Media Industry in India & Abroad

Overview, market size, growth trends, news resources

 
Cricket lovers in the 1980s used to be kept on tenterhooks by Doordarshan about whether it would be telecasting cricket series involving India played abroad. They would be made to wait until a few hours before the matches. Today’s fans can take live footage for granted, telecast or live streaming, thanks to the media and entertainment (M&E) industry, a multisector business that has grown by leaps and bounds in the past two decades.

To quickly cover the basics: the M&E industry comprises radio and TV broadcasting, print media, films, and music sectors. The radio is the oldest of the segments and still the cheapest source of news and entertainment. The first commercial radio station opened in the US on November 2, 1920. Today, there are 45,000 radio stations in the world, including All India Radio, which started broadcasts in 1936, and the now popular FM stations.

The first TV station was established in New York in 1928. In India, the government-controlled Doordarshan started telecasts in September 1959. Colour TV was introduced in the early 1980s, and soon, permission was given to private broadcasters. There are now about 800 channels broadcasting programmes in various languages.

The print media industry can trace its history from AD 105, when paper was invented by the Chinese. Movable type, refinements to the printing press by Gutenberg in the 15th century, the rise of media barons Pulitzer and Hearst, the invention of the electric typewriter, the introduction of computers, and digitalisation of journals followed.

Over 2.5 billion people read at least one daily newspaper, globally. In India, nearly one lakh publications are registered with the Registrar of Newspapers; however, only about 20 of them have circulations of over one million. Figures (May 2015) from the Audit Bureau of Circulations say that the Hindi daily Dainik Bhaskar is the largest circulated newspaper in the country with 3.6 million copies, followed by The Times of India with 3.3 million.

The print media also includes publishers of magazines and other periodicals, books, their digital versions, directories, software, and games. “The Big Five,” the five biggest publishers, are Penguin Random House, HarperCollins, Macmillan, Simon & Schuster, and the Hachette Book Group. Published works can be in the form of conventional print, e-books, CDs, and DVDs.

Globally, the film industry is run mainly by large multinational corporations that have various media and entertainment divisions under them. These divisions produce films and TV shows and create video games. The top film companies in the world include Fox Entertainment Group, Paramount Pictures, DreamWorks Animation, Walt Disney Motion Pictures Group, and Time Warner.

The digital revolution

We can enjoy M&E “products” in old-fashioned ways, by going to a movie, watching a TV show, or reading a paperback. But the advent of digital technology and digital media allows us to carry our entertainment wherever we go. Smartphones, tablets, e-book readers, and laptops make this possible through high-speed Internet.

However, digital technology also allows us to skip commercials embedded in our videos, which is not such a good thing for advertisers, who fail to catch the viewer’s eyes, and for media companies, which risk losing their advertisers and all-important revenue from ads. Media companies and advertisers, therefore, are adopting technology to use all platforms to reach viewers and also to provide quality content to hold their attention.

In the developed world, at least, the newspaper industry has been the biggest victim of the digital invasion, as it is forced to compete with free online resources that are available 24/7. Plunkett Research notes that the newspaper circulation in the US dropped almost 25 percent between 2000 and 2010. Many newspapers are still struggling; some have folded up or stopped their print editions to go fully electronic. However, companies that have adopted electronic formats have done particularly well.

The flip side of the digital revolution is increased piracy. The Motion Picture Association has estimated that the US economy loses nearly $60 billion each year to piracy. In parts of the developed world, the US and Canada, for example, box-office receipts in 2014 were about $10 billion, down 5 percent from the previous year. Film production companies are also affected by DVDs taken on rent and free downloads. However, there is some consolation: in some countries, box-office receipts have increased—in China, for example, receipts for 2014 were $4.8 billion, up from $2.8 billion in 2012.

Advances in digital technology have also affected TV content production companies. New TVs are Internet-enabled, and many people download their favourite shows or movies instead of subscribing to DTH or cable companies.

The media industry largely depends on revenue from advertising apart from subscription fees (newspapers, magazines, online journals, TV channels), ticket sales (films and music shows), sale of DVDs (films and music), and paid downloads of online content (film and music videos). One estimate has it that global advertising revenue for the media was over $522 billion in 2014. Online media is a big contributor, and countries such as India and China are the fastest-growing markets.

This has forced the M&E industry to think of new advertising strategies, as ad revenue has traditionally been most important. There are various platforms for delivering/receiving content, but the challenge of providing engaging content remains. Smartphones and tablets have given the people the power of choice, and they seem to be telling media companies to raise their game.

Quick facts

The market value of the global M&E industry is expected to reach $2 trillion in 2016, according to the Statista website.

Despite the digital revolution, nondigital platforms such as newspapers and magazines will continue to bring in higher revenues than digital at least until 2018, worldwide ($1,156 billion and $994 billion are the projected figures for that year). But online advertising is the ad revenue stream that shows the most promise with a projected compound annual growth rate of over 10 percent between 2013 and 2018.

The US is home to nine of the top ten M&E companies in the world. They are Comcast, Walt Disney, Twenty-First Century Fox, Time Warner, Time Warner Cable, Directtv (all US), WPP (UK), CBS, Viacom, and British Sky Broadcasting (all US), according to Forbes figures in April 2015.

