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India : Entertainment Sector Report_August 2013
India has one of the largest and fastest growing entertainment industries in the world. The industry is expected to grow at a compound annual growth rate of 15.1% until 2017, with television remaining the largest segment. Emerging segments like animation, gaming, and digital advertising are growing rapidly as well. Rising incomes and evolving lifestyles are driving demand for entertainment across India. The government is also supporting industry growth through policies that encourage foreign investment and liberalization.
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India : Entertainment Sector Report_August 2013
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- 3. Third largest TVmarket • With 146 million television households in 2011, India stood as the third largest television market after the U.S. and China One of the largest broadcasting market • India has one of the largest broadcasting industries in the world with approximately 800 satellite television channels, 245 FM channels and more than 100 operational community radio networks Rising no. of subscribers • The total subscriber base for Indian television industry is expected to increase to 173 million by 2016 from 95 million in 2009 Fast growing Animation industry • The Indian animation industry is expected to expand at a CAGR of 15.8 per cent to USD1.4 billion by 2017 from USD650 million in 2012 Source: Planning Commission, Aranca Research
- 4. • The engineeringsector is delicensed; 100 per cent FDI is allowed in the sector • Due to policy support, there was cumulative FDI of USD14.0 billion into the sector over April 2000 – February 2012, making up 8.6 per cent of total FDI into the country in that period Growing demand Source: KPMG report 2012, Aranca Research Notes: AGV - Animation, Gaming and VFX, VFX - Visual Effects, M&A - Merger and Acquisition, CAGR - Compound Annual Growth Rate, FDI - Foreign Direct Investment, E - Estimate Robust demand • Rising incomes and evolving lifestyles have led to higher demand for aspirational products and services • Higher penetration and a rapidly growing young population coupled with increased usage of 3G and portable devices would augment demand Attractive opportunities • Industry is set to expand at a CAGR of 15.1 per cent over 2012–17, one of the highest rates globally • Television and AGV segments expected to lead industry growth; opportunities in digital technologies as well Policy support • Policy sops, increasing FDI limits • Measures such as digitisation of cable distribution to improve profitability and ease of institutional finance • Increasing liberalisation and tariff relaxation Increasing investments • Higher FDI inflows • Increasing M&A activity • More big-ticket deals such as Walt Disney- UTV, Sony-ETV and Zee- Star • Entry of big players across all segment of industry 2012 Market Size: USD15.1 billion 2017E Market Size: USD30.5 billion Advantage India
- 5. Source: KPMG Report2013, Aranca Research Notes: VFX - Visual Effects Entertainment Television Gaming Animation & VFX Out Of Home (OOH) Music Digital Advertising Radio Films Print
- 6. Market size (USDbillion) Source: KPMG Report 2013, Aranca Research Note: F - Forecast, CAGR - Compound Annual Growth Rate, * In Indian rupee terms The entertainment industry is expected to develop at a CAGR of 15.1 per cent during 2012–17 The total market size of the entertainment industry expanded to USD15.1 billion in 2012 from USD9.2 billion in 2006, at a CAGR of 10.9* per cent The industry recorded one of the highest growths in the world in 2010 (11.0 per cent); the growth in 2012 picked up even further to reach 12.6 per cent 9 11 12 12 14 15 15 17 19 23 26 31 0% 5% 10% 15% 20% 0 5 10 15 20 25 30 35 2006 2007 2008 2009 2010 2011 2012 2013F 2014F 2015F 2016F 2017F size (USD Billions) Growth (RHS)
- 7. Size of majorindustry segments (2012) Source: KPMG Report 2013, Aranca Research The entertainment industry continues to be dominated by the television segment, accounting for 45 per cent of market share in terms of revenues, which is expected to grow further to 51.0 per cent by 2017E Television, print and films together account for 86 per cent of market share Size of major industry segments (2017) 45% 27% 14% 2% 1% 2% 4% 2% 3% Television Print Films Radio Music Out of Home Animation and VFX Gaming Digital Advertising 51% 20% 12% 2%1% 2% 4% 3% 5% Television Print Films Radio Music Out of Home Animation and VFX Gaming Digital Advertising
