Marketing Practices Research Paper

8/10/2019 Marketing Practices Research Paper

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Marketing Practices In Indian Media and

Entertainment Industry

1. Introduction

The Indian entertainment and media (E&M) industry has out-performed the Indian economy

and is one of the fastest growing sectors in India with a size of Rs. 584 billion and a

Compounded Annual Growth Rate (CAGR) of 15% between 2005 and 2008. The key drivers of

the growth of Indian Media and Entertainment industry have been

the rising spend on entertainment by the growing Indian middle class, regulatory initiatives,

increased corporate investments and integration of existing players across the value chain.

The industry has also been driven by increasing digitization and higher internet usage over the

last decade.

1.1 Size and Growth of the Indian Media and Entertainment Industry

The Media and Entertainment industry comprises of the following segments:

1.Television

2.Print

3.Films4.Radio

5.Music

6.Animation

7.Gaming

8.Internet Advertising

9.0ut of home advertising

1.2 Market Dynamics

a. The size of the Indian M&E sector increased from about Rs 805 billion (US$ 12.84

billion) in 2011 to almost Rs 965 billion (US$ 15.38 billion) in 2012, showcasing a year-

on-year (y-o-y) growth of 20 per cent, according to PwC India.

b. India's television market expanded by 13 per cent with revenues increasing from Rs 340

billion (US$ 5.42 billion) in 2011 to Rs 383 billion (US$ 6.11 billion) in 2012.

c. Filmed entertainment recorded a growth of 17 per cent; revenues increased from Rs 96

billion (US$ 1.53 billion) in 2011 to Rs 112 billion (US$ 1.79 billion) in 2012.

d. The print sector continued to sustain its beneficiary position. The revenues are expected

to increase by more than 9 per cent compounded annual growth rate (CAGR) to reach

Rs 331 billion (US$ 5.28 billion) in 2017 from Rs 212 billion (US$ 3.38 billion) in 2012.


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Figure 1

1.3 Various Segments :

1.3.1 Film Industry

Indian film industry is one of the largest in the world in terms of number of filmsover 1,000

movies are released yearly in India. Indian film segment is driven by the growth in multiplexes,

movie sell through, sale of content rights and movie merchandising. The size of the film

segment was estimated at about Rs. 117 billion in 2009(E) and the CAGR between 2005 and

2009(E) was about 15% .With a huge spread of the Indian diaspora and the growth of Brand

India, it has also made inroads in the international market.

The key revenue streams in the films industry are the box-office collections (i.e. collections

through multiplexes, collections through single screen cinemas and overseas movie

collections), home video entertainment (i.e. movie rentals, sell-through market and movies-

on-demand), movie content rights (i.e. movie content rights and movie remake rights) and

ancillary revenues (through in-cinema advertising, merchandising, music rights, internet rights

etc).

Institutional and international funding has been made available to the film segment only since2000 after it has been accorded industry status. There has been an audience shift from the

single screen to the multiplexes. With the number of multiplex screens on the rise (increased

from 520 in 2007 to 747 in 2008 and is expected to go up to 1,405 in 2013), multiplexes are

expected contribute further to the share in revenue However, piracy is an important risk

factor which can threaten the growth of this industry.

The last four to five years have been characterized by several changes in the Indian film

segment, such as reduction in the contribution of domestic theatrical from about 78% in 2005

to about 72% in 2008, over 100% increase in the number of multiplex screens, availability oforganized funding.


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1.3.2. Television Industry

The Indian television segment is the largest contributor in terms of size to the media and

entertainment sector and accounts for 40% of revenues. The television sector in India has

grown at ~12%p.a. (2007-2010) and is estimated tocontinue this strong growth, owing to healthy advertising spends and increased penetration in

semi-urban and rural areas, mainly by DTH. By the end of 2011, the industry is estimated to

reach US$ 7.1 billion, a growth of ~14% over 2010.

Size of TV Industry

Figure 2

In 2010, subscription revenues contributed around 63% to the total television revenues and

stood at US$ 3.9 billion; while advertising constituted 33% at US$ 2.1 billion. The televisioncontent constitutes approximately 4% to the total television market at US$ 260 million.

Despite one of the lowest average revenue per user (ARPU) for paid television in the world, TV

distribution dominated the total Television revenue pie and saw a strong growth of ~15% in

2010, largely on the back of rapid DTH expansion. TV Advertising which has a high

contribution towards broadcasters revenue grew at 13% in 2010.


