MEDIA AND

ENTERTAINMENT INDUSTRY
- AN OVERVIEW

Sejal Jain 13
Nikita Kankekar
16
Aarti Mishra 24
Flavia Noronha 31
Priyanka Noronha
32
Introduction:
An overview

Media, the fourth estate, when entwined with the entertainment component represents
an effective facet of consumers in India. Technology has played a key role in influencing
the entertainment industry, by redefining its products, cost structure and distribution.

The Indian Media and Entertainment (M&E) industry stood at US$ 12.9 billion in 2009
registering a 1.4 per cent growth over last year, according to a joint report by KPMG and
an industry chamber. Over the next five years, the industry is projected to grow at a
compound annual growth rate (CAGR) of 13 per cent to reach the size of US$ 24.04
billion by 2014, the report stated. Additionally, the gaming segment is expected to be
the fastest growing sector in the M&E industry. The sector showed a 22 per cent growth
in 2009 and is expected to grow at a CAGR of 32 per cent to reach US$ 705.2 million by
2014, while the animation segment is expected to record a CAGR of 18.7 per cent in the
next five years as per the joint report.

There are many different ways in which people communicate such as, through the
phone, through personal encounters, and by attending work place, school, seminars
etc. Though media is not the only communication medium used to dispense the flow of
information, its importance in developed countries is worth mentioning as it has been
the main source to inform people on political issues or current affairs as well as being as
the main source of entertainment. The flow of information from one geographical
location to another has increased in speed considerably with the advent in digitally
enabled communication devices. Different network channels over cable or satellite TV,
newspapers and radio channels are emerging at a very rapid pace providing the people
with a medium to connect themselves with the outside world. Print media has always
been a dominant medium throughout the decades in the western civilization, but it is the
emergence of the television which has become the backbone of the global commercial
development.
Growth Potential
The Indian entertainment and media sector is one of the fastest growing sectors in the
economy, and its segments have all witnessed tremendous double digit growth in the
last few years. The past 2 years were tumultuous, especially due to poor liquidity in the
system for financing big projects for the big and small screen. However, with global
indicators realigning themselves once again, the Indian media and advertising industry
too looks poised to resume where it left off pre 1H 2008.
According to a 2009 report jointly published by the Federation of Indian Chambers of
Commerce and Industry (FICCI) and KPMG, the media and entertainment industry in
India is likely to grow at ~13 % CAGR over 2009-13, touching US$ 20 billion by
2013.
The key reasons favoring the rapid growth of the Indian entertainment and media
sector are the demographic and economic factors buoying India’s development; with a
majority of the population below the age of 35, and increasing disposable income in
Indian households, the average spend on media and entertainment is likely to grow,
according to the 2009 edition of PricewaterhouseCoopers report. In addition, advances
in technology, increasing penetration of communication mediums, policy initiatives of
the Indian government to increase FDI and the increased participation of private media
companies have been the other key drivers of the industry.
As per current estimates the television industry is projected to grow by 22%, filmed
entertainment by 16%, radio by 18% and the Indian advertising industry 61% over the
next 3 years. Given the lucrative prospects of this segment, international media giants
are all vying for a stake in the segment. In addition to domestic growth, the growing
popularity of Indian content in the world market and South Asia in particular, has
encouraged Indian entertainment industry players to also venture abroad to tap this
booming segment; according to a report by CII-AT Kearney, the share of international
markets in total box office collections is estimated to increase from 8% in 2006 to 15%
in 2010.
Source: Lifestyle Consumption by Edelweiss Securities Private Limited-2005

Increase in Rising
Number of
Increase Aspiration
working urban
in spending levels

Consumption of lifestyle items

 KEY DRIVERS FOR MEDIA AND ENTERTAINMENT INDUSTRY IN INDIA:

The FICCI-KPMG report 2010 has identified 10 key drivers for the growth of the Indian
media and entertainment industry.

These are as follows:

1. Digitization to help in spreading the reach and impact of M&E industry:

 Availability and penetration of newer distribution platforms like Digital Cable, DTH and
IPTV, digitization of newspapers, magazines, films and sale of online and mobile music
 are some of the ways in which the M&E industry has benefited from digitization and the
growth is likely to continue in years to come.