- 8. Growth of televisionindustry (in 2011) Source: KPMG Report 2013, Aranca Research Note: E - Estimates With a growth rate of 15.8 per cent in 2011, Indian television industry stood second when compared with BRIC and other major developed economies Currently, the television industry in India derives the major share of its revenue from subscription segment (65 per cent) and the rest from advertising (35 per cent) The revenue share from subscription segment is expected to reach 69 per cent by 2016, driven by higher penetration of subscription television Television segments 2.1% 3.6% 10.6% 14.4% 15.8% 22.5% United States United Kingdom China Russia India Brazil 35% 31% 65% 69% 2011 2016E TV advertising Subscription revenues
- 9. Industry size ofemerging segments (USD millions) Source: KPMG Report 2013, Aranca Research Notes: VFX- Visual Effects; F - Forecast, CAGR - Compound Annual Growth Rate Radio, Animation & VFX, Gaming and Digital advertising are also emerging as fast growing segments The total market share in terms of revenue is expected to reach 15 per cent by 2017 from 11 per cent in 2012 During 2012–17, these segments are expected to develop at a CAGR of: Digital advertising (41.6 per cent) Gaming (28.8 per cent) Radio (21.2 per cent) Animation (20.1 per cent) 0 20 40 60 80 2007 2008 2009 2010 2011 2012 2013F 2014F 2015F 2016F 2017F Radio Animation and VFX Gaming Digital Advertising
- 10. Advertising revenue forecast Source:KPMG Report 2013, Aranca Research Note: OOH - Out Of Home, F - Forecast Total spending on advertising across all media stood at USD5.5 billion, accounting for 41 per cent of the total industry revenue in 2011 Advertising revenue is expected to touch USD10.8 billion by 2016 from USD5.5 billion in 2011 Print is the largest contributor, accounting for 46 per cent of the advertising share Advertising revenue share (2011) 39% 46% 6% 5% 4% TV Print OOH Digital Advertising Radio 5.0 5.1 4.9 5.7 5.5 6.1 7.1 8.1 9.3 10.8 -10% -5% 0% 5% 10% 15% 20% 0 2 4 6 8 10 12 2007 2008 2009 2010 2011 2012F 2013F 2014F 2015F 2016F Total revenue- (USD billion) Growth (%) -RHS
- 11. Source: Company Websites,Business Week, KPMG report 2012 Aranca Research Notes: M&E - Media and Entertainment Company Business description Star India Pvt Ltd • Fully owned subsidiary of News Corporation • Portfolio includes 33 channels in seven languages across various categories such as soaps, reality, news and films • Also manages a portfolio of business ventures including DTH operator Tata Sky, cable system Hathway, channel distributor STAR Den, news channel operator MCCS, the film production and distribution business Fox STAR Studios India and STAR CJ Home Shopping Zee Entertainment Enterprises Ltd • Fully owned subsidiary of Essel Group and first listed media company in India • One of the largest producers and aggregators of Hindi programming in the world • An estimated reach of more than 670 million viewers across 168 countries • Pioneer of television entertainment industry in India; launched Zee TV- the country’s first Hindi satellite channel • Range of businesses across the value chain in the M&E industry Multi Screen Media Pvt Ltd • Fully owned subsidiary of Sony Pictures Entertainment • Comprises of Sony Entertainment Television (SET) and SAB, leading Hindi general entertainment television channels; MAX, a movies and special events channel; and PIX, a channel that airs Hollywood movies • Its programming spans across various genres including drama, reality, comedy, horror, Bollywood and live events
