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INDUSTRY – MEDIA
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UWSB, TERM V, NEVEMBER-2013, MARKETING MAJOR
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1.1 BRIEF HISTORY 4-8
1.2 GROWTH DRIVER 9-11
1.3 GOVERNMENT REGULATIONS 12-14
1.4 LEADING COMPANIES 15
1.5 ESTIMETED SIZE OF THE INDUSTRY 16
1.6 TRENDS IN SALES OVER RECENT YEARS 17-19
1.7 CURRENT OPERATIONAL/ MANAGEMENT
1.8 MARKET STRATEGIES PREVAILENTS 21-23
1.9 SENSITIVITY TO ECONOMIC FLUCTUATIONS 24-25
INDUSTRY DEVELOPMENT, NEWS,
3 CONSUMER MARKET DATA 31-35
4 COMPETITOR INFORMATION 36-39
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NO LIST OF TABLE P.NO NO LIST OF FIGURE P.NO
AGE GROUP WISE
TV VALUE CHAIN
FLOW IN ANALOGUE AND
DIGITIZATION SYSTEM 20
TAXATION ON CABLE
AND DTH SECTORS 12 4
THE DIGITIAL CONSUMER
VIEWER SHIP ACROSS TV
GENERES IN INDIA
GROUP IN INDIA 15 7
BREAKUP OF DOMESTIC
AND IMPORTED NEWS
VIEWER SHIP SHARE OF
REGIONAL CHANNEL 33
OF COMPANIES ON
MOBILE & OUT OF
14 A COMPARISION 36-39
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1.1 BRIEF HISTORY-
Indian Media consist of several different types of communications: television, radio, cinema,
newspapers, magazines, and Internet-based Web sites/portals. Indian media was active since the
late 18th century with print media started in 1780, radio broadcasting initiated in 1927, and the
screening of Auguste and Louis Lumière moving pictures in Bombay initiated during the July of
1895. It is among the oldest and largest media of the world.
SOME NUMBERS (SOURCE- KPMG, 2013)
730 million TV Viewers
181 million Press AIR
159 million Radio listeners
176 million Internet users
Indian Press under British Rule
Bengal Gazette (English weekly) published by James Augustus Hickey in 1780 Jan 29th from
Calcutta. It was the first newspaper in South Asian sub- continent
- Bengal Gazette alias „Hicky Gazette‟, „Calcutta General Advertiser‟
- Declaration „a weekly political and commercial paper open to all but, influenced by none‟
- Hickey had his own column, many persons wrote by pen names.
- Bengal Gazette could not survive more than two years due to sharp confrontation with
Governor General Warren Hastings and Chief Justice Elijah Impey.
Indian Gazette as a rival to Bengal Gazette, published in the same year (1780) by Peter Read, a
salt agent (backing by Hastings).
After Bengal Gazette, other publications from India were-
Madras Courier weekly (1785),
Bombay Herald weekly (1789) merged into Bombay Gazette in 1791,
Hurukaru weekly (1793),
Calcutta Chronicle (1818),
Bengal Harkarer etc.
In the early period newspapers in India were run by Britishers.
Indian’s involvement in publication
- Raja Ram Mohan Roy, the pioneer Indian journalist and social reformer
- By his inspiration Gangadhar Bhattacharjee published Bengal Gazette (1816), the first Indian
owned English daily newspaper, but could not survive long
- Raja‟s own publications- Sambad Kaumudi (Bengali 1821), Mirat ul Akhbar (Persian 1822)
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and Brahminical Magazine (English 1822)
- Press Regulation –1823 imposed by British govt. in India to control newspapers.
- The regulation was used as a tool to deport James Silk Buckingham, Editor of Calcutta
- Raja presented a petition to Supreme Court to protest the regulation in favour of J.S.
- It was his bold step for the preservation of press freedom, however he defeated the case.
- Anti reformists Hindu fundamentalists published Samachar Chandrika weekly to challenge
Raja‟s social reforms.
- Raja passed away in 1833
1857 Mutiny (the first war of Indian independence) was a turning point to Indian journalism.
- In the issue of mutiny, British owned press and Indian owned press blamed each other in the
- British owned press acted like blood mongers of Indians.
- This event worked as a fuel to Indian owned press against the British rule in India.
- Pioneers Indian journalists on those days- Raja Ram Mohan Roy, Gangadhar Bhattacharjee,
Bhawani Charan Bannerjee, Dwarkanath Tagore, Girish Chandra Ghose, Harischandra
Mukharjee, Ishworchandra Vidyasagar, Kristo Pal, Manmohan Ghose, Keshub Chander Sen etc.
- Other major publications by Indians- The Reformer, Enquirer, Gyan Auneshun, Bengal Herald,
Bang Doot, Hindu Patriot, Indian Mirror, Sulab Samachar, etc.