 The digitization of TV platforms has given way to better technology and picture and
sound quality for viewers, more transparent distribution of revenues for stakeholders in
the value chain and more band width becoming available to broadcasters giving them
opportunity to provide value add services. This will enable niche content being available
in future.

 Digital production in films has reduced film processing and storage costs and digital
distribution and exhibition has led to enhanced picture quality, reduced costs, shortened
release window and a wider reach.

 Digital music distribution is mainly restricted to the telecom segment, through ring tones
and caller ring back tunes. With increase in mobile and broadband penetration and
expected 3G rollout, market for other digital distribution platforms such as full track
downloads; streaming music and subscriptions etc might also open up.

2. Regionalization to aid in inclusion of untapped markets

 2009 was the year of providing content in regional languages across sectors like Print,
TV, Music, Films and Radio. Going forward, it is expected that regionalization will be one
of the significant factors driving growth with growing increase in literacy, consumption
and disposable incomes in Tier 2 & 3 cities. Advertisers are also increasing focus on
rural markets due to saturation of urban markets. Demand for regional content is
emerging fast.

 Ad spends on regional TV channels is increasing... and national broadcasters are

looking at adding regional channels to their portfolios. The share of local advertisers on
radio and in print is increasing. Corporate involved in the filmed entertainment business
are taking exposure in regional cinema in order to diversify.

 Multiplexes, which were largely based in HSM, are now increasingly opening up
properties in other regions. Over last few years, Hindi cinema has lost share to other
languages in terms of total films certified. Tapping of regional markets is growing in
importance in the India strategy of international film studios.
3. Convergence and Impact of new media to benefit media players: Advertisers are
looking at multiple delivery platforms for content to break through the clutter in existing
platforms.

4. Consolidation leading to emergence of players with superior capabilities: The M&E

industry is increasingly becoming fragmented in nature due to entry of newer players and
newer customers and regions getting added. We have seen existing players expanding
horizons by coming out of their traditional businesses and establishing presence in other
domains.

5. Competition expanding the operating market: The entry of newer players in the market
has had a positive impact on the overall market as it has helped in expanding the market
size.

6. Talent development and management key to business success:

 The M&E industry relies heavily on its human capital for business success and
differentiation, as it is talent driven to a great extent. The industry has dealt with a lack of
supply of trained professionals in the sector for a long time. Investment in educational
institutions providing specialized courses for skilled technicians is a step in the right
direction to develop talent and meet the demand of the industry.

7. Innovation across product, process, marketing, distribution and business model by

media players:

 Innovation is essential for players to adapt to the changing market scenario,

technology and consumer behavior.

8 The growing importance of pay markets in media business models:

 Traditionally advertising revenues have had a strong hold in the M&E industry, but
now even subscription revenues are becoming important with consumers paying for
media services. The media business models in India are undergoing a change with
audiences becoming more willing to pay for content and value added services.
Technology has brought about convenience and offered superior quality to
consumers who have responded positively. The growth in ticket prices of movies at
multiplexes, increasing number of Pay TV subscribers, increasing penetration of
 DTH with its user friendly interface and technology, and introduction of VAS by
media players are some examples of pay markets gaining importance.

 Growth in this will be driven by research in consumption trends and better understanding
the set of audiences who are likely to pay more for these value added services. This will
ensure going beyond basic monetization of audience through ad sales.

9. Consumer research to ensure consumer-oriented media products and delivery:

 With increasing fragmentation of audiences and competition within and from outside
media sectors, it is becoming difficult for players in the M&E industry to rely purely on
past experience and creative expression. There is an increasing need for investments
and focus on research in concept testing, new product development and delivery
platforms. Companies are increasing spends on consumer research as the stakes have
increased. Many players have a separate team within the organization to concentrate on
research as an ongoing process, whereas others take help of outside research...

