Indian media industry


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Indian media industry

  1. 1. Indian Media Industry<br />By Prof. IndraniSen<br />SIMC<br />18.7.2011<br />
  2. 2. At a Glance<br />One of the largest media market globally<br />Total size valued at $ 10 Bn<br />Advertising revenue accounts for 41%<br />Growing at 23.4%<br /> Top 10 media companies accounting for 44 % of<br />advertising revenue<br />Advertising remains underinvested as a % of GDP<br />At 0.4% compared to the global average of 1%<br />
  3. 3. Enjoying Steady Growth Till 2008<br />As per FICCI Reports M&E industry was enjoying steady growth till 2008<br />Like many other Indian industries, its growth rate surpassed the performance of Indian economy<br />The global M&E industry recorded single digit growth rate (6% to 7.5%) during 2006-2008 <br />Indian M&E industry enjoyed much higher growth rate (12% to 14%) during the same period<br />In 2009 the industry growth rate slowed down clocked at only 1.4%<br />
  4. 4. The Slowdown in 2009<br /> The recessionary pressure was the main reason for the slowdown<br />Highest share of revenue comes from advertising<br />Higher in case of Print and TV <br />Film, radio and OOH registered a negative growth during 20o9<br />Aggravated by several internal factors<br />Delay in auctions of phase 3 FM radio and 3G mobile telecom<br />The multiplex strike<br />Lack of quality content on TV<br />Renewed focus on innovations, creativity and managing costs<br />
  5. 5. Comparative Growth in Ad Spends 2008-2009<br />Source Group M<br />
  6. 6. Source of Revenue for Media Industries In India<br />Based on various industry sources,<br />courtesy: VanitaKohli-Khandekar<br />*Worldspace<br />subscribers<br />
  7. 7. Estimated Share of Advertising Revenue (%)<br />Source Industry Estimates<br />
  8. 8. Media Spend As % of GDP<br />World average is 0.80%<br />Source Worldwide Media & Marketing Forecasts Group M Summer 2009<br />
  9. 9. India Lags Behind <br />India is second only to China with 22% share of world population<br />China’s media spend as percentage of GDP 0.75% is close to the world average 0.80% <br />India is lagging far behind with only 0.41% <br />
  10. 10. Under-Penetrated Market<br /> India US China<br />TV Penetration 47.6% 98.2% 92.0%<br />Cable & Satellite 67.8% 85.8% 37.0%<br />DTH 6mn 319mn 539mn<br />Broadband 0.3% 39.3% 4.0%<br />Internet Users 60mn 215mn 162mn<br />Literacy Rate 68% 99% 90.9%<br />
  11. 11. Potential for Growth<br />As penetration of media increases and more audiences come into its fold, the gap between India and China will reduce<br />China’s current media spend per capita is almost 8 times that of India<br /> Higher penetration of media channels may not result in higher spend on media from the lower socio-economic strata and rural population<br />Infrastructural development in China is far ahead of India<br />
  12. 12. Media Spend Per capita<br />US D<br />491<br />343<br />4<br />Source Worldwide Media & Marketing Forecasts Group M Summer 2009<br />
  13. 13. Penetration of Mass Media<br />Growing at a slower rate compared to <br />The growth of spends on media <br />The investment on media industries<br />Focus on the great Indian middle class and the elite upper class <br />Would that approach provide a long term result in terms of overall development which would get reflected in the macro economic statistics?<br />
  14. 14. Mass Media Reach (U + R): 2006 to 2008 <br />Source IRS 2008 R2<br />
  15. 15. The Potential of Press<br />Some of the largest print titles in the world<br />Mostly concentrated in top 15% of the population in urban India <br />Currently Press Reach is 221 mn adults<br />The literates( education of class V onwards) constitute 495 mn adults<br />A potential of 274 mn readers to be added!<br /> Expecting a 5% circulation growth y-o-y in next 3 years<br />
  16. 16. Need for Focus on Rural Area <br />As per IRS 2007 to 2009<br />Literacy rates growing steadily<br />Working female population increasing steadily<br />Movement towards smaller household sizes<br />Rapid urbanization escalated <br />The total working population <br />Growth in the extreme ends of the strata SEC A and SEC E <br />Rural India is emerging as potential market for many product categories<br />In 2009 advertisers pulled back on their ad spends but continued with their rural initiatives<br />
