The document discusses the growth potential of the Indian media and entertainment industry across different segments like television, print, films and radio. It highlights that the industry is growing at a fast pace due to rising incomes, urbanization, and exposure to new technologies. Television is the largest segment currently and is expected to grow at 26% annually. Print and films are also growing steadily with increased literacy and multiplexes. The radio sector is opening up with new FM licenses being issued. Overall, the Indian media industry has potential to go global in the future through various strategies like targeting the NRI population, international partnerships and acquisitions of foreign media companies. However, barriers like regulations, piracy and low investments need to be addressed for realizing

1. Can Indian Media Be Global ? Television, Print, Film & Radio

2. Entertainment & Media Industry Growth outperforms the economy One of the fastest growing sectors of the Indian economy Current Size : Rs 40,230 Crore Estimated growth rate : 20 % over the next 4 years Source : PwC analysis

3. The Growth Drivers Consumerisation of urban India Rising proportion of young population Increase in income levels Changing spending patterns Increase in number of working urbans Increase in spending power Rising aspiration levels Consumption of lifestyle items Source : Lifestyle consumption by Edelweiss Securities Pvt Ltd

4. Technology is changing the face of media industry Films Television Radio Media Music E&M Sector  Content  Commercial (Hindi & Regional) Cinema Art Movies Cartoon Movies Commissioned Programs News & Current Affairs Commissioned Programs News & Current Affairs Fiction/Non Fiction Articles Film Music Private Albums Delivery  Cinema Halls Home Videos (Video Cassettes, VCDs, DVDs,) Cable Terrestrial DTH IPTV Public Broadcaster FM Channels Newspapers Magazines Books Cassettes CDs Mobile Phones Internet ---------- Straight line denotes Traditional Delivery Mechanisms - - - - Dotted line denotes Converged Delivery Mechanisms Source : PwC analysis

5. Television

6. An Explosion Of Channel Choices New launches & delivery mechanisms lead to exponential growth in number of channels Source : TAM

7. Industry size & growth potential Source : PwC analysis Industry projected to grow at an annual compounded rate of 26% per annum over the next 4 years

8. Industry structure Television dominates the entertainment & media industry 3 segments : Advertising, Subscription & Software

9. Growth Drivers - Subscription Projected CAGR of 29 % over the next 5 years Current average monthly collection : Rs 130. Projected : Rs 250 (by 2010) Larger base of TV households from lower SECs New regulatory changes & delivery mechanisms (like CAS & DTH) will result in improved declarations New technologies will bring in increased revenues through value added services

10. Growth Drivers - Advertising Ad spend in India : 0.48 % of GDP ; global average 0.96 % Growth in disposable incomes: urbanization & consumerism Increased reach of the medium due to expanding delivery platforms and technology advancements Higher investment from sunrise sectors. Continued support from traditional categories (FMCG, durables ) Separate viewership measurement for upmarket audience (Elite Panel) Will result in higher niche channel spends

11. Growth Drivers - Software Sustained growth in this sector Frequent & never ending launch of 24 hour channels leading to demand for content Regional channel potential being tapped by national players. Increased demand for language programming Better performance of dubbed foreign content (movies, cricket commentary , cartoons) will increase demand for such services

12. Key developments CAS An addressable system to provide subscribers with a selective choice of content via the “pay” mode Implemented in Zone -1 areas of Bombay, Delhi and Kolkata from Jan 2007 As per TAM’s latest report , 17 % penetration in the notified areas IPTV MTNL offering services in Delhi & Mumbai Around 70 – 100 channels on offer Service allows for time-shifted TV : viewers can watch programs upto a week old

13. Key developments DTH Allowed by Government in 2000 Absence of middle men – consumer apathy with current Local Cable Operators DTH is 'flexible‘, it is not connected to the ground infrastructure DTH is a ‘National’ service :same STB can be used in any city Current players DD Direct, Dish TV and Tata Sky ( Star + Tata venture) In the pipeline : Reliance, Sun group Subscriber nos : Dish TV – 20 L, Tata Sky – 4 L, DD – 50 L