10. 360 degree content

 The players are looking beyond just the traditional mediums by reaching the consumers
across multiple platforms in order to establish a stronger connect. They are taking the
help of multiple touch points at the same time to communicate to the consumer across
platforms like TV, Print, Radio, OOH, Films, Internet, Mobile and Retail.

 Recent examples of two very successful 360 degree marketing campaigns of films are
Avatar and 3 Idiots. Avatar was released globally with one of the most successful digital
marketing campaigns. 3 Idiots repeated the success story in India with their innovative
techniques and all inclusive marketing strategy. These films managed to explore multiple
touch points and reach out effectively through digital media and experiential marketing
techniques.
SWOT Analysis of Media &
Entertainment Industry
STRENGTHS:

 .Media And Entertainment is one of the most booming sectors in India due to its vast
customer reach. The various segments of the Media And Entertainment industry like
television and film industry have a large customer base.

 The growing middle class with higher disposable income has become the strength of the
Media and Entertainment industry.

 Change in the lifestyle and spending patterns of the Indian masses on entertainment.

 Technological innovations like online distribution channels, web-stores, multiplexes are

complementing the ongoing revolution and the growth of the sector.

 Indian film industry is second largest in the world and the largest in terms of the films
produced and tickets sold.

 The low cost of production and high revenues ensure a good return on investment for
Indian Media And Entertainment industry.

WEAKNESSES:

 The Media and Entertainment sector in India is highly fragmented.

 Lack of cohesive production & distribution infrastructure, especially in the case of music
industry.

 The lack of efforts for media penetration in lower socio-economic classes, where the
media penetration is low.

OPPORTUNITIES:
  The concept of crossover movies, such as Bend It Like Beckham has helped open up new
doors to the crossover audience and offers immense potential for development.

 The increasing interest of the global investors in the sector.

 The media penetration is poor among the poorer sections of the society, offering
opportunities for expansion in the area.

 The nascent stage of the new distribution channels offers an opportunity for development.

 Rapid de-regulation in the Industry

 Rise in the viewership and the advertising expenditure.

 Technological innovations like animations, multiplexes, etc and new distribution

channels like mobiles and Internet have opened up the doors of new opportunities in the
sector.

THREATS:

 Piracy, violation of intellectual property rights poses a major threat to the Media and
Entertainment companies.

 Lack of quality content has emerged as a major concern because of the 'Quick- buck'
route being followed in the industry.

 With technological innovations taking place so rapidly, the media sector is facing
considerable uncertainty about success in the marketplace.
Constituents of Media and Entertainment
 Source: Industry estimates, IMaCS Analysis

Television industry -Wholesome

entertainment
The television industry in India is currently at its prime, contributing the largest share in the total
media and entertainment industry. While India is the third largest cable television market in the
world, the penetration level of pay TV is still low, which promises a huge untapped potential for
growth.

According to the figures released by an industry chamber in March 2010, the Broadcast and
Television (TV) sector comprised over 43 per cent of the overall M&E sector wherein the total
size of the television sector accounted for US$ 5.7 billion. The broadcast sector is on a strong
growth path and the outlook for advertisement expenditure is on a rise for the television sector.

Digital distribution platforms such as direct-to-home (DTH) are transforming the industry.
Direct-to-Home segment is gearing up for a new phase of TV viewing with digital video
recorders (DVRs) or personal video recorders that will free consumers from having to watch
television at broadcaster-ordained timetables.

A report by research firm Media Partners Asia (MPA) stated that India is poised to become the
world's largest direct-to-home (DTH) satellite pay TV market with 36.1 million subscribers by
2012, overtaking the US. Furthermore, in its report titled 'Asia Pacific Pay-TV and Broadband
Markets 2010', MPA said India's DTH subscriber base will increase from 17 million in 2009 to
45 million by 2014 and 58 million by 2020.

Anil Dhirubhai Ambani Group's company, Reliance Media Works (RMW) has signed a
memorandum of understanding (MoU) with IMAGICA Corp of Japan for film processing
services. Under this alliance, RMW, on behalf of IMAGICA, would provide film restoration,
image processing and enhancement and high definition (HD) conversion services to the Japanese
clients. IMAGICA Corp would work with RMW's Los Angeles-based subsidiary Lowry Digital,
which has handled projects for leading studios like Walt Disney, Paramount Pictures, MGM and
20th Century Fox. RMW would be doing the processing job for IMAGICA either in India or in
California in the US.