- 12. Source: Company Websites,The Times of India, Aranca Research Notes: CAGR - Compound Annual Growth Rate, FY - Financial Year Company Business description Bennett, Coleman and Co Ltd • Largest media conglomerate in India • Publishes world’s most widely circulated English broadsheet daily ‘The Times of India’ and second most widely circulated financial daily ‘Economic Times’ • Other prominent publications include magazines such as Zigwheels, Filmfare, Femina and Top Gear and Hindi dailies such as Navbharat Times and Sandhya Times • The group has also diversified into radio and television business HT Media Ltd • Hindustan Times is the second most widely read newspaper with 3.8 million readers in India • Other prominent publications include the business daily Mint and the Hindi daily Hindustan • The group has also forayed into many adjacent businesses such as print and digital services, internet, radio, and events and marketing solutions • The company’s job portal www.shine.com has over 8.5 million registrations Living Media India Ltd • India Today and Readers Digest are among India’s most circulated magazines • Other prominent magazine publications include Business Today, Cosmopolitan, Time, Golf Digest, Design Today, Money Today and The Chartered Accountant • The group has interests in various other businesses such as radio, events, printing, music, television, education and publishing
- 13. Source: Company Websites,Business Week, Aranca Research Company Business description Yash Raj Films Studios • The only privately owned film studio in India • Apart from film production, the company has also expanded into distribution of films and music, home entertainment, production of television software, ad films, documentaries and private label music production • The company launched a youth films studio Y-Films in 2011 to connect with the large young population of the country Eros International Media Ltd • Strong distribution network spanning across 50 countries and over 27 dubbed foreign languages • One of the largest content owners in the industry having a film library of over 2600 films, thus ensuring stable, recurring cash flows • The company is diversifying into Marathi, Punjabi, Tamil and other regional language films to leverage upon the growing demand for regional cinema Red Chillies Entertainments Pvt Ltd • Founded in 2002 as a film production house, the company has branched into TV shows and advertisement, visual effects and multi-media production equipment leasing • Its latest venture 'Ra.one‘ is Bollywood's most expensive movie and very first Sci-fi movie • It also owns the Kolkata Knight Riders cricket franchise in the Indian Premier League
- 14. Source: Company Websites,Business Week, Aranca Research Company Business description Music Bharti • A wholly owned subsidiary of Bharti Airtel • The largest music company in terms of revenues • Provides mobile-based value-added music services (VAS) such as hello tunes, call back tunes, music on demand, Mirchi mobile and Airtel radio Saregama India Ltd • The company owns the largest music archives in India, one of the largest in the world • It uses the music labels Saregama, RPG Music and HMV • The company is making efforts to digitise its catalogue to make inroads into the digital music market and counter declining physical music sales Super Cassettes Industries Ltd • The company owns the rights to over 2,000 video and 35,000 audio titles, comprising of nearly 24,000 hours of music • The company has diversified into film production, consumer electronics and mobile phones manufacture Tips Industries Ltd • The company owns 3,500 titles of which a minimum of 25 have been sold over a million copies, with another 10 selling over 10 million copies • Since 1981, Tips has the highest number of gold and platinum discs to their credit in India • Tips also holds soundtrack copyrights of over 50 Hindi movies and has also ventured into film production • The company’s distribution channel serves more than 1,000 wholesalers across country