The top M&E companies in India are Zee Entertainment Enterprises (net profit ₹831 crore), Sun Network (₹737 crore), DB Corp (₹317 crore), Jagran Prakashan (₹224 crore), Eros International Media (₹124 crore), HT Media (₹114 crore), Entertainment Network Media (₹106 crore), TV Today Network (₹81 crore), TV 18 Broadcast (₹15 crore), and PVR (₹14 crore).

Media industry in India

The growth story of the M&E industry in India has few surprises: Digital media is galloping forward at a rate of 44 percent and TV at 14 percent, while the print media is somewhat of a laggard at 8 percent growth.

The total M&E industry revenues in the country were expected to touch ₹1.16 trillion (₹1.16 lakh crore, or about $17.8 billion) in 2015, according to a study done by the Federation of Indian Chambers of Commerce and Industry (FICCI) and KPMG. The study report highlighted the milestones for the industry in 2014 as the ongoing digitisation in the cable TV sector, the auctions for FM radio frequencies, the new spectrum for mobile communications, and the consolidation in the cinema multiplex segment.

Various sectors of the industry were upbeat by the fact that digital advertising had been project to grow from ₹4,350 crore in 2014 to ₹6,350 crore in 2015. Digital media was expected to grow at a compound annual growth rate of over 30 percent for the next five years.

The reason for the happy digital story is not far to seek. India is now the world’s fastest-growing smartphone market, thanks to the drop in prices of the devices and affordable 3G rates. The beginning of 2015 saw 116 million Internet-enabled smartphones and this number is expected to rise to 435 million by 2019. However, one concern is the lack of Internet penetration, which is only 19 percent.

But the number of mobile and Wi-Fi broadband connections is expected to rise steeply. Internet access from smartphones has taken overall social media penetration to 9 percent. Forty-one percent of mobile-phone users are active on social media. TV channels are increasingly using social media for viewer engagement. Social media has transformed from a casual channel for interaction to an advertisers’ platform that yielded revenues of nearly ₹500 crore in 2014.

In 2014, the TV industry grew at nearly 14 percent, particularly because of the advertisement revenue from political parties’ campaigns for the general elections and lavish ad spends by ecommerce companies. Advertising revenue projections for 2015 were ₹17,460 crore, up from ₹15,490 crore in 2014. Digitisation of the cable sector also gained momentum. However, problems such as low revenue from subscription and poor indigenisation of set-top-box production continue to worry the industry.

The print media, despite the low growth rate of 8 percent, had something to cheer about: the revenue increased, though this was because of hikes in cover prices. The advertising revenue for the print media is bigger than that for television and was projected to increase to ₹19,260 crore in 2015. Print media can thank the smaller cities, where increased circulation of regional dailies/editions was largely responsible for the growth.

Private FM radio was expected to grow at 14 percent in 2015. Live Mint reports that the government has completed the third phase of partial auctions of 135 channels in 69 cities and earned over ₹3,000 crore. However, the scarcity of spectrum in the metros remains.

The year 2014 was not a bed of roses for the film industry in terms of content or box-office revenue. The industry found once again that in order to draw audiences to theatres, films should have either top-league actors or quality content. Other concerns included the drop in revenue from satellite rights and piracy.

Quoting sources, the Indian Brand Equity Foundation says that the video games industry grew at a record 22 percent in 2014 over 2013 to increase its net worth to about ₹2,548 crore. The Indian animation industry was worth ₹4,860 crore in 2014.

Investments

The foreign direct investment in the Indian information and broadcasting sector from April 2000 to June 2015 was ₹26,325 crore. Here’s a glance at some of the investors: Cinepolis plans to build 60 additional screens (for a total of 250) and SRS 50 more screens. Turner International plans to launch its third channel for kids, Toonami, according to IBEF. Twitter has announced a research facility in Bangalore, its first outside the US. Balaji Telefilms is acquiring a stake in a US TV series “Brown Nation.” Viacom is buying a 50 percent stake in Prism TV, which operators the Colours channels, and Netflix will enter the Indian market in 2016.

Government initiatives

The government has permitted 45 new channels in the news and entertainment streams. Zee, Viacom, Sony, and Star are among those who have secured licences. Industry status has been granted to the film industry to give it access to institutional finance. Digitisation of TV cable distribution is also being implemented to attract investors. The FDI limit has been increased from 74 percent to 100 percent for cable and DTH investments

Jobs in the Media industry

The major challenges that the M&E industry is facing are lack of quality content and poor management. Although companies are trying to hire quality talent, the demand-supply gap persists.

The M&E industry hires personnel full-time and also engage freelancers. Apart from private companies, government-run media agencies make recruitments for various positions. So do media and advertising companies.

The average age of the Indian population will be 29 years in 2020, and M&E companies seem to be gearing up to cater to young Indians with quality programmes on various formats. What better way to start than by recruiting the young and talented.

Online resources and news

  1. The Economic Times
  2. Forbes
  3. M&E Industry Trends, Technology and Research
  4. MIN
  5. MPA
  6. Adweek
  7. Financial Times
  8. The Economist

 
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