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The Indian Media &
Entertainment Industry
2016
Trends & Analysis - Past, Present & Future
Chaitanya Chinchlikar
Vice President – Whistling Woods International
Vice President – Mukta Arts Ltd
chaitanya.c@whistlingwoods.net
Source: FICCI-KPMG Report 2016
652
728
821
918
1026
1156
1314
1503
1723
1980
2261
0
400
800
1200
1600
2000
2400
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
INRBillions
Indian M&E Industry
The Indian M&E Industry - High-volume, low-value.
The Indian Media & Entertainment Industry includes
Film, Television, Print, Radio, Music, Digital Media, Animation & VFX, Gaming,
Events & Live Media, Out-of-home, Sports, Entertainment Parks & other media.
• Valued at over US$
17.4bn (1,15,600Cr INR)
which is ~0.97% of the
global M&E industry
(estimated at US$ 1.8tn)
• Expected growth (14.3%)
over the next 5 years is to
be higher than the global
M&E industry (at 5.1%)
• Dawn of Digital – 38.2% in
2015, 33.5% in 2016-2020.
12.8%
14.3%
Source: FICCI-KPMG Report 2016
Indian M&E Industry – SOTP
0
500
1000
1500
2000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
297 329 370 417
475
542
617
710
823
957
1098
193
209
224
243
263
283
305
330
356
384
413
83
93
113
125
126
138
159
174
190
208
227
10
11
13
15
17
20
23
28
33
38
43
9
9
11
10
10
11
12
14
16
18
21
16
18
18
19
22
24
28
32
35
40
45
24
31
35
40
45
51
58
67
78
91
108
10
13
15
19
24
27
31
34
39
45
51
10
15
22
30
44
60
81
114
153
199
255
INRBillions
TV Print Film Radio Music OOH Animation & VFX Gaming Digital
All sections are growing. Some are growing faster than others
Source: FICCI-KPMG Report 2016
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
46% 45% 45% 45% 46% 47% 47% 47% 48% 48% 49%
30% 29% 27% 26% 26% 24% 23% 22% 21% 19% 18%
13%
13% 14% 14% 12% 12% 12%
12% 11% 11%
10%
2%
2% 2% 2%
2%
2%
2%
2%
2%
2%
2%
1%
1% 1% 1%
1%
1%
1%
1%
1%
1%
1%
2%
2% 2%
2%
2%
2%
2%
2%
2%
2%
2%
4%
4% 4%
4%
4%
4%
4%
4%
5%
5%
5%
2% 2% 2% 2%
2%
2%
2%
2%
2%
2%
2%
2% 2% 3% 3% 4% 5% 6% 8% 9% 10% 11%
TV Print Motion Picture Radio Music OOH Animation & VFX Gaming Digital
Indian M&E Industry – Market-share
Source: FICCI-KPMG Report 2016
83
93
113
125 126
138
159
174
190
208
227
0
50
100
150
200
250
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
INRBillions
The Indian Film Industry
• Largest in the world by
films produced with over
1,400 films produced &
over 3.25bn tickets sold
(~50% theatrical releases)
• At US$ 2.1bn, it is less than
the BO of Avatar
• 2015 was heavily polarised
wrt film performance.
• % of online ticketing grew
by 5x from 6% to 32%
• Regional & Hollywood are
growing domestic theatrical
9.3%
10.5%
Studios have started getting into content production
through own productions & strategic alliances
(Reliance – Phantom, Fox – Dharma)
Source: FICCI-KPMG Report 2016
The Indian Film Industry =
‘Bollywood’
While‘Bollywood’ is a generally used term to define the Indian Film industry,
Hindi films accounted for only 16% of the 1,400+ films that were produced.
The South Indian Film industry accounts for almost 50% of the films
Language No of Films
Hindi 234
Tamil 210
Telugu 218
Kannada 157
Malayalam 108
Bengali 139
Marathi 122
Gujrati 67
Bhojpuri 84
Punjabi 9
Others 78
Total 1,426
Source: FICCI-KPMG Report 2016
0%
20%
40%
60%
80%
100%
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
74% 76% 75% 74% 73% 73% 72% 72% 71% 70%
7% 7% 7% 7% 7% 7% 7% 7% 7% 7%
11% 11% 12% 12% 12% 11% 11% 11% 11% 11%
5% 5% 6% 7% 7% 8% 9% 10% 11% 11%
INRBillions
Film Revenues % Breakdown
Domestic Theatrical Overseas Theatrical Home Video Cable & Satellite Rights Ancillary Revenues
Film Revenues Breakdown
Domestic Revenues have always had a 90%+ market-share & expected to continue.
This is THE double-edged sword for the industry.
Proving the digital
medium’s
dominance,
Ancillary revenues
as a % of total film
revenue will
increase 1.5x over
the next 5 years.
Home Video, like
in the rest of the
world, is dying out
fast.
Source: FICCI-KPMG Report 2016
Film – Revenue Split
When you pay Rs 100 for a movie ticket, what is the split?
• Gross – 100% (Rs 100)
• Entertainment Tax – 30% (Rs 30)
• Exhibitor – 50% of balance 70% (Rs 35)
• Distributor – 50% of balance 70% (Rs 35)
• Producer(s) – depends on what deal they have made with distributor –
Outright / MG / Commission / Distribution Fee
• Co-producer(s) – deal-specific
• P&A funding – deal specific, but usually is last-in-first-out.
• Talent – actors / director – sweat equity.
Source: FICCI-KPMG Report 2016
Exhibition needs to grow!
• India has one of the lowest screen
densities among global film markets
• Urgent & rapid infrastructure growth in
multiplex screens is needed
• Since the Box office is not as robust as
other countries, government
intervention is needed by way of SOPs.
126
85 82
61 57
26
13
6
0
20
40
60
80
100
120
140
Screens/Million
9,200
13,118
18,195
22,000
25,000
1,250 1,470 1,650 1,750 1,950
10,000
8,700
7,600
6,500 6,000
-
5,000
10,000
15,000
20,000
25,000
30,000
2011 2012 2013 2014 2015
Screens
Multiplex-China Multiplex-India SingleScreen-India
2.0
2.7
3.5
4.7
5.7
1.0
1.3 1.4 1.4 1.5
-
1.0
2.0
3.0
4.0
5.0
6.0
2011 2012 2013 2014 2015
Billion$
Domestic Box Office Size
China India
Source: FICCI-KPMG Report 2016
Industry = Value x Volume
No of screens that a film plays in
has grown radically over the past
decade, curbing piracy and
augmenting theatrical revenues
Average ticket prices of
multiplexes are 3-6 times that of
single screen theatres.
