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Can Indian Media Be Global ?
Television, Print, Film & Radio
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Entertainment & Media Industry
Growth outperforms the economy One of the fastest growing sectors of the
Indian economy
Current Size : Rs 40,230 Crore
Estimated growth rate : 20 % over the next4 years
Source : PwC analysis
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The Growth Drivers
Consumerisation of urban India
Rising proportion ofyoung population
Increase inincome levels
Changing spendingpatterns
Increase in numberof working urbans
Increase inspending power
Rising aspirationlevels
Consumption of lifestyle items
Source : Lifestyle consumption by Edelweiss Securities Pvt Ltd
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Films Television Radio Media MusicE&M Sector
Content Commercial (Hindi& Regional) Cinema
Art Movies
Cartoon Movies
Commissioned
Programs
News & Current
Affairs
Commissioned
Programs
News & Current
Affairs
Fiction/Non
Fiction Articles
Film Music
Private Albums
Delivery Cinema HallsHome Videos
(Video Cassettes,
VCDs, DVDs,)
Cable
Terrestrial
DTH
IPTV
Public
Broadcaster
FM Channels
Newspapers
Magazines
Books
Cassettes
CDs
Mobile
Phones
Internet
---------- Straight line denotes Traditional Delivery Mechanisms
- - - - Dotted line denotes Converged Delivery Mechanisms
Technology is changing the faceof media industry
Source : PwC analysis
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Television
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0
50
100
150
200
250
300
350
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
No
ofch
annels
New launches & delivery mechanisms lead to
exponential growth in number of channels
An Explosion Of ChannelChoices
Source : TAM
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Industry structure
Television dominates the entertainment &media industry
3 segments : Advertising, Subscription &Software
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Growth Drivers - Subscription
Projected CAGR of 29 % over the next 5 years Current average monthly collection : Rs 130.
Projected : Rs 250 (by 2010)
Larger base of TV households from lower SECs
New regulatory changes & delivery mechanisms (likeCAS & DTH) will result in improved declarations
New technologies will bring in increased revenuesthrough value added services
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Growth Drivers - Advertising Ad spend in India : 0.48 % of GDP ; global average
0.96 %
Growth in disposable incomes: urbanization & consumerism Increased reach of the medium due to expanding delivery
platforms and technology advancements
Higher investment from sunrise sectors. Continued supportfrom traditional categories (FMCG, durables )
Separate viewership measurement for upmarket audience(Elite Panel)
Will result in higher niche channel spends
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Growth Drivers - Software
Sustained growth in this sector Frequent & never ending launch of 24 hour channels
leading to demand for content
Regional channel potential being tapped by nationalplayers. Increased demand for language programming
Better performance of dubbed foreign content (movies,cricket commentary , cartoons) will increase demandfor such services
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Key developments
CAS An addressable system to provide subscribers with a
selective choice of content via the pay mode
Implemented in Zone -1 areas of Bombay, Delhi and
Kolkata from Jan 2007 As per TAMs latest report , 17 % penetration in the
notified areas
IPTV
MTNL offering services in Delhi & Mumbai Around 70 100 channels on offer
Service allows for time-shifted TV : viewers canwatch programs upto a week old
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Key developments
DTH Allowed by Government in 2000 Absence of middle men consumer apathy with
current Local Cable Operators
DTH is 'flexible, it is not connected to the groundinfrastructure
DTH is a National service :same STB can be used inany city
Current players DD Direct, Dish TV and Tata Sky ( Star
+ Tata venture) In the pipeline : Reliance, Sun group
Subscriber nos : Dish TV 20 L, Tata Sky 4 L, DD 50 L
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Can Indian Television Industry
Go Global ?
Some pointers
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Homegrown channels vs foreign
networks Indian channels dominate most of the markets /genres (Zee, Sun , ETV, Aaj Tak , NDTV) Zees improved performance vs Star Plus decline at
national level
Regional channels dominate in TN, AP, Karnataka,Kerala, WB , Maharashtra
News, Hindi movie , music genres dominated byIndian channels
In sports, new entrant Neo Sports takes on ESPN,Star Sports, Ten Sports.
