Trends & Analysis of the Past, Present & Future of the Indian Media & Entertainment industry as of 2019, covering areas of Film, TV, OTT, Animation, VFX, Music, Radio, Gaming, Sports & E-Sports...

1. The Indian Media & Entertainment Industry
2019
Chaitanya Chinchlikar
chaitanya.c@whistlingwoods.net
Vice President & Chief Technology Officer – Whistling Woods International
Overview

2. The Indian M&E Industry
•Key Characteristic
Armed with volume,
looking for value
•Valued in 2018 at
US$ 24bn / INR 1.7 tn
•Growth from 2019-21
(12%) is over 2x of the
global M&E industry
(5%)
1476
1674
1887
2349
0
500
1000
1500
2000
2500
2017 2018 2019 2021
INRBillions
13.4%
12%
CAGR
12.7%
1bn INR = 14mn US$
Segments: Television, Film, OTT/Digital, Print,
Animation, VFX, Gaming, Radio, Music, Events,
Sports, Out-of-home, Theme Parks & others

3. Segmentation
• Digital only – consume content only on digital platforms, do not access television
• Tactical digital – Consume Pay TV and at least one paid OTT service
• Bundled digital – Consume Pay TV and generally only telco-bundled content
• Mass consumers – Consume Pay TV and occasionally may consume some OTT content
• Free consumers – Do not pay for content
Consumers

4. The Indian Film Industry

5. The Indian Film Industry
• Largest in the world by:
– Films produced: 1,800
– Tickets sold: 4bn+
• Valued at US$ 2.5bn / INR 180bn in 2018.
• Growth in 2018 was 12%.
• 2019-21 CAGR is 11%.
• Is one of the world’s most underscreened markets
with a screens-per-million ratio of 9 (US is at 125)
• Average Ticket Price is less than 2$
62% 59% 57% 55%
16%
17% 18% 19%
12%
12% 12% 11%
5% 8% 9% 10%
4% 4% 5% 5%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2017 2018 2019 2021
Domestic Theatrical Overseas Theatrical Cable & Satellite Rights
Digital / OTT In-Cinema Advertising Home Video

6. The ‘Indian’ Film Industry
While‘Bollywood’ is often a commonly used
term to define the Indian Film industry, Hindi
films (which the word refers to), accounted for
only 20% of films produced in 2018.
With 20% volume, Hindi films hold ~45% of the value.
With 45% volume, South Indian films hold ~35% of the value
1bn INR = 14mn US$

7. Revenues & Films – Domestic
• Hindi films have got back on track
over the past 2 yrs, after a 5-year
period of plateauing toplines and
diminishing profitability.
• For first time in the last decade,
the major ‘Bollywood stars’ did
not find a place in the top 3
positions of box-office
collections.
• Contribution of ‘big star’ films to
the top 25 movies’ box office
collections dropped from 50% in
2015 to to 23% in 2018.
24 26 27 26 27 30
34
0
5
10
15
20
25
30
35
40
2012 2013 2014 2015 2016 2017 2018
INRBillions
Top 50 Hindi Films
Box Office Collection
8
6
8
6 7
9
13
0
5
10
15
2012 2013 2014 2015 2016 2017 2018
100Cr+ Hindi Films

8. Tourism Impact – 3 Idiots
Value Added by film-induced tourism
- 4x revenue of the film
- 500x employment generation

9. Exhibition
125
60
40
16 10 8
0
20
40
60
80
100
120
140
US UK South
Korea
China Brazil India
4,723
18,195
41,179
50,776
55,623
10,635 9,951
9,481
9,530 9,601
39,233 40,024 40,604 40,246 40,837
-
10,000
20,000
30,000
40,000
50,000
60,000
2009 2013 2016 2017 2018
China
India
US
After 5+yrs of
decline, 2018 was
the 2nd
consecutive
year of screen
growth, albeit
marginal, &
nowhere close to
what is required.
Ratio: Screens per million (population)
925 1,225 1,500 2,100 2,450 2,750 2,950
9,710 9,121 8,451 7,400 7,031 6,780 6,651
-
2,000
4,000
6,000
8,000
10,000
12,000
2009 2011 2013 2015 2016 2017 2018
Multiplex
SingleScreen
9,481 9,530 9,601