- 15. Television • Television penetrationin India is at about 60 per cent and penetration is expected to reach 70 per cent by 2016 • The government announced the digitisation of cable television in India in four phases, which would be completed by the end of 2014 • The direct-to-home (DTH) subscription is growing rapidly driven by content innovation and product offerings • The subscription share to the total revenue is expected to grow to 69 per cent by 2016 Print • Considering the huge potential in regional print markets, national advertisers are entering these markets to increase their advertising share • Increasing income levels and evolving lifestyles have led to robust growth in niche magazines segment • Increasing literacy levels leading to a rise in the readership base Film • Growth to be fuelled by multiplex chains, increasing footfalls of consumers and higher quality content • Increasing share of Hollywood content in the Indian box office • 3D cinema is driving the growth of digital screens in the country • The Indian film industry is largest producer of films globally with 400 production houses and corporate houses involved in film production Source: KPMG Report 2012, Economic Times, Aranca Research Notes: DTH - Direct to Home, 3D - Three Dimension
- 16. Animation, Gaming and VFX(AGV) • Growing focus on the ‘kids genre’ and rise in dedicated channels for them • Surge in 3D/HD animated movies in theatres and use of animation and VFX in TV advertising and gaming • Growing outsourcing of VFX and gaming to India is due to cost effectiveness of Indian players • Content localisation such as T20fever.com and ICC World Cup 2011 games Radio • Increasing FM enabled radio phones, mobiles and car music systems • During 2010, there were a total of 245 channels operating across India • Government introduced favorable guidelines for expansion of the 3rd phase of FM radio broadcasting services, which will bring 294 towns and 839 stations under FM coverage • Liberalisation of policy on community radio took place in 2008 which led to 29 community radio stations getting operational in the country Music • The Indian music industry is a consortium of 142 music companies • Players are looking at new ways and mediums to monetise music, such as utilising social media to promote music • Mobile phones, iPods and mp3 players – devices that enable music on-the-go – are becoming the primary means to access music • Digital music on mobile continues to drive music industry revenue Source: KPMG Report 2012, Economic Times, Aranca Research
- 17. Source: Aranca Research Growingdemand Inviting Resulting in Growing demand Increasing investmentsPolicy support Higher real incomes and changing lifestyles Falling prices, increasing penetration Growing young user base with high access to technology Policy sops, favourable FDI climate Policies to enhance growing segments like animations and gaming Increasing liberalisation, tariff relaxation Higher FDI inflows Increasing M&A activity Increasing participation of big players
- 18. Rising per-capita incomein India (USD) Source: IMF, Aranca Research, Note: CAGR - Compound Annual Growth Rate Incomes have risen at a brisk pace in India and will continue rising given the country’s strong economic growth prospects. Nominal per capita income is estimated (IMF) to have recorded a CAGR of 11.2 per cent over 2000–12 Rising incomes, with its positive impact on the consumer base, will be the key growth driver for the entertainment industry (across the country) As the proportion of ‘working age population’ in total population increases, per capita income and GDP are expected to grow higher -5% 0% 5% 10% 15% 20% 25% 30% 300 600 900 1,200 1,500 1,800 2,100 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011F 2012F 2013F 2014F 2015F 2016F 2017F Gross domestic product per capita, current prices Growth
- 19. Indian residents shiftingfrom low-income to high- income groups Source: McKinsey Quarterly Report, Aranca Research Apart from the impact of rising incomes, widening of the consumer base will also be aided by expansion of the middle class, increasing urbanisation, and changing lifestyles The entertainment industry will also benefit from continued rise in the propensity to spend among individuals; empirical evidence points to the fact that decreasing dependency ratio leads to higher discretionary spending on entertainment 1 3 72 6 17 12 25 29 35 40 32 50 26 15 2008 2020 2030 Globals (>18412.8) Strivers (9206.4-18412.8) Seekers (3682.5 - 9206.4) Aspirers (1657-3682.5) Deprived (<1657) Million Household,100%