500
1000
3000
3500
4200
0
500
1000
1500
2000
2500
3000
3500
4000
4500
1994 - Hum
Aapke Hain
Koun
2009 - 3
Idiots
2012 - Ek
Tha Tiger
2013 -
Dhoom 3
2015 -
Bajrangi
Bhaijaan
No of Screens
250
130
75
40
0
50
100
150
200
250
300
High End
Multiplex
Multiplex Single Screen Low End Single
Screen
Ticket Rates (INR)
Source: FICCI-KPMG Report 2016
The Indian Film Industry - Key points
• Realisation of the value of Film education. Scale needed. Urgently.
• Digital gaining over C&S for release window.
• Regional shows its importance – Marathi, Gujarati, Punjabi
• Hollywood films account for less than 10% of the Indian Film industry.
• Share of Revenue from first week is highly critical (ranges from 55-
75% of box office collections)
• Funding avenues grow significantly – Banks (IDBI, Exim, Kotak, YES),
Film Funds, Crowd-funding.
• The industry lacks a globally merchandisable home-grown IP brand.
Source: FICCI-KPMG Report 2016
297
329
370
417
475
542
617
710
823
957
1098
0
100
200
300
400
500
600
700
800
900
1000
1100
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
INRBillions
TV
The Indian Television Industry
• The most consistently
performing sector of the
Indian M&E Industry.
• It is, presently, nearly 4
times the size of the Indian
Film industry and is the
largest employer in the M&E
space.
• India overtook the US in
2014 as the 2nd largest TV-
owning market in the world.
The potential: The Indian average subscription rate is
US$4-5 per month per TV for Cable TV / DTH against
US$40-100 in evolved markets like US / UK / Europe.
14.2%
15.1%
Source: FICCI-KPMG Report 2016
TV Connectivity – A Digital blitz
With digitisation
primarily
successful for
Phase 1 & 2
(over 95%) and
the rest of the
country
underway on
the same path,
digital STBs
and DTH
connections are
the way of the
future. 0
20
40
60
80
100
120
140
160
180
200
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
74 69 68 70 65
41
5 5 5 5
6 19 25
29 37
55
80 84 87 90
31
34
37
40
44 55 74
76
78
79
8
9
9
10
15
19
20
21
22
22
Subscribers
Analog Cable Digital Cable DTH Other Digital
Source: FICCI-KPMG Report 2016
TV Connectivity, Channels, ARPUs
• India has added, on an avg 4.5
channels/month for the last 15 yrs.
• India has ~400 news channels.
Channel differentiation is weak.
138
175
200
71%
83%
87%
0
50
100
150
200
250
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2010 2015 2020
TV Households
& Penetration
248
258
266
299
334
367
214 219
230
261
298
343
150
200
250
300
350
400
2015 2016 2017 2018 2019 2020
ARPUs
DTH Digital Cable
5 55
130
263
550
800
0
100
200
300
400
500
600
700
800
900
1990 1995 2000 2005 2010 2015
Channels & Growth
TV households, C&S penetration
& ARPUs are all expected to
grow over the next 5 years
Source: FICCI-KPMG Report 2016
GEC – GRP v/s Profitability
Low GRP High GRP
Low
Profitability
High
Profitability
Long running soaps
Low-cost game /
performance based
reality shows
Mythological series
Recently released movies
Celebrity-based shows
Why do we see what we see on GECs?
How does programming get divided between building a viewer base and profitability,
thorough the application of the concept of ‘stick-ability’!
Source: FICCI-KPMG Report 2016
TV Revenues – Getting better, slowly!
• High subscription revenue
growth expected to bring
about innovative content /
content for a niche
audience.
• In 2015, of INR 360 billion
paid by consumers, ONLY
INR 86 billion reached the
broadcasters, which is less
than 25%. Underreporting
of subscribers, carriage
fees & lack of digitisation is
the reason for this.
213 245 281 320 361
407
468
548
637
733
47 57 69 75 86 100 118 145 174 203
22%
23%
25%
23% 24% 25% 25%
26%
27% 28%
0%
5%
10%
15%
20%
25%
30%
0
100
200
300
400
500
600
700
800
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
INRBillions
Subscription Revenue
Paid by Consumers Recd by Broadcasters %
213
245
281
320
361
407
468
548
637
733
116 125 136 155
181
210
242
276
320
365
0
100
200
300
400
500
600
700
800
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
INRBilions
TV Revenues - Split & Growth
Subscription Revenue Advertising Revenue
Source: FICCI-KPMG Report 2016
Viewership & Ad-Revenue – Disparity!
View Ad Rev
Regional GEC 29.6% 15.9%
Hindi GEC 28.4% 27.5%
Hindi Movies 13.4% 6.7%
Regional Movies 6.6% 2.8%
Kids 5.6% 3.8%
Regional News 3.5% 8.3%
Hindi News 3.0% 8.4%
Regional Music 2.7% 1.4%
Music 2.6% 3.0%
Sports 2.1% 4.3%
Infotainment 1.1% 2.0%
English Entertainment 0.5% 4.6%
English News 0.0% 5.0%
Others 0.9% 6.3%
100.0% 100.0%
• Regional GECs break
the Hindi GEC glass
ceiling in viewership.
• Regional / Kids
channels highly under-
indexed
• Hindi movies under-
indexed on account of
changed release
window – TV vs digital.
• News, Sports, English
enjoy severe over-
indexing
Source: FICCI-KPMG Report 2016
Indian Animation picks up
• Broadcasters are willing to pay over
double for good quality Indian
Animated content as compared to
daily soaps / Hindi general
entertainment content, even though
this segment gets only 5.6% of the
viewership, as compared to 28.4%
for Hindi GECs.
• Also the fact that this segment
continues to be under-indexed, with
only 3.8% ad-revenue share doesn’t
bother broadcasters as this content
has long-tail revenue
• It offers repeat viewing value, multi-
language dubbing value and
merchandising value.
Source: FICCI-KPMG Report 2016
Hindi GEC Fiction content changing. Slowly.
• GECs have finally embraced the
tele-series format with season-
based programming
• The value:volume ratio is reversed
in such programming as compared
to the daily / weekly soaps.
