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Media & Entertainment Industry

With more than 600 television channels, 100 million pay-TV households, 70,000 newspapers and 1,000 films produced annually, India’s vibrant media and entertainment (M&E) industry provides attractive growth opportunities for global corporations. Enticed by economic liberalization and high volumes of consumption, many of the world’s media giants have been present in the Indian market for more than two decades. However, in recent years, with near double-digit annual growth and a fast-growing middle class, there has been a renewed surge in investments into the country by global companies. Media sectors, regarded as “sunset” industries in mature markets, are flourishing in India, presenting global media companies with exciting opportunities to counter declining revenues. For example, the newspaper industry, which is facing declining readership in many international markets because of digital media, continues to thrive in India, driven by increasing literacy rates and consumer spending as well as the growth of regional markets and specialty newspapers. Newspapers account for 42% of all advertising spend in India, the highest in all media streams. India’s favourable regulatory environment and recent reforms are creating investment opportunities in a number of M&E sectors. Entry restrictions for foreign companies have been relaxed and Foreign Direct Investment (FDI) caps have been recently increased in key sectors, including Direct-To-Home (DTH) and radio. Mandatory digitization of the country’s TV distribution infrastructure has spurred the growth of digital cable and DTH, and created the need for these companies to fund their expansion. The third round of radio license auctions (phase III), expected in the near future, is expected see radio networks adding around 700 radio stations across the country. Then, there are India’s diverse content markets. The bulk of the country’s urban consumption is from non-metro cities (the tier 2 and tier 3 towns) and comprises regional markets with distinct cultures, languages and content preferences. These markets, which are huge markets within markets, provide global M&E companies with a variety of opportunities to deliver localized content. Many global film studios and TV broadcasters have already entered these markets and are producing regional language content. Finally, there is the evolution of consumption of digital content, which is at an inflection point in India. Although internet penetration is currently low in the country, the recent launch of 3G services and the eventual launch of 4G are expected to bring a late surge in wireless-based broadband adoption. In conjunction with India’s mobile phone user base of more than 750 million subscribers, the scale and impact of the country’s potential for digital content consumption is huge.

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