Escolar Documentos
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MARCH
2013
Entertainment
Contents
MARCH
2013
Advantage India Market overview and trends Growth drivers Success stories: UTV, SUN TV Opportunities Useful information
Entertainment
Advantage India
MARCH
2013
2016E
Growing demand
Opportunities
Rising incomes and evolving lifestyles have led to higher demand for aspirational products and services Higher penetration and a rapidly increasing young population will provide further boost to demand
Industry is set to expand at a CAGR of 15 per cent over 2011-2016, one of the highest rates globally Television and AGV segments expected to lead industry growth; opportunities in digital technologies as well
Advantage India
Higher investments
Policy support
Policy sops, increasing FDI limits Measures such as digitisation of cable distribution to improve profitabilit and ease of institutional finance Increasing liberalisation and tariff relaxation
2011
Market Size: USD15.2 billion
Higher FDI inflows Increasing M&A activity More big-ticket deals such as Walt Disney-UTV, Sony-ETV and Zee-Star Entry of big players across all segment of industry
Source: KPMG report 2012, Aranca Research Notes: AGV - Animation, Gaming and VFX, VFX - Visual Effects, M&A - Merger and Acquisition, CAGR - Compound Annual Growth Rate, FDI - Foreign Direct Investment, E - Estimate
ADVANTAGE INDIA
Entertainment
Contents
MARCH
2013
Advantage India Market overview and trends Growth drivers Success stories: UTV, SUN TV Opportunities Useful information
Entertainment
MARCH
2013
Television
Others
Radio
AGV
Source:: KPMG report 2012, Aranca Research Notes: AGV - Animation, Gaming and VFX, VFX - Visual Effects
Entertainment
MARCH
2013
The total market size of industry expanded to USD15.2 billion in 2011 from USD9.2 billion in 2006, a CAGR of 10.6 per cent The industry recorded one of the highest growths in the world in 2010 (11.2 per cent); in 2011 growth picked up even further to touch 12.6 per cent
CAGR 10.6 %
11.8 9.2 10.7 12.1
15.2 13.5
2006
2007
2008
2009
2010
2011
Entertainment
MARCH
2013
During 2006-11, television revenues expanded at a CAGR of 11.4 per cent to USD6.9 billion Advertising revenue growth has been behind the consistent rapid growth of the television industry Over the same period, revenues in the print segment expanded to USD4.4 billion, a CAGR of 10.0 per cent The fastest growth during this period was however in the AGV segment; its CAGR was 16.6 per cent
Television
Film
AGV
Entertainment
MARCH
2013
TV has the highest share in the sector; AGV is one of the fastest growing
Total market size in 2011 was USD15.2 billion The entertainment industry continues to be dominated by television, print and films; together they have a 86.7 per cent market share AGV has emerged as one of the fastest growing segments with revenues growing by about 31 per cent during 2011
Print
12.8% 45.2% Film AGV Radio Music
28.7%
Others
Entertainment
MARCH
2013
Zee Entertainment Enterprises Ltd Fully owned subsidiary of Essel Group and first listed media company in India One of the largest producers and aggregators of Hindi programming in the world An estimated reach of more than 670 million viewers across 168 countries Pioneer of television entertainment industry in India; launched Zee TV - the countrys first Hindi satellite channel Range of businesses across the value chain in the M&E industry
Multi Screen Media Pvt Ltd Fully owned subsidiary of Sony Pictures Entertainment Comprises of Sony Entertainment Television (SET) and SAB, leading Hindi general entertainment television channels; MAX, a movies and special events channel; and PIX, a channel that airs Hollywood movies Its programming spans across various genres including drama, reality, comedy, horror, Bollywood and live events
Source: Company Websites, Business Week, KPMG report 2012 Aranca Research
Notes: M&E - Media and Entertainment
Entertainment
MARCH
2013
10
Entertainment
MARCH
2013
11
Entertainment
MARCH
2013
12
Entertainment
MARCH
2013
Television
2016
Unbundling of products to increase profitability Increasing income levels and evolving lifestyles have led to robust growth in niche
magazines segment
Increasing literacy levels leading to a rise in the readership base
Rising circulation of English, Hindi as well as regional language dailies Growth to be fuelled by multiplex chains, increasing footfalls of consumers and higher
quality content
Film