Standard, The Bombay Times and Telegraph merged into Times of India in 1861, Robert Knight
was the owner , he was also owner of Statesman daily (1875) from Calcutta, Indian Economist
monthly and Agriculture Gazette of India, his editorials and writings were balanced and
Other major publications-
Indu Prakash weekly, Gyan Prakash, Lokhitavadi (all 1861),
Amrit Bazar Patrika (1868 Cacutta),
Pioneer (1872 Allahbad),
The Hindu (1878 Chennai) ,
Kesari (marathi) and The Maratha (English) (both in1878 from Pune by veteran freedom fighter
Pioneer Indian Journalists-
Bal Gangadhar Tilak,
Mahadev Govinda Ranade,
Gopal Rao Hari Deshmukh,
Vishu Shastri Pandit,
Bal Sashtri Jambhekar etc.
British govt. enacted Vernacular Press Act-1878 to suppress Indian language newspapers
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Indian National Congress (INC) founded in 1885.
It was led by many nationalists like
Bipin Chandra Pal,
G. Subramania Aiyer, etc., who were active journalists too.
After establishment of INC, Indian press became an important part of struggle for independence.
Leading Newspapers After Establishment of INC
-1900- Bangalee English Daily (ed)- Surendranath Banarjee
-1901- New India English Weekly (ew)- Bipinchandra Pal
- 1901- Bande Mataram – Bengalee weekly- Bipinchandra Pal
- 1906- Yugantar – Bengali daily- Barendra kumar Ghose
- 1909- Leader- ed- Madan Mohan Malviya
- 1913- New India –ed- Annie Besant
- 1913- Bombay Chronicle –ed- Phiroj Shah Mehata
- 1918 –Justice- ed- Dr.T.M.Nair (published by non- Brahmin movement in Madras)
- 1918 – Searchlight- English biweekly- Shachindranath Sinha
-1919- The Independent -ed– Pandit Motilal Neharu
- 1919- Young India – ed- Mahatma Gandhi
- 1920 – Nav Jeevan – Gujarati weeky- Mahatma Gandhi
- 1922- Swarajya- ed- T.Prakasham
- 1923- Forward- ed- Chittaranjan Das
- 1923- The Hindustan Times –ed- K.M. Panikar (first daily in Delhi)
- 1929- Liberty-ed- Subhas Chandra Bose
-1932- Harijan- Gujarati weekly- Mahatma Gandhi
- 1938- National Herald- Jawaharlal Nehru
The Golden Era of Indian Mission Journalism (1920 – 1947)
- Declaration of non-cooperation movement against British rule in India.
- Press marched shoulder to shoulder with Satyagrahis.
- Mahatma Gandhi lauded for freedom of expression, ideas and people‟s sentiments
- Gandhi would not accept adv., he believed newspapers should survive on the revenue from
- He would not accept any restrictions on the paper, he rather close it down
- His writings were widely circulated and reproduced in the newspapers all over the country
- A big challenge to non-Gandhian newspapers.
- Gandhi declared „Salt Satyagraha‟ in 1930
- The nationalist press played a memorable role, which perhaps is unique in the history of any
- Press ordinance issued in 1930 to suppress Indian press through heavy security deposits.
- When second world war broke out , British rulers became more suppressive to the Indian press
- In 1940 UP government directed the press to submit the headlines of the news to the secretary
of the information department for his pre- approval
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- In response to this, National Herald (newspaper run by Jawaharlal Neharu) published the news
- Second world war and freedom fight gave more fuel to Indian press
- Britishers charged them as „ pro-Hitler‟
- All India Newspaper Editors Conference held in 1940 at Delhi voiced against the suppressive
attitude of the British govt.
- Fresh suppression and struggle started from 1942 when Quit India Movement initiated
- Many press, publications and journalists including Neharu suspended and arrested in1942
- It continued until the declaration of independence in1947 August
- K. Rama Rao, Editor, Swarajya “ It was more than a vocation, it was a mission and the
newspaper was a noble enterprise working for patriotic purpose”.
Indian Press: 1947 Onwards
- India received independence from British rule on 1947 August 15th
- The press celebrated the independence, because it was their victory too.
- At the beginning of independence the relation between the national govt. and press was good,
but a year after situation was changed
- P M Nehru, Sardar Ballav Bhai Patel, etc. were not happy with the press.
