Intro: The Media and Entertainment Industry in India is the purveyor of rich, pluralistic Indian culture and it should get the necessary push by the Government to capture global markets.
The Media and Entertainment Industry in India is a vibrant segment of the industry recording a consistent growth over the years. Catering to both business houses and to direct consumers, the industry holds promise of good returns to investors. Accordingly, the Central government has identified and projected this industry as one of the twenty five sectors under the ‘Make in India’ campaign of PM Narendra Modi. There are some areas of the media and entertainment industry which have far greater growth potential than others. One of these is digital advertising. With the onset of digital revolution, business organisations have started leveraging on internet, cable and dish TV as channels of advertisement. The role of print media has not waned. Even the good old radio retains its space in the media world. Mobile telephony has arrived in a big way and is being used now as a publicity and advertising tool.
With the arrival of digital technology, there has been a glaring shift in the growth patterns of various segments of the media and entertainment industry in India viz. print media, electronic media, radio, internet and outdoor segments. According to projections made by CII-PwC, the revenue from advertising is expected to grow at a Compound Annual Growth Rate (CAGR) of 13 per cent. Internet access has replaced the print segment as the second largest segment contributing to the overall share of M&E sector revenues. Digital advertising is expected to lead the CAGR with 27.7 per cent, followed by radio with 18.1 per cent. Gaming and television are expected to register a CAGR of 16.2 per cent, followed by animation and VFX (15.9 per cent), music (13.2 per cent), films (11.9 per cent) and OOH with 9.2 per cent expected CAGR increase. All these projections paint a clear picture of the high significance of media and entertainment as a sector of economic growth, a fact that has been duly highlighted by the government as an area of domestic and foreign investment for India's accelerated economic development. The government has supported this sector's growth by taking various initiatives such as digitising the cable distribution sector to attract institutional funding, increasing FDI limit from 74 per cent to 100 per cent in cable and DTH satellite platforms and granting industry status to the film industry for easy access to institutional finance.
There are some points required to be seriously looked at in regard to our media and entertainment industry growth. In the print space, visible efforts are towards consolidation of business rather than aggressive expansion. The fall of rupee and its volatility in recent years eroded to an extent the bottom-line of the print media companies as the cost of imported newsprint soared. We need to expand our domestic newsprint production facilities to reduce dependence on costly imports. We perhaps need to encourage domestic and foreign investment in creating more newsprint production facilities.
The advent of digital platforms has created a situation that will require industry participants to invest in constant innovation in products and services, without which growth or even survival may be threatened. Thus, going forward, innovation will be the key to attract more consumers and deliver relevant content and services that are profitable. The government needs to promote domestic Research and Development to this end. Establishment of R&D bodies in the Public Sector or sponsoring research by Private Sector agencies in this sector are suggestive steps.
With metros getting saturated, regional markets provide greater scope for growth in the media sector. In print media, newspapers are being published in regional languages. In the television segment too, newer channels are being introduced in local languages. Smaller cities and towns are set to drive the Indian consumption story in the next few years and, therefore, our focus for investment and growth should be small cities and towns and even rural areas. Television will continue to lead the media industry in terms of revenue contribution with 39 per cent, followed by internet access with 28 per cent, while the share of print and films is likely to decrease to 15 per cent and 9 per cent respectively in 2017. Our investment strategy should duly consider this important aspect.Last but not the least; Bollywood film producers should be encouraged to export films after subtitling or translating them.
(The writer is a senior columnist)