Indian media industry poised for huge growth

IN Media Practice | 25/02/2006

                               Indo-Asian News Service

Fakir Hassen

The Indian media and entertainment industry is witnessing unprecedented growth and is heading for exponential revenue growth over the next five years, according to a report by PriceWaterhouseCoopers (PWC).

Deepak Kapoor of PricewaterhouseCoopers said with technological advancements in the industry, the future would be an increasingly well-connected convergent world, with India well poised to meet the challenges and opportunities that this would bring.

The PWC report, "The Indian Entertainment and Media Industry: Unravelling the Potential", was released at Frames 2006, an annual meet organised here by the Chambers of Commerce and Industry (FICCI).

Summarising the report, which takes stock of the state of the media and entertainment industry, Kapoor said the buoyant economy with resultant consumer spending and foreign direct investment in media had created the opportunity to reach out to the masses, with encouraging results.

"The entertainment and media industry will grow by a cumulative 19 percent over the next five years," Kapoor said, adding the print media had been included this year to make it a true media report and not just an entertainment one.

The low ratio of advertising to GDP in India was far higher than in other countries, creating the potential for growth, he pointed out.

With the Indian film industry having recorded three billion admissions last year and being boosted by public issues, especially at multiplex cinemas, huge growth was possible in this field, said Kapoor.

"The Indian movie lovers have handsomely contributed to the cause of Indian cinema, which is targeting not only the Indian diaspora but also international cinema lovers with the potential to more than double its size in the next five years," he said.

"The digital cinema space is also still waiting to be tapped to its fullest."

The study said that the television industry grew 15 percent overall, which enabled the industry to garner 42 percent in the overall media industry pie, while the print media had received the much-needed impetus for growth with approval for foreign direct investment in July 2005.

The key growth factor in the still infant radio industry, said the report, lay in reaching local audiences, which have till now been served largely by print media. It said this could grow by at least four times in the next five years

The only area that showed a drop in growth was the music industry, which was plagued by piracy and continued to suffer losses. Kapoor called for action to address this, including support from government.

The fields of animation, gaming, live entertainment and other emerging segments were very small but were expected to grow significantly in coming years, according to the document.

Animation was expected to move from $12 billion to $42 billion by 2009 with two thirds of this coming from India, while the mobile gaming industry would grow by 67 percent within five years.