- Press Commission- 1952, report- 1954
- Recommendations – Press Council, press registrar, minimum basic salary for working
journalists, strengthen the role of the editors
- The working journalist act-1955
- The newspaper (price and page) act- 1956
- Press Council established – 1965
P.M. Mrs. Indira Gandhi declared state of emergency on 1975 June
- It was a shocking blow to the freedom of press
- Ignored the press freedom guaranteed by article 19 (1) in the constitution
- Heavy censorship during the emergency period under Defence Rule “ in order to maintain
- 1975 Dec 8th ordinance banned the publication of all „ objectionable matter‟, no permission to
report parliament, close down Press Council , blaming it was failed to curb provocative writings
- During 19 months of emergency 253 journalists detained and 7 foreign correspondence
When Janata Dal came into power, all the restrictions over press were removed
- After emergency Indian press became more professional along with high tech., simultaneous
publications increased, tremendous change in the contents, more supplements, booming of
- Press Council re- established under new act- 28 member, chaired by retired judge of high court
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CENTENARIAN NEWSPAPERS OF INDIA
The Times of India – 1861
Amrit Bazar Patrika – 1868
Pioneer - 1872
The Statesman - 1875
The Hindu – 1878
- Amateur Radio Club started local broadcasting in 1924 at Madras
- Indian Broadcasting co.(private) 1927- Bombay and Calcutta
- Indian State Broadcasting Service – 1930
- Name changed as All India Radio (AIR) / Aakashbani
- Before independence AIR stations in Hyderabad, Baroda, Mysore, Trivandrum, Aurangabad,
Delhi, Bombay, Calcutta, Madras, Lukhnow, Pesawar and Dhaka
- During second World War radio became more popular in India
- After independence AIR was a major tool to disseminate govt. information
- AIR as an „ electronic ambassador‟ in abroad
- Now AIR have more than 200 stations
- News in 24 languages including Hindi, English and many other languages of India
- From 1997 broadcasting is being regulated by an autonomous corporation under Prasar Bharati
- Door Darshan (DD) started as an experiment in 1959 from New Delhi, for educational purpose
- Regular broadcasting started from 1965 from New Delhi
- Indian Space Research Organization borrowed a satellite from NASA (National Aeronautics
and Space Administration) in 1975
- Color broadcasting from 1982 on the eve of Asian Games held in New Delhi
- 40 different broadcasting centers
- programs in about a dozen languages
- after 1995 many private channels
- all TV broadcasting regulated by Prasar Bharati Act
- Press Trust of India (PTI) 1947
- Hindustan Samachar 1948
- United News of India (UNI) - 1961
- Samachar Bharati –1965
Hindustan Samachar and Samachar Bharati produce news in various Indian languages while PTI
and UNI in English
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1.2 FACTORS THAT AFFECT GROWTH-
Impending digitization has encouraged a few broadcasters to take a leap of faith in
launching specialty, advertisement free and niche channels, particularly in the Kids genre.
Many of these channels are available only on digital platforms in order to develop a
subscription driven business model. For instance, HBO Asia and Eros launched HBO
Hits and HBO Defined – two new advertisement free premium priced movie channels.
INTERNET USERS –
As expected, mobile and wireless connections continued to drive the growth of internet
penetration in India. By the end of 2012 there were 124 million internet connections in
India, a rise of 41 percent over last year. Over last year fixed line connections grew by 11
percent. Over the same period, wireless connections have grown by almost 50 percent,
outlining the importance of mobile data access in the overall digital economy.
REGIONAL MARKET –
Rising literacy, growth in disposable income, brand consciousness and strong
commercial development in tier II and tier III cities. The majority of India‟s urban
consumption comes from non-metro cities / Tier 2 and Tier 3 towns - regional markets
with distinct cultures, languages and content preferences. India‟s smaller cities have
delivered robust economic growth over the last 15 years, comparable with the largest. It
is estimated these will add 160 million to the overall urban population and contribute to
49 percent of the urban GDP.
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TABLE 1-GROWTH: LITERACY & MEDIA CONSUMPTION
(SOURCE-IRS 2012 Q4)
ALL FIGURES IN „000
RISING RURAL MARKET –
Rural India accounts for 70 percent of India‟s population, 56 percent of National Income
and 64 percent of the total expenditure. Union Budget 2013-14 has allocated INR 801
billion towards rural development schemes and INR 270 billion for agriculture. The
budget has also fixed an annual agriculture credit target of INR 7000 billion in 2013- 14,
up from INR 5,750 billion.
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The Lifestyle and Infotainment genre saw a viewership growth of 12percent in 2012, with
players expanding their offerings for Indian viewers through new channel launches,
localization of content and audio feeds in multiple languages. Indian content accounts for
35 percent of programming on Fox Traveler and 20 percent of programming on NGC.
Other channels are also looking at mix of international and local content. Discovery
channel aired tailor-made Indian content like „Feast India‟ and „Rhodes across India‟,
while Animal Planet broadcast a 52- week run of „India: Wild encounters‟.
FM RADIO POLICY-
The potential and viability of radio will grow many-fold once Phase III of FM policy is
launched. In phase 3, many new frequencies will come up, taking radio to newer towns,
which will help the market to expand and also enable growth of radio as a category.
Majority of radio listenership comes from the age group of 20-40 years of age.
TABLE 2-RADIO LISTENERSHIP AGE GROUP WISE (SOURCE-IRS Q3 2012)
AGE GROUP % OF LISTENERSHIP
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1.3 GOVERNMENT REGULATIONS-
Regulatory interventions have been a key enabler of growth for the sector. Anticipated
developments in 2013 such as continued cable DAS rollout, Phase 3 licensing for Radio, and 4G
rollout, will spur growth from the medium term.
However, continued and unflinching government support is needed. There is a need for measures
to aid curtailment of piracy and encourage investments to support further growth.
