 2005Total : 12,275 Cr

Statewise C&S penetration


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Statewise C&S penetrationStates Base pop TV owning HHs C&S TV HHs % TV penetration % C&S

Andhra Pradesh 19142 12620 11562 66% 92%

Assam 5718 1931 541 34% 28%

Bihar 16393 3640 788 22% 22%

Chattisgarh 4578 1763 773 39% 44%

Delhi 3339 3023 2608 91% 86%

Gujarat 11429 6346 3901 56% 61%

Jharkhand 5444 1572 707 29% 45%

Punjab/HP/Chandigarh 6603 5286 2556 80% 48%

Haryana 4554 3354 1998 74% 60%

Karnataka 11956 7947 6602 66% 83%Kerala 7520 5166 3591 69% 70%

Madhya Pradesh 12622 5020 2361 40% 47%

Maharashtra/Goa 22900 14457 8322 63% 58%

Meghalaya 504 304 199 60% 65%

Orissa 9077 3442 1609 38% 47%

Rajasthan 10675 4941 1778 46% 36%

Tamil Nadu/Pondicherry 16522 11121 10257 67% 92%Tripura 757 338 199 45% 59%

Uttar Pradesh 29473 10502 2828 36% 27%

Uttaranchal 1811 1036 360 57% 35%

West Bengal 18227 7851 4849 43% 62%

ALL 219244 111660 68389 51% 61%

So rce NRS06

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