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Attracting strategic and financialinvestors
Television segment open to FDI 49 % for cable & DTH; 26 % for news channel
Indian channels / media groups attracting foreigninvestment
Reuters, UK takes equity stake in Times GlobalBroadcasting
Blackstone invests $275 Mn in Eenadu CNN IBN: partnership between Turner International and
TV18
Tata Sky : alliance between Tata & Star for DTHoperations in the country
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Barriers to growth
Price regulation TRAI recommendations stifle broadcasters attempt to
fix prices based on market dynamics
Cross media ownership rules
Government yet to evolve clear rules in this regard
Potential investors unable to plan their long-termstrategy for the market
Lack of empowered regulators
Many TRAI recommendations still not fully acted upon Eg: Addressability in distribution, digitalisation of
cable TV, privatisation of terrestrial broadcasting etc
Yet to enact broadcasts bill; Content code (BRAI)
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Growth in titles
49145
58469
44000
46000
48000
50000
52000
54000
56000
58000
60000
2001 2003-04
Registered publications
Source : RNI
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Industry size & growth potential
978010900 12100
13500
15300
17300
19500
0
5000
10000
15000
20000
25000
2004 2005 2006 E 2007 F 2008 F 2009 F 2010 F
INRCrore
Source : PwC analysis
Industry projected to grow at an annual compounded
rate of 13% per annum over the next 4 years
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Growth drivers
Booming economy resulting in increasedjob creation
More number of household with highspending power - service sector boom
Rural / lower SECs provide vastopportunity for print players
IT advancements will lead provide easyaccess to rural areas
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Growth drivers
Opening up of the sector for FDI Upto 100 % permitted in publishing / printing scientificand technical magazines
Upto 26 % in news and current affairs (newspaper)category
Increased ad spends In line with economic growth
Increased activity from sunrise sectors like Retail, Telco
Publications rapidly increasing number of colour pagesand supplements
Launch of specialized magazines providing focusedreach among niche segments
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Key trends
Tapping the reading population : The readership of print media currently stands at 27 %
Growth will be driven by increase in literacy levels
7 dailies in India have readership over 1 Cr: Dainik Jagran,
Dainik Bhaskar, Eenadu, Lokmat , Amar Ujala, Hindustanand Daily Thanti
Building a pan-India presence Publications drive growth through geographic expansion
Eg: HT launch in Mumbai, Deccan Chronicle in Chennai,Midday in Bangalore, new editions from Dainik Jagran,Bhaskar, Business Line in Mumbai
Source : NRS
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Key trends
According to World Association of Newspapers(WAN) Indian newspaper sales increased 7 % in 2005 (vs
0.56 % worldwide) and 33 % during 2001-05 (vs 6 %
worldwide) India is the 2nd largest newspaper market with 7.8 Cr
copies daily (China 9.6 Cr)
Indian newspaper advertising revenue increased
23.2% over 2004 (vs 5.7 % globally)
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Can Indian Print Media Go Global
?
Some pointers
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Targeting the NRI population
Online editions Almost all the lead dailies (English & language)
have internet editions providing free access to
the latest news Internet editions used by advertisers to reachIndians living abroad
Many dailies provide epaper versions with
search options Monetized by dailies like Hindu
Free access in the case of TOI, HT
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Targeting the NRI population
Overseas editions for many dailies Sandesh weekly Chicago
ABP fortnightly US
Malayala Manorama daily Bahrain, Dubai Madhyamam daily Bahrain, Dubai
Gujarat Samachar weekly New York
Divya Bhaskar fortnightly New York
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Barriers to growth
Low literacy levels Most of the big media houses are family run
Wary of external / foreign investment
Follow conservative growth strategies
Lack of uniform media policy for foreign investment Content : News (26%) and non-news (100%)
Growing younger population and their increasing
internet affinity poses new challenges Mushrooming 24 hour news channels undermine
the agenda setting function played by newspapers
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Films
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Industry size & growth potential
5650
68007900
9700
11300
13200
15300
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
2004 2005 2006 E 2007 F 2008 F 2009 F 2010 F
INRC
rore
Source : PwC analysis
Industry projected to grow at an annual compounded
rate of 18% per annum over the next 4 years
G th d i
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Growth drivers Advancements in technology helping the
industry in film production, exhibition andmarketing Corporatisation of the film industry
Many exhibition companies (PVR, Shringar, Inox)have gone public
Entry of the largest industrial house in the E & Mindustry Reliance acquired majority stake in Adlabs
Corporates also forayed into film distribution eg. UTVsoftware
Increased marketing spends Corporatisation also resulted in innovative marketingactivities : microsites, blogs, contests, mobiledownloads etc
Centralised marketing and promotion activities
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Growth drivers
Derisking through portfolio approach (multiplereleases with multiple revenue streams) Companies getting associated through in film brand
placements, endorsements etc
Mobile companies :selling ringtones and wallpapers atpremium rates
Merchandising catching on in a big way
Growing number of multiplexes
Incentive for low-budget, niche films and experimentalcinema
Higher admission rates : account for 60 % of Box Officerevenues
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T i k t
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Tapping overseas markets
Growing collection from overseas markets
Indian films are becoming increasingly popular evenwith the non Indian community
More number of prints being released abroad
Overseas revenues estimated to account for 10 % oftotal earnings by 2010
In 2006, films like Kabhie Alvidha Na Kehna, Fanaa,Rang De Basanti emerged blockbusters in UK andNorth America.