Mobile TV- where content will stream in on mobile phones – which is currently at a nascent
stage is poised to grow big with the advent of 3G, according to experts. This can lead to the
growth of many business opportunities in the media and entertainment sector. And according to
ABI Research, the mobile TV market worldwide is expected to attract over 50 crore viewers in
the next five years.

Considering that video is the most popular medium of entertainment, it will not be limited to
mobile phones but will be expanded to in-car television and personal media players among
others, according to experts.
• Mass Entertainment Hindi and regional language channels attract almost 80% of
the total TV viewership in India
• Niche channels like News and Sports gaining ground
These staggering statistics give rise to immense number of opportunities, some of
which are described below:
 Demand for content
Today, there are over 300 channels, which are beamed into the Indian skies and most of
such channels are available to all C&S connected homes. However, this has not
discouraged the investor who still believes that there is room for more, keeping in
consideration the potential to reach the large number of eyeballs, which no other medium
can capture. As a result, around 50 new channels are being added each year. This has
given rise to the serious demand for content for these 24-hour channels. Television
broadcasting companies are continually scouting for content software companies and due
to this imbalance, the programming costs are rising in an un-proportionate manner. This
is a potential opportunity which still needs to be tapped to its fullest.
Regional programming is another segment, which needs to be evaluated closely for the
opportunities that it presents. Most of the content on satellite channels today is either in
Hindi or English. When all channels of Star TV went into exclusive Hindi programming
two years back, the demand for local language content was proved beyond doubt. This
aspect now needs to dwell further into vernacular languages and not just the southern
languages where companies have already started their investments.
Dubbed Foreign Content is yet another genre where content is limited. If one were to
analyse the Top 10 movies in 2004 that were shown on television, three amongst those
were English movies dubbed in Hindi. Further, most satellite channels that have foreign
content have dubbed their progammes in Hindi. Examples of these include:
•Both channels of Disney (The Walt Disney Group) in India only show dubbed Hindi
programming on a 24-hour basis
• On weekends, the programming of a leading Hindi Film Channel include only dubbed
Hollywood films
•ESPN-Star Sports, the leading sports channel in India has a dual Hindi feed to tap the
local markets
 Niche Channels
With the influx of general entertainment, movie and news channels, television
broadcasters are losing their audiences to their competition. Thus when one looks at the
viewership ratings of the three main general entertainment channels in India, these do not
vary significantly over a period.
Investors hence now need to look at developing targeted niche channels as in the case of
most matured television markets in the world. Though some channels in the genre of
lifestyle and music have been launched, these are still a handful and thus there still is
potential in this area. For example, India could do with a dedicated 'food' channel or a
'women' channel as in the US. Certain niche channels for genres of English Business
News and Sports are doing very well in India, which gives the impetus for broadcasters to
explore content for such niche channels.
Music:
The Indian music industry, which until recently was overwhelmingly dominated by film music,
is now being driven by non-film music. However, piracy and advent of radio channels which
constantly play hit music leading to loss of sales of music, has affected the industry.

The music industry is a vast entity and over the years it has witnessed change significantly. The
potential of the Indian music industry can be better understood from its size estimated at around
US$ 182.9 million in 2010, up from US$ 160.9 million in 2008, portraying a growth of 14
per cent during the reporting period. It is expected to grow at a CAGR of 16 per cent over
2010-14 to reach US$ 379.1 million.

While cassettes and cds have traditionally accounted for most of the sales, future growth will
come from non-physical formats such as digital downloads and ringtones, among others.

According to a joint study by Sound buzz, a digital music company, PwC and International
Federation of Phonographic Industries, India was poised to become the second country in the
world, after South Korea, where digital music sales will surpass the sales of music in traditional
formats.

