India media to earn $29 bil by 2012
EmptyNEW DELHI -- Boosted by a rapid growth in the number of digital consumers, the Indian entertainment industry will earn as much as $28.9 billion by 2012, PricewaterhouseCoopers and an industry group reported Monday.
In a study titled "Indian Entertainment and Media Industry 2008," PwC India and the Federation of Indian Chambers of Commerce and Industry said that the Indian entertainment industry grew 17% in 2007 -- faster than the predicted 15% -- reaching $12.82 billion, up from $10.95 billion in 2006.
The television industry contributed the largest share of the growth, with TV earnings up 18% in 2007 to $5.65 billion. This represents 44% of the industry total. Television revenue is expected to reach $15 billion by 2012 at a compound annual growth rate (CAGR) of 22%.
The television landscape is going digital, with the report projecting that the number of direct-to-home subscribers -- currently at more than 4 million -- is expected to grow at a CAGR of 44% over the next five years.
"Digitalization is the future for most segments, and companies have to adopt this revolution with appropriate infrastructure, relevant business models, and technology upgradation along with associated costs," said Timmy Kandhari, PwC India executive director and leader technology, infocomm and entertainment and media practice. "The pace of adoption will determine industry dynamics."
Global confidence in the Indian industry is seen in the size of foreign investments -- primarily in television -- which hit a record high of $211 million in 2007. This trend is seen in such recent deals as Viacom's entry into an equal joint venture with Network18; Disney's committment of $330 million to raise its stake in Mumbai-based media conglomerate UTV to 32.1%; and NBC Universal payment of $150 million for a 26% stake in New Delhi Television.
Digital has touched film, too, with PwC and FICCI reporting that digital cinema "continued to make significant progress in the film industry, which also saw a rise in online and mobile ticketing sales."
Film industry revenue from the world's most prolific filmmaking country rose 14% in 2007 to $2.4 billion and is projected to touch $4.4 billion by 2012.
There also is a shift to a Hollywood-style studio model which "is further de-risking the business." The last year saw Sony Pictures debut its Bollywood production "Saawariya" (Beloved) and Warner Bros. announced its maiden India venture, "Made in China." There are unconfirmed reports that 20th Century Fox also is readying India plans.
Indian advertising also has experienced a "paradigm shift, with digital platforms enabling to reach the critical mass," the report said. Online advertising touched $67.5 million in 2007 growing 69%, and is expected to touch $275 million by 2012. Indian advertising touched $4.9 billion in 2007, growing 22% year on year, up from $4.02 billion in 2006.
Industrywide, music recorded the slowest growth, rising just 1% during the year to reach $182 million. It is projected to hit $200 million by 2012 at a CAGR of 2%.