India's entertainment explosion
Report: Sector expected to grow faster than economyNEW DELHI -- The Indian media and entertainment industry is expected to grow at an 18% compound annual growth rate and reach an overall value of $22 billion by 2011 from its present size of $9.7 billion, according to a report published by PricewaterhouseCoopers for the Federation of Indian Chambers of Commerce and Industry.
The 2007 annual edition of the FICCI-PWC report, titled Indian Entertainment and Media Industry: A Growth Story Unfolds, will be released Monday at the annual FICCI-FRAMES entertainment industry conference in Mumbai.
According to the report, the Indian media and entertainment sector grew 20% last year. Key drivers of growth will be continued technological advancement and the government's relaxation of foreign investment rules that will put the industry's growth rate higher than the economic growth rate (an average of about 8%) through 2011.
The report estimates that, during the past three years, foreign investment in India's entertainment industry topped more than $890 million, with 13 Foreign Direct Investment proposals cleared by the government in 2006 alone. An additional 22 proposals are being processed.
FICCI secretary general Amit Mitra said Tuesday that the "age of convergence was leading to a number of collaborations between value-chain partners to drive new products and services to consumers and helping the formation of Indian media powerhouses."
Television commands the highest share of the entertainment pie, with its current size of $4.2 billion projected to grow 22% to $11.5 billion by 2011. With the implementation of such new distribution technologies as Conditional Access System and Direct to Home, subscription revenue is set to increase "both from the number of pay TV homes (estimated at about 50 million) as well as increased subscription rates," the report indicated.
Filmed entertainment is set to grow from its current size of $1.9 billion to $3.9 billion at a rate of 16%, thanks to such factors as increasing industry consolidation, long-term contracts between film production companies and talent and "the fact that more than half the releases in 2006 were by corporations rather than individuals."
The exhibition sector also is on a growth path because of the proliferation of multiplexes and digital cinemas.
The report predicts that the music industry will grow from $1.6 billion to $1.9 billion, reflecting a modest 4% growth, proving that the segment is still battling dwindling physical sales and piracy, though opportunities abound in digital distribution and mobile music.