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Entertainment: Industry Report ,March 2013

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1 Entertainmen t For updated information, please visit www.ibef.org MARCH 2013
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11

Entertainment

For updated information, please visit www.ibef.org

MARCH

2013

22

Contents Advantage India

Market overview and trends

Growth drivers

Success stories: UTV, SUN TV

Opportunities

Useful information

For updated information, please visit www.ibef.org

EntertainmentMARCH

2013

33

Entertainment

For updated information, please visit www.ibef.org ADVANTAGE INDIA

Advantage India

Advantage

India

• Rising incomes and evolving lifestyles have led to higher demand for aspirational products and services

• Higher penetration and a rapidly increasing young population will provide further boost to demand

• Industry is set to expand at a CAGR of 15 per cent over 2011-2016, one of the highest rates globally

• Television and AGV segments expected to lead industry growth; opportunities in digital technologies as well

• Higher FDI inflows• Increasing M&A activity• More big-ticket deals such as

Walt Disney-UTV, Sony-ETV and Zee-Star

• Entry of big players across all segment of industry

• Policy sops, increasing FDI limits

• Measures such as digitisation of cable distribution to improve profitabilit and ease of institutional finance

• Increasing liberalisation and tariff relaxation

Market Size:

USD30.4 billion

2016E

Market Size:

USD15.2 billion

2011

Source: KPMG report 2012, Aranca ResearchNotes: AGV - Animation, Gaming and VFX, VFX - Visual Effects, M&A - Merger and

Acquisition, CAGR - Compound Annual Growth Rate, FDI - Foreign Direct Investment, E - Estimate

Growing demand Opportunities

Higher investments Policy support

MARCH

2013

44

Contents Advantage India

Market overview and trends

Growth drivers

Success stories: UTV, SUN TV

Opportunities

Useful information

For updated information, please visit www.ibef.org

EntertainmentMARCH

2013

55For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS

Entertainment

Entertainment

Television

Print

Film

AGVRadio

Music

Others

Source:: KPMG report 2012, Aranca ResearchNotes: AGV - Animation, Gaming and VFX, VFX - Visual Effects

The sector is split into seven segments

MARCH

2013

66For updated information, please visit www.ibef.org

The Indian entertainment industry is growing rapidly … (1/2)

→ The total market size of industry expanded to USD15.2 billion in 2011 from USD9.2 billion in 2006, a CAGR of 10.6 per cent

→ The industry recorded one of the highest growths in the world in 2010 (11.2 per cent); in 2011 growth picked up even further to touch 12.6 per cent

Market size (USD billion)

Source:: KPMG report 2012, Aranca Research

MARKET OVERVIEW AND TRENDS

Entertainment

Notes: CAGR - Compound Annual Growth Rate

2006 2007 2008 2009 2010 2011

9.210.7

11.8 12.113.5

15.2CAGR 10.6 %

MARCH

2013

77For updated information, please visit www.ibef.org

The Indian entertainment industry is growing rapidly … (2/2)

→ During 2006-11, television revenues expanded at a CAGR of 11.4 per cent to USD6.9 billion

→ Advertising revenue growth has been behind the consistent rapid growth of the television industry

→ Over the same period, revenues in the print segment expanded to USD4.4 billion, a CAGR of 10.0 per cent

→ The fastest growth during this period was however in the AGV segment; it’s CAGR was 16.6 per cent

Size of major industry segments (USD billion)

Source:: KPMG report 2012, Aranca Research

Notes: AGV - Animation, Gaming and VFX;

VFX - Visual Effects

MARKET OVERVIEW AND TRENDS

Entertainment

AGV

Film

Print

Television

0 1 2 3 4 5 6 7 8

0.3

1.8

2.7

4

0.6

1.9

4.4

6.9

2011 2006

MARCH

2013

88For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS

Entertainment

Segmental composition of entertainment (2011)

Source: KPMG report 2012, Aranca ResearchNotes: AGV - Animation, Gaming and VFX,

VFX - Visual Effects

45.2%

28.7%

12.8%

4.3%

1.6%1.2%

6.3%

TelevisionPrintFilmAGVRadioMusicOthers

TV has the highest share in the sector; AGV is one of the fastest growing

→ Total market size in 2011 was USD15.2 billion

→ The entertainment industry continues to be dominated by television, print and films; together they have a 86.7 per cent market share