Mandatory digitization of cable TV services was notified in November 2011. It will be
implemented in following four phases –
TABLE 3- PHASE OF DIGITIZATION IN INDIA
PHASE CITIES DEADLINE
1 ALL METROS(Delhi, Mumbai, Chennai, Kolkata) 30 JUNE 2012
2 TIER 1 CITIES (having population more than 1 million) 31 MARCH 2013
3 TIER 2 CITIES (urban areas under municipalities and municipal
30 SEPTEMBER 2014
4 REST OF INDIA 31 DECEMBER 2014
TABLE 4: TAXATION ON CABLE AND DTH SECTORS
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Cumulative tax on Customer Premise Equipment (CPE), 80% of which is imported and is
expected to stay that way is very high. This has made the entry cost very high for the consumers.
The digital distribution sector which is already subsidizing the STB for new customers, to
provide their services at competitive rates is facing longer payback periods. Further, the high
cumulative tax burden on services and equipment has become a major stumbling block for rapid
Digitalization of the industry.
Since the TRAI orders on the regulations on tariff and interconnection and the consumer
complaint redressal system by MSOs have not yet been substantially implemented, this has
resulted in delaying the installation of set-top boxes. On account of this and representations
received from stakeholders, the MIB has extended the deadline of 30 June 2012 for Phase-I to 31
The uplinking and downlinking guidelines have been revised effective December 2011. Some of
the key changes introduced include the following:
TABLE 5- TRAI REGULATIONS
SEGMENT EXISTING LIMIT REVISED LIMIT
Uplinking of non- news
First channel: 15 million INR
Additional channels: 10 million INR
First channel: 50 million INR
Additional channels: 25 million
Uplinking of news and
First channel: 30 million INR
Additional channels: 20 million INR
First channel: 200 million INR
Additional channels: 50 million
Teleport services One-channel capacity: 10 million INR
Six-channel capacity: 15 million INR
Ten-channel capacity: 25 million INR
Fifteen-channel capacity: 30 million INR
First teleport: 30 million INR
Additional teleport: 10 million
SEGMENT TIME FRAME CONDITIONS
Uplinking of non-news and
One year from permission PBG of 10 million INR for each channel
Uplinking of news and current
One year from permission PBG of 20 million INR for each channel
Teleport services One year from permission PBG of 2.5 million INR for each
Downlinking Same as 1 No PBG
At least one of the persons occupying a top management position in the applicant company
should have a minimum of three years of experience in a relevant media company.
TRAI has issued tariff order and interconnection regulations for digital addressable cable TV
systems on 30 April, 2012 with a view to ensure that consumers have the flexibility to choose
their bouquet of channel and to budget their subscriptions accordingly. All channels will
therefore be offered on an a la carte basis to subscribers. A „basic service tier‟ consisting of
minimum 100 free-to-air channels has been prescribed with a maximum subscriber fee of 100
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INR per month. The tariff order also covers the mechanism for revenue-sharing between MSOs
and cable operators as well as the carriage fees charged by MSOs from broadcasters.
The Cable TV Act which was modified in 2008 permitting telecom service providers to provide
TRAI has released the recommendations on prescribing minimum channel spacing, within a
licence service area, in the FM radio sector in India. As part of the paper, TRAI recommends that
frequencies for FM radio channels within a licensed service area should be released with a
minimum spacing of 400 KHz.
Unlike traditional radio, there are no license requirements. The internet radio is therefore
accessible from any part of India.
TABLE 6 - FDI IN THE BROADCASTING SECTOR
As per Press Note 7 (2012 series) issued on 10 April 2012, the Government raised the existing
foreign investment limits / liberalized the FDI norms in various key activities in broadcasting
sector. Previous and the revised FDI limits in relation to broadcasting sector are tabulated below:
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1.4 LEADING BUSINESS IN THE INDUSTRY –
TABLE 7- LEADING MEDIA GROUPS IN INDIA (SOURCE- BUSINESS STANDARD)
COMPANY/ GROUPS REVENUES-2013 (CRORE)
THE TIMES GROUP (BCCL,TV,INTERNET,ENIL) 6700
ZEE GROUP (BROADCASTING, DTH, CABLE & NEWS) 6350
STAR INDIA 6100
BHARTI AIRTEL (VAS, DTH) 4270
SONY (BROADCASTING) 3120
NETWORK 18 (GROUPS) 2400
HT MEDIA (GROUP) 2048
SUN NETWORK 1923
DB CORPORATION 1592
PRASAR BHARATI CORPORATION 1553
JAGARAN PRAKASHAN 1525
HATHWAY GROUP (PUBLISHING & CABLE) 1500
RELIANCE (ADAG-MEDIA) 1490
KASTURI & SONS 1100
MALAYALA MANORAMA 1100
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1.5 ESTIMETED SIZE OF THE INDUSTRY –
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. Given the impetus introduced by digitization,
continued growth of regional media, upcoming elections, strength in the film sector and fast
increasing new media businesses, the 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.
TABLE 8-OVERALL INDUSTRY SIZE AND PROJECTIONS (SEGMENT WISE)
SOURCE – KPMG, 2013
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1.6 TRENDS IN SALES OVER RECENT YEAR –
a. DIGITIZATION OF FILM AND TV DISTRIBUTION
Digitization of distribution has brought in the promise of more sustainable and profitable
business models across media sectors.
