SECTION: TELEVISION

Tags: Jehil Thakkar, KPMG, Synjini Nandi

Headline: KPMG report on M&E industry
Short Story:
Today, powered by digital technologies, growth in penetration of broadband and digital cinema,
increasingly sophisticated mobile devices, the dreams of advertisers, media houses, and telcos are
beginning to take steps towards fulfillment.
Synjini Nandi
March 13, 2013
Story:
The year 2012 has been a mixed bag. There has been several changes which has led to the opening
of opportunities for building further growth. Today, powered by digital technologies, growth in
penetration of broadband and digital cinema, increasingly sophisticated mobile devices, the dreams
of advertisers, media houses, and telcos are beginning to take steps towards fulfillment.
According to Jehil Thakkar, Leader, Entertainment & Media, KPMG, the Indian M&E industry grew
from INR 728 billion in 2011 to INR 821 billion in 2012, registering an overall growth of 12.6 percent.
With some improvement also likely in the global economy in 2013, the prognosis for the Indian
economy looks somewhat better and real GDP growth is expected to be in the range of 6.1 to 6.7
percent in 2013.
Given the impetus introduced by digitisation, continued growth of regional media, upcoming elections,
strength in the film sector and fast increasing new media businesses, the Media and Entertainment
industry is estimated to achieve a growth rate of 11.8 percent in 2013 to touch INR 917 billion. The
sector is projected to grow at a healthy CAGR of 15.2 percent to reach INR 1661 billion by 2017.
Commenting on the same Thakkar stated, "Interestingly India remains a growth market for traditional
media and the language markets remain key centres of growth. Hence the regional growth story
continues to be in a range of 12 to 15 per cent".
According to the KPMG report, digitisation of cable is expected to bring in transparency and increase
subscription revenues for Multi System Operators (MSOs) and broadcasters. New media has
observed a 40 per cent growth in advertising with 174 million internet viewers and 44 million
smartphone installed base.
The radio industry had a muted growth of 10 percent in CY 2011 and reached revenues of INR 12.7
billion compared to INR 11.5 billion in CY 2011. Digital tunes are now being played like never before
contributing 57 percent to the INR 10.6 billion music industry which grew pie 18 percent Y-o-Y. The
INR 224 billion Indian print industry grew by only 7.3 percent from INR 209 billion in 2011- lower
than KPMG in Indias expectation of 8.3 percent growth last year.
The VFX industry, a rapidly evolving segment in India, is estimated at approximately INR 7.7 billion
and can be broadly classified into the following verticals movies, TV shows and advertisements.
According to Thakkar, after several years of muted growth, 2012 was an exciting year for the Indian
film industry with the audience returning to the theaters. With the growth in number of screens via
multiplexes, increased ticket prices and delivery of robust content, Indias domestic theatrical
revenues grew by 23.8 percent Y-o-Y; contributing 76 percent to the INR 112.4 billion film industry.
While 50-60 percent of the outdoor budget was consumed by Mumbai and Delhi alone a few years
ago, there appears to be a marked shift to the Tier II and III cities - the top 10-12 markets spend has

over the last few years reduced from 80 percent to 60 percent. This trend is expected to continue.
The projected growth for television is 18 per cent, radio is 16.6 per cent, print is 8.7 per cent and films
is 11.5 per cent. Television and print are expected to dominate as the number one and number two
mediums. The other projected growth figures are 32.1 per cent for digital advertising, 15.8 per cent for
animation and VFX, 22.4 per cent for gaming and 16.2 per cent for music.
According to Thakkar, the potential risks that can derail growth are challenges for phase one cities
from seeding to monetisation, further delay in the phase three roll on plan, the unsuccessful
implementation of 4g, the lack of necessary incentives and policy support by the Government and the
continual low rate of economic growth.
Thakkar concluded by saying that the industry still needs logistics and funding for successful
digitisation, viable digital monetisation models and a robust measurement system.
Jehil Thakkar was expressing his views at FICCI Frames held in Mumbai on March 12, 2013.