→ AGV has emerged as one of the fastest growing segments with revenues growing by about 31 per cent during 2011

MARCH

2013

99For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS

Company Business description

Star India Pvt Ltd• Fully owned subsidiary of News Corporation• Portfolio includes 35 channels in seven languages across various categories such as

soaps, reality, news and films• Also manages a portfolio of business ventures including DTH operator Tata Sky, cable

system Hathway, channel distributor STAR Den, news channel operator MCCS, the film production and distribution business Fox STAR Studios India and STAR CJ Home Shopping

Zee Entertainment Enterprises Ltd• Fully owned subsidiary of Essel Group and first listed media company in India• One of the largest producers and aggregators of Hindi programming in the world• An estimated reach of more than 670 million viewers across 168 countries• Pioneer of television entertainment industry in India; launched Zee TV - the country’s first

Hindi satellite channel• Range of businesses across the value chain in the M&E industry

Multi Screen Media Pvt Ltd• Fully owned subsidiary of Sony Pictures Entertainment• Comprises of Sony Entertainment Television (SET) and SAB, leading Hindi general

entertainment television channels; MAX, a movies and special events channel; and PIX, a channel that airs Hollywood movies

• Its programming spans across various genres including drama, reality, comedy, horror, Bollywood and live events

Entertainment

Source: Company Websites, Business Week, KPMG report 2012 Aranca ResearchNotes: M&E - Media and Entertainment

Key players in the entertainment industry - Television

MARCH

2013

1010For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS

Company Business description

Bennett, Coleman and Co Ltd• Largest media conglomerate in India• Publishes world’s most widely circulated English broadsheet daily ‘The Times of

India’ and second most widely circulated financial daily ‘Economic Times’• Other prominent publications include magazines such as Zigwheels, Filmfare,

Femina and Top Gear and Hindi dailies such as Navbharat Times and Sandhya Times

• The group has also diversified into radio and television business

HT Media Ltd• Hindustan Times is the second most widely read newspaper with 3.7 million

readers in India.• Other prominent publications include the business daily Mint and the Hindi daily

Hindustan• The group has also forayed into many adjacent businesses such as print and

digital services, internet, radio, and events and marketing solutions• The company’s job portal www.shine.com has over 7 million registrations

Living Media India Ltd• India Today and Readers Digest are among India’s most circulated magazines• Other prominent magazine publications include Business Today, Cosmopolitan,

Time, Golf Digest, Design Today, Money Today and The Chartered Accountant• The group has interests in various other businesses such as radio, events,

printing, music, television, education and publishing

Entertainment

Source: Company Websites, The Times of India, Aranca Research

Notes: CAGR - Compound Annual Growth Rate, FY - Financial Year

Key players in the entertainment industry - Print

MARCH

2013

1111For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS

Company Business description

Yash Raj Films Studios• The only privately owned film studio in India• Apart from film production, the company has also expanded into distribution of

films and music, home entertainment, production of television software, ad films, documentaries and private label music production

• The company launched a youth films studio Y-Films in 2011 to connect with the large young population of the country

Eros International Media Ltd• Strong distribution network spanning across 50 countries and over 27 dubbed

foreign languages• One of the largest content owners in the industry having a film library of over

2600 films, thus ensuring stable, recurring cash flows• The company is diversifying into Marathi, Punjabi, Tamil and other regional

language films to leverage upon the growing demand for regional cinema

Red Chillies Entertainments Pvt Ltd• Founded in 2002 as a film production house, the company has branched into TV

shows and advertisement, visual effects and multi-media production equipment leasing

• Its latest venture 'Ra.one‘ is Bollywood's most expensive movie and very first Sci-fi movie

• It also owns the Kolkata Knight Riders cricket franchise in the Indian Premier League

Entertainment

Source: Company Websites, Business Week, Aranca Research

Key players in the entertainment industry - Film

MARCH

2013

1212For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS

Company Business description

Music Bharti• A wholly owned subsidiary of Bharti Airtel• The largest music company in terms of revenues• Provides mobile-based value-added music services (VAS) such as hello tunes, call

back tunes, music on demand, Mirchi mobile and Airtel radio

Saregama India Ltd• The company owns the largest music archives in India, one of the largest in the

world • It uses the music labels Saregama, RPG Music and HMV• The company is making efforts to digitise its catalogue to make inroads into the

digital music market and counter declining physical music sales

Super Cassettes Industries Ltd• The company owns the rights to over 2,000 video and 35,000 audio titles,