- 20. Television • Digitisation ofthe cable distribution sector to attract greater institutional funding, improve profitability and help players improve their value chain • FDI limit increased from 49 per cent to 74 per cent in cable and DTH satellite platforms in 2012 • No restriction on foreign investment for uplinking and downlinking of TV channels other than news and current affairs Film • Co- production treaties with various countries such as Italy, Brazil, UK and Germany to increase the export potential of the film industry • Granted ‘industry’ status in 2001 for easy access to institutional finance • FDI upto 100 per cent through the automatic route has been granted by government • Entertainment tax to be subsumed in the GST; this would create a uniform tax rate regime across all states and will also reduce the tax burden Radio • FDI limit in radio increased to 26 per cent from 20 per cent in 2011 • Private operators allowed to own multiple channels in a city, subject to a limit of 40 per cent of total channels in the city. • Private players allowed to carry news bulletins of All India Radio • Further boost may be given to the radio sector by charging licence fees on the basis of ‘net income’ so as to provide relief to loss making radio players Source: Aranca Research, Notes: FDI – Foreign Direct Investment, FII – Foreign Institutional Investors
- 21. Print • FDI/NRI investmentupto 26 per cent in an Indian firm dealing with publication of newspaper and periodicals • FDI/NRI investment upto 26 per cent in publications of Indian editions of foreign magazines • FDI/NRI investment upto 26 per cent in publications of scientific and technical magazines/ specialty journals/ periodicals Music • Parliamentary approval on the Copyright Act (Amendment) Bill, 2012, which strengthens the royalty claims of musicians, lyricists and others in the field • Policies are adopted against digital piracy and file-sharing; steps have been taken to block illegal music websites • Adoption of revenue sharing model by Copyright Board requiring FM radio companies to share 2 per cent of their net advertising revenues with music companies Animation, Gaming and VFX (AGV) • 100 per cent FDI allowed in the sector through automatic route provided it is in compliance with Reserve Bank of India guidelines • The government has craved out a National Film Policy to tap the potential of the film sector mainly for the animation segment Source: PwC India Entertainment and Media Outlook 2011, KPMG report 2012, Aranca Research
- 22. Source: Digital Dawn,KPMG Report 2013, Aranca Research In December 2011, the Indian government passed ‘The Cable Television Networks (Regulation) Amendment Act’ for digitisation of cable television networks by 2014 The cable operators under the digitisation regime are legally bound to transmit only digital signals, while the customer can access the subscribed channels through a set-top box The number of DTH subscribers in India is expected to increase from 44 million currently to 200 million by 2018 The entire process of digitisation will be carried out in four phases Phase City/Region Date for switchover* Phase 1 Delhi 31st October 2012 Mumbai 31st October 2012 Kolkata 15th January 2013 Chennai Not completed Phase II 38 cities in 15 states 31st March 2013 Phase III All remaining urban areas 30th November 2014 Phase IV Rest of India 31st March 2015
- 23. Source: Digital Dawn,KPMG Report 2013, Aranca Research Advantages of Digitisation Higher consumer preference, which lacked in the former Conditional Access System (CAS) Consumers will be able to select content of their choice as well as indefinitely store and access digital content The digital platform in films also includes the ‘video-on-demand’ feature on television Higher transparency; subscriber declaration level is expected to increase to 100 per cent under post-digitisation regime as compared to 15–20 per cent as declared by local cable operators (LCOs) to multiple system operators (MSOs) Stake-holder revenues share Pre-digitisation Post-digitisation Consumer ARPU 100 100 Local Cable Operators (LCOs) 65–70 35–50 Distributor 5 0–5 Multiple System Operators (MSOs) 15–20 25–30 Broadcaster 10–15 30–35
- 24. Average revenue peruser per month (USD) Source: KPMG Report 2013, Aranca Research Note: F - Forecast Presence of analog cable and higher contribution has led to lower Average Revenue Per User (ARPU) level, which is around USD3.0 for a digital pay television However, with higher scope of introduction of new and niche channels with digitisation, ARPU levels are expected to increase 3.0 3.1 3.1 3.1 3.12.9 3.1 3.3 3.7 4.2 4.6 2011 2012 2013F 2014F 2015F 2016F Analog Digital