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1.3.3 Print Industry

Indian print media is one of the largest print media in the world. Indian print industry is one of

the contributor to media and entertainment industry estimated at US $ 3.7 billion in 2010

according to PwC. The Indian Print Media industry is estimated to have grown by 7.6% in 2008and reaching around INR 172.6 billion in size. The industry is projected to grow at a CAGR of

9% over the next five years and reach around INR 266 billion in size by 2013. Hindi dailies

have the highest growth in readership. Regional players are expected to grow at a brisk pace,

both in terms of advertising revenue as well as market expansion.There are more than 62,000

newspapers printed in India, around 92% of which are published in Hindi & other vernacular

languages.

The structure of the Indian print media industry is highly fragmented with importance to

regional dominance. The Indian print media segment primarily comprises newspaper andmagazine publishing.

Figure 3

Categorization of players in the Print Industry

Category Players

Dailies Deccan Chronicle, The Times of India, The Hindu, Aaj Tak,

India Abroad, Deepika Global, Asian Age

Business

dailies

The Economic Times, The Financial Express, Business Line,

Business Standard

Weeklies

and

Monthlies

The Week, Outlook, India Today, Asha kiran, Panchjanya

weekly


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1.4 Key Players in Media and Entertainment Sector


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2.Literature Review

Julia HannaImproving Brand Recognition In Tv Adspublished on June 7 2010

As per New research by HBS professor Thales S.Teixeira more than a third of viewersskip over with digital VCRs or by switching channels or tuning out altogether when

pulsing or repeating brief images of brand is done.

The research focused on what viewers see, what causes their eyes to move to particular

elements of an ad, the image they were watching when they decided to zap a

commercial.

the degree of dispersion in eye-movement patterns was directly related to distraction,

and that farther away a person's gaze is from that of other viewers, the more likely this

person is to zap the commercial.

Theories abound as to the most effective strategy for crafting a TV commercialwhere

and how often to place a brand in the ad frame. Some suggest using small, nonintrusive

instances, while others recommend the hard-sell approach. There are also ideas about

placing the brand early in the commercial, late (the so-called mystery approach), or

early and late.

Mystery ads try to entertain and draw people in by getting them to puzzle through what

the commercial is selling, only revealing the answer at the end. But if a viewer watches

the ad for 15 seconds before zapping it, the ad is completely ineffective.

If you deliver it all at once, a person will tune out mentally. A better strategy would beto deliver the information bit by bit and intersperse it with other, more appealing items.

The dilemma is that our findings show that brand images cause people to zap," Teixeira

says. "But they're a necessary evil; without the brand, viewers can't identify what is

being sold.

Changing the pattern of brand exposure can lower zapping rates, and that a "pulsing"

strategy in which the brand is inserted briefly and intermittently throughout the

commercial is most effective, resulting in an average decreased zapping of 8 to 10

percent.

"If the brand is woven into the story linenot too overt, not too in-your-faceit's

more likely that the consumer will get used to it and not have the urge to zap.

From a managers' perspective, altering the commercials to mimic a pulsing strategy is a

virtually cost-free fix for a significant payoff, with zapping rates for some commercials

reduced by as much as 25 percent in a lab experiment.


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P Prasada Rao and Karthik Kannan Marketing Strategies of Bollywood Movies in India and

Overseas: An Empirical Study published on March 2008

This paper empirically proves how marketing has a definite impact on the returns of

Bollywood movies made by the Hindi film industry. The different marketing channels, whichcan be used to create not just awareness but also increase the sale ability of the finished

product, have been aptly discussed in the paper.

Based on the data obtained from different websites dealing with the required information, a

Regression Analysis is conducted on a sample of 30 movies released during 2000-2006.

The following conclusion was drawn :

The movies are categorized under 4 broad categories:

1. High on Content and Aggressive Promotion

2. Low on Content and Aggressive Promotion


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3.High on Content and Low on Promotion

4.Low on Content and Low on Promotion

Limitations:

Result would have been more relevant if each of the marketing channels could be

quantified.

Data is taken from sites such as Wikipedia, Bollywood mantra, box office india, imdb

etc. and has little credibility. The sample size is very less.

The classification of movies with or without content is subjective in nature.


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Bollywood, iipm

This paper focuses on the latest trends in the entertainment industry fromthe glasses of movies and film production houses .

Focus is towards the changing trends in this industry.

The paper defines how the changing industry trends have led toa. Corporatisation

b. Multinational studios,

c. Enhanced production values due to higher production costs

films making a sustained impact in the international arena

d. Increased investments in promotions as well as marketing entertainment

properties leading to more and more brands jumping onto the

entertainment bandwagon.

The paper defines how Film-goers love a certain element of surprise and the magic of discovery.This leadsto modern day producers involving an outside advertising or marketing agency to obtain a different perspective and

present positive criticism.

Film marketer has the advantage of a choice from a large menu of sponsorships and branding opportunities during the pre-release, release and post-release phases of each film.

