1. Indian Entertainment Industry
2. The Role of Music in Indian Films
3.




   How is the Indian entertainment industry u...
1. Overview of the Indian Entertainment Industry

2. Role of Music in Indian Films

3. Ground Realities

4. The Future
1. Indian Entertainment Industry
THE INDIAN OPPORTUNITY
     3/4 of India's consumer market in 2025 doesn’t exist today.
     About $1.32 trillion-a-year i...
INDIAN DOMESTIC BOX OFFICE
     Indian film goers account for half of the world’s ticket admissions,
     but have some of...
INDIAN FILM INDUSTRY
     The most prolific filmmakers in the world and a large number of
     screens across the country....
INDIAN ENTERTAINMENT LANDSCAPE:
2006-2009e

        In billions Rs   2006   2007       2008       2009e        CARG

Domes...
INDIAN ENTERTAINMENT LANDSCAPE:
2006-2009e

                      USD    2009e

Domestic Theatrical         1,475m
Oversea...
INDIAN ENTERTAINMENT LANDSCAPE:
2010p-2014p

        In billions Rs   2010p   2011p   2012p   2013p      2014p      CARG

...
PRODUCER REVENUE STREAM
                                                         Cable and Satellite
                     ...
2. Role of Music in Indian Films
KEY ROLE OF MUSIC IN
INDIAN FILMS

• 3-4 song and dance
  numbers per film
• Music launch event first
  exposure to film
•...
MUSIC PLATFORMS: INSTALL BASE

• At peak, cassette players 40 million
• At peak, CD players 40 million
• Current broadband...
THE RUB: REVENUE SHARING AGREEMENTS

                         Operator
                           Rationale:
             ...
TURNING POINT: AIRTEL - SAREGAMA

     May 2009:
     Airtel proclaims its has overtaken in revenue
     India’s largest m...
PERCEIVED VS PRACTIVAL VALUE
MATRIX
ROLLOUT OF VAS FEATURES:




Source: Boston Analytics MVAS Report 2007
SNAPSHOT OF MOBILE MUSIC
FORMATS
• Full-track downloads (FTDs) have yet to find a market:
  • Slow mobile connection speed...
3. Ground Realities
CONTENT OWNER: T-Series Music Label

  Best relationships with filmmakers:

• Preemptively buys rights
• Pays big
• Contri...
DIGITAL AGGREGATOR: Bollywood
Hungama

• 2003: Signs back-to-back deal for all digital
  rights handling for T-Series.
• T...
CBRT PLATFORM: OnMobile

• Right place, right time.
   – Operators realize WAP investments hadn’t lived
     up to expecta...
4. The Future
• New technology providers:
   – Operators renegotiating contracts
   – New nimble operators/MVNOs

• New formats:
   – IV...
Roadshow asia future group india
Roadshow asia future group india
Roadshow asia future group india
Roadshow asia future group india
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Roadshow asia future group india