The year 2012 heralded the much awaited start to digitization of cable. Despite some hiccups,
Phase 1 saw significant progress in implementation of mandatory digital access system (DAS)
across the four metros. Industry now hopes to realize benefits over the medium term – including
enhanced ability to monetize content, greater transparency and equitable revenue share across the
value chain, lower burden of carriage fees and hence increased ability to invest in differentiated
and sophisticated content.
Digital distribution has also enabled the films sector to make a comeback this year. The industry
has achieved 77 percent digitization of screens and expects to be close to 100 percent digitized in
the next 18 months to 2 years. Today 80-90 percent of films are distributed digitally vis a vis 50
percent physical prints in 2010.
b. GROWTH IN NEW MEDIA
The rapid increase in mobile and wireless connections continued to drive the growth of internet
penetration in India. With better access, through cheaper and smarter devices, audiences
(especially youth) are consuming more content and are getting increasingly engaged.
Going forward, better uptake of 3G connections and the beginnings of the 4G rollout are
expected to spur growth further. 4G technologies will enable greater uptake in services including
Live TV, HD video/ audio streaming, real time online gaming, high speed data downloads and
uploads and could enable introduction of new innovative offerings. The industry looks forward
with great hope to an aggressive rollout of this technology by the telcos.
c. WITH TRADITIONAL MEDIA STILL GOING STRONG
India remains a growth market for „traditional‟ media evidenced by the growth last year in TV
audiences, radio listenership, and footfalls in theatres. India is an outlier country where print is
still a growth market. There is growing overseas demand for quality Indian animation/ VFX
work at affordable pricing.
d. GREATER SOPHISTICATION OF AND SEGMENTATION IN
A key outcome of the push in digitization will be the ability to increase production budgets and
invest in differentiated genres and multilingual content.
Phase 3 licensing, and anticipated provisions for permitting multiple frequencies in a city, would
encourage investments in differentiated content for the Radio sector.
Internet and mobile platforms are a cost effective enabler to reach diverse audience segments
with tailored content. For example, special genre internet radio stations of players such as Radio
Mirchi, Radio City, and multiple genre music libraries available for download online.
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e. REGIONAL MARKETS REMAIN KEY CENTERS OF GROWTH
Advertisers continue to see higher growth in consumption from key regional markets. Hence
regional media continues on a strong growth trajectory especially in the print and television
sectors. Key media players are focusing on selectively expanding their presence in regional
markets that are seeing higher rates of advertising revenue growth, and better insulation from
slowdown than metros, which may be close to saturation in many cases. For example Bennett
Coleman & Co. launched Bengali daily „Ei shomoy. Zee and Star both launched their Bangla
movie channels – Zee Cinema Bangla and Jalsha Movies. Star owned Asianet Communications
also launched Asianet Movies, the first satellite movie channel in Malayalam.
f. COMING LIVE TO YOU
With changing lifestyles, there is an increase in media consumed out of home. Brands are also
increasingly keen to connect with consumers via „experiences‟ to ensure greater recall and
amplification of brand values.
Live music events/ festivals have been successful in attracting widespread audiences and
engaging youth across key cities. Increased consumption of music/radio/ video on-the-go via
mobile and in cars provides opportunities for real time mobile, location-based advertising.
There is hence an increased need to provide 360 degree solutions to advertisers and provide
multiple platforms to reach out to consumers wherever they are.
g. REVENUE MODELS STILL ADVERTISING DEPENDENT
M&E is still an advertising dependent industry in India. Hence it remains sensitive to the impact
of business cycles. While the print sector saw some increases in circulation revenues, and
increases in cover price in some areas, cover prices still remain significantly lower than global
counterparts. Established practices, competitive pressures from within the sector and from TV,
and the threat of digital migration, are likely to keep prices under pressure. In the TV sector,
digitization has the potential to increase ARPUs and improve the share of subscription revenues
to the broadcasters. Early indicators suggest that carriage costs have already dropped somewhat
in Metros after Phase 1 digitization.
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TABLE 9-ADVERTISING REVENUE (IN BILLION)
SOURCE – KPMG, 2013
1.7 CURRENT OPERATIONAL/ MANAGEMENT TRENDS –
FIGURE 2-TV VALUE CHAIN (SOURCE – DELOITTE ANALYSIS)
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FIGURE 3 -FLOW IN ANALOGUE AND DIGITILAZATION SYSTEM
(SOURCE – DELOITTE ANALYSIS)
FIGURE 4 -THE DIGITAL CONSUMER AND DISRUPTIVE TECHNOLOGIES
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1.8 MARKET STRATEGIES PREVALENTS –
CONTENT INNOVATION AND MULTI PLATFORM DELIVERY
Digitization will provide an opportunity for multiple channels to enter the market, adding to the
overall content clutter. But this will also enable players to experiment with new business models
relying primarily on subscription revenue, as compared to the traditional dependency on
advertising. Thus, broadcasters can focus on establishing niche market positions, driven by the
type and quality of content delivered, to differentiate themselves from competition. In the
medium term, increasing online and mobile connectivity and usage will also drive multiplatform
delivery of content.
