As per FICCI – KPMG Report, Media and Entertainment (M&E) industry grew at a CAGR of 15% over the last two years (2006-08). A snapshot of the size and the revenue contribution of the industry segments is given below:
Rising digitalisation (as content creation and as a distribution platform), increase in penetration of media segments, narrowcasting (niche segmentation of target audience), regionalization (strategy to capture untapped potential of tier 2 and tier 3 cities), expanding international markets for Indian content, organized funding and deregulation would be the key growth drivers for the industry.
The advertising segment, which is a key contributor to the M&E industry's revenue, though slowed down in FY09 due to the economic slowdown, have shown signs of revival during the current year. Further the potential for advertising spends remains strong as Advertising to GDP ratio in India is low (0.47x) as compared to US (1.34x) and also China (0.54x). Print Media segment is the largest contributor to the total advertising segment. Going forward, the growth is likely to be driven by Internet advertising while Print and Television segment would continue to dominate the advertisement segment.
Television Industry is expected to grow at a faster rate than the overall industry on account of a paradigm shift in distribution platforms due to digitalization (through Compulsory implementation of Conditional Access System (CAS) by TRAI) and increased focus on content due to narrowcasting and regionalization. The key concerns of broadcasters viz inadequate audience measurement/rating system, low Average Revenue Per User (ARPU) and high carriage costs would remain until CAS gets substantially implemented across India.
In FY09, the print industry was severely hit on account of reduced advertising revenues due to economic slowdown and rise in newsprint prices.
However, the improving industry scenario during the current year has enabled them to consolidate their position. The industry is enhancing its presence in regional markets and exploiting alternative distribution platforms like online circulation to combat the rising threat of internet and to gain increased penetration on a pan-India level.