Forbes magazine estimates : Dhoom-2 ($18.4 million)Fanaa ($17.7 million) and KANK ($17.5 million)
Regional language movies (Telugu, Tamil) alsopopular abroad
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International co-productions
Increased corporatisation has resulted in Indiancompanies doing more co-productions UTV tie up with Fox , Will Smiths Overbrook ,
Porchlight (animation)
Viacom plans co-production with local film makers Percept Picture Company joined hands with Further
Films and Sahara One to produce Tree of Life
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Barriers to growth Low capital / investment levels
Producers unable to invest in a large number of printsand marketing initiatives
Digitalization will change the scenario
Piracy Most of the credible efforts to combat piracy initiated
by industry bodies
Current copyright act dated in terms of technology
improvements
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FM opportunities
Investments Need for financial investments as well as technical and
operating experience to run the stations
Content boost Average requirement expected to be 5000 content
hours per annum per radio channel
Potential to reach local markets Only 22 of the 338 channels are in the four metro cities
Huge potential to target the smaller cities
I d t i & th t ti l
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Industry size & growth potential
240300
370
550
800
1000
1200
0
200
400
600
800
1000
1200
1400
2004 2005 2006 E 2007 F 2008 F 2009 F 2010 F
INRC
rore
Source : PwC analysis
Industry projected to grow at an annual compounded
rate of 35% per annum over the next 4 years
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Can Indian media companies go
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Can Indian media companies goglobal ?
Acquiring / taking a stake in local companies NDTV and SE Asian news broadcasting company Astro
Broadcast have tied up to do business in Malaysia and
Indonesia UTV , Astro JV to launch channels in Hindi, Regional,Indonesia and Malaysia Bahasa
Astro and Sun TV have formed a joint venture to
generate and distribute TV programs/channels for globalaudience
More acquisitions likely as companies go publicand have access to funds
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Can Indian Media Be Global ?
Yes the foundation has been laid
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Yes the foundation has been laid
Large Indian companies will take over foreign
entities Zees acquisition of Ten Sports an indicator of things to
come
Synergies, access to funds, regulatory mechanism will
set the pace
TV, Films & Radio have already gone global Potential for further growth through technology
advancements & relaxed trade agreements
Huge talent pool creative & technical will drive thisgrowth
Print will catch on soon
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Internet and epaper versions already available More international editions once the base population
crosses threshold figure
Increased interest in India will create huge demand for
Indian content More syndication arrangements in the offing
Print will catch onsoon
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Thank you
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Appendix
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Cable TV penetration
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Austra
lia
Phillippin
es
Japan
S.Korea
Chi
na
Singapo
re
India
Germany
Canada
US
Taiw
an
Source : Worldscreen, Morgan Stanley Research
Advertising spend split by
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Advertising spend split bymedium
OOH
8%
TV
41%
Cinema
0%
Radio
3%
47%
Internet
1%
Source : groupM estimates
Year : 2005Total : 12,275 Cr
Statewise C&S penetration
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Statewise C&S penetrationStates Base pop TV owning HHs C&S TV HHs % TV penetration % C&S
Andhra Pradesh 19142 12620 11562 66% 92%
Assam 5718 1931 541 34% 28%
Bihar 16393 3640 788 22% 22%
Chattisgarh 4578 1763 773 39% 44%
Delhi 3339 3023 2608 91% 86%
Gujarat 11429 6346 3901 56% 61%
Jharkhand 5444 1572 707 29% 45%
Punjab/HP/Chandigarh 6603 5286 2556 80% 48%
Haryana 4554 3354 1998 74% 60%
Karnataka 11956 7947 6602 66% 83%Kerala 7520 5166 3591 69% 70%
Madhya Pradesh 12622 5020 2361 40% 47%
Maharashtra/Goa 22900 14457 8322 63% 58%
Meghalaya 504 304 199 60% 65%
Orissa 9077 3442 1609 38% 47%
Rajasthan 10675 4941 1778 46% 36%
Tamil Nadu/Pondicherry 16522 11121 10257 67% 92%Tripura 757 338 199 45% 59%
Uttar Pradesh 29473 10502 2828 36% 27%
Uttaranchal 1811 1036 360 57% 35%
West Bengal 18227 7851 4849 43% 62%
ALL 219244 111660 68389 51% 61%
So rce NRS06
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