  1. 1. 1. Indian Entertainment Industry 2. The Role of Music in Indian Films 3. How is the Indian entertainment industry using mobile? Presented by: Jonathan Dotan Mobile Squared Roadshow: Asia Monty Munford 6 May 2010
  2. 2. 1. Overview of the Indian Entertainment Industry 2. Role of Music in Indian Films 3. Ground Realities 4. The Future
  3. 3. 1. Indian Entertainment Industry
  4. 4. THE INDIAN OPPORTUNITY 3/4 of India's consumer market in 2025 doesn’t exist today. About $1.32 trillion-a-year in future purchases is up for grabs. A Picture of India in 2025: Continuing rise in personal incomes will spur a ten-fold increase, enlarging the middle class to about 583 million people, or 41% of the population. India's wealthiest citizens will total 24 million (larger than the current population of Australia) and account 20% of national private consumption Aggregate Disposable Income, by annual income bracket Globals 2.0 (1.2) 6.3 (3.3) 21.7 (9.5) Strivers 1.6 (2.4) 3.8 (5.5) 20.9 (33.1) Seekers 3.1 (10.9) 15.2 (55.1) 30.6 (94.9) Middle Class Aspirers 11.4 (91.3) 14.6 (106.0) 13.7 (93.1) Deprived 5.4 (101.1) 3.8 (74.1) 2.6 (49.9) 2005 2015 2025 Primary Figure: Aggregate Disposable Income, in trillion INR Bracketed Figure: Number of Households, in millions Source: McKinsey and Co. 2006
  5. 5. INDIAN DOMESTIC BOX OFFICE Indian film goers account for half of the world’s ticket admissions, but have some of the lowest ticket prices in the world. Source: Goldman Sachs Research 2009
  6. 6. INDIAN FILM INDUSTRY The most prolific filmmakers in the world and a large number of screens across the country. Source: Goldman Sachs Research 2009
  7. 7. INDIAN ENTERTAINMENT LANDSCAPE: 2006-2009e In billions Rs 2006 2007 2008 2009e CARG Domestic Theatrical 62.1 71.5 80.2 68.5 3.30% Overseas Theatrical 5.7 8.7 9.8 6.8 6.20% Home Video 2.9 3.3 3.8 4.3 13.10% C&S Rights 5 6.2 7.1 6.3 7.90% Ancillary Streams 2.5 2.9 3.5 3.5 12.90% Total 78.2 92.6 104.4 89.4 4.60% Source: KPMG-FICCI FRAMES REPORT 2010
  8. 8. INDIAN ENTERTAINMENT LANDSCAPE: 2006-2009e USD 2009e Domestic Theatrical 1,475m Overseas Theatrical 144m Home Video 91m C&S Rights 134m Ancillary Streams 74m Total 1,893m Source: KPMG-FICCI FRAMES REPORT 2010
  9. 9. INDIAN ENTERTAINMENT LANDSCAPE: 2010p-2014p In billions Rs 2010p 2011p 2012p 2013p 2014p CARG Domestic Theatrical 73.3 79.3 85.8 93 100.8 8% Overseas Theatrical 7.3 7.9 8.6 9.3 10.1 8% Home Video 4.7 5.2 5.9 6.6 7.4 11% C&S Rights 7 7.9 9 10.1 11.4 12% Ancillary Streams 4.1 4.7 5.4 6.2 7.1 15% Total 96.4 105 114.7 125.2 136.8 8.90% Source: KPMG-FICCI FRAMES REPORT 2010
  10. 10. PRODUCER REVENUE STREAM Cable and Satellite Rights (16%) Home Video Rights (9%) Sale of Domestic Overseas Other Sources Theatrical Sales Physical Music Rights (35%) (50%) Rights (15%) (5%) Digital Rights (3%) Product Placement / Merch Source: Crisil, Nirmal Bang Research (2%)
  11. 11. 2. Role of Music in Indian Films
  12. 12. KEY ROLE OF MUSIC IN INDIAN FILMS • 3-4 song and dance numbers per film • Music launch event first exposure to film • Music videos core of film trailers • Music videos cut into TV promos
  13. 13. MUSIC PLATFORMS: INSTALL BASE • At peak, cassette players 40 million • At peak, CD players 40 million • Current broadband connections: 16 million VS 500 million+ mobile phone subscribers (20m subs added in March 2010) 60 million mobile Internet-enabled handsets (Despite lack of 3G still 8-10% Y-Y growth) Source: Estimates from Sony BMG India
  14. 14. THE RUB: REVENUE SHARING AGREEMENTS Operator Rationale: • High Data Costs 30% 70% • Marketing costs • No sustainable advertising revenue • Not enough spectrum • Legacy of bad deals
  15. 15. TURNING POINT: AIRTEL - SAREGAMA May 2009: Airtel proclaims its has overtaken in revenue India’s largest music company Saregama. Rs million Q1-2009 Q2-2009 Q3-2009 Q4-2009 Saregama 288 305 286 Awaited *Airtel Music Revenue 4007 4385 4496 4813 (40%) Airtel Non-SMS VAS 1602 1754 1798 1925 Revenue by Medianama Source: Analysis
  16. 16. PERCEIVED VS PRACTIVAL VALUE MATRIX
  17. 17. ROLLOUT OF VAS FEATURES: Source: Boston Analytics MVAS Report 2007
  18. 18. SNAPSHOT OF MOBILE MUSIC FORMATS • Full-track downloads (FTDs) have yet to find a market: • Slow mobile connection speeds • Low penetration of music-capable handsets • Piracy • Whereas, piracy-free sales of RBTs have grown rapidly. – In 2008 accounted for 70% of entertainment VAS revenue. – 35% CAGR – Market share for RBTs will shrink, but will continue to prosper: • Easy consumer access to content 36 via shortcodes • Premium SMS • IVR portal services Popular with India rural population (40% illiterate)
  19. 19. 3. Ground Realities
  20. 20. CONTENT OWNER: T-Series Music Label Best relationships with filmmakers: • Preemptively buys rights • Pays big • Contributes massive advertising – Retains blocks of ad revenue on hand – Cornered radio stations with MGs Founder Gulshan Kumar – Gets TV networks to license songs to use in reality shows etc. • Excellent distribution: – Still 35% in physical packaged media sales
  21. 21. DIGITAL AGGREGATOR: Bollywood Hungama • 2003: Signs back-to-back deal for all digital rights handling for T-Series. • The advantage that Hungama provides: – Hassle-free expertise – International contacts Founder Neeraj Roy • Conflicting Interests? – The carrier has to justify ROI per product – Hungama is in a marketshare game. – Content owners?
  22. 22. CBRT PLATFORM: OnMobile • Right place, right time. – Operators realize WAP investments hadn’t lived up to expectations – 85% to 93% of total subscriptions are pre-paid – ARPU from peer-to-peer (P2P) SMS is expected to dip in the medium term as voice becomes relatively cheaper than SMS. • Became default CRBT provider since 2004
  23. 23. 4. The Future
  24. 24. • New technology providers: – Operators renegotiating contracts – New nimble operators/MVNOs • New formats: – IVR – Text based premium packages – Gaming • New role of social media – 1.5m Twitter users – 8mFacebook users – 15m Orkut users
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