  17. 17. Urban & Rural Population<br />5%<br />4%<br />7%<br />Source IRS 2008 R2<br />
  18. 18. Mass Media Reach by Urban/ Rural<br />Source IRS 2008 R2<br />
  19. 19. Uneven Media Penetration & Reach<br />An analysis of media reach by urban and rural highlights the inadequacy of media reach in villages<br />The gap between urban and rural reach is lowest for radio and highest for satellite TV<br />Technically footprint of TV covers the entire country but in reality 20% of urban and 60% of rural population are still outside its reach<br />On an average a person in urban area spends almost 90 minutes per day on different media related activities while a person in rural area spends almost 60 minutes<br />
  20. 20. Share Of Media - Urban<br />All figs. Minutes / Day<br />89.5 min / day<br />Source: IRS 2008 R2<br />
  21. 21. Share Of Media - Rural<br />All figs. Minutes / Day<br />61 min / day<br />Source: IRS 2008<br />
  22. 22. A closer Look at Media Reach in Urban Sector<br />
  23. 23. Urban Media Reach by SEC<br />
  24. 24. Urban Population Distribution by SEC<br />
  25. 25. The Great Indian Paradox <br />M&E industry targeting only 50% of the urban audience in upper socio economic strata<br />The penetration of media goes down significantly as we go down the population strata <br />Left to the mechanism of the market driven industry, it may take decades before this anomaly is corrected<br />
  26. 26. Pop-strata wise Media Reach<br />
  27. 27. Mass Media & Marketing<br />Stage I : Marketing led expansion of mass media<br />Stage II : Media led growth of mass marketing<br />Stage III : Consumer led media segmentation<br />In India , all three stages are existing at different socio-economic and demographic segments<br />
  28. 28. Uneven Media Penetration & Reach<br />An analysis of media reach by urban and rural highlights the inadequacy of media reach in villages<br />The gap between urban and rural reach is lowest for radio and highest for satellite TV<br />Technically footprint of TV covers the entire country but in reality 20% of urban and 60% of rural population are still outside its reach<br />On an average a person in urban area spends almost 90 minutes per day on different media related activities while a person in rural area spends almost 60 minutes<br />
  29. 29. Infrastructure: A Major Issue <br />Electricity is one of the main issue which is slowing down the rate of broadcast media consumption<br />Serious issues exist in the production and distribution of electricity across the country<br />Accessibility is another issue which has improved a lot over the last two decades <br />Road and train links have opened up new markets <br />Villages have come closer to towns <br />On Highways and railroads<br />Connected by regular transport<br />
  30. 30. TV is The Opium <br />Sweeping across social clusters<br />Almost 82 million TV homes with a viewing population of more than 400 million<br />TV penetration higher than cooking gas<br />Access to about 175 channels with 90% of TV sets accessing 12-16 channels only<br /> 3 hours of daily escape on TV<br />170+ channels available in India today<br />Yet, top 6 channels account for 70 % of the TV advertising revenues<br />Dominating emphasis on media buying<br />
  31. 31. Top TV Networks<br />Channel TVR Share <br />SUN NETWORK 2.6 18 <br />STAR NETWORK FINAL 2.3 17<br />ZEE NETWORK 2.1 15<br />CABLE 1.4 10<br />SONY NETWORK 1.1 8<br />DD NETWORK 0.5 4<br />ETV NETWORK (EENADU) 0.5 4<br />INDIA TODAY NETWORK 0.3 2<br />TV 18 NETWORK 0.1 1<br />NDTV NETWORK 0.1 1<br />INX NETWORK 0.0 0<br />Others 3.0 21<br />Any Channel + 14.2 100<br />
  32. 32. Emerging Trends in TV<br />Glut of TV channels leading to slowing down in the growth of revenue<br />A gradual opening up of the Pay TV market<br />Unregulated growth of cable and satellite homes<br />Ku-band DTH TV stalled by vested interest<br />Regional TV is growing across the country <br />Accelerated growth of C&S penetration<br />Penetration up from 33% to 63% in 7 years<br />Proliferation of mass, niche and regional satellite channels<br />
