"The Media & Entertainment industry landscape is undergoing a significant shift. Cable digitization, the promise of wireless broadband, increasing DTH penetration, digitization 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," KPMG's Head of Media & Entertainment, Jehil Thakkar said.
The growth trajectory 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 compounded aggregate growth rate (CAGR) of 15 per cent to touch Rs 1,457 billion by 2016, an official statement on the report, 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," FICCI Secretary General Dr Rajiv Kumar said.
While television continues to be the dominant medium, sectors such as animation and visual effects, digital advertising, and gaming are fast increasing their share in the overall pie. Radio is expected to display a healthy growth rate after the advent of Phase 3 reforms, the statement said.
The report, which will be formally released at the inaugural session of FICCI FRAMES 2012 on March 14, also said that while witnessing a decline in growth rate, print will continue to be the second largest medium in the Indian media and entertainment industry.
The film industry also has reason to cheer, with multiple movies crossing the Rs 100 crore mark in domestic theatrical collections, and Rs 30 crore mark in cable and satellite rights, the statement said.
Advertising spends across all media accounted for Rs 300 billion in 2011, contributing to 41 per cent of the overall M&E industry's revenues. Advertising revenues witnessed a growth of 13 per cent in 2011, as against 17 per cent observed in 2010, the statement said.
In terms of performance, 2011 proved to be a year with mixed results in terms of growth across different sub sectors.
The traditional media businesses experienced a slow down compared to last year, especially in the second half of the year. However, the new media segments like animation and visual effects, online and gaming businesses witnessed phenomenal growth rates, the statement said.
"The media and entertainment landscape is beginning to change with national cross media conglomerates emerging and consolidation and deal making finally picking up the pace," KPMGs Head of Markets Rajiv Jain said.
However, the average revenue per user (ARPU) for television, average newspaper cost for print and average ticket price for films continue to be low on account of hyper competition in these industries, the statement said.
"Segments like Radio and a significant portion of online content are available free of cost to consumers. Owing to this, the Indian consumer is still not used to paying for content and hence the industry players are sensitive to the impact of the slowdown which affects the budgets of advertisers," the statement said.
Apart from the shifts in consumer preferences, company strategies and business models, one big change awaited for the next growth wave is the implementation of recently enacted and regulations on digitisation for cable, implementation of Phase 3 reforms, copyright for radio and the roll out of 4G. These shifts are expected to be game changers in terms of how business is being done currently and what could be the path going forward, the statement added.