Increasing share of Hollywood content in the Indian box office 3D cinema is driving the growth of digital screens in the country The Indian film industry is largest producer of films globally with 400 production
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Entertainment
MARCH
2013
advertising
Growing outsourcing of VFX and gaming to India is due to cost effectiveness of Indian
players
Content localisation by Indiagames (by launching T20fever.com) and by Zapak (by
Increasing FM enabled radio phones, mobiles and car music systems During 2010, there were a total of 245 channels operating across India Government has introduced favorable guidelines for expansion of the third phase of FM
Radio
radio broadcasting services, which will bring 294 towns and 839 stations under FM coverage
Earlier only educational institutions were permitted to set up a community radio; in
2008 liberalisation of policy on community radio took place and currently 29 community radio stations are operational in the country
Source: PwC India Entertainment and Media Outlook 2011,
KPMG report 2012 Economic Times, Aranca Research Notes: AGV - Animation, Gaming and VFX, 3D - Three Dimension, VFX - Visual Effects, FM - Frequency Modulation
14
Entertainment
MARCH
2013
Music
15
Entertainment
Contents
MARCH
2013
Advantage India Market overview and trends Growth drivers Success stories: UTV, SUN TV Opportunities Useful information
16
Entertainment
MARCH
2013
Policy support Strong government support Policy sops, favourable FDI climate Inviting Resulting in Measures to improve profitability across segments
Increasing investments
GROWTH DRIVERS
17
Entertainment
MARCH
2013
Incomes have been rising at a brisk pace in India and will continue to do so given the countrys strong economic growth prospects; nominal per-capita income is estimated (IMF) to have recorded a CAGR of 12.5 per cent over 2001-11 Rising incomes, with its positive impact on the consumer base, will be the key growth driver for the entertainment industry (across the country) As the proportion of working age population in total population increases, percapita income and GDP are expected to grow higher
GROWTH DRIVERS
18
Entertainment
MARCH
2013
Apart from the impact of rising incomes, widening of the consumer base will also be aided by expansion of the middle class, increasing urbanisation, and changing lifestyles The entertainment industry will also benefit from continued rise in the propensity to spend among individuals; empirical evidence points to the fact that decreasing dependency ratio leads to higher discretionary spending on entertainment
70 60 50 40
Million households
30
20 10 0
GROWTH DRIVERS
19
Entertainment
MARCH
2013
Television
FDI limit increased from 49 per cent to 74 per cent for broadcast carriage service
Film
Granted industry status in 2001 for easy access to institutional finance FDI upto 100 per cent through the automatic route has been granted by government Entertainment tax to be subsumed in the GST; this would create a uniform tax rate
regime across all states and will also reduce the tax burden
FDI limit in radio increased to 26 per cent from 20 per cent Private operators allowed to own multiple channels in a city, subject to a limit of 40 per
Radio
GROWTH DRIVERS
20
Entertainment
MARCH
2013
magazines
FDI/NRI investment upto 26 per cent in publications of scientific and technical
strengthens the royalty claims of musicians, lyricists and others in the field
Music
Policies are adopted against digital piracy and file-sharing; steps have been taken to
to share 2 per cent of their net advertising revenues with music companies
100 per cent FDI allowed in the sector through automatic route provided it is in
Source: PwC India Entertainment and Media Outlook 2011, KPMG report 2012,
Aranca Research Notes: GST - Goods and Services Tax, FDI - Foreign Direct Investment, NRI - Non Resident Indian
GROWTH DRIVERS
21
Entertainment
MARCH
2013
Increasing investments in the sector - key deals and FDI inflows (1/2)
Consolidation will be the major route to grow inorganically for entertainment companies in order to expand their portfolios and enter into new regions A few big deals have come about, the most notable ones being Walt Disney-UTV and TV18-ETV (together amounting to around USD700 million)
Mergers and Acquisitions (M&A) deals during 2011-2012 Acquirer Target Deal date Deal value (USD million)
395 300
Mar-2012
3.2
Blackstone
Jul-2011
46.9
Samara Capital
Dec-2012
18.8
