Industry had a "challenging" year but should still reach $28 billion by 2015.
NEW DELHI -- The Indian media and entertainment industry registered a growth of 11% over 2010 to touch 652 billion rupees ($14.5 billion) according to a report by industry body Federation of Indian Chambers of Commerce and Industry (FICCI) and consultants KPMG India.
The report will be formally presented Wednesday at the 12th annual entertainment industry confab, FICCI-FRAMES in Mumbai.
Thanks to a strong recovery in ad spend, future growth is projected to register a healthy compound annual growth rate of 14%, with the Indian media and entertainment industry expected to reach $28 billion by 2015.
"The key industry highlights are the growing potential of the regional markets, increasing media penetration and per capita consumption and increasing importance of New Media (online media) driven by changing media consumption patterns," FICCI Secretary General Amit Mitra said.
The report also finds that 2010 was a year of “great dynamism with growth across all sectors other than film” with advertising spends as a key driver for growth.
In 2010, advertising spends grew by 17% to 266 billion rupees and accounted for 41% of overall industry size.
Last year was “a challenging year for the film industry,” according to the report with the sector touching 83 billion rupees compared to 89 billion rupees in 2009. Last year’s FICCI-KPMG report said that the film biz had registered a de-growth of 14% in 2009 over 2008 when the industry touched 109.3 billion rupees.
However, “with better content, increase in multiplexes, investment in research and continued cost corrections," future growth seems healthy with this year’s report predicting that the film biz will grow to 132 billion rupees by 2015.
As in years past, television continues to command the major share of the overall entertainment pie.
Backed by growth in advertising and subscription revenues, the television industry grew by 15.5% in 2010 from 257 billion rupees in 2009 and is expected to grow at a CAGR of 16% to touch 630 billion rupees by 2015.
Television is expected to account for almost half of the Indian media and entertainment industry revenues, and more than twice the size of print, the second largest media sector. Television saw a tremendous increase in the net direct-to-home subscriber base, totaling 28 million at the end of 2010 while total TV households will surge to 156 million by 2015.
Other sectors also reflect healthy growth such as music, which the report forecasts will growth at 17% to cross 19 billion rupees by 2015.
“The resurgence in advertising, growth in subscription revenues, thrust on digitisation, and emerging avenues for content monetisation were the key growth drivers for the Indian media and entertainment industry in 2010. However going forward, it will become imperative for media companies to reset their business models and build greater focus on profitability and changing consumer preferences," KPMG head of media and entertainment Rajesh Jain said.