14. Can Indian Television Industry Go Global ? Some pointers

15. Homegrown channels vs foreign networks Indian channels dominate most of the markets / genres (Zee, Sun , ETV, Aaj Tak , NDTV) Zee’s improved performance vs Star Plus decline at national level Regional channels dominate in TN, AP, Karnataka, Kerala, WB , Maharashtra News, Hindi movie , music genres dominated by Indian channels In sports, new entrant Neo Sports takes on ESPN, Star Sports, Ten Sports.

16. Reaching out to Indian diaspora Leading TV channels have presence in foreign markets though distribution tie ups Zee Presence in Asia Pacific, Africa, UK, US & Europe Reach of more than 120 countries & 350 million viewers globally Sun, NDTV, Aaj Tak, Eenadu , Asianet and other channels beaming to different parts of the world Channels also accessed through dish antenna in regions without C&S connection Dedicated programming targetting overseas Indians Eg : UAE band on Asianet, Kairali TV Zee coverage

17. Attracting strategic and financial investors Television segment open to FDI 49 % for cable & DTH; 26 % for news channel Indian channels / media groups attracting foreign investment Reuters, UK takes equity stake in Times Global Broadcasting Blackstone invests $275 Mn in Eenadu CNN IBN: partnership between Turner International and TV18 Tata Sky : alliance between Tata & Star for DTH operations in the country

18. Joint ventures recognizing strength of Indian entities NDTV & Genpact alliance offers media outsourcing services to enterprises Editing, digitizing and subtitling Star Ananda Bengali news channel – alliance between ABP & Star Balaji Telefilms & Star form new company to launch Telugu channel

19. WTO agreement Will finally open up media segments across countries to global competition

20. Barriers to growth Lack of uniform media policy for foreign investment Different caps in FDI in various segments DTH 49 % ; cable 49 % (ownership can only be with Indian citizens) News channel 26 % ; Entertainment 100 % Adhoc content regulation Content regulator vs self-regulation Debate continues on the working mechanism of content regulation - enforcement, penalties etc Recent issue : government ban on AXN channel for showing adult content Sports broadcast ordinance : compulsory for content providers to share content with DD

21. Barriers to growth Price regulation TRAI recommendations stifle broadcaster’s attempt to fix prices based on market dynamics Cross media ownership rules Government yet to evolve clear rules in this regard Potential investors unable to plan their long-term strategy for the market Lack of empowered regulators Many TRAI recommendations still not fully acted upon Eg: Addressability in distribution, digitalisation of cable TV, privatisation of terrestrial broadcasting etc Yet to enact broadcasts bill; Content code (BRAI)

22. Print

23. Growth in titles Source : RNI

24. Industry size & growth potential Source : PwC analysis Industry projected to grow at an annual compounded rate of 13% per annum over the next 4 years

25. Growth drivers Booming economy resulting in increased job creation More number of household with high spending power - service sector boom Rural / lower SECs provide vast opportunity for print players IT advancements will lead provide easy access to rural areas

26. Growth drivers Opening up of the sector for FDI Upto 100 % permitted in publishing / printing scientific and technical magazines Upto 26 % in news and current affairs (newspaper) category Increased ad spends In line with economic growth Increased activity from sunrise sectors like Retail, Telco Publications rapidly increasing number of colour pages and supplements Launch of specialized magazines providing focused reach among niche segments

27. Key trends Tapping the reading population : The readership of print media currently stands at 27 % Growth will be driven by increase in literacy levels 7 dailies in India have readership over 1 Cr: Dainik Jagran, Dainik Bhaskar, Eenadu, Lokmat , Amar Ujala, Hindustan and Daily Thanti Building a pan-India presence Publications drive growth through geographic expansion Eg: HT launch in Mumbai, Deccan Chronicle in Chennai, Midday in Bangalore, new editions from Dainik Jagran, Bhaskar, Business Line in Mumbai Source : NRS