GROWTH DRIVERS
22
Entertainment
MARCH
2013
Increasing investments in the sector - key deals and FDI inflows (2/2)
FDI inflows into the entertainment sector between April 2000 and March 2012 stood at USD2.9 billion By March 2012, the share of FDI in Information and Broadcasting was 1.8 per cent of total FDI inflows into the country Demand growth, supply advantages, and policy support have been the key drivers in attracting FDI
Cumulative FDI inflows into Information and Broadcasting from April 2000
2.9
FY08
FY09
FY10
FY11
FY12
Source: DIPP, Aranca Research Notes: DIPP - Department of Industrial Policy and Promotion
GROWTH DRIVERS
23
Entertainment
Contents
MARCH
2013
Advantage India Market overview and trends Growth drivers Success stories: UTV, SUN TV Opportunities Useful information
24
Entertainment
UTV - One of the largest media conglomerates
Interactive
MARCH
2013
Disney becomes a majority share holder with a stake of 32.1% Launched IPO as UTV Software communications Ltd Ventured into internet content creation and aggregation
Became worlds first company to record over 100 million downloads on Nokia store Acquires Indiagames Ltd, enters gaming software and content
Broadcasting
Motion pictures
Launched Hungama TV
Television content
1990
1996
2000
2004
2005
2007
2008
2012
25
Entertainment
MARCH
2013
Enters Film Production and Distribution through SUN Pictures Launches three pay channels and four ad - free action movie channels Launches SUN Direct to provide Direct-to-Home (DTH) services Starts its first FM Channel Sumangali FM
Newspaper
Radio
Motion pictures
Direct to Home
Broadcasting
1985
1993
2000
2003
2005
2007
2008
2012
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Entertainment
Contents
MARCH
2013
Advantage India Market overview and trends Growth drivers Success stories: UTV, SUN TV Opportunities Useful information
27
Entertainment
MARCH
2013
Over 2011-16, the total market size is expected to rise at a CAGR of 14.9 per cent to USD30.4 billion The next five years will see digital technologies increase their influence across the industry leading to a sea change in consumer behaviour across all segments
15.2
CAGR 14.9 %
19.7 17.3 22.2
30.4 25.0
2011
2012E
2013E
2014E
2015E
2016E
OPPORTUNITIES
28
Entertainment
MARCH
2013
Television will continue to be the lead contributor to overall industry growth; the segment is estimated to expand in size to USD15.3 billion by 2016 (CAGR of 17.3 per cent since 2011) Animation, Gaming and VFX (AGV) is likely to witness the fastest expansion - a CAGR of 27.2 per cent (2011-16); its size is set to touch USD2.0 billion in 2016
Television
Film Notes: AGV - Animation, Gaming and VFX; VFX - Visual Effects
AGV
OPPORTUNITIES
29
Entertainment
MARCH
2013
Television distribution is projected to garner a share of 62 per cent in the television pie by 2015 (as addressable digitisation is expected to cover the entire country by then) Television advertisement is also expected to witness robust growth; its share in the advertising industry is expected to touch 42.5 per cent by 2015 from 41 per cent in 2010
Television
The Indian animation industry was worth USD511 million in 2010 and is expected to expand at
AGV
Growth in international animation films, especially 3D productions, and the subsequent work for
Print
Accelerated growth is forecasted in regional print and local news segments
Source: KPMG Report 2012, PwC India Entertainment and Media Outlook 2011, Aranca Research Notes: 3D - Three Dimension, AGV - Animation, Gaming and VFX; VFX - Visual Effects
OPPORTUNITIES
30
Entertainment
MARCH
2013
Size of the Indian film industry is expected to touch USD3.1 billion by 2016, up from USD1.9 billion in 2011 Increasing digital screens and 3D films are expected to help industry growth
Film
Big ticket releases lined up for the next couple of years are also expected to boost revenues
Phase III of e-auctions for FM radio licences will provide an impetus to the segment Radio advertising is another area likely to experience accelerated growth
Radio
Mobile VAS and arrival of 3G are likely to lead to a surge in paid digital downloads Phase III radio licensing will also help in increasing music revenues from radio
Music
Source: KPMG report 2012, PwC India Entertainment and Media Outlook 2011, Aranca Research
Notes: 3D - Three Dimension
OPPORTUNITIES
31
Entertainment
Contents
MARCH
2013
Advantage India Market overview and trends Growth drivers Success stories: UTV, SUN TV Opportunities Useful information