• For the past 20-odd years, the
content has largely mirrored
American programming of the 70s-
80s, with our soaps comparable to
content like the Bold & The
Beautiful, Santa Barbara, Dallas,
etc.
Source: FICCI-KPMG Report 2016
TV – Key Points
• Digitisation – increased revenue for the broadcaster, should lead to
more investment in content (& hence better quality content)
• Global proliferation of Indian-origin content is increasing, albeit for
the Indian diaspora only. This is THE BIG opportunity.
• Indian animation on TV is starting to matter.
• Hindi GECs are exploring new content programming & a changed
value:volume mix in revenue models.
• Lack of quality viewership measurement systems is an issue.
Hopefully, BARC should resolve this.
• Targeted advertising is the next step
Source: FICCI-KPMG Report 2016
Digital – Growth galore!
10
15
22
30
44
60
81
114
153
199
255
0
50
100
150
200
250
300
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
INRBillions
Digital is expected to quadruple its size in the next 5 yrs
Source: FICCI-KPMG Report 2016
Telecom Base – Volume galore!
Tele-Density: 81.83
Urban: 148.73, Rural: 50.88
What’s coming?
As of March 2016
Telecom Service
Providers
Subscribers
Bharti Airtel 25,12,37,263
Vodafone 19,79,46,755
IDEA 17,50,74,042
Reliance 10,24,08,072
Aircel 8,70,86,612
BSNL 8,63,45,709
Tata 6,00,97,988
Telenor 5,24,54,949
Sistema 76,91,379
Videocon 65,63,762
MTNL 35,60,856
Quadrant 31,63,438
TOTAL 1,03,36,30,825
Source: FICCI-KPMG Report 2016
Digital – global comparison!
• India has the
lowest net
penetration
among all
developing
countries and
much lower than
the developed
ones.
• Despite that, India
has more internet
users than the
US.
19%
53%
46%
60%
87%
90%
86%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
India Brazil China Russia USA UK Japan
Internet Penetration
Avg Broadband speed % of connections > 4MBPS
2014 2015 2014 2015
South Korea 25.3 20.5 96% 96%
Hong Kong 16.3 15.8 89% 92%
Japan 15.0 15.0 87% 90%
Singapore 12.2 12.5 83% 87%
Taiwan 9.5 10.1 78% 88%
New Zealand 7.0 8.7 77% 87%
Thailand 6.6 8.2 85% 93%
Australia 6.9 7.8 66% 72%
Malaysia 4.1 4.9 39% 53%
China 3.8 3.7 34% 33%
Indonesia 3.7 3.0 35% 17%
Vietnam 2.5 3.4 14% 31%
Philippines 2.5 2.8 9% 10%
India 2.0 2.5 7% 14%
Source: FICCI-KPMG Report 2016
The Digital Business – A BLITZ of growth!
51.1 64.9
85.2
107.3
129.5
153.1
9
16.2
28.4
46
69.8
102.1
0.0
50.0
100.0
150.0
200.0
250.0
300.0
2015 2016 2017 2018 2019 2020
INRBillions
Size of the Digital Business
Web Mobile
0
100
200
300
400
500
600
700
800
900
1000
2014 2015 2016 2017 2018 2019
825 857 886 913 938 960
281
348
420
494
570
640
MillionsofUsers
TV Internet
18%
0
50
100
150
200
250
300
350
400
450
500
2015 2016 2017 2018 2019 2020
173
232
286
342
399
457
116
188
249
299
369
435
MillionsofUsers
Net on Mobile Smartphones
Source: FICCI-KPMG Report 2016
Digital – Usage
96%
44%
36%
97%
50%
38%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
WhatsApp FB
Messenger
Hike
% of Smartphone users accessing Apps
Oct-Dec 2014 Oct-Dec 2015
22%
19%
10%
37%
22%
17%
0%
5%
10%
15%
20%
25%
30%
35%
40%
2%
0% 1%
18%
10%
3%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
24%
10%
13%
9%
3%
49%
30%
23%
14%
4%
0%
10%
20%
30%
40%
50%
60%
42%
0% 0%
60%
12%
4%
0%
10%
20%
30%
40%
50%
60%
70%
YouTube Hotstar ErosNow
15%
6%
4%
0% 0% 1% 0%
15%
8%
6%
3% 2% 2% 2%
0%
4%
8%
12%
16%
20%
59%28%
8%
1%
4%
Top 100 YouTube Channels, by viewership
Film / TV
Music
Education
Health
Others
Source: FICCI-KPMG Report 2016
Content - Global Digital Platforms
Source: FICCI-KPMG Report 2016
Indian Digital Platforms
Source: FICCI-KPMG Report 2016
Digital – Key Points
• Digital platforms of web, mobile & smart TVs are the present & the future.
• Content consumption modes & patterns are changing with a large number
of sub-18-yr-olds finding their ‘stars’ online.
• YouTube is taking the Indian market seriously and has set up a ‘YouTube
Space’ & ‘YouTube Educator Lab’ in India, in partnership with Whistling
Woods International.
• Content creation needs to adapt. Content creators are yet to commence
utilising the unique characteristics of the digital platforms & of ‘India’ & are
still treating it as a 3rd screen with no censorship. Changes needed are:
o Multi-formatting the content being created to include Digital platforms
o Specialised writing / content creation structures for Indian digital platforms
keeping in mind the unique characteristics of digital & that of Indian content.
o Utilising the entire spectrum of the platform – clickable / interactive video,
AR/VR (360 deg video, etc), gamification of content, etc…
Source: FICCI-KPMG Report 2016
24
31
35
40
45
51
58
67
78
91
0
10
20
30
40
50
60
70
80
90
100
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
INRBillions
Animation, VFX & Post-Production
• The industry has shown growth on
the back of strong VFX / post-prodn
growth, but Animation has not grown
as much.
• Lack of original IP creation is a
major reason of the low growth of
the Animation industry.
16.1%
13.8%
1
2 2
4
6
1
4
1
5
3 3
0
0
1
2
3
4
5
6
7
2000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Animated Films Released Theatrically
2014
2015
Source: FICCI-KPMG Report 2016
23% 22% 20% 18% 16% 15% 14% 13% 12% 12%
14% 13% 12% 11% 11% 10% 10% 9% 8% 8%
20% 22% 23% 25% 28% 31% 34% 36% 39% 42%
44% 44% 45% 45% 45% 44% 43% 41% 40% 39%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Animation Services Animation Product Creation VFX Post-Prodn
Animation, VFX & Post-Production
• Even though all
areas of the
industry are
growing, the
growth is
disparate between
Animation & VFX /
post-prodn.