28. Key trends According to World Association of Newspapers (WAN) Indian newspaper sales increased 7 % in 2005 (vs 0.56 % worldwide) and 33 % during 2001-05 (vs 6 % worldwide) India is the 2 nd largest newspaper market with 7.8 Cr copies daily (China – 9.6 Cr) Indian newspaper advertising revenue increased 23.2% over 2004 (vs 5.7 % globally)

29. Can Indian Print Media Go Global ? Some pointers

30. Targeting the NRI population Online editions Almost all the lead dailies (English & language) have internet editions providing free access to the latest news Internet editions used by advertisers to reach Indians living abroad Many dailies provide “ epaper” versions with search options Monetized by dailies like Hindu Free access in the case of TOI, HT

31. Targeting the NRI population Overseas editions for many dailies Sandesh – weekly – Chicago ABP – fortnightly – US Malayala Manorama – daily – Bahrain, Dubai Madhyamam – daily – Bahrain, Dubai Gujarat Samachar – weekly – New York Divya Bhaskar – fortnightly – New York

32. Foreign tie-ups Tie-ups with foreign publications Publications are opting for foreign tie ups to launch new titles/ improve current offerings HT Media’s business paper “mint” launched last week with a 20 % content sharing agreement with Wall Street Journal Financial Times has taken an equity stake in Business Standard Living Media group brings Time, Fortune & HBR to India; Outlook launches Newsweek & Marie Claire Deccan Chronicle brings out International Herald Tribune TOI group forms alliance with BBC Worldwide to launch its magazines in India including Top Gear

33. Local vs foreign titles Indian magazines hold on against foreign magazines Better understanding of the market and the target audience Femina still the No 1 Womens magazine with a readership of 3.47 Lakhs vs Cosmopolitan’s 0.19 L (among SEC A1+) Local news magazines like India Today and Outlook way ahead of Time, Newsweek etc Source : NRS

34. Barriers to growth Low literacy levels Most of the big media houses are family run Wary of external / foreign investment Follow conservative growth strategies Lack of uniform media policy for foreign investment Content : News (26%) and non-news (100%) Growing younger population and their increasing internet affinity poses new challenges Mushrooming 24 hour news channels undermine the agenda setting function played by newspapers

35. Films

36. Industry size & growth potential Source : PwC analysis Industry projected to grow at an annual compounded rate of 18% per annum over the next 4 years

37. Growth drivers Advancements in technology helping the industry in film production, exhibition and marketing Corporatisation of the film industry Many exhibition companies (PVR, Shringar, Inox) have gone public Entry of the largest industrial house in the E & M industry – Reliance acquired majority stake in Adlabs Corporates also forayed into film distribution eg. UTV software Increased marketing spends Corporatisation also resulted in innovative marketing activities : microsites, blogs, contests, mobile downloads etc Centralised marketing and promotion activities

38. Growth drivers Derisking through portfolio approach (multiple releases with multiple revenue streams) Companies getting associated through in film brand placements, endorsements etc Mobile companies :selling ringtones and wallpapers at premium rates Merchandising catching on in a big way Growing number of multiplexes Incentive for low-budget, niche films and experimental cinema Higher admission rates : account for 60 % of Box Office revenues

39. Can Indian Film Industry Go Global ? Some pointers

40. Tapping overseas markets Growing collection from overseas markets Indian films are becoming increasingly popular even with the non Indian community More number of prints being released abroad Overseas revenues estimated to account for 10 % of total earnings by 2010 In 2006, films like Kabhie Alvidha Na Kehna, Fanaa, Rang De Basanti emerged blockbusters in UK and North America. Forbes magazine estimates : Dhoom-2 ($18.4 million) Fanaa ($17.7 million) and KANK ($17.5 million) Regional language movies (Telugu, Tamil) also popular abroad