INCREASING INTEREST BY TELECOM COMPANIES
Recently, the multi-crore investments by Reliance in Network18 Group and acquisition of 27.5%
stake in Living Media by Aditya Birla Group supports long held desire of telecom companies to
get access to media content to expand their businesses. These deals follow global trend of
telecom companies moving forward from being carrier to content provider.
Telecos have realized that quicker access to superior content will act as key differentiators for
the companies and provide them with a competitive edge. These deals help media companies
accomplish their desire to build scale and go national.
As players with national hold are preferred by advertisers which enable them to garner better
rates and higher ad volumes, any inorganic expansion will only be beneficial to the company.
Stake sale to Aditya Birla Group is most likely the result of Living Media‟s attempts to raise
funds to expand its print business. The company plans to start the Mumbai edition of its existing
property Mail Today and may possibly want to get into the Hindi newspaper market to reap
benefits of the high Hindi speaking population of the country.
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FIGURE 5 : VIEWERSHIP ACROSS TV GENRES IN INDIA (%)
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DECREASING DEPENDENCE ON PRINT
The recent formation of an equal JV with US firm Apollo Global Inc, an expansion into
education industry. Amar Chitra Katha Private Ltd‟s (ACK) plan to get in amusement park
business is another example of increasing diversification by players in print.
In the absence of cross-media restrictions and with government policies contributing to further
corporatization, especially with respect to the television medium, diversity of news flows could
be adversely affected contributing to the continuing privatization and commodification of
information instead of making it more of a “public good”. The absence of restrictions on cross-
media ownership implies that particular companies or groups or conglomerates dominate
markets both vertically (that is, across different media such as print, radio, television and the
internet) as well as horizontally (namely, in particular geographical regions).
THE BOTTOM-LINE, NOT THE BY-LINE
Media companies tend to have a variety of professionals on their boards, such as investment
bankers, venture capitalists, chartered accountants, corporate lawyers, and CEOs of big
companies. Professional journalists, ironically, rarely figure. As a result, those at the top of the
decision-making hierarchy are those for whom the bottom-line, not the by-line, is most
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1.9 SENSITIVITY TO ECONOMIC FLUCTUATIONS –
The high dependence on advertisement revenues resulted in the growth of print industry being
dampened by poor macro economic performance of the country. In 2012-13, the Indian economy
slowed down its growth momentum-registering a growth of only 5 percent as compared to 6.2
percent in 2011-12. The slowdown can be attributed to a host of factors such as high interest
rates to curb inflation, investment bottlenecks that slowed down corporate and infrastructure
investment and poor global economic conditions that took a toll on India‟s exports. All this has
resulted in advertisers adopting a cautious approach towards their marketing initiatives-leading
to relatively muted growth in overall advertising spends.
In such challenging times, the Indian print industry has adopted a pragmatic approach with most
print players now focusing on consolidating their position in core markets and penetrating them
further through the launch of new editions rather than entering newer territories. The industry has
also made efforts to save the bottom line by effectively managing operating costs.
FIGURE 6 -ADVERTISING & CIRCULATION REVENUE SHARE
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TABLE 10-TOP CATEGORIES ADVERTISING ON PRINT
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NEWSPRINT PRICES ANTICIPATED TO BE STABLE BUT RUPEE DEPRECIATION
STILL A RISK
The print industry continued to derive most (94 percent) of its revenues from the newspaper
category. Newsprint typically accounts for 40 to 50 percent of a publisher‟s cost base. The total
newsprint demand in India was 2.1 million MT in FY 2012. Of this, approximately 1 million MT
of newsprint was produced and procured locally, while 1.1 million MT (approximately 50
percent of total demand) was imported from international newsprint producers.
FIGURE 7 - BREAK UP OF DOMESTIC AND IMPORTED NEWS PRINT
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2. INDUSTRY DEVELOPMENT, NEWS, INNOVATIONS
TABLE 11- KEY TRANSACTION IN 2012
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The broadcasting and advertising industries have long been vocal about the need for more
competition in the television ratings measurement service in India. With this objective,
Broadcaster Audience Research Council (BARC) was initially registered in July 2010, after
being in plans for six years and was launched in March 2012. BARC is a joint body of
advertisers and broadcasters with three shareholders – Indian Broadcasting Foundation (IBF),
Advertising Agencies Association of India (AAAI) and Indian Society of Advertisers (ISA). IBF
holds 60 percent in the JV, with the balance 40 percent equity being shared by AAAI and ISA.
BARC is reported to be formed on similar lines as BARB (Broadcast Audience Research Board)
that compiles audience measurement and television ratings in the UK.
BARC is reported to be targeting a sample size of 30,000 households. The broadcasting industry
has indicated that transparency is a key pillar for BARC, which has decided to segregate the
functions of data collection, analysis and reporting between three independent agencies.