• From a 65:35
ratio in 2011, the
sub-segments
reach a 80:20
ratio in 2020.
7.1 7.6 8.0 8.1 8.3 8.8 9.5 10.4 11.4 12.54.2 4.5 4.7 5.1 5.6 6.0 6.5 7.0 7.6 8.46.2 7.7 9.3 11.3 14.4 18.0
22.5
28.4
35.8
45.1
13.5
15.5
17.7
20.4
22.8
25.5
28.6
32.3
36.5
42.0
-
20.0
40.0
60.0
80.0
100.0
120.0
INRBillions
Source: FICCI-KPMG Report 2016
Animation on Indian Screens
While, only 3 out of the top 10 characters on Indian TV are of Indian
origin, 7 out of the top 10 episodes are for Indian shows
Source: FICCI-KPMG Report 2016
10
13
15
19
24
27
31
34
39
45
51
0
5
10
15
20
25
30
35
40
45
50
55
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
INRBillions
Gaming
Gaming
• Grew over 20%, on the back of
mobile gaming.
• With 1bn+ users, increasing travel
time & a young population, India is
one of the faster-growing low-end
mobile gaming markets in the world
13.9%
46% 49% 51% 52% 55% 57%
39% 35% 32% 30% 28% 26%
15% 16% 17% 18% 18% 17%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2014 2015 2016 2017 2018 2019
Mobile Console PC & Online
12.8%
Source: FICCI-KPMG Report 2016
9 9
11
10 10
11
12
14
16
18
21
0
2
4
6
8
10
12
14
16
18
20
22
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
INRBillions
Music
• The Music industry shows
growth for the first time in 3
years.
• Over 50% of Indian web
users access unlicensed
content.
• Music-on-cloud is expected
to gather steam as it rides
the 3G/4G wave to deliver
streamed music, ad
supported, free of cost as
well as ‘freemium’ music,
hopefully denting piracy.
13.8%
10.2%
Source: FICCI-KPMG Report 2016
Music - Consumption
• The consumption % reversed
from 2010 to 2015 between
physical & digital.
• Films fuel over 80% of the
Music industry (Not good!)
• Indian non-film music (Indie /
pop / rock / regional) is
struggling, with only Religious
& Indian Classical music
managing to survive.
• Very little structured music
education & training
81.0%
10.0%
4.0%2.2% 2.8%
Music Consumption
by Genre
Bollywood
International
South Indian
Punjabi
Others
58%
33%
6%
3%
20%
55%
15%
10%
0%
10%
20%
30%
40%
50%
60%
70%
Physical Digital TV & Radio Public
Performance
Music Consumption
by Source
2010
2015
Source: FICCI-KPMG Report 2016
10 11
13
15
17
20
23
28
33
38
43
0
5
10
15
20
25
30
35
40
45
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
INRBillions
Radio
Radio
• The growth in 2015 has been built
around increased ad revenue from
politics, entertainment, real estate
& e-commerce.
• The shift to radio is as it is a cost-
effective advertising vehicle, as
compared to TV.
16.9%
15.3%
Source: FICCI-KPMG Report 2016
Sports
• With the ‘private’ sports
leagues being taxed on lines
similar to live entertainment,
the line between sports and
entertainment has blurred.
• Sports is one of the largest
content providers to the
broadcast, live events &
digital industries.
• In 2015:
o Female viewership was at
an unprecedented 38%
o Rural viewership at 45%.
Investment
IPL
Reach
Investment
ISL
PKL
IPTLPWL
IBL
UBA
HIL
Star Sports
INR 200 billion
Sony Six
INR 192 billion
Ten Sports
INR 6 million
Neo Sports
INR 120 million
Source: FICCI-KPMG Report 2016
Live Events
• Yet to be ‘organised’
• Growth of ~20%
• Margin growth flat
• Government spending (elections / events) still the largest contributor
• Licensing issues
• Taxation issues
• Live IP-based entertainment on the rise:
o Stand up Comedy
o Theatre
Source: FICCI-KPMG Report 2016
Theme Parks
• Emerging area
• Destination
entertainment (non-
natural-tourism based)
yet to consolidate in
India
• Evolution:
o 1980 – Appu Ghar
o 1990 – Esselworld
o 2010 – Imagica &
Wonderla
o 2015 – INR 300 bn+
investment committed
o Over next 5 yrs, 19%
CAGR.
Source: FICCI-KPMG Report 2016
Jobs in M&E
• As per the NSDC, by 2022, the
Media & Entertainment industry
would be requiring 12.5 lakh
professionals, ~85% of these in
the Film, TV & digtial verticals.
• The media industry as a whole still
lacks sufficient world-class
training facilities to enable
professionalism and best
practices.
• Significant government-
intervention and private
investments will be needed to
correct this imbalance
1.60
2.40
4.40
1.40
2.80
6.40
0.60 0.70
1.30
0.20 0.30 0.40
0.20 0.30 0.40
-
1.00
2.00
3.00
4.00
5.00
6.00
7.00
2014 2017 2022
Employment
Growth
Film
TV
Print
Radio
Animation,
VFX, Gaming
Source: FICCI-KPMG Report 2016
Key Disruptions in 2015 / Trends for 2016
• ANALYTICS – Audience Analytics, Operations Analytics, Event Driven
Analytics, Predictive Analytics, Campaign Analytics
• Film – 4k, Digital Rights, Immersive, VR / AR
• TV – 2nd/3rd screen, Targeted Advertising, Interactivity
• Animation & VFX – 3D printing, non-photorealistic rendering, VR / AR
• Advertising – Cross platform, Targeted, Programmatic buying
• Music – Predictive analytics
• Radio – Online platforms
• OOH – Watcher Analytics, Interactivity
Source: FICCI-KPMG Report 2016
What are the pain-points of the Indian M&E Industry?
• Lack of original Intellectual Property creation leading to lack of a globally
merchandisable brand.
• M&E Education & Training
o Of the 4 lakh people employed, nearly 75% involved in content creation have
no formal training.
o Very few world-class Film & Media institutes with a combined output of
approx 500 graduates a year, with 200 of them being from a single institute.
• Innovation – we are followers, not leaders when it comes to formats or
technical / narrative innovation.
