The Indian media and entertainment industry is valued at over $17 billion and is expected to grow at a rate of 14.3% over the next five years, higher than the global growth rate of 5.1%. Television is the largest and most consistent sector, nearly four times the size of the film industry, while digital media is growing rapidly at 38.2% of total revenues. The film industry produces over 1,400 films per year but generates less box office revenue than a single Hollywood film. Increased digitization and infrastructure growth are keys to the further development of the industry.
1. The Indian Media &
Entertainment Industry
2016
Trends & Analysis - Past, Present & Future
Chaitanya Chinchlikar
Vice President – Whistling Woods International
Vice President – Mukta Arts Ltd
chaitanya.c@whistlingwoods.net
2. Source: FICCI-KPMG Report 2016
652
728
821
918
1026
1156
1314
1503
1723
1980
2261
0
400
800
1200
1600
2000
2400
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
INRBillions
Indian M&E Industry
The Indian M&E Industry - High-volume, low-value.
The Indian Media & Entertainment Industry includes
Film, Television, Print, Radio, Music, Digital Media, Animation & VFX, Gaming,
Events & Live Media, Out-of-home, Sports, Entertainment Parks & other media.
• Valued at over US$
17.4bn (1,15,600Cr INR)
which is ~0.97% of the
global M&E industry
(estimated at US$ 1.8tn)
• Expected growth (14.3%)
over the next 5 years is to
be higher than the global
M&E industry (at 5.1%)
• Dawn of Digital – 38.2% in
2015, 33.5% in 2016-2020.
12.8%
14.3%
5. Source: FICCI-KPMG Report 2016
83
93
113
125 126
138
159
174
190
208
227
0
50
100
150
200
250
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
INRBillions
The Indian Film Industry
• Largest in the world by
films produced with over
1,400 films produced &
over 3.25bn tickets sold
(~50% theatrical releases)
• At US$ 2.1bn, it is less than
the BO of Avatar
• 2015 was heavily polarised
wrt film performance.
• % of online ticketing grew
by 5x from 6% to 32%
• Regional & Hollywood are
growing domestic theatrical
9.3%
10.5%
Studios have started getting into content production
through own productions & strategic alliances
(Reliance – Phantom, Fox – Dharma)
6. Source: FICCI-KPMG Report 2016
The Indian Film Industry = ‘Bollywood’
While‘Bollywood’ is a generally used term to define the Indian Film industry,
Hindi films accounted for only 16% of the 1,400+ films that were produced.
The South Indian Film industry accounts for almost 50% of the films
Language No of Films
Hindi 234
Tamil 210
Telugu 218
Kannada 157
Malayalam 108
Bengali 139
Marathi 122
Gujrati 67
Bhojpuri 84
Punjabi 9
Others 78
Total 1,426
7. Source: FICCI-KPMG Report 2016
0%
20%
40%
60%
80%
100%
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
74% 76% 75% 74% 73% 73% 72% 72% 71% 70%
7% 7% 7% 7% 7% 7% 7% 7% 7% 7%
11% 11% 12% 12% 12% 11% 11% 11% 11% 11%
5% 5% 6% 7% 7% 8% 9% 10% 11% 11%INRBillions
Film Revenues % Breakdown
Domestic Theatrical Overseas Theatrical Home Video Cable & Satellite Rights Ancillary Revenues
Film Revenues Breakdown
Domestic Revenues have always had a 90%+ market-share & expected to continue.
This is THE double-edged sword for the industry.
Proving the digital
medium’s
dominance,
Ancillary revenues
as a % of total film
revenue will
increase 1.5x over
the next 5 years.
Home Video, like
in the rest of the
world, is dying out
fast.
8. Source: FICCI-KPMG Report 2016
Film – Revenue Split
When you pay Rs 100 for a movie ticket, what is the split?
• Gross – 100% (Rs 100)
• Entertainment Tax – 30% (Rs 30)
• Exhibitor – 50% of balance 70% (Rs 35)
• Distributor – 50% of balance 70% (Rs 35)
• Producer(s) – depends on what deal they have made with distributor –
Outright / MG / Commission / Distribution Fee
• Co-producer(s) – deal-specific
• P&A funding – deal specific, but usually is last-in-first-out.
• Talent – actors / director – sweat equity.
9. Source: FICCI-KPMG Report 2016
Exhibition needs to grow!
• India has one of the lowest screen
densities among global film markets
• Urgent & rapid infrastructure growth in
multiplex screens is needed
• Since the Box office is not as robust as
other countries, government
intervention is needed by way of SOPs.
