|Chennai||Rs. 27770.00 (-0.14%)|
|Mumbai||Rs. 29200.00 (2.31%)|
|Delhi||Rs. 27900.00 (-0.36%)|
|Kolkata||Rs. 28270.00 (1%)|
|Kerala||Rs. 27050.00 (-0.37%)|
|Bangalore||Rs. 27550.00 (1.66%)|
|Hyderabad||Rs. 27770.00 (-0.14%)|
Time for a reality check! The world’s largest film industry and its second-largest TV market is a sad place to do business in. This is because despite these bombastic numbers, the industry’s ability to monetise the potential of its 740 million TV viewers or 350 million newspaper readers is limited.
That explains why at 0.9 per cent of gross domestic product, India’s media and entertainment (M&E) spends are among the lowest in the world, way below countries with a fraction of its potential. For developed countries, the average is two per cent. For China, it’s 1.2 per cent, making it the third-largest M&E market in the world.
These, among other findings, are part of a PricewaterhouseCoopers (PwC) report released at a Confederation of Indian Industry (CII) event on the sector. The report, Indian Media and Entertainment Outlook 2012, talks of the industry hitting the $100-billion mark, against the current $17 billion. Neither the report nor CII specifies when the industry would hit this mark. Smita Jha, leader (entertainment and media), PwC India, explains why: If you go by the current growth (17 per cent compounded annual growth), the Indian M&E sector would achieve this by 2023. However, the idea is to accelerate the process. The report reckons three factors could push the growth to more than 17 per cent — higher consumer spend, higher advertiser spend and policy support.
The most interesting aspect the report focuses on is consumer spend. In countries like the US, where consumer spends on M&E products are higher than ad spends, the market shifts; the way content is created and distributed changes. And, revenue flexibility increases — you become less dependent on advertisers.
In India the only segment in which consumers pay reasonable prices for media products is films. The box-office accounts for about 60 per cent of the industry’s revenue. Add ringtones and home video sales, and the figure would probably rise to 65-70 per cent. The per capita spend on tickets and ancillaries around cinema has been rising, thanks to multiplexes. As the money coming back into the system has increased, it has led to a creative explosion not seen in two decades.
Once it gets a better share of pay revenues after digitisation, something similar would take place in the TV space, the biggest segment of the Indian M&E industry.
However whether that would help the industry hit the $100-billion mark is moot.