32
Entertainment
MARCH
2013
Animation encompasses three key segments; these are Animation Entertainment, Visual Effects (VFX) and Custom Content Development Indias animation industry has been growing at a brisk pace; from a size of USD177 million in 2005, the sector is forecasted to post a CAGR of 23.6 per cent over 2005-13 (to USD961 million)
961
CAGR 23.6%
511
177
64%
Custom Content Development 2010 2011E 2013E
2005
Source: Media and Entertainment in India: Digital Road Ahead by Deloitte, Aranca Research
Note: E - Estimates, VFX - Visual Effects
USEFUL INFORMATION
33
Entertainment
Appendix: Gaming in India and opportunities for domestic firms
MARCH
2013
Gaming can be classified under three segments - Personal Computer Games (PC), Mobile Games, Console Games and Online Games In 2010, Console Games (USD88 million) recorded the highest revenue among different segments of the gaming industry in India, followed by Mobile Games (USD60 million)
Opportunities* for Indian gaming firms across the segments value chain
Concept Creation
Pre-production
Development
Final Testing
Strong
Source: Media and Entertainment in India: Digital Road Ahead by Deloitte, Aranca Research Notes: *We have portrayed the intensity of opportunities in each segment based on the extent of Indian players current prese nce in that segment
USEFUL INFORMATION
34
Entertainment
Industry Associations (1/2)
MARCH
2013
Indian Motion Picture Producers Association (IMPPA) "IMPPA HOUSE, Dr Ambedkar Road, Bandra (West), Mumbai - 400 050 Tel: 91-22-26486344/45/1760 Fax: 91-22-26480757 Website: www.indianmotionpictures.com/imppa/index.html The Film and Television Producers Guild of India G - 1, Morya House, Veera Industrial Estate, Off Oshiwara Link Road, Andheri (W), Mumbai - 400 053 Tel: 91-22-66910662 Fax: 91-22-66910661 E-mail: guild@filmtvguildindia.org Website: www.filmtvguildindia.org Newspapers Association of India (NAI) A - 115, Vakil Chamber, Top Floor, Vikas Marg, Shakarpur, Delhi - 110092 Tel: 91-9971847045, 9810226962 E-mail: contact@naiindia.com Website: www.naiindia.com
For updated information, please visit www.ibef.org
USEFUL INFORMATION
35
Entertainment
Industry Associations (2/2)
Association of Radio Operators for India (AROI) 304, Competent House, F - 14, Connaught Place, New Delhi - 110001 Tel: 91-124-4385887 e-mail: info@aroi.in Website: www.aroi.in
MARCH
2013
The Indian Music Industry (IMI) Crescent Towers, 7th Floor B - 68, Veera Estate, Off New Link Road, Andheri West, Mumbai - 400 053 Tel: 91-22- 26736301/02/03 Fax: 91-22-26736304 E-mail: sudhir@indianmi.org Website: www.indianmi.org
USEFUL INFORMATION
36
Entertainment
Glossary
MARCH
2013
GST: Goods and Service Tax IPO: Initial Public Offering M&A: Merger and Acquisition M&E: Media and Entertainment PPP: Purchasing Power Parity USD: US Dollar
VAS: Value Added Services VFX: Visual Effects Wherever applicable, numbers have been rounded off to the nearest whole number
USEFUL INFORMATION
37
Entertainment
Disclaimer
MARCH
2013
India Brand Equity Foundation (IBEF) engaged Aranca to prepare this presentation and the same has been prepared by Aranca in consultation with IBEF. All rights reserved. All copyright in this presentation and related works is solely and exclusively owned by IBEF. The same may not be reproduced, wholly or in part in any material form (including photocopying or storing it in any medium by electronic means and whether or not transiently or incidentally to some other use of this presentation), modified or in any manner communicated to any third party except with the written approval of IBEF. This presentation is for information purposes only. While due care has been taken during the compilation of this
presentation to ensure that the information is accurate to the best of Aranca and IBEFs knowledge and belief, the content is not to be construed in any manner whatsoever as a substitute for professional advice. Aranca and IBEF neither recommend nor endorse any specific products or services that may have been mentioned in this presentation and nor do they assume any liability or responsibility for the outcome of decisions taken as a result of any reliance placed on this presentation. Neither Aranca nor IBEF shall be liable for any direct or indirect damages that may arise due to any act or omission on the part of the user due to any reliance placed or guidance taken from any portion of this presentation.
DISCLAIMER
38