• Piracy - Affects every sector of the industry & causes nearly 35%
revenue reduction
Source: FICCI-KPMG Report 2016
The Great Opportunities in M&E
In the M&E industry, building volume is hard. India already has the
volume. We now need to build value to each unit of the already
existing volume. This is done by enhancing quality. The best way to
build quality is be educating & training the industry.
The big opportunities in M&E are:
• Screens for Film
• IP creation
• Digital platforms
• Education in M&E
Thank You!
Chaitanya Chinchlikar
Vice President – Business Development
chaitanya.c@whistlingwoods.net

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Indian Media & Entertainment Industry 2016 - Trends & Analysis!

  • 1. The Indian Media & Entertainment Industry 2016 Trends & Analysis - Past, Present & Future Chaitanya Chinchlikar Vice President – Whistling Woods International Vice President – Mukta Arts Ltd chaitanya.c@whistlingwoods.net
  • 2. Source: FICCI-KPMG Report 2016 652 728 821 918 1026 1156 1314 1503 1723 1980 2261 0 400 800 1200 1600 2000 2400 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 INRBillions Indian M&E Industry The Indian M&E Industry - High-volume, low-value. The Indian Media & Entertainment Industry includes Film, Television, Print, Radio, Music, Digital Media, Animation & VFX, Gaming, Events & Live Media, Out-of-home, Sports, Entertainment Parks & other media. • Valued at over US$ 17.4bn (1,15,600Cr INR) which is ~0.97% of the global M&E industry (estimated at US$ 1.8tn) • Expected growth (14.3%) over the next 5 years is to be higher than the global M&E industry (at 5.1%) • Dawn of Digital – 38.2% in 2015, 33.5% in 2016-2020. 12.8% 14.3%
  • 3. Source: FICCI-KPMG Report 2016 Indian M&E Industry – SOTP 0 500 1000 1500 2000 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 297 329 370 417 475 542 617 710 823 957 1098 193 209 224 243 263 283 305 330 356 384 413 83 93 113 125 126 138 159 174 190 208 227 10 11 13 15 17 20 23 28 33 38 43 9 9 11 10 10 11 12 14 16 18 21 16 18 18 19 22 24 28 32 35 40 45 24 31 35 40 45 51 58 67 78 91 108 10 13 15 19 24 27 31 34 39 45 51 10 15 22 30 44 60 81 114 153 199 255 INRBillions TV Print Film Radio Music OOH Animation & VFX Gaming Digital All sections are growing. Some are growing faster than others
  • 4. Source: FICCI-KPMG Report 2016 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 46% 45% 45% 45% 46% 47% 47% 47% 48% 48% 49% 30% 29% 27% 26% 26% 24% 23% 22% 21% 19% 18% 13% 13% 14% 14% 12% 12% 12% 12% 11% 11% 10% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 4% 4% 4% 4% 4% 4% 4% 4% 5% 5% 5% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 3% 3% 4% 5% 6% 8% 9% 10% 11% TV Print Motion Picture Radio Music OOH Animation & VFX Gaming Digital Indian M&E Industry – Market-share
  • 5. Source: FICCI-KPMG Report 2016 83 93 113 125 126 138 159 174 190 208 227 0 50 100 150 200 250 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 INRBillions The Indian Film Industry • Largest in the world by films produced with over 1,400 films produced & over 3.25bn tickets sold (~50% theatrical releases) • At US$ 2.1bn, it is less than the BO of Avatar • 2015 was heavily polarised wrt film performance. • % of online ticketing grew by 5x from 6% to 32% • Regional & Hollywood are growing domestic theatrical 9.3% 10.5% Studios have started getting into content production through own productions & strategic alliances (Reliance – Phantom, Fox – Dharma)
  • 6. Source: FICCI-KPMG Report 2016 The Indian Film Industry = ‘Bollywood’ While‘Bollywood’ is a generally used term to define the Indian Film industry, Hindi films accounted for only 16% of the 1,400+ films that were produced. The South Indian Film industry accounts for almost 50% of the films Language No of Films Hindi 234 Tamil 210 Telugu 218 Kannada 157 Malayalam 108 Bengali 139 Marathi 122 Gujrati 67 Bhojpuri 84 Punjabi 9 Others 78 Total 1,426
  • 7. Source: FICCI-KPMG Report 2016 0% 20% 40% 60% 80% 100% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 74% 76% 75% 74% 73% 73% 72% 72% 71% 70% 7% 7% 7% 7% 7% 7% 7% 7% 7% 7% 11% 11% 12% 12% 12% 11% 11% 11% 11% 11% 5% 5% 6% 7% 7% 8% 9% 10% 11% 11% INRBillions Film Revenues % Breakdown Domestic Theatrical Overseas Theatrical Home Video Cable & Satellite Rights Ancillary Revenues Film Revenues Breakdown Domestic Revenues have always had a 90%+ market-share & expected to continue. This is THE double-edged sword for the industry. Proving the digital medium’s dominance, Ancillary revenues as a % of total film revenue will increase 1.5x over the next 5 years. Home Video, like in the rest of the world, is dying out fast.
  • 8. Source: FICCI-KPMG Report 2016 Film – Revenue Split When you pay Rs 100 for a movie ticket, what is the split? • Gross – 100% (Rs 100) • Entertainment Tax – 30% (Rs 30) • Exhibitor – 50% of balance 70% (Rs 35) • Distributor – 50% of balance 70% (Rs 35) • Producer(s) – depends on what deal they have made with distributor – Outright / MG / Commission / Distribution Fee • Co-producer(s) – deal-specific • P&A funding – deal specific, but usually is last-in-first-out. • Talent – actors / director – sweat equity.
