FICCI-KPMG report 2012: M&E industry grew by 12% in 2011

According to the FICCI-KPMG report (to be released on 14 March 2012), the Indian media and entertainment (M&E) industry registered a growth of 12 % over 2010, to reach Rs 728 billon. The growth trajectory, as per the report, is backed by strong consumption in tier 2 and 3 cities, continued growth of regional media, and fast increasing new media business. Overall, the industry is expected to register a CAGR (Compounded Annual Growth Rate) of 15 % to touch Rs 1,457 billion by 2016.

Ad spends across all media accounted for Rs 300 billion in 2011, contributing to 41 % of the overall M&E industry’s revenues. Ad revenues witnessed a growth of 13 % in 2011, as against 17% observed in 2010.

Rajiv Kumar, secretary general, FICCI, said,"The key highlights are rise in digital content consumption, launch of diverse content delivery platforms, strong consumption in tier 2 and 3 cities, rising footprint of the players in the regional media, rapidly increasing new media business and regulatory shifts.”

Jehil Thakkar, head of media and entertainment, KPMG, added, “The Media & Entertainment industry landscape is undergoing a significant shift. Cable digitisation, the promise of wireless broadband, increasing DTH penetration, digitisation of film distribution, growing internet use are all prompting strategic shifts in the way companies work. Traditional business models are evolving for the better as a host of new opportunities emerge.”

Key highlights from the report–

Print: The print industry grew by 8.3 % from Rs 193 billion in 2010 to Rs 209 billion in 2011. The growth was slightly lower than our expectation of 9.5 % last year due to the challenging macro-economic environment and reduced ad spends.

Television:  The over-all television industry is estimated to be Rs 329 billion in 2011, and is expected to grow at a CAGR of 17 % over 2011-16, to reach Rs 735 billion in 2016. The share of subscription to the total industry revenue is expected to increase from 65 % in 2011 to 69 % in 2016. The TV industry continues to have headroom for further growth as television penetration in India is still at approximately 60 % of total households.

Radio: Owing to increase in listenership in both metros and non-metros, overall the industry grew at 15% in CY 2011 to reach Rs 11.5 billion compared to Rs 10 billion in CY 2010.

New Media: Growth in ad revenues is expected 40% over last year; online ad spend reached approximately 4% of total M&E industry ad revenue. Growth is largely driven by increase in internet penetration and proliferation of new age devices.

Out of Home: The OOH sector was hit relatively harder by the global economic slowdown than other sectors of the advertising industry. The sector registered a year-on-year growth of 7.6 %.