comprising of nearly 24,000 hours of music• The company has diversified into film production, consumer electronics and

mobile phones manufacture

Tips Industries Ltd• The company owns 3,500 titles of which a minimum of 25 have been sold over a

million copies, with another 10 selling over 10 million copies• Since 1981, Tips has the highest number of gold and platinum discs to their credit

in India• Tips also holds soundtrack copyrights of over 50 Hindi movies and has also

ventured into film production

Entertainment

Source: Company Websites, Business Week, Aranca Research

Notes: VAS - Value Added Services

Key players in the entertainment industry - Music

MARCH

2013

1313For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS

Television

• Television penetration in India is at about 60 per cent• The television industry has been aided by strong growth in

advertising• Television subscription accounts for around 65 percent of revenues

in 2011 whereas advertising accounted for the rest• The share of subscription to the total revenue is expected to

increase to 69 per cent by 2016

Print

• Unbundling of products to increase profitability• Increasing income levels and evolving lifestyles have led to robust

growth in niche magazines segment• Increasing literacy levels leading to a rise in the readership base• Rising circulation of English, Hindi as well as regional language

dailies

Film

• Growth to be fuelled by multiplex chains, increasing footfalls of consumers and higher quality content

• Increasing share of Hollywood content in the Indian box office• 3D cinema is driving the growth of digital screens in the country• The Indian film industry is largest producer of films globally with

400 production houses and corporate houses involved in film production

Source: KPMG report 2012, Economic Times, Aranca ResearchNotes: DTH - Direct to Home, 3D - Three Dimension

EntertainmentNotable trends in the entertainment industry … (1/2)

MARCH

2013

1414For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS

Animation, Gaming and VFX (AGV)

• Growing focus on the ‘kids genre’ and rise in dedicated channels for them

• Increase in animation movies in theatres and use of animation and VFX in TV advertising

• Growing outsourcing of VFX and gaming to India is due to cost effectiveness of Indian players

• Content localisation by Indiagames (by launching T20fever.com) and by Zapak (by launching ICC World Cup 2011 games)

Radio

• Increasing FM enabled radio phones, mobiles and car music systems

• During 2010, there were a total of 245 channels operating across India

• Government has introduced favorable guidelines for expansion of the third phase of FM radio broadcasting services, which will bring 294 towns and 839 stations under FM coverage

• Earlier only educational institutions were permitted to set up a community radio; in 2008 liberalisation of policy on community radio took place and currently 29 community radio stations are operational in the country

EntertainmentNotable trends in the entertainment industry … (2/3)

Source: PwC India Entertainment and Media Outlook 2011,KPMG report 2012 Economic Times, Aranca ResearchNotes: AGV - Animation, Gaming and VFX, 3D - Three

Dimension,VFX - Visual Effects, FM - Frequency Modulation

MARCH

2013

1515For updated information, please visit www.ibef.org MARKET OVERVIEW AND TRENDS

Music

• The Indian music industry is a consortium of 142 music companies • Players are looking at new ways and mediums to monetise music,

such as utilising social media to promote music• Mobile phones, iPods and mp3 players - devices that enable music

on-the-go are becoming the primary means to access music• Digital music on mobile continues to drive music industry revenue

EntertainmentNotable trends in the entertainment industry … (3/3)

Source: PwC India Entertainment and Media Outlook 2011,KPMG report 2012 Economic Times, Aranca ResearchNotes: AGV - Animation, Gaming and VFX, 3D - Three

Dimension,VFX - Visual Effects, FM - Frequency Modulation

MARCH

2013

1616

Contents Advantage India

Market overview and trends

Growth drivers

Success stories: UTV, SUN TV

Opportunities

Useful information

For updated information, please visit www.ibef.org

EntertainmentMARCH

2013

1717For updated information, please visit www.ibef.org GROWTH DRIVERS

Strong demand and policy support driving investments

Entertainment

Strong government

support

Growing demand

Inviting Resulting

in

Growing demand Increasing investments

Policy support

Higher real incomes and

changing lifestyles

Falling prices, increasing

penetration

Growing, young

consumer base

Policy sops, favourable FDI

climate

Measures to improve

profitability across

segments

Increasing liberalisation,

tariff relaxation

Higher FDI inflows

Increasing M&A activity

Increasing participation of big players

Source: ICRA, PwC, Business Standard, Business Today, Aranca ResearchNotes: M&A - Merger and Acquisition, FDI - Foreign Direct Investment