  • 9. Source: FICCI-KPMG Report 2016 Exhibition needs to grow! • India has one of the lowest screen densities among global film markets • Urgent & rapid infrastructure growth in multiplex screens is needed • Since the Box office is not as robust as other countries, government intervention is needed by way of SOPs. 126 85 82 61 57 26 13 6 0 20 40 60 80 100 120 140 Screens/Million 9,200 13,118 18,195 22,000 25,000 1,250 1,470 1,650 1,750 1,950 10,000 8,700 7,600 6,500 6,000 - 5,000 10,000 15,000 20,000 25,000 30,000 2011 2012 2013 2014 2015 Screens Multiplex-China Multiplex-India SingleScreen-India 2.0 2.7 3.5 4.7 5.7 1.0 1.3 1.4 1.4 1.5 - 1.0 2.0 3.0 4.0 5.0 6.0 2011 2012 2013 2014 2015 Billion$ Domestic Box Office Size China India
  • 10. Source: FICCI-KPMG Report 2016 Industry = Value x Volume No of screens that a film plays in has grown radically over the past decade, curbing piracy and augmenting theatrical revenues Average ticket prices of multiplexes are 3-6 times that of single screen theatres. 500 1000 3000 3500 4200 0 500 1000 1500 2000 2500 3000 3500 4000 4500 1994 - Hum Aapke Hain Koun 2009 - 3 Idiots 2012 - Ek Tha Tiger 2013 - Dhoom 3 2015 - Bajrangi Bhaijaan No of Screens 250 130 75 40 0 50 100 150 200 250 300 High End Multiplex Multiplex Single Screen Low End Single Screen Ticket Rates (INR)
  • 11. Source: FICCI-KPMG Report 2016 The Indian Film Industry - Key points • Realisation of the value of Film education. Scale needed. Urgently. • Digital gaining over C&S for release window. • Regional shows its importance – Marathi, Gujarati, Punjabi • Hollywood films account for less than 10% of the Indian Film industry. • Share of Revenue from first week is highly critical (ranges from 55- 75% of box office collections) • Funding avenues grow significantly – Banks (IDBI, Exim, Kotak, YES), Film Funds, Crowd-funding. • The industry lacks a globally merchandisable home-grown IP brand.
  • 12. Source: FICCI-KPMG Report 2016 297 329 370 417 475 542 617 710 823 957 1098 0 100 200 300 400 500 600 700 800 900 1000 1100 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 INRBillions TV The Indian Television Industry • The most consistently performing sector of the Indian M&E Industry. • It is, presently, nearly 4 times the size of the Indian Film industry and is the largest employer in the M&E space. • India overtook the US in 2014 as the 2nd largest TV- owning market in the world. The potential: The Indian average subscription rate is US$4-5 per month per TV for Cable TV / DTH against US$40-100 in evolved markets like US / UK / Europe. 14.2% 15.1%
  • 13. Source: FICCI-KPMG Report 2016 TV Connectivity – A Digital blitz With digitisation primarily successful for Phase 1 & 2 (over 95%) and the rest of the country underway on the same path, digital STBs and DTH connections are the way of the future. 0 20 40 60 80 100 120 140 160 180 200 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 74 69 68 70 65 41 5 5 5 5 6 19 25 29 37 55 80 84 87 90 31 34 37 40 44 55 74 76 78 79 8 9 9 10 15 19 20 21 22 22 Subscribers Analog Cable Digital Cable DTH Other Digital
  • 14. Source: FICCI-KPMG Report 2016 TV Connectivity, Channels, ARPUs • India has added, on an avg 4.5 channels/month for the last 15 yrs. • India has ~400 news channels. Channel differentiation is weak. 138 175 200 71% 83% 87% 0 50 100 150 200 250 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2010 2015 2020 TV Households & Penetration 248 258 266 299 334 367 214 219 230 261 298 343 150 200 250 300 350 400 2015 2016 2017 2018 2019 2020 ARPUs DTH Digital Cable 5 55 130 263 550 800 0 100 200 300 400 500 600 700 800 900 1990 1995 2000 2005 2010 2015 Channels & Growth TV households, C&S penetration & ARPUs are all expected to grow over the next 5 years
  • 15. Source: FICCI-KPMG Report 2016 GEC – GRP v/s Profitability Low GRP High GRP Low Profitability High Profitability Long running soaps Low-cost game / performance based reality shows Mythological series Recently released movies Celebrity-based shows Why do we see what we see on GECs? How does programming get divided between building a viewer base and profitability, thorough the application of the concept of ‘stick-ability’!
  • 16. Source: FICCI-KPMG Report 2016 TV Revenues – Getting better, slowly! • High subscription revenue growth expected to bring about innovative content / content for a niche audience. • In 2015, of INR 360 billion paid by consumers, ONLY INR 86 billion reached the broadcasters, which is less than 25%. Underreporting of subscribers, carriage fees & lack of digitisation is the reason for this. 213 245 281 320 361 407 468 548 637 733 47 57 69 75 86 100 118 145 174 203 22% 23% 25% 23% 24% 25% 25% 26% 27% 28% 0% 5% 10% 15% 20% 25% 30% 0 100 200 300 400 500 600 700 800 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 INRBillions Subscription Revenue Paid by Consumers Recd by Broadcasters % 213 245 281 320 361 407 468 548 637 733 116 125 136 155 181 210 242 276 320 365 0 100 200 300 400 500 600 700 800 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 INRBilions TV Revenues - Split & Growth Subscription Revenue Advertising Revenue
  • 17. Source: FICCI-KPMG Report 2016 Viewership & Ad-Revenue – Disparity! View Ad Rev Regional GEC 29.6% 15.9% Hindi GEC 28.4% 27.5% Hindi Movies 13.4% 6.7% Regional Movies 6.6% 2.8% Kids 5.6% 3.8% Regional News 3.5% 8.3% Hindi News 3.0% 8.4% Regional Music 2.7% 1.4% Music 2.6% 3.0% Sports 2.1% 4.3% Infotainment 1.1% 2.0% English Entertainment 0.5% 4.6% English News 0.0% 5.0% Others 0.9% 6.3% 100.0% 100.0% • Regional GECs break the Hindi GEC glass ceiling in viewership. • Regional / Kids channels highly under- indexed • Hindi movies under- indexed on account of changed release window – TV vs digital. • News, Sports, English enjoy severe over- indexing
  • 18. Source: FICCI-KPMG Report 2016 Indian Animation picks up • Broadcasters are willing to pay over double for good quality Indian Animated content as compared to daily soaps / Hindi general entertainment content, even though this segment gets only 5.6% of the viewership, as compared to 28.4% for Hindi GECs. • Also the fact that this segment continues to be under-indexed, with only 3.8% ad-revenue share doesn’t bother broadcasters as this content has long-tail revenue • It offers repeat viewing value, multi- language dubbing value and merchandising value.
  • 19. Source: FICCI-KPMG Report 2016 Hindi GEC Fiction content changing. Slowly. • GECs have finally embraced the tele-series format with season- based programming • The value:volume ratio is reversed in such programming as compared to the daily / weekly soaps. • For the past 20-odd years, the content has largely mirrored American programming of the 70s- 80s, with our soaps comparable to content like the Bold & The Beautiful, Santa Barbara, Dallas, etc.