126
85 82
61 57
26
13
6
0
20
40
60
80
100
120
140
Screens/Million
9,200
13,118
18,195
22,000
25,000
1,250 1,470 1,650 1,750 1,950
10,000
8,700
7,600
6,500 6,000
-
5,000
10,000
15,000
20,000
25,000
30,000
2011 2012 2013 2014 2015
Screens
Multiplex-China Multiplex-India SingleScreen-India
2.0
2.7
3.5
4.7
5.7
1.0
1.3 1.4 1.4 1.5
-
1.0
2.0
3.0
4.0
5.0
6.0
2011 2012 2013 2014 2015
Billion$
Domestic Box Office Size
China India
10. Source: FICCI-KPMG Report 2016
Industry = Value x Volume
No of screens that a film plays in
has grown radically over the past
decade, curbing piracy and
augmenting theatrical revenues
Average ticket prices of
multiplexes are 3-6 times that of
single screen theatres.
500
1000
3000
3500
4200
0
500
1000
1500
2000
2500
3000
3500
4000
4500
1994 - Hum
Aapke Hain
Koun
2009 - 3
Idiots
2012 - Ek
Tha Tiger
2013 -
Dhoom 3
2015 -
Bajrangi
Bhaijaan
No of Screens
250
130
75
40
0
50
100
150
200
250
300
High End
Multiplex
Multiplex Single Screen Low End Single
Screen
Ticket Rates (INR)
11. Source: FICCI-KPMG Report 2016
The Indian Film Industry - Key points
• Realisation of the value of Film education. Scale needed. Urgently.
• Digital gaining over C&S for release window.
• Regional shows its importance – Marathi, Gujarati, Punjabi
• Hollywood films account for less than 10% of the Indian Film industry.
• Share of Revenue from first week is highly critical (ranges from
55-75% of box office collections)
• Funding avenues grow significantly – Banks (IDBI, Exim, Kotak, YES),
Film Funds, Crowd-funding.
• The industry lacks a globally merchandisable home-grown IP brand.
12. Source: FICCI-KPMG Report 2016
297
329
370
417
475
542
617
710
823
957
1098
0
100
200
300
400
500
600
700
800
900
1000
1100
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
INRBillions
TV
The Indian Television Industry
• The most consistently
performing sector of the
Indian M&E Industry.
• It is, presently, nearly 4
times the size of the Indian
Film industry and is the
largest employer in the M&E
space.
• India overtook the US in
2014 as the 2nd largest TV-
owning market in the world.
The potential: The Indian average subscription rate is
US$4-5 per month per TV for Cable TV / DTH against
US$40-100 in evolved markets like US / UK / Europe.
14.2%
15.1%
13. Source: FICCI-KPMG Report 2016
TV Connectivity – A Digital blitz
With digitisation
primarily
successful for
Phase 1 & 2
(over 95%) and
the rest of the
country
underway on
the same path,
digital STBs
and DTH
connections are
the way of the
future. 0
20
40
60
80
100
120
140
160
180
200
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
74 69 68 70 65
41
5 5 5 5
6 19 25
29 37
55
80 84 87 90
31
34
37
40
44 55 74
76
78
79
8
9
9
10
15
19
20
21
22
22
Subscribers
Analog Cable Digital Cable DTH Other Digital
14. Source: FICCI-KPMG Report 2016
TV Connectivity, Channels, ARPUs
• India has added, on an avg 4.5
channels/month for the last 15 yrs.
• India has ~400 news channels.
Channel differentiation is weak.
138
175
200
71%
83%
87%
0
50
100
150
200
250
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2010 2015 2020
TV Households
& Penetration
248
258 266
299
334
367
214 219
230
261
298
343
150
200
250
300
350
400
2015 2016 2017 2018 2019 2020
ARPUs
DTH Digital Cable
5 55 130
263
550
800
0
100
200
300
400
500
600
700
800
900
1990 1995 2000 2005 2010 2015
Channels & Growth
TV households, C&S penetration
& ARPUs are all expected to
grow over the next 5 years
15. Source: FICCI-KPMG Report 2016
GEC – GRP v/s Profitability
Low GRP High GRP
Low
Profitability
High
Profitability
Long running soaps
Low-cost game /
performance based
reality shows
Mythological series
Recently released movies
Celebrity-based shows
Why do we see what we see on GECs?
How does programming get divided between building a viewer base and profitability,
thorough the application of the concept of ‘stick-ability’!
16. Source: FICCI-KPMG Report 2016
TV Revenues – Getting better, slowly!
• High subscription revenue
growth expected to bring
about innovative content /
content for a niche
audience.