  33. 33. Size of Key Regional TV Markets 2009<br />Source Industry Estimates <br />
  34. 34. Looking at Future<br />Will internet be the medium of delivery?<br />A lot of hype has been created around the broadband internet delivery of television to Indian TV or computer homes<br /> It appears that TV will continue to be delivered via terrestrial and satellite transmission<br />What will be the role of Doordarshan as a Public Broadcaster as against the private channels ?<br /> Indian Government review the existing policy <br />
  35. 35. Cinema: the great Equalizer <br />Industry estimates Rs.6800 cr ( USD 136 mn) in 2008<br /> Estimated to be Rs15300 (USD 306 mn) by 2012<br />Bollywoodgoing global<br />Global investment by Indian players in film industry<br />Global film studios eyeing Indian market<br />
  36. 36. Emerging Trends in Cinema<br />Associative marketing<br />Integrating content along with brand communication is a growing trend <br />Advertiser Funded Programmes/ Entertainment<br />In Serial placements of brands<br />In film placements of brands<br />Celebrity endorsements dominate advertising content<br />More and more brands trying to identify with famous personalities <br />In-film advertising opportunity<br />Including meet & greet by stars<br />Activations at multiplexes<br />
  37. 37. Radio Realities<br />A single broadcaster market till 2002<br />Three channels / 203 stations<br />AIR covers 89.8% of the geographical area and 90.3% of the population of the country through AM broadcast <br />AIR’s ‘Home Service’ programmes are beamed from 203 transmitters for over 5lakh hours every year<br />AIR caters to all the important cultural and linguistic regions <br />Radio covers 40% of the population in 25% of the geographical area through FM broadcast<br />Privatization has given radio a second life<br />Localization of content and advertising accelerated the growth of FM radio in India<br />
  38. 38. Global Media Participation in FM Radio<br />A Canadian Financial Institute picked up 20% stake in Radio Mirchi<br />GW capital picked up 75% stake in radio City in 2005<br />Astro Asia joined hands with NDTV and value Labs to buy India Today’s Red FM in 3 cities in 2006<br />BBC along with a private investor picked up an undisclosed stake in Mid day West<br />
  39. 39. Bright Future for Radio<br />Radio advertising has been growing steadily touching Rs 10 million in 2009 <br />More licenses are expected to be given<br />Multiple frequencies ?<br />News broadcast?<br />Distribution platforms hold huge scope<br />Mobile<br />Internet or streaming radio<br />Satellite radio<br />Radio over broadband (offered by DTH operators)<br />New trends <br />Hybrid digital radio (expensive)<br />Podcasting (through i-pods)<br />Scope of cross media buys (BCCL etc)<br />Educational institutes and NGOs in India encouraged to come up with their own stations<br />
  40. 40. The Magic of OOH<br />Largely fragmented, unorganized –<br />many opportunities unauthorized!<br /> Monitoring and maintenance an issue<br />Entry of large media houses :<br />Reliance, Star Network and Bennett & Coleman & Co to increasing<br />professionalism<br /> Technology coming in : 3M, LED,<br />Interactive, store TV<br /> Coexistence of high end opportunities to rural wall paintings<br />
  41. 41. Emerging Trends: Mobile <br />Mobile phones becoming ubiquitous: most dynamic mobile market in the world<br />90 %penetration by 2014<br />Mobile ownership growing @ 12%<br />
  42. 42. The New Media for New generation<br />Rising penetration of internet <br />Current online penetration stands at: 55 Million<br />Current Broadband penetration stands at: 6.22 million<br />Net users growing at the rate of 30% y-o-y<br />Increased use of search engines<br />Social networking and life streaming<br />Jobs, marriage uniquely Indian<br /> 12 mn users<br /> 10 mn users<br />Live/micro Blogging<br />Facebook /Twitter<br /> Video viewing on the web: U Tube<br />Significant access in upscale youth- however media optimality is still a challenge<br />