- 25. Source: KPMG Report2012, Aranca Research Consolidation will be the major route to grow inorganically for entertainment companies in order to expand their portfolios and enter into new regions A few big deals have come about, the most notable ones being Walt Disney-UTV and TV18-ETV (together amounting to around USD700 million) Mergers and Acquisitions (M&A) deals during 2011-2012 Acquirer Target Deal date Deal value (USD million) Gujarat Telelinks V&S Cable Private Limited April -2012 - Educational Trustee Company Metronation Chennai Television Mar-2012 3.2 Walt Disney UTV Feb-2012 300 TV18 Eenadu Group Jan 2012 395 Samara Capital Newswire18 Dec-2012 18.8 Blackstone Jagran Media Network Jul-11 46.9
- 26. Cumulative FDI inflowsinto Information and Broadcasting from April 2000 (USD billion) Source: DIPP, Aranca Research Notes: DIPP - Department of Industrial Policy and Promotion, FY13* Data from April 2012-February 2013 FDI inflows into the entertainment sector between April 2000 and February 2013 stood at USD3.1 billion By February 2013, the share of FDI in ‘Information and Broadcasting’ was 1.6 per cent of total FDI inflows into the country Demand growth, supply advantages and policy support are the key drivers in attracting FDI 0.6 1.3 1.8 2.2 2.9 3.1 FY08 FY09 FY10 FY11 FY12 FY13*
- 27. Source: Company AnnualReports, Aranca Research Television content Motion pictures Games content Broadcasting Television content Motion pictures Games content Broadcasting Started as a content provider for Doordarshan Ventured into internet content creation and aggregation Launched IPO as UTV Software communications Ltd Launched Hungama TV Disney becomes a majority share holder with a stake of 32.1% Deal with Disney to dub its content into Indian languages Acquires Indiagames Ltd, enters gaming software and content Became world’s first company to record over 100 million downloads on Nokia store 1990 1996 2000 2004 2005 2007 2008 2012 Interactive
- 28. Source: Company website,Aranca Research 1985 1993 2000 2003 2005 2007 2008 2012 ‘SUN TV’ is launched with daily three hours of programming Launches SUN Direct to provide DTH services Launches three pay channels and four ad-free action movie channels Starts its first FM Channel ‘Sumangali FM’ Direct to Home Motion pictures Radio Newspaper Magazine Broadcasting Founded as Sumangali Publications Launches a slew of other channels in various South Indian languages Acquires Dinakaran newspaper, Tamil Nadu’s leading daily Enters Film Production and Distribution through ‘SUN Pictures’
- 29. Adlabs Imagica Source: Companywebsite, Aranca Research Adlabs Imagica, a flagship project of Adlabs Entertainment Ltd is a 300-acre entertainment theme park located on the Mumbai–Pune expressway It is India's most elaborate theme park for a total value of USD294 million The park features 21 attractions including rides, film shows and live acts drawn from Indian mythology and Bollywood cinema The total footfall is expected to be around 2-3 million per year SALIENT FEATURES Total area - 300 acre Total cost - USD294 million Visitor capacity - 10,000 to 15,000 visitors per day Ticket cost - Weekday (USD23) weekends (USD28)
- 30. Dish TV revenues(USD million) Source: Company website, Aranca Research Note: CAGR - Compound Annual Growth Rate Dish TV is Asia's largest and India's first direct-to-home or commonly known as DTH company Dish TV India Limited, a division of Zee Network Enterprise (Essel Group Venture) provides DTH satellite television Dish TV ranks 5th on the list of media companies in the Fortune India 500 The company’s revenue rose at a CAGR of 48.3 per cent to USD423.1 million in FY12 87.4 149.4 233.7 320.9 423.1 FY08 FY09 FY10 FY11 FY12 CAGR: 48.3 %
- 31. 14.8 16.8 19.4 22.7 26.4 30.5 2012 2013F2014F 2015F 2016F 2017F Market size (USD billion) Source: KPMG Report 2013, Aranca Research Note: CAGR - Compound Annual Growth Rate Over 2012–17, the total market size is expected to expand at a CAGR of 15.6 per cent to USD30.5 billion The next five years will see digital technologies increase their influence across the industry leading to a sea change in consumer behaviour across all segments CAGR: 15.6%