• In 2015, of INR 360 billion
paid by consumers, ONLY
INR 86 billion reached the
broadcasters, which is less
than 25%. Underreporting
of subscribers, carriage
fees & lack of digitisation is
the reason for this. 213 245 281 320 361
407
468
548
637
733
47 57 69 75 86 100 118 145 174 203
22%
23%
25%
23% 24% 25% 25%
26%
27% 28%
0%
5%
10%
15%
20%
25%
30%
0
100
200
300
400
500
600
700
800
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
INRBillions Subscription Revenue
Paid by Consumers Recd by Broadcasters %
213
245
281
320
361
407
468
548
637
733
116 125 136 155
181
210
242
276
320
365
0
100
200
300
400
500
600
700
800
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
INRBilions
TV Revenues - Split & Growth
Subscription Revenue Advertising Revenue
17. Source: FICCI-KPMG Report 2016
Viewership & Ad-Revenue – Disparity!
View Ad Rev
Regional GEC 29.6% 15.9%
Hindi GEC 28.4% 27.5%
Hindi Movies 13.4% 6.7%
Regional Movies 6.6% 2.8%
Kids 5.6% 3.8%
Regional News 3.5% 8.3%
Hindi News 3.0% 8.4%
Regional Music 2.7% 1.4%
Music 2.6% 3.0%
Sports 2.1% 4.3%
Infotainment 1.1% 2.0%
English Entertainment 0.5% 4.6%
English News 0.0% 5.0%
Others 0.9% 6.3%
100.0% 100.0%
• Regional GECs break
the Hindi GEC glass
ceiling in viewership.
• Regional / Kids
channels highly under-
indexed
• Hindi movies under-
indexed on account of
changed release
window – TV vs digital.
• News, Sports, English
enjoy severe over-
indexing
18. Source: FICCI-KPMG Report 2016
Indian Animation picks up
• Broadcasters are willing to pay over
double for good quality Indian
Animated content as compared to
daily soaps / Hindi general
entertainment content, even though
this segment gets only 5.6% of the
viewership, as compared to 28.4%
for Hindi GECs.
• Also the fact that this segment
continues to be under-indexed, with
only 3.8% ad-revenue share doesn’t
bother broadcasters as this content
has long-tail revenue
• It offers repeat viewing value, multi-
language dubbing value and
merchandising value.
19. Source: FICCI-KPMG Report 2016
Hindi GEC Fiction content changing. Slowly.
• GECs have finally embraced the
tele-series format with season-
based programming
• The value:volume ratio is reversed
in such programming as compared
to the daily / weekly soaps.
• For the past 20-odd years, the
content has largely mirrored
American programming of the
70s-80s, with our soaps
comparable to content like the Bold
& The Beautiful, Santa Barbara,
Dallas, etc.
20. Source: FICCI-KPMG Report 2016
TV – Key Points
• Digitisation – increased revenue for the broadcaster, should lead to
more investment in content (& hence better quality content)
• Global proliferation of Indian-origin content is increasing, albeit for
the Indian diaspora only. This is THE BIG opportunity.
• Indian animation on TV is starting to matter.
• Hindi GECs are exploring new content programming & a changed
value:volume mix in revenue models.
• Lack of quality viewership measurement systems is an issue.
Hopefully, BARC should resolve this.
• Targeted advertising is the next step
21. Source: FICCI-KPMG Report 2016
Digital – Growth galore!
10
15
22
30
44
60
81
114
153
199
255
0
50
100
150
200
250
300
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
INRBillions
Digital is expected to quadruple its size in the next 5 yrs
22. Source: FICCI-KPMG Report 2016
Telecom Base – Volume galore!
Tele-Density: 81.83
Urban: 153.45, Rural: 49.94
As of December 2015
Telecom Service
Providers
Ac0ve
subscribers
Bhar3 Airtel 243,289,404
Vodafone 193,600,085
IDEA 171,912,608
Reliance 100,890,431
Aircel 85,632,249
BSNL 82,507,640
Tata 60,727,856
Telenor 50,702,396
Sistema 8,006,814
Videocon 6,958,178
MTNL 3,614,439
Quadrant 3,047,100
TOTAL 1,010,889,200
What’s coming?
23. Source: FICCI-KPMG Report 2016
Digital – global comparison!
• India has the
lowest net
penetration
among all
developing
countries and
much lower than
the developed
ones.
• Despite that, India
has more internet
users than the
US.