10. Indian Films go global, just as the world comes to India…
In 2008, Hollywood films had a 3-4% market share in India.
In 2018, it was 10%, mostly on account of them being dubbed in
Indian languages.
With growing internet access and access to global content, the
cultural alienation between India & other cultures is reducing.
2017 2018
No of Films
released
331 332
Box office
US$ 439
mn
US$ 491
mn
China releases

11. The Indian Television Industry

12. The Indian Television Industry
0
50
100
150
200
2017 2018
99 103
52 56
31
36
Subscribers (millions)
Cable DTH Free TV HITS
• Homes: 190 mn
• Value: >11bn US$
• Sub-Adv Ratio: 3:2
• ARPU: 3-4$ pm
• Channels: 885
(42 new channels p/y for 18 yrs 😳)
• News Channels - 380+
(43% of all channels 😳)

13. The Indian OTT/Digital Industry

14. OTT/Digital
119
169
223
354
0
50
100
150
200
250
300
350
400
2017 2018 2019 2021
INRBillions
• Valued at US$ 2.4bn in 2018. To double by 2021.
• India is the world’s 2nd largest internet using
country – 510mn users as of 2018.
• India has 350mn mid-to-high-level smartphones
in 2018, which is ~40% of all phones.
42%
28%
CAGR
32%
1bn INR = 14mn US$
• 9 out of 10 OTT consumers watch content on their cellphones.
• Mobile data cost crashed from Rs 16/GB (22c) in 2016 to Rs 4.5/GB (6c) in 2018.
• Per capita data consumption doubled from 4GBpm in 2017 to 8GBpm in 2018.
• English content is not the first choice for 9 out of 10 consumers.

15. Telecom Base – Data is the new Oil!
As of Aug 2019
Tele-Density: 90.34
Urban: 161.54, Rural: 56.92
Subscribers Aug-2019
Vodafone Idea 375,063,514
Jio 348,240,104
Bharti Airtel 327,952,234
BSNL 116,320,051
MTNL 3,402,005
Reliance 18,561
Total 1,170,996,469
668 646
499 526
0
200
400
600
800
1000
1200
1400
2017 2018
Mobile Subscribers
Rural
Urban
314
373
132
197
0
100
200
300
400
500
600
2017 2018
Mobile Internet
Rural
Urban
83 58
363
512
0
100
200
300
400
500
600
2017 2018
Broadband
Narrowband
49%
41%

16. India is a Mobile Video Watching Market
2018 Per-capita per week video watching hours
India crossed 9 hrs per-capita per week of video-watching
in August 2019

17. Subscriptions, etc…
• Digital subscription grew 262% to reach INR14 bn. That said, the % of
paying subscribers to total consumers is less than 5% for video & less
than 1% for audio.
• Paid video subscribers grew from 7mn in 2017 to around 15mn in 2018.
• Over 200mn people accessed digital content through telco data
bundles.
• Star India announced a stop in cable distribution in the USA, only on
Hotstar now. Zee announced similar moves in some European markets
& Australia. Provides almost the same reach with more revenue.
• Zee & Alt have launched a co-production & co-distribution venture.

18. Platforms Galore!
1,500 hours of new original content
created for OTT platforms in 2018

19. Opportunities in Digital
• Digital is no more a ‘also’ platform. It is the present & the future.
• Content consumption modes & patterns are changing with a large number of sub-18-yr-olds
finding their ‘stars’ online.
• Industry should look at digital beyond JUST a 3rd screen with limited censorship.
• Multi-formatting of ‘filmy’ content to include Digital platforms (25% extra effort)
• Digital is a writers’ & marketers’ medium – New IP Creation opportunities galore.
• Digital is all about Analytics – Audience analytics, Content-based analytics, Predictive analytics,
Campaign analytics, etc

20. Immersive

21. Content ‘Experience’
• Technology-enabled
experiences in content
consumption are what the
consumer is seeking out.
• The consumption
experience is becoming as
important is the content.