- 32. Size of majorindustry segments (USD billion) Source: KPMG Report 2013, Aranca Research Note: CAGR - Compound Annual Growth Rate Television will continue to be the lead contributor to the overall industry growth. The segment is estimated to expand to USD15.6 billion by 2017 (CAGR of 18.5 per cent since 2012) Radio, Animation & VFX, Gaming and Digital advertising are emerging as the fast growing segments During 2012–17, these segments are expected to expand at a CAGR of: Digital advertising (41.6 per cent) Gaming (28.8 per cent) Radio (21.2 per cent) Animation (20.1 per cent) 0.0 5.0 10.0 15.0 Music Radio Gaming Out of Home Digital Advertising Animation and VFX Films Print Television 2017F 2012
- 33. Size of theanimation industry in India (USD million) Source: KPMG Report 2013, Aranca Research; Note: F - Forecast VFX - Visual Effects, CAGR - Compound Annual Growth Rate Animation encompasses three key segments; these are ‘Animation Entertainment’, ‘Visual Effects (VFX)’ and ‘Custom Content Development‘ India’s animation industry has been growing steadily; from a size of USD355 million in 2007, the sector is forecasted to post a CAGR of 18.0 per cent to reach USD1.4 billion over 2007–17 Share of sub-segments in India’s animation industry (2012) 16% 20% 64% Animation VFX Animation Entertainment Custom Content Development 0.4 0.4 0.4 0.5 0.6 0.6 0.7 0.9 1.0 1.2 1.3 2007 2008 2009 2010 2011 2012 2013F 2014F 2015F 2016F 2017F CAGR: 14.3%
- 34. Source: ‘’Media andEntertainment in India: Digital Road Ahead’ by Deloitte, Aranca Research; Notes: * We have portrayed the intensity of opportunities in each segment based on the extent of Indian players’ current presence in that segment Gaming can be classified under three segments – ‘Personal Computer Games (PC)’, ‘Mobile Games’, ‘Console Games’ and ‘Online Games’ Revenues from Console gaming are expected to reach USD343.8 million by 2017E from USD144.5 million in 2012. Revenues from Mobile and PC & Digital TV are expected to grow to USD329.1 million and USD96.9 million by 2017 from USD104.2 million and USD32.9 million, respectively in 2012 Opportunities* for Indian gaming firms across the segment’s value chain Concept Creation Pre-production Development Post- Production and Testing Final Testing Console Very Strong Strong Good Good Good Mobile Good Good Good Good Good PC Strong Strong Good Good Good Online Strong Strong Good Good Good
- 35. Number of subscribers(Millions) Source: KPMG Report 2013, Aranca Research Note: F - Footnote The share of digital cable as well as DTH service providers is expected to increase post-digitisation Total subscription for DTH is expected to increase to 75 million subscribers by 2016 from 4 million in 2009 Total subscription for DTH is expected to increase to 86 million by 2016 subscribers from 16 million in 2009 69 68 68 59 50 32 12 4 4 5 6 19 32 49 67 75 16 28 37 46 53 64 78 86 6 7 8 8 8 8 8 8 2009 2010 2011 2012F 2013F 2014F 2015F 2016F Analog Digital DTH DD Direct
- 36. Television • Television isprojected to garner a share of 51 per cent in the television pie by 2017 (as addressable digitisation is expected to cover the entire country by then) • Television advertisement revenue is also expected to witness robust growth and increase from USD2.1 billion in 2011 to USD4.2 billion by 2016 Animation • The Indian animation industry was worth USD650 million in 2012 and is expected to expand at a CAGR of 15.8 per cent to USD1.4 billion by 2017 • Growth in international animation films, especially 3D productions, and the subsequent work for Indian production houses will help growth in this segment Print • The print industry was worth USD4.1 million in 2012 and is expected to develop at a CAGR of 8.7 per cent to USD6.3 billion by 2017 • Newspapers and niche magazines are likely to drive industry growth • Accelerated growth is forecasted in regional print and local news segments Source: KPMG Report 2013, Aranca Research Note: CAGR - Compound Annual Growth Rate
