India media growth to slow to 12.5%
Five-year projection down from earlier forecast of 18%NEW DELHI -- Growth in India's media and entertainment industry is expected to slow to 12.5% over the next five years, an annual industry body report released Tuesday said.
The "Indian Media and Entertainment Industry 2009" report from the Federation of Indian Chambers of Commerce and Industry and consultants KPMG was released on the first day of the three-day FICCI Frames media conference in Mumbai.
The report said that growth from 2009-2013 would bring the Indian industry's annual revenues to about $22 billion (1 trillion rupees).
The projected slowdown in growth compares with the 18% growth projected for 2008-2012 by PricewaterhouseCoopers in the report released last year at this time.
The report released Tuesday shows 2008 revenues of $12 billion (584 billion rupees), up 12.4% from 2007. According to last year's report, a faster than forecast growth of 17% in 2007 brought industry revenues up to $ 10.68 billion (513 billion rupees). This, in turn, was a rise from $9.12 billion (438 billion rupees) in 2006.
Television continues to command almost half of the industry pie, with revenues touching an estimated $5 billion (241 billion rupees), up 14.2% over 2007.
TV growth drivers in 2008 included the penetration of digital TV distribution technology, the addition of more DTH (Direct To Home) players and the debut cricket season of the Indian Premier League, "which proved that innovation in traditional formats resulted in runaway success," the report said.
The report projects Indian TV industry growth of 14.5% from 2009-13 to $9.8 billion (473 billion rupees).
"India is one of the few countries where economic growth will be led by domestic consumption," said Amit Mitra, FICCI secretary general. "With a low advertising spend to GDP ratio of 0.47 per cent, a growing consumer class, low media penetration and increasing discretionary spending, India continues to be an attractive market for media and entertainment."
The report cautions, however, that the slowdown in advertising revenues "especially since the last quarter of 2008, is likely to continue this year."
Indian film revenues in 2008 were around $2.27 billion (109.3 billion rupees) in 2008, up 13.4% over 2007, driven by the success of many small budget movies and rising competition in the regional market.
The report projects Indian film industry growth of 9.1% to $3.5 billion (168.6 billion rupees) by 2013.
Forecasting future trends in film, the report states that filmmakers should try to reach their audience by investing in new formats and content, by expand home video distribution, and by being proactive in the fight against piracy and the promotion of new talent.
Taking a long term view of the overall entertainment industry, Rajesh Jain, the head of information, communication and entertainment at KPMG India said, "In the immediate future, media corporates are likely to focus more on operating margins, and assess opportunities for consolidation, while building on core strengths."