19%
53%
46%
60%
87%
90%
86%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
India Brazil China Russia USA UK Japan
Internet Penetration
Avg Broadband speed % of connections > 4MBPS
2014 2015 2014 2015
South Korea 25.3 20.5 96% 96%
Hong Kong 16.3 15.8 89% 92%
Japan 15.0 15.0 87% 90%
Singapore 12.2 12.5 83% 87%
Taiwan 9.5 10.1 78% 88%
New Zealand 7.0 8.7 77% 87%
Thailand 6.6 8.2 85% 93%
Australia 6.9 7.8 66% 72%
Malaysia 4.1 4.9 39% 53%
China 3.8 3.7 34% 33%
Indonesia 3.7 3.0 35% 17%
Vietnam 2.5 3.4 14% 31%
Philippines 2.5 2.8 9% 10%
India 2.0 2.5 7% 14%
28. Source: FICCI-KPMG Report 2016
Digital – Key Points
• The Digital platforms of web, mobile & web-connected smart TVs
are the present & the future.
• Content consumption modes & patterns are already starting to
change with a large number of under-18-yr-olds finding their ‘stars’
online.
• YouTube is taking the Indian market very seriously and has set up
a ‘YouTube space’ in India, in partnership with Whistling Woods
International.
• Most TV networks & some film companies are seriously investing
in app & web-based OTT platforms.
29. Source: FICCI-KPMG Report 2016
24
31
35
40
45
51
58
67
78
91
0
10
20
30
40
50
60
70
80
90
100
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
INRBillions
Animation, VFX & Post-Production
• The industry has shown growth on
the back of strong VFX / post-prodn
growth, but Animation has not grown
as much.
• Lack of original IP creation is a
major reason of the plateau-ing of
the Animation industry.
16.1%
13.8%
1
2 2
4
6
1
4
1
5
3 3
0
0
1
2
3
4
5
6
7
2000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Animated Films Released Theatrically
2014
2015
30. Source: FICCI-KPMG Report 2016
23% 22% 20% 18% 16% 15% 14% 13% 12% 12%
14% 13% 12% 11% 11% 10% 10% 9% 8% 8%
20% 22% 23% 25% 28% 31% 34% 36% 39% 42%
44% 44% 45% 45% 45% 44% 43% 41% 40% 39%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Animation Services Animation Product Creation VFX Post-Prodn
Animation, VFX & Post-Production
• Even though all
areas of the
industry are
growing, the
growth is
disparate
between
Animation &
VFX / post-prodn.
• From a 65:35
ratio in 2011, the
sub-segments
reach a 80:20
ratio in 2020.
7.1 7.6 8.0 8.1 8.3 8.8 9.5 10.4 11.4 12.54.2 4.5 4.7 5.1 5.6 6.0 6.5 7.0 7.6 8.46.2 7.7 9.3 11.3 14.4 18.0
22.5
28.4
35.8
45.1
13.5
15.5
17.7
20.4
22.8
25.5
28.6
32.3
36.5
42.0
-
20.0
40.0
60.0
80.0
100.0
120.0
INRBillions
31. Source: FICCI-KPMG Report 2016
Animation on Indian Screens
While, only 3 out of the top 10 characters on Indian TV are of Indian
origin, 7 out of the top 10 episodes are for Indian shows
32. Source: FICCI-KPMG Report 2016
10
13
15
19
24
27
31
34
39
45
51
0
5
10
15
20
25
30
35
40
45
50
55
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
INRBillions
Gaming
Gaming
• Grew over 20%, on the back of
mobile gaming.
• With 1bn+ users, increasing travel
time & a young population, India is
one of the fastest growing mobile
gaming markets in the world
13.9%
46% 49% 51% 52% 55% 57%
39% 35% 32% 30% 28% 26%
15% 16% 17% 18% 18% 17%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2014 2015 2016 2017 2018 2019
Mobile Console PC & Online
12.8%
33. Source: FICCI-KPMG Report 2016
9 9
11
10 10
11
12
14
16
18
21
0
2
4
6
8
10
12
14
16
18
20
22
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
INRBillions
Music
• The Music industry shows
growth for the first time in 3
years.
• Over 50% of Indian web
users access unlicensed
content.
• Music-on-cloud is expected
to gather steam as it rides
the 3G/4G wave to deliver
streamed music, ad
supported, free of cost as
well as ‘freemium’ music,
hopefully denting piracy.
13.8%
10.2%
34. Source: FICCI-KPMG Report 2016
Music - Consumption
• The consumption % reversed
from 2010 to 2015 between
physical & digital.
• Films fuel over 80% of the
Music industry (Not good!)