Projected size of Indian Music Industry

 Projected size of Indian Music Industry

Key Players -
Indian Music Industry

• BMG is one of the earliest music companies to enter India in a joint venture with
Crescendo, an Indian company
• EMI owned Virgin Records is another international music company operating in India
• Universal is one of the leading names in Indian music industry with a strong
presence across all genres
• Sony is one of the leading music companies of India with a presence in both
Indian and International albums
• Saregama, formerly known as The Gramophone Company of India Ltd. is India’s oldest
music company with largest repertoire of music across all genres and languages including
top-recording artistes of the past hundred years
Source: report by India Brand Equity Foundation
Radio
The cheapest and oldest form of entertainment, reaching 99 per cent of the population, this
segment is likely to see many dynamic changes.

Currently, the sector generates annual revenues worth US$ 49.5 million and is growing at around
20 percent annually, according to the joint report by KPMG and an industry chamber.

To exploit the true potential of this sector, frequency modulation (FM) radio needs to step up its
penetration to at least 300 stations in 100 cities, which would further attract an investment of
US$ 899,160 per radio station frequency, the total additional investment required has been
estimated at US$ 247.3 million, according to industry sources.

Radio is expected to grow at a CAGR of 16 per cent over 2010-14 and reach to a size of US$
361.4 million by 2014.

Globally, radio is enjoying a revival, based on the support of the youth, with players like Radio
Mirchi emerging out as one of the clear leaders with over 41.2 million listeners, as per the
recently published Indian Readership Survey (IRS) quarter 1 (Q1), 2010.

VedantiNET, the Broadband and application service provider of Guwahati promoted by SM

Computer Consultants Pvt Ltd, has launched the service of first Internet Radio of Assam, ‘Radio
Assam', in the city.

FM radio broadcasting has expanded at a rapid pace and India today has over 300 FM radio
stations.

These three measures by the Government have thrown open several opportunities in the
sector, which is poised to grow at 22 per cent per annum:
• Investments required
The opening of 338 licenses for which bidding will commence soon has given rise to the need
for funding and operating these licenses. As many as 101 companies have expressed their
interest in the segment, most of which are currently not in the business of running and operating
a radio station. This has brought about a need not just for financial investments but also technical
and operating experience. As most of the existing players are themselves bidding for additional
licences, there is a demand from the new players, who are proposing to enter this space, for
technical and financial expertise to run a radio business and thus are looking out to international
market for the same.
• Content boost
The opening of new radio channels is also providing a boost to creative content companies to
spring into action. Assuming an average requirement of about 5000 content hours per annum per
radio channel, one can clearly see the potential for content in the additional 338 channels that
being launched in the country.
Further, radio as a medium also has the potential to tap into local markets, which earlier was
being serviced only by the print media.
Though 'hit music' continues to be the preferred genre of content on radio, radio companies are
not afraid to try out new creative formats, even though news is not permitted.
• Potential to reach local markets
Out of the 338 channels that are up for bidding in the second phase of FM Radio expansion, only
22 channels are in the four metro cities, which have a flavour of a private radio broadcast. The
balance 316 channels in 87 cities until now had access only to the radio services offered by the
State Broadcaster. When the first FM licences were available in the four metros, there was a
dramatic change in lifestyles in theses cities where people actually went back to radio listening
itself! Thus, listenership of radio grew from an almost zero base to about 70 per cent today.
Since listenership is directly linked to the advertising revenues of these radio stations, advertisers
are looking forward to tap this local audience base and radio companies in turn to target growth
from such niche-advertising revenues. Further, as compared to television commercials, radio
commercials are relatively very economical to make. Because of this, advertisers are able to
make multiple creatives to suit different cities, different day-parts and different brand objectives.
Key Players -
Indian Television & Radio Industry