MARCH

2013

1818For updated information, please visit www.ibef.org

→ Incomes have been rising at a brisk pace in India and will continue to do so given the country’s strong economic growth prospects; nominal per-capita income is estimated (IMF) to have recorded a CAGR of 12.5 per cent over 2001-11

→ Rising incomes, with its positive impact on the consumer base, will be the key growth driver for the entertainment industry (across the country)

→ As the proportion of ‘working age population’ in total population increases, per-capita income and GDP are expected to grow higher

Entertainment

GROWTH DRIVERS

Rising per-capita income in India

Source: IMF, Aranca Research

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

F20

13F

2014

F20

15F

2016

F20

17F

0

500

1,000

1,500

2,000

2,500

-5%

0%

5%

10%

15%

20%

25%

30%

Per Capita income, USD, LHSAnnual growth rate

Multiple factors will drive growth in demand … (1/2)

MARCH

2013

1919For updated information, please visit www.ibef.org

→ Apart from the impact of rising incomes, widening of the consumer base will also be aided by expansion of the middle class, increasing urbanisation, and changing lifestyles

→ The entertainment industry will also benefit from continued rise in the propensity to spend among individuals; empirical evidence points to the fact that decreasing dependency ratio leads to higher discretionary spending on entertainment

Changing income dynamics over the years

Source: McKinsey Quarterly Report, Aranca Research

Entertainment

GROWTH DRIVERS

0

10

20

30

40

50

60

70

2005 2010 2015 2020 2025

Deprived Globals Aspirers Strivers Seekers

Seekers: annual income INR200,000- 500,000

Globals: annual income > INR1000,000

Strivers: annual income INR500,000- 1000,000

Aspirers: annual income INR90,000 -200,000

Deprived: annual income < INR90,000

Million households

Multiple factors will drive growth in demand … (2/2)

MARCH

2013

2020For updated information, please visit www.ibef.org

Entertainment

Television

• Digitisation of the cable distribution sector to attract greater institutional funding, improve profitability and help players improve their value chain

• FDI limit increased from 49 per cent to 74 per cent for broadcast carriage service providers who upgrade to digital and addressable environments

• No restriction on foreign investment for uplinking and downlinking of TV channels other than news and current affairs

Film

• Co-production treaties with various countries such as Italy, Brazil, UK and Germany to increase the export potential of the film industry

• Granted ‘industry’ status in 2001 for easy access to institutional finance

• FDI upto 100 per cent through the automatic route has been granted by government

• Entertainment tax to be subsumed in the GST; this would create a uniform tax rate regime across all states and will also reduce the tax burden

Radio

• FDI limit in radio increased to 26 per cent from 20 per cent• Private operators allowed to own multiple channels in a city,

subject to a limit of 40 per cent of total channels in the city• Private players allowed to carry news bulletins of All India Radio

• Further boost may be given to the radio sector by charging licence fees on the basis of ‘net income’ so as to provide relief to loss making radio players

Source: ICRA, PwC India Entertainment and Media Outlook 2011, KPMG report 2012, Aranca Research

Notes: GST - Goods and Services Tax, FDI - Foreign Direct InvestmentGROWTH DRIVERS

Policy support aiding sector growth… (1/2)

MARCH

2013

2121For updated information, please visit www.ibef.org

Entertainment

Print

• FDI/NRI investment upto 26 per cent in an Indian firm dealing with publication of newspaper and periodicals

• FDI/NRI investment upto 26 per cent in publications of Indian editions of foreign magazines

• FDI/NRI investment upto 26 per cent in publications of scientific and technical magazines/ specialty journals/ periodicals

Animation, Gaming and VFX (AGV)

• 100 per cent FDI allowed in the sector through automatic route provided it is in compliance with Reserve Bank of India guidelines

Music

• Parliamentary approval on the Copyright Act (Amendment) Bill, 2012, which strengthens the royalty claims of musicians, lyricists and others in the field

• Policies are adopted against digital piracy and file-sharing; steps have been taken to block illegal music websites

• Adoption of revenue sharing model by Copyright Board requiring FM radio companies to share 2 per cent of their net advertising revenues with music companies

Source: PwC India Entertainment and Media Outlook 2011, KPMG report 2012,Aranca Research