• Indian non-film music (Indie /
pop / rock / regional) is
struggling, with only Religious
& Indian Classical music
managing to survive.
• Very little structured music
education & training
81.0%
10.0%
4.0%2.2% 2.8%
Music Consumption
by Genre
Bollywood
International
South Indian
Punjabi
Others
58%
33%
6%
3%
20%
55%
15%
10%
0%
10%
20%
30%
40%
50%
60%
70%
Physical Digital TV & Radio Public
Performance
Music Consumption
by Source
2010
2015
35. Source: FICCI-KPMG Report 2016
10 11
13
15
17
20
23
28
33
38
43
0
5
10
15
20
25
30
35
40
45
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
INRBillions
Radio
Radio
• The growth in 2015 has been built
around increased ad revenue from
politics, entertainment, real estate
& e-commerce.
• The shift to radio is as it is a cost-
effective advertising vehicle, as
compared to TV.
16.9%
15.3%
36. Source: FICCI-KPMG Report 2016
Sports
• With the ‘private’ sports
leagues being taxed on lines
similar to live entertainment,
the line between sports and
entertainment has blurred.
• Sports is one of the largest
content providers to the
broadcast, live events &
digital industries.
• Female viewership was at
an unprecedented 35-38%,
rural viewership at 45%, in
2015.
Investment
IPL
Reach
Investment
ISL
PKL
IPTLPWL
IBL
UBA
HIL
Star Sports
INR 200 billion
Sony Six
INR 192 billion
Ten Sports
INR 6 million
Neo Sports
INR 120 million
37. Source: FICCI-KPMG Report 2016
Live Events
• Yet to be ‘organised’
• Growth of ~20%
• Margin growth not as much
• Government spending (elections / events)
• Licensing issues
• Taxation issues
• Live IP-based entertainment on the rise:
o Stand up Comedy
o Theatre
38. Source: FICCI-KPMG Report 2016
Theme Parks
• Emerging area
• Destination
entertainment (non-
natural-tourism based)
yet to consolidate in
India
• Evolution:
o 1980 – Appu Ghar
o 1990 – Esselworld
o 2010 – Imagica &
Wonderla
o 2015 – INR 300 bn+
investment committed
o Over next 5 yrs, 19%
CAGR.
39. Source: FICCI-KPMG Report 2016
Jobs in M&E
• As per the NSDC, by 2022, the
Media & Entertainment industry
would be requiring 12.5 lakh
professionals, ~85% of these in
the Film, TV & digtial verticals.
• The media industry as a whole still
lacks sufficient world-class training
facilities to enable professionalism
and best practices.
• Significant government-
intervention and private
investments will be needed to
correct this imbalance
1.60
2.40
4.40
1.40
2.80
6.40
0.60 0.70
1.30
0.20 0.30 0.40
0.20 0.30 0.40
-
1.00
2.00
3.00
4.00
5.00
6.00
7.00
2014 2017 2022
Employment
Growth
Film
TV
Print
Radio
Animation,
VFX, Gaming
40. Source: FICCI-KPMG Report 2016
Key Disruptions in 2015 / Trends for 2016
• ANALYTICS – Audience Analytics, Operations Analytics, Event Driven
Analytics, Predictive Analytics, Campaign Analytics
• Film – 4k, Digital Rights, Immersive, VR / AR
• TV – 2nd/3rd screen, Targeted Advertising, Interactivity
• Animation & VFX – 3D printing, non-photorealistic rendering, VR / AR
• Advertising – Cross platform, Targeted, Programmatic buying
• Music – Predictive analytics
• Radio – Online platforms
• OOH – Watcher Analytics, Interactivity
41. Source: FICCI-KPMG Report 2016
What are the pain-points of the Indian M&E Industry?
• Lack of original Intellectual Property creation leading to lack of a globally
merchandisable brand.
• M&E Education & Training
o Of the 4 lakh people employed, nearly 75% involved in content creation have
no formal training.
o Very few world-class Film & Media institutes with a combined output of
approx 500 graduates a year, with 200 of them being from a single institute.
• Innovation – we are followers, not leaders when it comes to formats or
technical / narrative innovation.
• Piracy - Affects every sector of the industry & causes nearly 35%
revenue reduction
42. Source: FICCI-KPMG Report 2016
The Great Opportunities in M&E
In the M&E industry, building volume is hard. India already has the
volume. We now need to build value to each unit of the already
existing volume. This is done by enhancing quality. The best way to
build quality is be educating & training the industry.
The big opportunities in M&E are:
• Screens for Film
• Digital platforms
• Education in M&E
• IP creation – 360deg