41. Digital Cinema – removing the distance barrier Digitalization of Cinema India is on the verge of becoming the largest digital theatre country in the world Malayalam movie "Moonnamathoraal" reportedly became the first film to be digitally released: Sept’06 Advantages : curbs piracy, reduces production cost, gives better clarity and allows simultaneous release across centres reducing revenue loss FICCI estimates 25-30 % growth through digitalization and savings worth 2000 Cr (incurred due to piracy & film stock import)

42. International co-productions Increased corporatisation has resulted in Indian companies doing more co-productions UTV tie up with Fox , Will Smith’s Overbrook , Porchlight (animation) Viacom plans co-production with local film makers Percept Picture Company joined hands with Further Films and Sahara One to produce “Tree of Life”

43. Cinema – the future Could we imagine these 15-20 years back ? Mobile phones becoming an integral part of our life Cameras without film Access to around 300 TV channels Reading newspapers on the net In the next 2 – 3 years Physical movie prints will become obsolete Movie producers will be able to digitally release movies across all theatres in India (12000+) and abroad Reduced time lag in releasing home videos - higher revenues, reduced piracy Drop in VCD costs: Moser Baer already releasing regional movies in the Rs 28 – 34 price range

44. Barriers to growth Low capital / investment levels Producers unable to invest in a large number of prints and marketing initiatives Digitalization will change the scenario Piracy Most of the credible efforts to combat piracy initiated by industry bodies Current copyright act dated in terms of technology improvements

45. FM Radio Sector opened up after years of government dominance 338 licenses given away for 91 cities in the 2 nd phase of radio privatisation 20 % FDI allowed by government Eg: Virgin Radio tie up with HT Media, Mid day & BBC for Radio One Revenue share agreement in contrast to the earlier fixed license fee regime Only 20 stations were set up after auctioning of 108 frequencies during round 1 of privatisation

46. FM opportunities Investments Need for financial investments as well as technical and operating experience to run the stations Content boost Average requirement expected to be 5000 content hours per annum per radio channel Potential to reach local markets Only 22 of the 338 channels are in the four metro cities Huge potential to target the smaller cities

47. Industry size & growth potential Source : PwC analysis Industry projected to grow at an annual compounded rate of 35% per annum over the next 4 years

48. Radio going global Indian channels on international satellite radio services like World Space RM Radio, Jhankaar, Gandharv, NDTV etc Numerous Indian stations reaching out to people of Indian origin in foreign countries RBC Radio (US), Asianet Radio (Gulf countries) 24 hour Tamil station in Singapore ( Oli 96.8 FM) Numerous Indian stations in Trinidad, Fuji, Mauritius Strong advertising support from local / MNC clients

49. Can Indian media companies go global ? Acquiring / taking a stake in local companies NDTV and SE Asian news broadcasting company Astro Broadcast have tied up to do business in Malaysia and Indonesia UTV , Astro JV to launch channels in Hindi, Regional, Indonesia and Malaysia Bahasa Astro and Sun TV have formed a joint venture to generate and distribute TV programs/channels for global audience More acquisitions likely as companies go public and have access to funds

50. Can Indian Media Be Global ?

51. Yes the foundation has been laid Large Indian companies will take over foreign entities Zee’s acquisition of Ten Sports an indicator of things to come Synergies, access to funds, regulatory mechanism will set the pace TV, Films & Radio have already gone global Potential for further growth through technology advancements & relaxed trade agreements Huge talent pool – creative & technical – will drive this growth

52. Print Internet and epaper versions already available More international editions once the base population crosses threshold figure Increased interest in India will create huge demand for Indian content More syndication arrangements in the offing Print will catch on………soon

53. Thank you

54. Appendix

55. Cable TV penetration Source : Worldscreen, Morgan Stanley Research

56. Advertising spend split by medium Source : groupM estimates Year : 2005 Total : 12,275 Cr

57. Statewise C&S penetration Source : NRS’06 HH figs in 000 % C&S on the base of TV HHs