  • 20. Source: FICCI-KPMG Report 2016 TV – Key Points • Digitisation – increased revenue for the broadcaster, should lead to more investment in content (& hence better quality content) • Global proliferation of Indian-origin content is increasing, albeit for the Indian diaspora only. This is THE BIG opportunity. • Indian animation on TV is starting to matter. • Hindi GECs are exploring new content programming & a changed value:volume mix in revenue models. • Lack of quality viewership measurement systems is an issue. Hopefully, BARC should resolve this. • Targeted advertising is the next step
  • 21. Source: FICCI-KPMG Report 2016 Digital – Growth galore! 10 15 22 30 44 60 81 114 153 199 255 0 50 100 150 200 250 300 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 INRBillions Digital is expected to quadruple its size in the next 5 yrs
  • 22. Source: FICCI-KPMG Report 2016 Telecom Base – Volume galore! Tele-Density: 81.83 Urban: 148.73, Rural: 50.88 What’s coming? As of March 2016 Telecom Service Providers Subscribers Bharti Airtel 25,12,37,263 Vodafone 19,79,46,755 IDEA 17,50,74,042 Reliance 10,24,08,072 Aircel 8,70,86,612 BSNL 8,63,45,709 Tata 6,00,97,988 Telenor 5,24,54,949 Sistema 76,91,379 Videocon 65,63,762 MTNL 35,60,856 Quadrant 31,63,438 TOTAL 1,03,36,30,825
  • 23. Source: FICCI-KPMG Report 2016 Digital – global comparison! • India has the lowest net penetration among all developing countries and much lower than the developed ones. • Despite that, India has more internet users than the US. 19% 53% 46% 60% 87% 90% 86% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% India Brazil China Russia USA UK Japan Internet Penetration Avg Broadband speed % of connections > 4MBPS 2014 2015 2014 2015 South Korea 25.3 20.5 96% 96% Hong Kong 16.3 15.8 89% 92% Japan 15.0 15.0 87% 90% Singapore 12.2 12.5 83% 87% Taiwan 9.5 10.1 78% 88% New Zealand 7.0 8.7 77% 87% Thailand 6.6 8.2 85% 93% Australia 6.9 7.8 66% 72% Malaysia 4.1 4.9 39% 53% China 3.8 3.7 34% 33% Indonesia 3.7 3.0 35% 17% Vietnam 2.5 3.4 14% 31% Philippines 2.5 2.8 9% 10% India 2.0 2.5 7% 14%
  • 24. Source: FICCI-KPMG Report 2016 The Digital Business – A BLITZ of growth! 51.1 64.9 85.2 107.3 129.5 153.1 9 16.2 28.4 46 69.8 102.1 0.0 50.0 100.0 150.0 200.0 250.0 300.0 2015 2016 2017 2018 2019 2020 INRBillions Size of the Digital Business Web Mobile 0 100 200 300 400 500 600 700 800 900 1000 2014 2015 2016 2017 2018 2019 825 857 886 913 938 960 281 348 420 494 570 640 MillionsofUsers TV Internet 18% 0 50 100 150 200 250 300 350 400 450 500 2015 2016 2017 2018 2019 2020 173 232 286 342 399 457 116 188 249 299 369 435 MillionsofUsers Net on Mobile Smartphones
  • 25. Source: FICCI-KPMG Report 2016 Digital – Usage 96% 44% 36% 97% 50% 38% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% WhatsApp FB Messenger Hike % of Smartphone users accessing Apps Oct-Dec 2014 Oct-Dec 2015 22% 19% 10% 37% 22% 17% 0% 5% 10% 15% 20% 25% 30% 35% 40% 2% 0% 1% 18% 10% 3% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% 24% 10% 13% 9% 3% 49% 30% 23% 14% 4% 0% 10% 20% 30% 40% 50% 60% 42% 0% 0% 60% 12% 4% 0% 10% 20% 30% 40% 50% 60% 70% YouTube Hotstar ErosNow 15% 6% 4% 0% 0% 1% 0% 15% 8% 6% 3% 2% 2% 2% 0% 4% 8% 12% 16% 20% 59%28% 8% 1% 4% Top 100 YouTube Channels, by viewership Film / TV Music Education Health Others
  • 26. Source: FICCI-KPMG Report 2016 Content - Global Digital Platforms
  • 27. Source: FICCI-KPMG Report 2016 Indian Digital Platforms
  • 28. Source: FICCI-KPMG Report 2016 Digital – Key Points • Digital platforms of web, mobile & smart TVs are the present & the future. • Content consumption modes & patterns are changing with a large number of sub-18-yr-olds finding their ‘stars’ online. • YouTube is taking the Indian market seriously and has set up a ‘YouTube Space’ & ‘YouTube Educator Lab’ in India, in partnership with Whistling Woods International. • Content creation needs to adapt. Content creators are yet to commence utilising the unique characteristics of the digital platforms & of ‘India’ & are still treating it as a 3rd screen with no censorship. Changes needed are: o Multi-formatting the content being created to include Digital platforms o Specialised writing / content creation structures for Indian digital platforms keeping in mind the unique characteristics of digital & that of Indian content. o Utilising the entire spectrum of the platform – clickable / interactive video, AR/VR (360 deg video, etc), gamification of content, etc…
  • 29. Source: FICCI-KPMG Report 2016 24 31 35 40 45 51 58 67 78 91 0 10 20 30 40 50 60 70 80 90 100 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 INRBillions Animation, VFX & Post-Production • The industry has shown growth on the back of strong VFX / post-prodn growth, but Animation has not grown as much. • Lack of original IP creation is a major reason of the low growth of the Animation industry. 16.1% 13.8% 1 2 2 4 6 1 4 1 5 3 3 0 0 1 2 3 4 5 6 7 2000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Animated Films Released Theatrically 2014 2015
  • 30. Source: FICCI-KPMG Report 2016 23% 22% 20% 18% 16% 15% 14% 13% 12% 12% 14% 13% 12% 11% 11% 10% 10% 9% 8% 8% 20% 22% 23% 25% 28% 31% 34% 36% 39% 42% 44% 44% 45% 45% 45% 44% 43% 41% 40% 39% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Animation Services Animation Product Creation VFX Post-Prodn Animation, VFX & Post-Production • Even though all areas of the industry are growing, the growth is disparate between Animation & VFX / post-prodn. • From a 65:35 ratio in 2011, the sub-segments reach a 80:20 ratio in 2020. 7.1 7.6 8.0 8.1 8.3 8.8 9.5 10.4 11.4 12.54.2 4.5 4.7 5.1 5.6 6.0 6.5 7.0 7.6 8.46.2 7.7 9.3 11.3 14.4 18.0 22.5 28.4 35.8 45.1 13.5 15.5 17.7 20.4 22.8 25.5 28.6 32.3 36.5 42.0 - 20.0 40.0 60.0 80.0 100.0 120.0 INRBillions