  43. 43. Emerging Trends: Regionalization <br />Regionalization is likely to be one of the significant factor driving the growth in television <br />National broadcasters are looking at the scope of adding regional channels to their portfolio<br />Demand for regional content is increasing<br />OOH spends are increasing in tier 2 and 3 towns <br />Newspapers are publishing editions from smaller towns<br />Regionalization will help to increase media penetration in small towns and villages<br />
  44. 44. Extending The Media Platform <br />Prosperity of smaller towns are drawing in media <br />UFO Movies, the country’s largest digital theatre chain has 80% of its 1080 screens in tier 2 and 3 cities<br /> was launched to cash in on the traffic from small towns<br />Big spending in retail is visible in smaller towns adding to the crush for action in retail outlets <br />Playing commercials on LCD screens in malls is a prominent trend coupled with physical space<br />
  45. 45. English & Metro Bias<br />Advertisers and agencies have an English and Metro bias for many years<br />30% of the Rs 20,000 odd crores of ad spend in 2008 was blown up on Mumbai-centric media <br />60% of the ad spend is concentrated on six top metros<br />Marketers have started focusing on small towns and beyond which will impact the media value chain<br />
  46. 46. Other Emerging Trends<br /> Sports & Gaming are emerging as strong Entertainment platforms providing scope for cross media deals<br />Engaging in consumer’s ecosystem<br />Brand experience along with a shopping experience opening new opportunities in retail sector<br />Activation and ambient advertising<br />Music & Home Entertainment are growing rapidly<br />Branding DVD or CD covers <br />Placing ads in between the films <br />Innovations across product/ process/ marketing/ distribution model<br />Investment in talent and focus on HR within the industry<br />
  47. 47. Hot Destination for World Media <br />
  48. 48. Emergence of Media Conglomerates<br />This trend has started from the turn of the century<br />Home grown media conglomerates <br />Network 18 <br />(television, Internet, filmed entertainment, mobile content and allied business)<br />Pyramid Saimira <br />(filmed entertainment with focus on animation & gaming segment)<br />UTV Group <br />(film production, film distribution, television production and broadcasting, animation and allied business …. Disney has 32% investment in the company)<br />NDTV Group<br />(television, news and entertainment, media software, labs, emerging markets business and media process outsourcing)<br />Star Group<br />(television, national and regional, filmed entertainment with sister company Fox, new media and internet<br />
  49. 49. Network 18: A Full Play Media Conglomerate<br />Network 18<br />TV18 – CNBC TV18 & CNBC Awaaz<br />Web 18<br />Newswire 18<br />Through Global Broadcast News<br />CNN-IBN & IBN7<br />Homeshop18 <br />Online and on-air retail venture<br />Studio 18<br />Viacom 18 <br />Channels managed by MTV<br />Strategic alliance with Jagaran Prakashan for foray into print<br />
  50. 50. Growing in Size<br />In six years since 2003, almost every one of the top 10 media companies has grown twice if not three to four times in size<br />The Times Group, Zee Group, Star India Group, Network 18 Group, Reliance(ADAG), Ht Media, Living Media Group, Sony Group, PrasarBharati Corporation, Sun Network, Deccan Herald Holdings, JagaranPrakashan, Kasturi & Sons<br />Most of these media houses have multi media presence <br />
  51. 51. Investment in Media & Entertainment<br />Courtesy: VanitaKohliKhandekar<br />
  52. 52. Trends for Next Five Years<br />The M&E industry is expected to recover in 2010 and increase @ 11.2%<br />The CAGR from 2006 to 2009 has remained at 10% <br />The expected growth rate for the industry for next five years is 13%<br />TV and Print will continue to dominate the industry with 70% share of the revenue<br />TV is expected to grow @ 15%<br />Subscription revenue of both Print and TV will continue to grow @ 12% to 13% <br />Internet and gaming will show very high growth due to small revenue base <br />
  53. 53. After one year, it is going to be an exciting time for all of you in the M&E industry…..<br />