- 37. Film • Size ofthe Indian film industry is expected to touch USD3.6 billion by 2017, up from USD2.1 billion in 2012 • Increasing digital screens and 3D films are expected to help industry growth • Big ticket releases lined up for the next couple of years are also expected to boost revenues Radio • Size of the Indian radio industry is expected to reach USD503 million by 2017, up from USD234 million in 2012 • Phase III of e-auctions for FM radio licenses will provide an impetus to the segment • Radio advertising is another area likely to experience accelerated growth Music • Size of the music industry is expected to grow to USD413 million by 2017, up from USD195 million in 2012 • Mobile VAS and arrival of 3G are likely to lead to a surge in paid digital downloads • Phase III radio licensing will also help in increasing music revenues from radio Source: KPMG Report 2013, Aranca Research
- 38. Indian Motion PictureProducers’ Association (IMPPA) "IMPPA HOUSE”, Dr Ambedkar Road, Bandra (West), Mumbai - 400 050 Tel: 91-22-26486344/45/1760 Fax: 91-22-26480757 Website: www.indianmotionpictures.com/imppa/index.html The Film and Television Producers Guild of India G-1, Morya House, Veera Industrial Estate, Off Oshiwara Link Road, Andheri (W), Mumbai - 400 053 Tel: 91-22-66910662 Fax: 91-22-66910661 E-mail: guild@filmtvguildindia.org Website: www.filmtvguildindia.org Newspapers Association of India (NAI) A -115, Vakil Chamber, Top Floor, Vikas Marg, Shakarpur, Delhi - 110092 Tel: 91-9971847045, 9810226962 E-mail: contact@naiindia.com Website: www.naiindia.com
- 39. Association of RadioOperators for India (AROI) 304, Competent House, F-14, Connaught Place, New Delhi - 110001 Tel: 91- 124-4385887 e-mail: info@aroi.in Website: www.aroi.in The Indian Music Industry (IMI) Crescent Towers, 7th Floor B-68, Veera Estate, Off New Link Road, Andheri West, Mumbai - 400 053 Tel: 91-22- 26736301 / 02 / 03 Fax: 91-22-26736304 E-mail: sudhir@indianmi.org Website: www.indianmi.org
- 40. AGV: Animation, Gamingand VFX CAGR: Compound Annual Growth Rate DIPP: Department of Industrial Policy and Promotion, Ministry of Commerce and Industry DTH: Direct to Home FDI: Foreign Direct Investment FM: Frequency Modulation FY: Indian Financial Year (April to March) So FY10 implies April 2009 to March 2010 GST: Goods and Service Tax IPO: Initial Public Offering M&A: Merger and Acquisition M&E: Media and Entertainment
- 41. PPP: Purchasing PowerParity USD: US Dollar Conversion rate used: USD1= INR 54.45 VAS: Value Added Services VFX: Visual Effects Wherever applicable, numbers have been rounded off to the nearest whole number
- 42. Year INR equivalentof one USD 2004-05 44.95 2005-06 44.28 2006-07 45.28 2007-08 40.24 2008-09 45.91 2009-10 47.41 2010-11 45.57 2011-12 47.94 2012-13 54.31 Exchange Rates (Fiscal Year) Year INR equivalent of one USD 2005 45.55 2006 44.34 2007 39.45 2008 49.21 2009 46.76 2010 45.32 2011 45.64 2012 54.69 2013 54.45 Exchange Rates (Calendar Year) Average for the year
- 43. India Brand EquityFoundation (IBEF) engaged Aranca to prepare this presentation and the same has been prepared by Aranca in consultation with IBEF. All rights reserved. All copyright in this presentation and related works is solely and exclusively owned by IBEF. The same may not be reproduced, wholly or in part in any material form (including photocopying or storing it in any medium by electronic means and whether or not transiently or incidentally to some other use of this presentation), modified or in any manner communicated to any third party except with the written approval of IBEF. This presentation is for information purposes only. While due care has been taken during the compilation of this presentation to ensure that the information is accurate to the best of Aranca and IBEF’s knowledge and belief, the content is not to be construed in any manner whatsoever as a substitute for professional advice. Aranca and IBEF neither recommend nor endorse any specific products or services that may have been mentioned in this presentation and nor do they assume any liability or responsibility for the outcome of decisions taken as a result of any reliance placed on this presentation. Neither Aranca nor IBEF shall be liable for any direct or indirect damages that may arise due to any act or omission on the part of the user due to any reliance placed or guidance taken from any portion of this presentation.