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. 1. Overview of the Indian Entertainment Industry
2. Role of Music in Indian Films
3. Ground Realities
4. The Future

3. 1. Indian Entertainment Industry

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. 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. 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. 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. 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. 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. 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. 2. Role of Music in Indian Films

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. 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

15. 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

16. 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

17. PERCEIVED VS PRACTIVAL VALUE
MATRIX

18. ROLLOUT OF VAS FEATURES:
Source: Boston Analytics MVAS Report 2007

19. 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)

22. 3. Ground Realities

24. 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

25. 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?

26. 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

27. 4. The Future

28. • 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