Only through conclusive research that a film marketer can create the right fit in terms of exposure versus the investmentthat it offers to various brands.

A well-researched script forms the back-bone of a good marketing strategy. It is through your research that you define youraudience based on which you project which hepls you formulate a foolproof budget

Lets implement the above theories to study marketing startegies of famous Movies of bollywood

Dil Chahta Hai- was made based on the presumption that the size of the urban Indian population is growing

everyday and maybe they would like to see some reflections of their lives. Expectedly, the film did extremely well inMumbai and Delhi, but was only semi-successful in Dhanbad and Hoogly.

Kabhi Khushi Kabhi Gham was made on the pretext that Indians love larger than life films, and demonstration

effect in the middle income group Indians is the highest. It was estimated that their aspiration levels were beyond

belief. K3G happened and was a super hit.

Jhankaar Beats did very well in Mumbai. Indias financial capital is fast aping a London or a New York. The fast life

people are leading, the city itself decaying and aspirations skyrocketing. Finding pleasures in simple things andrelationships is something that city dwellers crave. Jhankaar Beats played on these emotions. The film was a semi-hit.

Kal Ho Naa Ho: Well, there are films that do not need research. Just pick up the story line of an age-old hit film,

give the reins in the hands of King Khan, add dollops of Manhattan, some good music and Hollywood style packagingand what you have is a super hit.

The paper discusses the logical way of promoting an d marketing a film in this bizarre place called Bollywood .

The focus is on 6PS of MAARKETING


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PRODUCT :The base for a well-defined film marketing strategy starts with the film itself. A well

researched script with a well-woven screenplay is where the core of the film-marketing strategy for a

film should be invested. It is not about who sees the film but also about catering to a definitive audience

who watches your film in theatres, and more often than not, more than once. While other elements of

marketing focus on attracting these audiences it is this aspect of marketing i.e. the product that aims at

satisfying these audiences.

Placement:This element makes the Product element possible. It is true that an audience will be satisfied only when theyare attracted to go into the theatre to watch the film. It is placement that accounts for attracting the audience into

crowding the theatre. Placement as a term is used to describe the modus-operandi of placing the communication andpromotion strategy of the film on to media and non-media platforms available in the industry today.There is a complete media-mix that should be put into place usually 15% to 25% of the production cost of the film isinvested into the marketing of the film in Bollywood. But then there are films like Lagaan, Boom, Out of Control, Khel and

others who have spent as much as 40% of their production cost on marketing. But only Lagaan out of all these films became

a super-hit and needles to point out that that had a lot to do with the central theme of the film.

Today it makes perfect sense to collaborate with one or more media partners in order to ensure maximum focused publicityof your film through certain guided platforms.

People:The positioning of the film has a lot to do with the personification of the film. Personification finally is the key tocreating a brand out of the film. Lagaan is brand India and Cricket.

It is the central characters (not the actors) of the film that should enable the making of a brand out of your film. There

should be a well-defined promotion plan that has to be put-into place for promoting the people of the film (both on-screenand the technical team). The build-up should be such that without over-exposing the team there should be enough flurry ofactivity that will catapult the audiences into the character of the film even before they see the film.

3. Analysis


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4. Future Outlook

4.1 Growth Potential of the Entertainment Industry

The E&M industry is a cyclical industry that grows faster when the economy is expanding. It

also grows faster than the nominal GDP during all phases of economic activity due to its

income elasticity wherein when incomes rise, more resources get spent on leisure and

entertainment and less on necessities. Further, consumption spending itself is increasing due

to rising disposable incomes on account of sustained growth in income levels, and this also

builds the case for a strong bullish growth in the sector.

The size of E&M in India is currently estimated at INR 353 billion and is expected to grow at a

compounded annual growth rate of 19 percent over the next five years.

The television industry continues to dominate the E&M industry by garnering a share of over

42 percent, which is expected to increase by a further 9 percent to reach about 51 percent.

The share of the film industry, which currently stands at 19 percent, is not expected to change

materially over the next five years. Print media, which stands at over 31 percent, is projected

to lose some of its share in favour of the emerging segments.


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Figure 4

4.2 Future Projections of various segments

4.2.1 Television

Subscription revenues are projected to be the key growth driver for the Indian television

industry over the next five years. Subscription revenues will increase both from the number of

pay TV homes as well as increased subscription rates. The buoyancy of the Indian economy

will drive the homes, both in rural and urban (second TV set homes) areas to buy televisions

and subscribe for the pay services. New distribution platforms like DTH and IPTV will only

increase the subscriber base and push up the subscription revenues.