• Doordarshan is the largest TV network in India with 19 channels reaching 90% of

the population through 1400 transmitters
• News Corporation owned Star TV Network entered India in 1991 and offers more
than 10 channels in mass entertainment, sports, news,, music, movies etc.
 • Zee is one of the pioneers of the Indian Television industry with 22 channels in its
bouquet. It is present in broadcasting, cable distribution, production and
distribution
of films, creation of animation software among others
• Sony Pictures Entertainment is present in India with 3 channels focusing on Hindi
entertainment and sports
• Sun Network is based in South India with 14 channels in four languages and a
focus on entertainment, news, movies, music, kids shows among others. Also
present in FM Radio
• Walt Disney is present in India through two kids channels and has recently
bought one more kids channel
• All India Radio, owned by Government of India is the largest radio network in
India with 214 broadcasting centers covering more than 99% of the Indian
population.
Source: report by India Brand Equity Foundation

Advertising
Advertising trends showed a healthy growth in the last five years as marketers sought to
woo customers for a wide range of products. According to an Economic Times survey of
100 large private sector companies, the aggregate spending on advertising by these
companies grew by a huge 22.4 per cent last year over the previous year. More than
four-fifths of the sample companies have witnessed a rise in sales turnover in 2007-08
following higher advertising spend.

With the economic slowdown, ad spends are slowing down as well. According to the
FICCI-KPMG report, ad spends could grow by 12.4 per cent a year now, compared to
the 17 per cent growth registered over the past three years.

However, as consumer spending slowly inches upwards – aided partly by the fiscal
measures undertaken by the government to boost the economy – some companies,
such as Dabur, Coca Cola India, the Emami group and the Future Group, are planning
to raise ad spends by almost 10 per cent in some cases to boost sales this year.

Radio, internet and cinema have been the traditional mediums of advertising and
according to a survey by Adlabs Cinemas and research firm IMRB, in cinema, the 30-
second in-theatre advertising accounts for 95 per cent of cinema advertising. The
remaining 5 per cent comprises activities in the lobby area such as new car or bike
displays, etc. Of the overall advertising spend, currently only around 0.4 per cent
(around US$ 15.42 million) is spent on cinema. Print and TV account for the majority of
the ad spend.

Going forward, digital media advertising (internet, mobile and digital signage) is
expected to emerge as the medium of choice for advertisers. Of the available media, it
was the fastest growing segment in 2008. Analysts feel that its better return on
investment and the comparative ease with which its efficacy can be measured will
ensure that the trend continues. In fact in 2009, video ads will the most popular form of
online advertising, according to Viraj Malik, MD, Percept Knorigin (digital advertising
arm of Percept). According to a FICCI-PwC report, online advertising it is expected to
touch US$ 212.03 million in 2011 from the current US$ 57.83 million.

To cash in on the opportunity, Malaysia-based media conglomerate Astro Group has

acquired a 50 per cent stake in Indian online firm Mogae Digital for US$ 5 million. The
joint venture has lined up a number of launches, which include a social networking
portal for mobile phones this year. Mogae Digital is promoted by Sandeep Goyal and
Tanya Goyal, who are the Indian JV partners of Japanese giant Dentsu, the single
largest ad agency in the world.
Cinema
The Indian film industry is the largest in the world in terms of number of films produced
per year. The FICCI-KPMG study values the Indian film industry at US$ 2.11 billion and
projects its growth at 9.1 percent till 2013.

Bucking the global slowdown – and in the aftermath of the Slum dog Millionaire win –
the box office collections in the first two months of this year have jumped 32 per cent
over 2008. Box office collections from over eight movies, which accounted for the bulk
of the revenues, hit US$ 36.62 million in January-February compared to US$ 27.95
million crore from over 12 movies in 2008 during the same months, according to data
with trade analysts.

Films Division has been motivating the broadest spectrum of the Indian public with a
view to enlisting their active participation in nation building activities.

According to the joint report by KPMG and an industry chamber, the film industry
contracted 14 per cent growth in 2009 wherein the industry is projected to grow at a
CAGR of 9 per cent to touch an estimated amount of US$ 3.02 billion over the next five
years. Growth drivers for the sector would include expansion of factors like an increase
in the number of multiplex screens, digital screens facilitating wider releases, higher
cable and satellite revenues, improving collections from the overseas markets and
supplementary revenue streams like DTH, digital downloads, etc, which are expected to
emerge in future.