22. VR Content / Business Models
Low Volume High Volume
Low
Value
High
Value
Tethered
HMD`s
Location-Based VR experiences
Wireless
connected
HMDs
Mobile + Headset
Tethered + seated +
multi-sensory experiences LBE
Tethered + Seated
Tethered
Wireless-Connected Headsets
/ Standalones
Mobile + Headset

23. Cinematic VR’s expected journey from 2019-2022
• Widespread fiction / narrative immersive & interactive experiences in all content / business models.
• First generation of Cinematic VR content creators to emerge, by 2020-21
• Increased Festival inclusion, dedicated VR film festivals.
• Tech pipeline to get better:
– High quality, film-grade sensors, cinematic lenses, 6 DoF, VolCap, Point Cloud Capture & Photogrammetry
– Stabilisation of VR workflow using the OMAF / HEVC / MPEG-H codecs
– HMDs to get better – 4k / wireless / nearly-weightless
– Native spatial audio in all headsets & mobiles
– Adequate computing & graphic computing power
– 5G for High Quality Streaming

24. Platforms

25. Content & Platforms
Film / Theatrical TV Digital/OTT VR/AR
Nature of
Viewing
Captive Community viewing Non-captive Family viewing Non-captive Individual viewing Captive Individual viewing
Platform
Viewing
Details
Fixed frame, large screen,
2D & 3D
Fixed frame, small screen,
2D
Fixed frame, mini screen,
2D
No fixed frame
(FRAMELESS), 2D & 3D,
Duration &
Structure
110-180 mins
60-100 scenes
1-8 shots / scene
22–44 mins
8-10 scenes
1-20 shots / scene
3–60 mins
2-20 scenes
1-4 shots / scene
???
(60secs - 60mins presently)
Fiction
Content
Structure
Primarily stand-alone,
marginally serial
Primarily serial, marginally
stand-alone
Equal amount of stand-alone &
serial content
???
(likely similar to Digital)
USP
Larger Than Life,
Audio-visual narrative
spectacle
Appointment Viewing,
Story & Character
development
Individuality,
High concept, less formulaic,
writing-focused, pace is critical
???
(Immersive & interactive is
all we know currently)
Creation of a ‘Value
Snacking’ content category.

26. Platforms
Low Volume High Volume
Low
Value
High
Value
Premium OTT
Theatrical
Immersive
Content
Free(mium) OTT
C&S / DTH
Note:
This is India-specific
There are 4 viewing
platforms & multiple types
of content presently.
On a Viewership / Value
matrix, this is where are
they now & where are they
likely to be 5 yrs from now. Free OTT

27. Animation, VFX & Post-Production

28. Animation, VFX & Post-Production
• The industry has shown growth / will continue to grow on the
back of strong VFX / post-prodn growth, but Animation has not
grown as much.
• Lack of original IP is the major reason of low growth in
Animation.
• Cost arbitrage is the key driver for animation services. Cost of
producing a full-length animated film in the US is US$ 40-150
mn, in India is US$ 10-40 mn, a saving of approximately 75%.
• More content = more post-prodn revenues for India.
67
79
93
128
0
20
40
60
80
100
120
140
2017 2018 2019 2021
INRBillions
17.9%
17.4%
177%
17.0 18.8 20.7 24.4
18.3 20.5 22.7
27.8
31.3 39.6 49.5 75.5
0%
20%
40%
60%
80%
100%
2017 2018 2019 2021
INRBillions
Animation Services Post-Prodn VFX