Notes: GST - Goods and Services Tax, FDI - Foreign Direct Investment, NRI - Non Resident Indian

GROWTH DRIVERS

Policy support aiding sector growth… (2/2)

MARCH

2013

2222For updated information, please visit www.ibef.org

→ Consolidation will be the major route to grow inorganically for entertainment companies in order to expand their portfolios and enter into new regions

→ A few big deals have come about, the most notable ones being Walt Disney-UTV and TV18-ETV (together amounting to around USD700 million)

Source: Company ‘s news, KPMG report 2011, Aranca Research

Entertainment

GROWTH DRIVERS

Mergers and Acquisitions (M&A) deals during 2011-2012

Acquirer TargetDeal date

Deal value (USD

million)

TV18 Eenadu Group Jan 2012 395

Walt Disney UTV Feb-2012 300

Educational Trustee

Company

Metronation Chennai

TelevisionMar-2012

3.2

Blackstone Jagran Media Network

Jul-2011 46.9

Samara Capital Newswire18 Dec-2012 18.8

Increasing investments in the sector - key deals and FDI inflows … (1/2)

MARCH

2013

2323For updated information, please visit www.ibef.org

→ FDI inflows into the entertainment sector between April 2000 and March 2012 stood at USD2.9 billion

→ By March 2012, the share of FDI in ‘Information and Broadcasting’ was 1.8 per cent of total FDI inflows into the country

→ Demand growth, supply advantages, and policy support have been the key drivers in attracting FDI

Source: DIPP, Aranca ResearchNotes: DIPP - Department of Industrial Policy and

Promotion

Entertainment

GROWTH DRIVERS

Cumulative FDI inflows into Information and Broadcasting from April 2000

FY08 FY09 FY10 FY11 FY12

0.600000000000001

1.3

1.8

2.2

2.88CAGR48.0%

Increasing investments in the sector - key deals and FDI inflows … (2/2)

MARCH

2013

2424

Contents Advantage India

Market overview and trends

Growth drivers

Success stories: UTV, SUN TV

Opportunities

Useful information

For updated information, please visit www.ibef.org

EntertainmentMARCH

2013

2525For updated information, please visit www.ibef.org

Television content

Motion pictures

Games content

Broadcasting

Interactive

Started as a content

provider for Doordarshan

Ventured into internet content

creation and aggregation

Launched IPO as UTV

Software communicatio

ns Ltd

Launched Hungama TV

Entertainment

SUCCESS STORIES: UTV, SUN TV

Disney becomes a

majority share holder with a

stake of 32.1%

Source: Company annual report, Company website, Aranca ResearchNotes: IPO - Initial Public Offering

Deal with Disney to dub its content into

Indian languages

Acquires Indiagames Ltd, enters gaming software and

content

Became world’s first company to record over 100

million downloads on Nokia store

1990 1996 2000 2004 2005 2007 2008 2012

UTV - One of the largest media conglomerates

MARCH

2013

2626

1985 1993 2000 2003 2005 2007 2008 2011

‘SUN TV’ is launched with

daily three hours of

programming

Launches SUN Direct to

provide Direct-to-Home (DTH)

services

Launches three pay channels and four ad - free action

movie channels

For updated information, please visit www.ibef.org

Direct to Home

Motion pictures

Radio

Newspaper

Magazine

Founded as Sumangali

Publications

Launches a slew of other channels in various South Indian languages

Acquires Dinakaran

newspaper, Tamil Nadu’s leading daily

Starts its first FM Channel

‘Sumangali FM’

Entertainment

SUCCESS STORIES: UTV, SUN TV

Enters Film Production and

Distribution through ‘SUN

Pictures’

Source: Company website, Aranca ResearchNotes: FM - Frequency Modulation

Broadcasting

SUN TV: The South - Indian behemoth

MARCH

2013

2727

Contents Advantage India

Market overview and trends

Growth drivers

Success stories: UTV, SUN TV

Opportunities

Useful information

For updated information, please visit www.ibef.org

EntertainmentMARCH

2013

2828

2011 2012E 2013E 2014E 2015E 2016E

15.2 17.3

19.722.2

25

30.4

For updated information, please visit www.ibef.org OPPORTUNITIES

Entertainment

→ Over 2011-16, the total market size is expected to rise at a CAGR of 14.9 per cent to USD30.4 billion

→ The next five years will see digital technologies increase their influence across the industry leading to a sea change in consumer behaviour across all segments

