Indian entertainment and media industry to grow by 12.4 per cent over next five years: PwC

The industry is expected to reach Rs 1040.8 billion by 2014, from Rs 580.8 billion in 2009

PricewaterhouseCoopers' Indian Entertainment and Media Outlook 2010 study suggests that the industry will be back in action starting this year, after seeing lower growth rate in 2009 following the recession.

The entertainment and media industry in India is poised to grow by 12.4 per cent cumulatively over the next five years. The industry is slated to touch Rs 1040 billion by 2014, after going through a low growth rate of 2.2 per cent in 2009.

Explaining the expected high growth rate, Timmy Kandhari, leader, entertainment and media practice, PwC, says, "Many of the factors that contributed to the slowdown in 2009 are not likely to persist. This, along with a likely increase in consumer and advertising spends, means that the industry is poised to get back to its high growth trajectory."

The year 2009 saw the television industry grow by 8.5 per cent; while the film entertainment sector recorded a decline of 11.2 per cent. Radio advertising grew by 8.4 per cent, while Internet advertising grew by 20 per cent. The OOH industry recorded a decline of 16.7 per cent, while print recorded a decline of 0.3 per cent.

The growth in the entertainment and media industry will continue to be dominated by television, print and films. Contribution from television, print and films will be 47 per cent, 22 per cent and 16 per cent, respectively.

The television industry is expected to grow by 12.9 per cent cumulatively over 2009-14. The maximum growth is slated to occur in 2010 (15.6 per cent), followed by 2012 (13 per cent).

The study says that growth from television advertising will be directly related to the GDP. Offering targeted viewing to its advertisers can result in exponential increase in advertising rates. For targeted viewing to happen, television distribution needs to be addressable.

The print industry is slated to grow at a cumulative average growth rate of 7.4 per cent over the next five years. The years 2010 and 2013 will see maximum growth in this industry. The print sector has grown at the rate of 10.2 per cent over the last five years. Hindi dailies continue to dominate with highest readership and circulation.

The economic downturn impacted the advertising revenues of print media players, due to which a few players were forced to slash their ad rates. The study says that niche magazines are likely to see quantum growth as a result of international titles. Regional markets are poised for growth in the next five years.

The radio industry had been through a tough time in 2009 due to a slowdown in advertising. Issues such as high music royalty, multiple frequency and extension of license period will be critical for its growth in 2010. The success of Phase 3 licensing is expected to be a big boost to the industry, helping it to grow higher than the projected 12 per cent.

The Internet industry in India is slated to grow at a CAGR of 20 per cent over 2009-14. With the increasing reach of mobile and the advent of modern technologies such as 3G, Internet advertising is projected to grow at a fast pace. However, lack of efficient measurement tools may pose a hindrance.

The out of home industry is projected to reach Rs 21 billion by 2014, growing at a CAGR of 11 per cent. Government regulation and improved measurement tools are expected to catalyse the growth of this industry.