INCREASING HD CHANNELS
Increasing digitalization and need for differentiation coupled with penetration of LCD and LED
screens would propel more channels to launch HD feeds. 2010 saw launch of two HD specific
channels Food Food, a food specific channel and Movies Now, English movie channel. Other big
launch was by BIG-CBS, a joint venture between RBNL and CBS, which launched three
channels, BIG Prime, BIG Spark and BIG Love targeted specific at urban audiences. The
competition amongst broadcasters is expected to increase further with Government approving 75
licenses for launch of new channels or re launch of existing channels in HD after a two year
freeze. The major players who are launching new channels and HD channels are Discovery,
UTV, Fox, ZEE and STAR amongst others.
With the roll-out of Phase III where the licence period has been increased from 10 to 15 years for
the radio industry relieving the pressure off radio companies. The TRAI has also released its
paper on Prescribing Minimum Channel Spacing, within a Licence Service Area, in FM Radio
Sector in India. As part of the paper, TRAI recommends that frequencies for FM radio channels
within a licensed service area be released with a minimum spacing of 400 KHz. With multiple
frequencies being allowed to a broadcaster in the same city, we expect radio channels to focus on
niche customer segments and offer quality content to existing listeners.
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Globally, the print industry has witnessed a decline in its subscription and advertising revenues
due to the steady shift of consumers towards new media platforms such as the internet and
mobile. The ability to attract online readers to pay for content will be the key differentiating
factor. The winners will be those who can create value for their content and facilitate on-demand
aggregation far more efficiently than they have done till date.
In line with the global scenario, social media and network are occupying more online time in the
country. Facebook alone accounts for more than a fifth of the total time spent online by users in
India. Many newspapers have content that can be shared by users on their social media pages,
besides having interactive pages on different social media sites.
Traditionally TV content is aired in predefined timeslots on Television within a limited period.
However, to sustain in a highly competitive Indian television industry, the content owners have
to identify new revenue sources from the existing content. One of the immediately deployable
solutions could be repurposing of the existing content. Repurposing can be done through the
conventional television media or through emerging media like smart phones, internet access
through desktops and laptops, 3G/4G enabled handheld devices etc. The final aim of repurposing
is make the content available through cataloging and categorizing it in such a way that it would
be able to reach the right audience at the time and through the medium of their choice.
The term convergence describes two trends: the ability of different network platforms (broadcast,
satellite, cable, telecommunications) to carry similar kinds of services; and the merging of
consumer devices such as telephones, televisions or PCs. From a technology perspective, the
twin forces accelerating convergence are increased broadband penetration and increased
standardization of networks and devices to use the Internet Protocol (IP).Convergence collapses
previously distinct media distribution channels (for example, broadcast/cable television, radio,
print, online) into a single delivery chain. A converged infrastructure supports a range of
interaction modes between users and content. Moreover, the open transport and interface
protocols of IP mean that access to content has become largely network and device independent.
Fundamentally, convergence affects the two-step process at the heart of any media-based
industry – content creation and transport. The first step entails selecting, packaging and encoding
content into a medium. The second step transports content to its destination and then decodes it
for use. In most instances, it is the second step that defines a particular media market, which
influences the form taken by the content in the first step.
With Micro max and similar low-cost players entering the tablet market fray, and the easy access
to high speed internet could also bring about traction amongst tablet users. Higher engagement
experiences such as long form reading and interaction games are naturally suited to the medium,
and present opportunities for niche production and magazine (travel magazine, for instance, can
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use the platform to create compelling multimedia travelogues ) to foster additional reader
FIGURE 8 -EVOLUTION OF PLATFORM CONVERGENCE
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3. CONSUMER MARKET DATA
A global Deloitte study on „Media democracy‟ in 2010 across over 2000 respondents confirms
the domination of TV and throws some interesting insights. Media consumption habits of
consumers in Metro & Tier 1 cities in India closely resemble the sophistication to that of
consumers in developed markets, like the UK and the US. On the other hand, media consumption
habits of consumers in Tier II cities and rural areas are less sophisticated. However, TV remains
a favorite media source for most consumers across age irrespective of domicile: 92% of the
respondents rank „watching TV‟ as their top media source while 94% respondents consider
„advertising on TV‟ as the most influential media source to impact their buying decisions.
While the media & entertainment market (M&E) in India is relatively small when compared with
other countries, India has the third largest television market, in terms of number of viewers after
China and the US. TV continues to dominate the M&E sector followed by print and filmed
FIGURE 9 : EXTRACT OF DELOITTE MEDIA DEMOCRACY SURVEY 2010
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Regional channels accounted for approximately 26.6 percent of total television viewership in
2012. Regional channels are estimated to account for approximately 30 percent of total revenues
of Star and Zee networks. MSM entered the Telugu market in 2012 with the acquisition of Maa
TV and is reported to be looking at expansion in at least three regional markets. Last year,
Network 18 group had acquired Eenadu TV which has its presence across 6 key regional
Regional channels command an advertising market share of 27.2 percent, which is proportionate
to their viewership share. Advertising interest in regional markets is strong and broadcasters see
immense potential for revenues from local advertisers who may be willing to pay a premium to
reach their targeted audience.
growing advertiser interest in regional markets has led to music channels looking at further
expansion in the regional markets. 9X Media Pvt. Ltd. launched two new regional music
channels in Punjabi and Marathi market - 9X Tashan and 9X Jhakaas, respectively. CNEB
launched a new Bhojpuri music channel, „Hummra M‟.