Source: KPMG report 2012, PwC India Entertainment and Media Outlook 2011,

Aranca Research

Market size (USD billion)

CAGR14.9 %

The entertainment industry is slated for rapid growth … (1/2)

MARCH

2013

2929For updated information, please visit www.ibef.org OPPORTUNITIES

Entertainment

→ Television will continue to be the lead contributor to overall industry growth; the segment is estimated to expand in size to USD15.3 billion by 2016 (CAGR of 17.3 per cent since 2011)

→ Animation, Gaming and VFX (AGV) is likely to witness the fastest expansion - a CAGR of 27.2 per cent (2011-16); its size is set to touch USD2.0 billion in 2016

Source: KPMG report 2012, PwC India Entertainment and Media Outlook 2011, Aranca Research

Notes: AGV - Animation, Gaming and VFX; VFX - Visual Effects

Size of major industry segments (USD billion)

AGV

Film

Print

Television

0 2 4 6 8 10 12 14 16 18

0.600000000000001

1.9

4.4

6.9

2

3.1

6.5

15.3

2016 2011

The entertainment industry is slated for rapid growth … (2/2)

MARCH

2013

3030For updated information, please visit www.ibef.org OPPORTUNITIES

Opportunities across segments in the entertainment industry … (1/2)

Entertainment

• Television distribution is projected to garner a share of 62 per cent in the television pie by 2015 (as addressable digitisation is expected to cover the entire country by then)

• Television advertisement is also expected to witness robust growth; its share in the advertising industry is expected to touch 42.5 per cent by 2015 from 41 per cent in 2010

Television

• Newspapers and niche magazines are likely to drive industry growth

• Accelerated growth is forecasted in regional print and local news segments

Print

• The Indian animation industry was worth USD511 million in 2010 and is expected to expand at CAGR of 23 per cent to USD961 million by 2013

• Growth in international animation films, especially 3D productions, and the subsequent work for Indian production houses will help growth in this segment

AGV

Source: KPMG Report 2012, PwC India Entertainment and Media Outlook 2011, Aranca Research

Notes: 3D - Three Dimension, AGV - Animation, Gaming and VFX; VFX - Visual Effects

MARCH

2013

3131For updated information, please visit www.ibef.org OPPORTUNITIES

Opportunities across segments in the entertainment industry … (2/2)

Source: KPMG report 2012, PwC India Entertainment and Media Outlook 2011, Aranca Research

Notes: 3D - Three Dimension

Entertainment

• Size of the Indian film industry is expected to touch USD3.1 billion by 2016, up from USD1.9 billion in 2011

• Increasing digital screens and 3D films are expected to help industry growth

• Big ticket releases lined up for the next couple of years are also expected to boost revenues

Film

• Mobile VAS and arrival of 3G are likely to lead to a surge in paid digital downloads

• Phase III radio licensing will also help in increasing music revenues from radio

Music

• Phase III of e-auctions for FM radio licences will provide an impetus to the segment

• Radio advertising is another area likely to experience accelerated growth

Radio

MARCH

2013

3232

Contents Advantage India

Market overview and trends

Growth drivers

Success stories: UTV, SUN TV

Opportunities

Useful information

For updated information, please visit www.ibef.org

EntertainmentMARCH

2013

3333For updated information, please visit www.ibef.org USEFUL INFORMATION

Entertainment

→ Animation encompasses three key segments; these are ‘Animation Entertainment’, ‘Visual Effects (VFX)’ and ‘Custom Content Development‘

→ India’s animation industry has been growing at a brisk pace; from a size of USD177 million in 2005, the sector is forecasted to post a CAGR of 23.6 per cent over 2005-13 (to USD961 million)

Source: ’Media and Entertainment in India: Digital Road Ahead’ by Deloitte, Aranca Research

Note: E - Estimates, VFX - Visual Effects

2005 2010 2011E 2013E

177

511

631

961

CAGR 23.6

%

16%

20%

64%

Animation VFX

Animation Enter-tainment

Custom Content Development

Size of the animation industry in India (USD million) Share of sub-segments in India’s animation

industry

Appendix: Brief overview of the animation industry in India

MARCH

2013

3434For updated information, please visit www.ibef.org USEFUL INFORMATION

Entertainment

→ Gaming can be classified under three segments - ‘Personal Computer Games (PC)’, ‘Mobile Games’, ‘Console Games’ and ‘Online Games’