  • 31. Source: FICCI-KPMG Report 2016 Animation on Indian Screens While, only 3 out of the top 10 characters on Indian TV are of Indian origin, 7 out of the top 10 episodes are for Indian shows
  • 32. Source: FICCI-KPMG Report 2016 10 13 15 19 24 27 31 34 39 45 51 0 5 10 15 20 25 30 35 40 45 50 55 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 INRBillions Gaming Gaming • Grew over 20%, on the back of mobile gaming. • With 1bn+ users, increasing travel time & a young population, India is one of the faster-growing low-end mobile gaming markets in the world 13.9% 46% 49% 51% 52% 55% 57% 39% 35% 32% 30% 28% 26% 15% 16% 17% 18% 18% 17% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2014 2015 2016 2017 2018 2019 Mobile Console PC & Online 12.8%
  • 33. Source: FICCI-KPMG Report 2016 9 9 11 10 10 11 12 14 16 18 21 0 2 4 6 8 10 12 14 16 18 20 22 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 INRBillions Music • The Music industry shows growth for the first time in 3 years. • Over 50% of Indian web users access unlicensed content. • Music-on-cloud is expected to gather steam as it rides the 3G/4G wave to deliver streamed music, ad supported, free of cost as well as ‘freemium’ music, hopefully denting piracy. 13.8% 10.2%
  • 34. Source: FICCI-KPMG Report 2016 Music - Consumption • The consumption % reversed from 2010 to 2015 between physical & digital. • Films fuel over 80% of the Music industry (Not good!) • Indian non-film music (Indie / pop / rock / regional) is struggling, with only Religious & Indian Classical music managing to survive. • Very little structured music education & training 81.0% 10.0% 4.0%2.2% 2.8% Music Consumption by Genre Bollywood International South Indian Punjabi Others 58% 33% 6% 3% 20% 55% 15% 10% 0% 10% 20% 30% 40% 50% 60% 70% Physical Digital TV & Radio Public Performance Music Consumption by Source 2010 2015
  • 35. Source: FICCI-KPMG Report 2016 10 11 13 15 17 20 23 28 33 38 43 0 5 10 15 20 25 30 35 40 45 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 INRBillions Radio Radio • The growth in 2015 has been built around increased ad revenue from politics, entertainment, real estate & e-commerce. • The shift to radio is as it is a cost- effective advertising vehicle, as compared to TV. 16.9% 15.3%
  • 36. Source: FICCI-KPMG Report 2016 Sports • With the ‘private’ sports leagues being taxed on lines similar to live entertainment, the line between sports and entertainment has blurred. • Sports is one of the largest content providers to the broadcast, live events & digital industries. • In 2015: o Female viewership was at an unprecedented 38% o Rural viewership at 45%. Investment IPL Reach Investment ISL PKL IPTLPWL IBL UBA HIL Star Sports INR 200 billion Sony Six INR 192 billion Ten Sports INR 6 million Neo Sports INR 120 million
  • 37. Source: FICCI-KPMG Report 2016 Live Events • Yet to be ‘organised’ • Growth of ~20% • Margin growth flat • Government spending (elections / events) still the largest contributor • Licensing issues • Taxation issues • Live IP-based entertainment on the rise: o Stand up Comedy o Theatre
  • 38. Source: FICCI-KPMG Report 2016 Theme Parks • Emerging area • Destination entertainment (non- natural-tourism based) yet to consolidate in India • Evolution: o 1980 – Appu Ghar o 1990 – Esselworld o 2010 – Imagica & Wonderla o 2015 – INR 300 bn+ investment committed o Over next 5 yrs, 19% CAGR.
  • 39. Source: FICCI-KPMG Report 2016 Jobs in M&E • As per the NSDC, by 2022, the Media & Entertainment industry would be requiring 12.5 lakh professionals, ~85% of these in the Film, TV & digtial verticals. • The media industry as a whole still lacks sufficient world-class training facilities to enable professionalism and best practices. • Significant government- intervention and private investments will be needed to correct this imbalance 1.60 2.40 4.40 1.40 2.80 6.40 0.60 0.70 1.30 0.20 0.30 0.40 0.20 0.30 0.40 - 1.00 2.00 3.00 4.00 5.00 6.00 7.00 2014 2017 2022 Employment Growth Film TV Print Radio Animation, VFX, Gaming
  • 40. Source: FICCI-KPMG Report 2016 Key Disruptions in 2015 / Trends for 2016 • ANALYTICS – Audience Analytics, Operations Analytics, Event Driven Analytics, Predictive Analytics, Campaign Analytics • Film – 4k, Digital Rights, Immersive, VR / AR • TV – 2nd/3rd screen, Targeted Advertising, Interactivity • Animation & VFX – 3D printing, non-photorealistic rendering, VR / AR • Advertising – Cross platform, Targeted, Programmatic buying • Music – Predictive analytics • Radio – Online platforms • OOH – Watcher Analytics, Interactivity
  • 41. Source: FICCI-KPMG Report 2016 What are the pain-points of the Indian M&E Industry? • Lack of original Intellectual Property creation leading to lack of a globally merchandisable brand. • M&E Education & Training o Of the 4 lakh people employed, nearly 75% involved in content creation have no formal training. o Very few world-class Film & Media institutes with a combined output of approx 500 graduates a year, with 200 of them being from a single institute. • Innovation – we are followers, not leaders when it comes to formats or technical / narrative innovation. • Piracy - Affects every sector of the industry & causes nearly 35% revenue reduction
  • 42. Source: FICCI-KPMG Report 2016 The Great Opportunities in M&E In the M&E industry, building volume is hard. India already has the volume. We now need to build value to each unit of the already existing volume. This is done by enhancing quality. The best way to build quality is be educating & training the industry. The big opportunities in M&E are: • Screens for Film • IP creation • Digital platforms • Education in M&E
  • 43. Thank You! Chaitanya Chinchlikar Vice President – Business Development chaitanya.c@whistlingwoods.net