29. VFX

30. Gaming

31. Gaming
• Gamers grew 52% to 278 mn in 2018.
• 5 bn game apps were downloaded in
2018, which accounted for 71% of
total entertainment app downloads.
• India has 250+ game development
companies.
• Casual gaming grew 40% to INR 22 bn.
• Real money gaming grew 82% to reach
INR 26 bn.
• Tencent organised India’s first PUBG
Championship with total prize pool of
50L and top prize of 15L.
Grand Theft Auto 5 is the single most profitable piece of media of ALL TIME
Produced at a cost of US$265mn, it has revenues of over US$7bn as of 2018.
30
49
68
120
0
20
40
60
80
100
120
140
2017 2018 2019 2021
INRBillions
Online Gaming
63.3%
35.4%
38.8%

32. Live Events

33. Live Events
• Still largely unorganised.
• Licensing & Taxation issues
• Ticket sales account for less than 10% of industry revenues.
• Corporates account for 75% of the organised industry’s
revenues
• India has seen a steady increase in marquee properties
starting from Mughal-e-Azam to Beauty & The Beast &
Alladin and most-recently – Cirque du Soleil.
• Weddings continue to be high value generators for the
industry.
65
75
86
112
0
20
40
60
80
100
120
2017 2018 2019 2021
INRBillions
15.4%
14%
14.7%

34. Radio

35. Radio
• Growth has been primarily
volume driven – more stations
in more towns / cities.
• In addition to the 386 private
FM stations in 35 cities, AIR
has 420 stations, programming
in 23 languages with the
ability to reach 99% of Indian
population.
• India lacks a quality
listenership measurement
system.
29 31 34
39
0
5
10
15
20
25
30
35
40
45
2017 2018 2019 2021
INRBillions
6.9%
8%
9.7%

36. Music

37. Music
• India reached 5bn music streams pm in Dec 2018.
• Over 96% of music consumers consumed music
on smartphones
• Film music contributed over 80% of total revenues
• Top 3 source of music discovery were YouTube,
Facebook, Instagram and not dedicated music
apps.
• Over 75% of Indian web users access unlicensed
content.
• India does not have high-quality, structured
career education in Music composition.
13 14
16
19
0
5
10
15
20
25
2017 2018 2019 2021
INRBillions
7.7%
10.8%
14.3%

38. Sports

39. Sports
• Sports is one of the largest content
providers to the broadcast, live
events & OTT platforms.
• Too many leagues caused Hockey,
Boxing, Basketball & Futsal to shut
operations in 2018.
• Viewers starting to explore OTT
platforms as primary sports
viewing platforms.
• Significant government
intervention, focused on athlete
support and making sports an
industry by 2022.

40. Sports
• Sports viewership
has widened across
sports.
• Cricket & Kabaddi
showing viewership
fatigue.
• The sports-watcher
stereotype has been
broken with 35%+
female & 40%+ rural
viewership for
IPL+ISL+PKL.

41. Technology

42. Technology in the Industry
Where we are at:
• 8k content acquisition & workflows for Film.
• 8k/6k stereo content acquisition in 360VR.
• 4k content acquisition & workflows for TV/OTT.
• Mobile filmmaking & ‘Script-to-Screen in a room’ workflow.
• Indigenization of the entire VFX pipeline.
• Usage of Motion Capture in advertising, some films.
• Emergence of ‘Digital Labour’ for RPA.
• Immersive content in Gaming, Tourism, Sports.
What Next?:
• Ubiquitous 4k/8k workflows for
Film, TV & High-end OTT.
• Cinematic VR across business
models.
• 6DoF Volumetric capture.
• 5G (It’s the next panacea ").
• Mainstreaming of ‘Digital Labour’.

43. Opportunities

44. The big opportunities in Indian M&E
• Education in M&E
• Globally Merchandisable IP
• Content that travels well globally (to non-diaspora viewers)
• IP creation - interoperable IPs across Film, TV, OTT, Gaming
• Screens for Film
• Non-English / Non-Hindi OTT content
• E-Sports & Online Gaming

45. In any industry, building volume is hard. India
already has the volume and is the largest free-
access digital market in the world.
We now need to build value to each unit of volume.
Only way to do it is quality.

46. THANK YOU
Chaitanya Chinchlikar
Vice President & Chief Technology Officer
chaitanya.c@whistlingwoods.net