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4.2.2 Filmed entertainment

Indians love to watch movies. And advancements in technology are helping the Indian film

industry in all the spheresfilm production, film exhibition and marketing. The industry is

increasingly getting more corporatised. Several film production, distribution and exhibitioncompanies are coming out with public issues. More theatres across the country are getting

upgraded to multiplexes and initiatives to set up more digital cinema halls in the country are

already underway. This will not only improve the quality of prints and thereby make film

viewing a more pleasurable experience, but also reduce piracy of prints.

4.2.3 Print media

A booming Indian economy, growing need for content and government initiatives that have

opened up the sector to foreign investment are driving growth in the print media. With the

literate population on the rise, more people in rural and urban areas are reading newspapers

and magazines today. Also, there is more interest in India amongst the global investor

community. This leads to demand for more Indian content from India. Foreign media too is

evincing interest in investing in Indian publications. And the internet today offers a new

avenue to generate more advertising revenues.

4.2.4 Radio


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The cheapest and oldest form of entertainment in the country, which was hitherto dominated

by the AIR, is going to witness a sea-change very shortly. In 2005, the government opened up

the sector to foreign investmentand this is the key factor that will drive growth in this

sector. As many as 338 licenses are being given out by the Indian government for FM radio

channels in 91 big and small towns and cities. This deluge of radio stations will result in rising

need for content and professionals. New concepts like satellite, internet and community radiohave also begun to hit the market. Increasingly, radio is making a comeback in the lifestyles of

Indians.

4.2.5 Internet advertising

An estimated 28 million Indians are currently hooked on to the internet. And this rising

number is leading to the growth of internet advertising, which today stands at approximately

INR 1 billion. The internet is being used for a variety of reasons, besides work, such as

chatting, leisure, doing transactions, writing blogs etc. This offers a huge opportunity to

marketers to sell their products. And with broadband becoming increasingly popular, this

segment is expected to grow by leaps and bounds.


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4.2.6 Music

The industry has been plagued by piracy and had been showing very sluggish growth over the

last few years, both in India and globally. However, mobile music and licensed digital

distribution services are projected to fuel the recovery of the music industry the world-over.

The pace of growth in mobile music reflects the fact that consumers increasingly view theirwireless device as an entertainment medium, using those devices to play games and listen to

music, while carriers are actively promoting ancillary services such as ringtones to boost

average revenue per user. Ringtones currently constitute the dominant component of the

mobile music market. Licensed digital distribution services are also contributing significantly to

growth in all regions.

4.2.7 Live entertainment

This segment of the entertainment industry, also known as event management, is growing at a

fast and steady rate. While this industry is still evolving, Indian event managers have clearly

demonstrated their capabilities in successfully managing several mega national and

international events over the past few years. In fact, event managers are also developing

properties around events. The growing number of corporate awards, television and sports

events are helping this sector. With rising incomes, people are also spending more on

wedding, parties and other personal functions. However, issues like high entertainment taxes

in certain states, lack of world-class infrastructure and the unorganized nature of most event

management companies, continue to somewhat check the potential growth in this segment of

the industry.


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4.2.8 Out-of-home advertising

Outdoor media sites in India are predominantly owned or operated by small, local players and

are typically, directly marketed by them to advertisers and advertising agencies. However, this

segment too is witnessing a sea-change with technological innovations. Growing billboard

advertising is fuelled by technologies such as light-emitting diode (LED) video billboard. This is

a segment that is seeing interesting technological innovations across the world and is likely to

evolve in India too in the short-term.

4.3 Challenges and opportunities to the industry:

1. Consumer needs are expanding beyond the mass media and segmented media to Lifestyle

Media, a new approach that will help consumers maximise their limited time and attention to

create a rich, personalised and social media environment. This approach presents many

opportunities for the industry to create new avenues to generate revenue.

2. Knowledge of consumer activity rather than exclusive ownership of content or distribution

assets will become the basis for competition. Businesses that capture consumer activity dataand use it to inform business and advertising models will be positioned to succeed.


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3. Media marketplace will provide a structure to capitalise on the Lifestyle Media opportunity.

Pull-oriented media consumption models, such as a media marketplace, in which the

consumer is furnished with robust search, research, customisation, configuration and

scheduling tools will capture the opportunity associated with Lifestyle Media better than

minor modifications to existing business practices. Participants in media market place must

collaborate on this transformation.

4. Early movers in establishing media marketplaces will have a significant advantage over late

entrants because of network effects, whereby the value of the market place increases as the

number of participants increase.

5. Media market places will be economically viable only if operational efficiencies can be

realised through consumer activity measurement capabilities and supporting systems.

6. Significant advancements in audience measurement technology will be needed to capture,analyse and standardise consumer activity data across platforms.

5. References

Marketing Practices Research Paper

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