M&E industry poised to grow at 13.9% CAGR, to reach Rs 1,964 bn by 2019: FICCI-KPMG Report 2015

The Indian M&E industry was estimated at Rs 1,026 bn in 2014. Digital recorded highest growth at 44.5%, followed by radio (17.6%), OOH (14%), TV (13.8%) and print (8.3%)

BestMediaInfo Bureau | Mumbai | March 26, 2015

The Indian Media and Entertainment Industry is poised to grow at a CAGR of 13.9 per cent, from Rs 1,026 billion in 2014 to reach Rs 1,964 billion by 2019. The report noted that advertising witnessed a healthy year largely on the back of heavy spending during the national and state elections and a significant surge in spends by e?commerce companies.

In 2014, television witnessed a growth of 13.8 per cent over 2013 to register Rs 474.9 billion; while print garnered Rs 263.4 billion, witnessing a growth of 8.3 per cent over the previous year. Radio grew by 17.6 per cent in 2014 over 2013, with revenues of Rs 17.2 billion. Out of Home, with Rs 22.0 billion, registered a 14.0 per cent growth for the same period. The growth in popularity of digital media continued to surge in 2014 with a significant growth in digital advertising of 44.5 per cent over 2013 to earn Rs 43.5 billion as compared to Rs 30.1 billion in 2013.

Jehil Thakkar

Jehil Thakkar, Head of Media and Entertainment, KPMG India, remarked, “Advertising will continue to show robust growth over the next five years as economic growth comes back and categories like e?commerce and telecom increase spending. However, the real pot of gold at the end of the rainbow is subscription revenue – if new pricing structures take hold within the industry, then Average Revenue Per User will rise, benefiting the entire TV value chain.”

Commenting on the significant growth registered in digital media, Thakkar said, “Digital media surpassed our earlier projections. With Internet on mobile finding broader adoption than previously anticipated, driven by cheaper smartphones and data plans, this sector will continue to power ahead. Mobile will be the defining medium for digital media with 435 million smartphones expected to be in use by 2019.”

According to the report, adoption of smartphones, healthy growth in number of 3G subscribers, continued adoption of 2G by masses in the hinterland and concerted efforts by various digital ecosystem players under the Digital India Programme have played a major role in making this possible.

“Print still commands the largest share of advertising in India. While the English market may see some challenges from digital in the years ahead, regional print continues to grow in low double digits – a rate that is the envy of most of the print world,” he added. The report noted that while advertisement revenue held a significant part in the total revenue pie and continued to be the growth driver for the industry, circulation revenue growth was higher than that of advertising revenue for Hindi and English markets last year.

The radio industry showed one of the highest growth rates amongst other traditional media segments, and this, despite further delays in the Phase III auctions. The Government has now started proceedings on the auctions, planned for 135 channels in 69 cities, and this bodes well for continued growth of the sector going forward. “In addition to additional radio licenses that will give the industry the ability to offer wide reach to match other media, Phase III will also introduce a host of regulations to enable a better business environment for the industry. The ability to own more than one station in a market and to be able to network nationally will be key to radio companies becoming more competitive,” added Thakkar.

The Indian OOH industry saw robust growth in 2014. “Measurability continues to be the bete noire for the industry. As such, the industry's effort to address this gap by creating a methodology through a third party is a welcome move. In terms of growth, transit media will continue to expand, with the Government making large investments in transport infrastructure,” pointed out Thakkar. Metros continue to dominate and enjoy more than 50 per cent of the OOH market share. Inventory utilisation has improved, but prices have not seen any significant changes. Tier II and III cities continue to grow, largely on account of development of better infrastructure such as malls, airports, roads, etc., in these cities.

The FICCI-KPMG Report 2015:

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