→ In 2010, ‘Console Games’ (USD88 million) recorded the highest revenue among different segments of the gaming industry in India, followed by ‘Mobile Games’ (USD60 million)

Opportunities* for Indian gaming firms across the segment’s value chain

Concept Creation

Pre-production Development Post-Production

and TestingFinal Testing

Console Very Strong Strong Good Good Good

Mobile Good Good Good Good Good

PCStrong

Strong Good Good Good

Online Strong Strong Good Good Good

Source: ‘’Media and Entertainment in India: Digital Road Ahead’ by Deloitte, Aranca ResearchNotes: *We have portrayed the intensity of opportunities in each segment based on the extent of Indian players’ current presence in

that segment

Appendix: Gaming in India and opportunities for domestic firms

MARCH

2013

3535For updated information, please visit www.ibef.org USEFUL INFORMATION

Industry Associations … (1/2)

Indian Motion Picture Producers’ Association (IMPPA)"IMPPA HOUSE”, Dr Ambedkar Road, Bandra (West),Mumbai - 400 050Tel: 91-22-26486344/45/1760Fax: 91-22-26480757 Website: www.indianmotionpictures.com/imppa/index.html

The Film and Television Producers Guild of IndiaG - 1, Morya House, Veera Industrial Estate,Off Oshiwara Link Road, Andheri (W),Mumbai - 400 053 Tel: 91-22-66910662Fax: 91-22-66910661E-mail: [email protected] Website: www.filmtvguildindia.org

Newspapers Association of India (NAI)A - 115, Vakil Chamber, Top Floor, Vikas Marg, Shakarpur,Delhi - 110092Tel: 91-9971847045, 9810226962E-mail: [email protected] Website: www.naiindia.com

Entertainment

MARCH

2013

3636For updated information, please visit www.ibef.org USEFUL INFORMATION

Industry Associations … (2/2)

Association of Radio Operators for India (AROI)304, Competent House, F - 14, Connaught Place,New Delhi - 110001 Tel: 91-124-4385887e-mail: [email protected]: www.aroi.in

The Indian Music Industry (IMI)Crescent Towers, 7th FloorB - 68, Veera Estate, Off New Link Road, Andheri West,Mumbai - 400 053 Tel: 91-22- 26736301/02/03Fax: 91-22-26736304E-mail: [email protected] Website: www.indianmi.org

Entertainment

MARCH

2013

3737For updated information, please visit www.ibef.org

Glossary

→ AGV: Animation, Gaming and VFX→ CAGR: Compound Annual Growth Rate→ DIPP: Department of Industrial Policy and Promotion, Ministry of Commerce and Industry→ DTH: Direct to Home→ FDI: Foreign Direct Investment→ FM: Frequency Modulation→ FY: Indian Financial Year (April to March)

→ So FY10 implies April 2009 to March 2010→ GST: Goods and Service Tax→ IPO: Initial Public Offering→ M&A: Merger and Acquisition→ M&E: Media and Entertainment→ PPP: Purchasing Power Parity→ USD: US Dollar

→ Conversion rate used: USD1= INR 48→ VAS: Value Added Services→ VFX: Visual Effects→ Wherever applicable, numbers have been rounded off to the nearest whole number

USEFUL INFORMATION

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India Brand Equity Foundation (IBEF) engaged Aranca to prepare this presentation and the same has been prepared by Aranca in consultation with IBEF.

All rights reserved. All copyright in this presentation and related works is solely and exclusively owned by IBEF. The same may not be reproduced, wholly or in part in any material form (including photocopying or storing it in any medium by electronic means and whether or not transiently or incidentally to some other use of this presentation), modified or in any manner communicated to any third party except with the written approval of IBEF.

This presentation is for information purposes only. While due care has been taken during the compilation of this

presentation to ensure that the information is accurate to the best of Aranca and IBEF’s knowledge and belief, the content is not to be construed in any manner whatsoever as a substitute for professional advice.

Aranca and IBEF neither recommend nor endorse any specific products or services that may have been mentioned in this presentation and nor do they assume any liability or responsibility for the outcome of decisions taken as a result of any reliance placed on this presentation.

Neither Aranca nor IBEF shall be liable for any direct or indirect damages that may arise due to any act or omission on the part of the user due to any reliance placed or guidance taken from any portion of this presentation.

For updated information, please visit www.ibef.org DISCLAIMER

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MARCH

2013

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