The traditional vision of the rural economy as purely agricultural is clearly obsolete. There are
significant changes i.e. increasing income, rising education and technology penetration as well as
globalisation that are enabling exposure and awareness. According to the National Sample
Survey (Household Consumer Expenditure in India 2009 –10) the average monthly per capita
expenditure in 2009 –10 was estimated at INR 1053.6 in rural India. This accounts for 60 percent
increase over 2004 – 05.
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TABLE 12 -HIGH DEPENDENCE OF COMPANIES ON RURAL MARKETS
In the print sector, revenues from Hindi and vernacular segments are fast catching up with
English, which has, to date enjoyed a majority share of the value. Hindi and vernacular language
publications have always enjoyed a healthy readership base. In 2012, nine out of top ten dailies
being published were either in Hindi and vernacular language publications. However, in the past
this segment had lagged in its ability to effectively monetize.
FIGURE 10 -VIEWERSHIP SHARE OF REGIONAL CHANNELS
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The Kids genre delivers 500-600 GRPs per week, and is the largest genre after the Hindi and
regional GECs. Advertisers are increasingly recognizing the power of reaching kids who are
emerging as key influencers in several household purchasing decisions. The genre witnessed a
growth of 20 percent in its advertisement revenue share in 2012, as compared to 5 percent in
2011. Total advertisement market for the Kids genre is estimated at INR 2.6 billion in 2012.
Channel [V] effectively exited the music genre, replacing music with youth focused fiction and
non-fiction programming and may be looking for higher advertisement rates with its new
positioning as a youth GEC channel. Digital extensions of music channel brands onto online
platforms, including pads and phones will drive revenue growth and will need to be considered
in the medium term.
While the music genre continues to be a very competitive space, viewership share increased from
2.7 percent in 2011 to 3.1 percent in 2012. However, 2012 saw the genre approach a „hyper-
competitive‟ scenario with a large number of channels competing for the viewer mind-share and
time-share. With Hindi film music dominating the content on music channels, content
differentiation has always been a challenge. Broadcasters are now looking at specialized music
channels to engage viewers. 9XM launched two new niche music channels – 9XO which runs
international music content and 9X Jalwa which features timeless „Bollywood‟ hit songs.
The news genre consists of general and business news in Hindi, English and regional languages.
Hindi and regional news account for 50 percent and 5 percent of total news viewership,
respectively. In 2012, news viewership declined by 15-20 percent, with English News channels
impacted more than Hindi channels.
After an increase in 2011, the sports genre saw a 26 percent decline in viewership and a
proportionate decline in its advertisement share in 2012. This is attributed to the absence of a
mega sporting event like the Cricket World Cup in 2011 and a muted advertiser response to
season 5 of IPL.
LIFESTYLE AND INFOTAINMENT
The Lifestyle and Infotainment genre saw a viewership growth of 12 percent in 2012, with
players expanding their offerings for Indian viewers through new channel launches, localization
of content and audio feeds in multiple languages. The Lifestyle and Infotainment genre, like the
English GEC genre, commands an advertisement share disproportionate to its viewership share.
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Increasing competition in the genre indicates that more broadcasters are eyeing the INR 3.452
billion infotainment market.
Sub-genres within niche genres is a growing trend, and the Infotainment genre has seen several
channels over the last 2-3 years focused on interests as diverse as history, adventure , travel,
cooking and lifestyle. While spends from traditional advertisers have been under pressure, varied
programming is bringing in more international advertisers like tourism boards promoting
international destinations, and ready-to-eat food companies, as infotainment channels focused on
sub-genres help them reach a targeted audience.
According to IRS and RAM, people are spending more time listening to radio as compared to the
time spent on other mediums such as television and print. The increased engagement with radio
is because it is consumed throughout the day and also there is a consistent increase in out-of-
home listenership through mobile and car stereo.
TABLE 13 -MOBILE AND OUT OF HOME LISTENERSHIP
SUBSCRIPTION DRIVEN NICHE CHANNELS
Impending digitisation has encouraged a few broadcasters to take a leap of faith in launching
specialty, advertisement free and niche channels, particularly in the Kids genre. Many of these
channels are available only on digital platforms in order to develop a subscription driven
business model. Discussions indicate that by the time digitisation approaches completion,
broadcasters want their offerings to achieve significant maturity amongst their target audiences
so as to benefit from increase in subscription revenue and achieve premium advertisement rates.
For instance, HBO Asia and Eros launched HBO Hits and HBO Defined – two new
advertisement free premium priced movie channels.
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4. COMPETITOR INFORMATION
TABLE 14 - A COMPARISION
ZEE GROUP STAR INDIA
G, STAR INDIA
1 AUGUST 1991
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ON ONE HAND
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AND OVER 1.1
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SPACE UP TO 2