The Indian Media & Entertainment Industry 2015

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  • The Indian Media & Entertainment Industry

    2015

    Presentation by

    Trends & Analysis - Past, Present & Future

  • Source: FICCI-KPMG Report 2015

    The Indian M&E IndustryThe Indian Media & Entertainment Industry includes

    Television, Film, Print, Radio, Music, Digital Media, Animation, Gaming, Events & Live Media, Out-of-home & other ancillary media.

    Valued at over US$ 16.2bn (1,02,600Cr INR) which is 0.9% of the global M&E industry (estimated at US$ 1.8tn)

    Its growth (11.7%) is nearly double the growth of the global M&E industry (at 6.1%)

    High-volume, low-value.

    580 587652

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    2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

    INR

    Billi

    ons

    11.7%

    13.9%

  • Source: FICCI-KPMG Report 2015

    Indian M&E Industry % BreakdownTV, which is currently 46% of the industry, is expected to break the 50% mark in

    2019. Film is expected to drop from 12% in 2008 to 10% in 2018, indicating that it is not growing as fast as TV. Print is expected to decline even more. Digital is expected

    double its share of the M&E market in the next 5 years.

    2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

    42% 44% 46% 45% 45% 45% 46% 47% 47% 48%

    49% 50%

    30% 30% 30% 29% 27% 26% 26% 25% 23% 22% 21% 20%

    18% 15% 13% 13% 14% 14% 12% 12% 12% 11% 11% 10%

    1% 1% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2%

    1% 1% 1% 1% 1% 1%

    1% 1% 1% 1% 1% 1%

    3% 2% 2% 2% 2% 2%

    2% 2% 2% 2% 2% 2%

    3% 3% 4% 4% 4% 4% 4% 4% 4% 5% 5% 5%

    1% 1% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2%

    1% 1% 2% 2% 3% 3% 4% 5% 6% 8% 8% 8%

    TV Print Motion Picture Radio Music OOH Animation & VFX Gaming Digital

  • Source: FICCI-KPMG Report 2015

    The Indian Film Industry Largest in the world by

    films released theatrically or tickets sold (over 1,400 films released & over 3.25bn tickets sold)

    2014 was a year of introspection when the star-backed films performed average and the script-backed films did great, marking a coming of age of Bollywood.

    1913-2000 2000-2004 2004-2010 2010-2014Production Analog Analog Analog Analog & Digital

    Post-Production Analog Digital Digital DigitalDistribution Analog Analog Analog & Digital Analog & Digital

    The Digital-isation of the Industry

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    89 8393

    113125 126

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    156171

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    2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

    INR

    Billi

    ons

    Film

    0.9%

    10%

  • Source: FICCI-KPMG Report 2015

    The Indian Film Industry = BollywoodWhile Bollywood is a generally used term to define the Indian Film industry,

    Hindi films accounted for only 16% of the 1,400+ films that released.

    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 2015

    Film Revenues BreakdownDomestic Revenues have always accounted for over 90% of the Indian Film

    industrys revenues. The trend is expected to strengthen against International revenues. This is THE double-edged sword for the industry.

    Proving the digital mediums

    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. 0%

    20%

    40%

    60%

    80%

    100%

    2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

    74% 74% 76% 75% 74% 73% 73% 72% 72% 71%

    8% 7% 7% 7% 7% 7% 7% 7% 7% 7%

    10% 11% 11% 12% 12% 11% 11% 11% 11% 11%

    5% 5% 5% 6% 7% 8% 8% 9% 10% 11% IN

    R B

    illio

    ns

    Film Revenues % Breakdown

    Domestic Theatrical Overseas Theatrical Home Video Cable & Satellite Rights Ancillary Revenues

  • Source: FICCI-KPMG Report 2015

    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.

    1.1 1 1.11.4 1.6 1.6

    0.9

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    44.5

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    2009 2010 2011 2012 2013 2014

    Domestic Box OfficeSize (US$ Bn)

    IndiaChina

    1,000 1,250 1,470 1,650 1,750

    6,256

    9,200

    13,118

    18,195

    22,000

    -

    5,000

    10,000

    15,000

    20,000

    25,000

    2010 2011 2012 2013 2014

    Multiplex Screens

    IndiaChina

    125

    85 82

    61 57

    2613 7

    0

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    140Screens/Million

  • Source: FICCI-KPMG Report 2015

    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

    239

    12795

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    High End Multiplex

    Multiplex Single Screen Low End Single Screen

    Ticket Rates (INR)

    5001000

    3000

    4500

    0500

    100015002000250030003500400045005000

    1994 - Hum Aapke Hain Koun

    2009 - 3 Idiots 2012 - Ek Tha Tiger

    2013 - Dhoom 3

    No of Screens

    Average ticket prices of multiplexes are 3-4 times that of single screen theatres.

  • Source: FICCI-KPMG Report 2015

    The Indian Film Industry - Key points Realisation of the value of Film education. Scale needed. Urgently. Script-backed v/s Star-backed. Hollywood films account for less than 10% of the Indian Film industry. Over-reliance on Domestic Theatrical revenues for mid-range films. Increased in-film advertising Tourism & products Increased no of domestic prints 5000 Increased no of overseas prints 2000 Share of Revenue from first week is highly critical (ranges from

    55-75% of box office collections) The industry lacks a globally merchandisable home-grown IP brand.

  • Source: FICCI-KPMG Report 2015

    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 (168 million TV households 82% penetration).

    The potential: The Indian average subscription rate is US$5-6 per month per TV for Cable TV / DTH against US$40-100 in evolved markets like US / UK / Europe.

    241 257297

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    2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

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    TV

    13.8%

    15.5%

  • Source: FICCI-KPMG Report 2015

    TV Connectivity A Digital blitzWith 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. 020

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    2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

    6574 69 68 70

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    275 5 5

    56 19 25

    2945

    67

    85 9094

    28

    3134

    3740

    48 61 7274

    76

    8

    8

    99

    1011

    1112

    1212

    Subscribers

    Analog Cable Digital Cable DTH Other Digital

  • Source: FICCI-KPMG Report 2015

    TV Connectivity A Digital blitz

    TV households, C&S penetration & ARPUs are all expected to grow over the next 5 years, enabling distribution-led growth in TV

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    74%76%78%80%82%84%86%88%90%92%

    2013 2014 2019

    TV Households (Millions) C&S penetration

    175196

    225248

    273

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    200220

    242266

    292

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    150170190210230250270290310330350

    2014 2015 2016 2017 2018 2019

    ARPUs

    Digital Cable DTH

  • Source: FICCI-KPMG Report 2015

    TV Channels galore! Channel growth over

    the past 14 years has been significant. On an average, India has added 3.2 channels per month for the past 14 years.

    India has more than 400 news channels.

    Channel differentiation is weak.

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    1991 1995 2000 2005 2010 2014

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    No of Channels

  • Source: FICCI-KPMG Report 2015

    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 TV? How do funds available for content creation get allocated between building a viewer base and