Reliance MediaWorks Ltd has signed a deal with UFO Moviez to establish a gateway
for digital film releases on Indian screens. The pact will enable the firm to combine UFO
Moviez' digitisation technology with its programming expertise and digital cinema
experience as stated by Reliance MediaworksThe cinema-viewing experience is also
undergoing major changes. One perceptible change has been the rapid growth of
multiplexes, which meets consumer demand for quality entertainment and has also
helped boost production of niche films targeted at niche audiences.
Multiplexes
The nation's multiplex industry is all set for an unprecedented boom buoyed by positive
regulatory changes and booming consumerism. According to an estimate, the number of
multiplex screens in India is expected to touch 5,000 by 2012, constituting around 40 per cent of
the total cinema screens.
In fact, currently the Indian market is highly underserved when compared to the West, India has
less than 13 screens per million of the population, against 117 in the US, 52 in Italy and 30 in the
UK.

PVR, Inox Leisure, Big Cinemas and other multiplexes plan to maintain their investment tempo
in the year ahead betting on big Bollywood releases, lower rentals, a cut in entertainment tax and
the drop in equipment prices. Multiplexes including Fun Multiplex, Cinemax and others plan to
invest more than US$ 2.89 billion in 2009 almost the similar amount as last year, according to
industry experts.

Fame India (formerly Shringar Cinemas), the company that owns and runs the Fame Cinemas
chain of multiplexes, is expanding its footprint in North India. The company owns about 73
screens across India, including the three screens it added to its portfolio at the Fame multiplex in
the Panchkula district of Haryana. Another multiplex with five screens in Chandigarh (at the City
Emporio mall) is in the pipeline.

Multiplexes /megaplexes have been instrumental in contributing 28 per cent of the total theatrical
sales for the film industry according to a report by Systematix Institutional Research.

• Entertainment conglomerate Adlabs Cinemas has drawn up a plan to build 12 megaplexes

in cities like Mohali, Lucknow, Hyderabad and Delhi.
• Multiplex chain PVR Cinemas, is also planning to add over 250 screens across India,
staggered over a period of three years from 2008-2010, with a total investment outlay of
around US$ 82. 27 million.
• Cinemax India, the multiplex chain which currently has 55 screens over 17 properties
across the country is planning to scale up its presence to 299 screens across about 100
properties by fiscal 2010.
• Inox, which has 26 multiplexes and 90 screens in 18 cities across India, will open nine
multiplexes in Bangalore, Mangalore, Hubli and Belgaum by the end of 2010.
• Mexico-based multiplex operator Cinepolis plans to set up 40 screens over the next 12
months in India, which could entail an investment of US$ 28 million.
• Milan Saini, Head and Managing Director, Cinepolis India Country stated that "India is a
huge opportunity for us as the market is under-penetrated. We plan to set up 40 screens
 over the next 12 months across seven properties in cities like Mumbai, Bangalore,
Chennai and Hyderabad."

• Print/Publishing
The print media industry is projected to grow at a CAGR of 9 per cent and targets to
reach around US$ 5.93 billion by 2014, according to the joint report by KPMG and an
industry chamber.
Jagran Prakashan of Jagran Group, which publishes one of India's largest read
language dailies, stated that it will acquire all the publications of Mid-Day Multimedia
in a stock deal valued nearly at US$ 40 million.
Foreign investment, including foreign direct investments (FDI) and investment by
non-resident Indians (NRIs)/person of Indian origin (PIO)/foreign institutional investor
(FII), up to 26 per cent, is permitted for publishing of newspapers and periodicals
dealing with news and current affairs under the Government route.
The segment hence provides for several opportunities as listed below:
• Tapping the reading population
As per the latest readership survey NRS 2005, the reach of the print media (dailies
and magazines combined), as a proportion of the reading population (i.e. 15 years
and above) is only 27 per cent. The global average readership is estimated to be
over 50 per cent. This highlights the significant potential of the print media market in
India.

• Build a pan-India presence

Due to low levels of literacy and India's marked regional diversity, the print media
segment is characterized by a large number of players dominating specific
geographies (See Table below). Vernacular news dailies thus dominate the market
with a 49 per cent share. Regional dominance is not just typical of only vernacular
papers- even English news dailies have managed to gain dominance only in specific
pockets. As a result, there are hardly any players with a pan-India presence.

• Leveraging a fragmented market

The print media market today is highly fragmented with most publishers being family
owned. These publishers hence had low access to capital and information and thus
concentrated only in the geographical location in which they were the leaders.
However ,this trend is now changing and publishers are looking to expand their
market though both organic and inorganic routes. With an added push of foreign
investment being allowed in the print media segment, this segment thus offers
significant investment opportunities.
Key Players -
Indian Print Media Industry

One of the leading English dailies owned by Bennett, Coleman & Co, a leading media group of
India

Another leading English newspaper with multiple editions published from

many states in India

One of the oldest newspapers with a strong presence in South India

Hindustan Times is another leading English newspaper with more than 4 million readership
mostly in North India

Published in English and Malayalam, this newspaper enjoys a strong readership in South India.
It also publishes a large number of well known magazines in English and regional languages
Digital Media
The digital technologies and their innovative applications have changed the entertainment sector
considerably, especially the content production and its quality. Internet has also emerged as the
latest revenue stream and has become one of the fastest growing advertising medium and has
made a significant impression on the entertainment industry.
Officials in the Information and Broadcasting Ministry have planned a roadmap for making
broadcasting operations completely digital. The Telecom Regulatory Authority of India (TRAI)
has suggested a three-stage process for digitisation, wherein tier one cities would be covered by
2013, tier two cities by 2014 and tier three cities by 2017. They further stated that the digital
transmission helps in enhancing the audio and picture quality.
Madison Media bagged the media buying account of US carmaker General Motors (GM),
estimated at more than US$ 22.1 million. GM, the third biggest ad spender among auto
companies in the country after Maruti Suzuki and Hyundai Motor, has given the account to
Madison for a period of three years.
Government Initiatives
The Government has initiated major reform measures, which have had a cascading
effect on the growth of the industry.

• Permitting 100 per cent foreign direct investment (FDI) through the automatic
route for film industry and advertising.
• Allowing 49 per cent foreign holding in cable TV and DTH.
• Allowing 100 per cent FDI in non-news publications and 26 per cent FDI in news
publications.
• The government has allowed 100 per cent FDI in fax editions of magazines and
newspapers.
• Recently, the government has allowed companies with core business in news
segment but hived off non-news business, to raise funds from overseas beyond the
stipulated FDI limit of 26 per cent. Such companies can raise and route funds from
overseas through its non-news arm, which will not be calculated as foreign
investment.
• The FM radio sector was opened for FDI with a 20 per cent cap.
• Permitting setting up of unlinking hubs for satellite unlinking by private TV
broadcasters from Indian soil.
• Giving industry status to the films segment.
• Opening FM Radio operations to the private sector.
• The government has allotted US$ 50.13 million in the current Five-Year-Plan for
various development projects of the film industry. The funds will be utilised to set up a
centre for excellence in animation, gaming and visual effects among others.
Going Global
With the growing popularity of Indian content in the world market in general and South
Asia in particular, the Indian entertainment industry players are venturing abroad to tap
this booming segment.

In fact, according to a report by CII-AT Kearney, the share of international markets in

total box office collections is estimated to increase from 8 per cent in 2006 to 15 per cent
in 2010.

Consequently, many domestic players like Yash Raj Films, Reliance-Adlabs and UTV,
among others, have set up distribution arms overseas. Not only films, other entertainment
content areas like music and television also have a huge potential international market.
One recent estimate puts the total value of Indian content sold overseas at over US$ 200
million. Further, this number is expected to grow over 20 per cent every year.

Technology has influenced the entertainment industry in a big way, and transformed
content delivery as well as viewership experience. Experts feel that in 2009-10, the media
and entertainment sector will see many new applications and ways of building the
business. With a host of factors contributing to the double-digit growth of the

industry and an added easing of the foreign investment norms, the E&M

Industry in India thus is a sunrise opportunity that presents significant avenues for
investment.