entertainment industry
Content
INTRODUCTION
The media and entertainment industry consists of many different segments under its folds such as television, print, and films. It also includes smaller segments like radio, music etc. Entertainment Industry in India has registered an explosive growth in last two decades making it one of the fastest growing industries in India. From a single state owned channel, Doordarshan in the 1990s there are more than 400 active channels in the country. As per the recent report by PricewaterhouseCoopers (PwC), Indians are likely to spend more on entertainment in the coming years with a steady growth in their disposable income. And as per the combined survey report by KMPG and FICCI, the entertainment industry in India is expected to expand by 12.5% every year and is likely to reach US$ 20.09 billion by the year 2013. The industry pegged at INR 5808 billion in 2009 as compared to INR 3565 billion in 2005. The Indian Media & Entertainment Industry grew by US$ 12.9 billion in 2009 to US$ 14.4 billion in 2010, a growth of 11 per cent, according to a report by the Federation of Indian Chambers of Commerce and Industry (FICCI) and research firm KPMG. The report also states that backed by positive industry sentiment and growing media consumption, the industry is estimated to achieve growth of 13 per cent in 2011 to touch US$ 16.2 billion. As the industry braces for exciting times ahead, the sector is projected to grow at a CAGR of 14 percent to reach US$ 28.1 billion by 2015.
Fig: Share of various segments in Media and Entertainment sector
FILM INDUSTRY
Films are the most important form of entertainment in India. Film industry in India is among the largest in the world in terms of films produced (approximately 800) with more than 1,000 films produced every year in more than 20 languages which include films in Hindi, Bengali, Tamil, Telegu, Punjabi and Malayalam. Approximately twentythree million Indians go to see a film every day. India also has the highest number of theatre admissions. The Indian film market derives almost 90% of its revenue from non-English language movies, largely dominated by Hindi films, followed by South Indian films and other regional films. Bollywood accounts for 46 percent of the total Indian film industry revenues film industry experts. According to unofficial estimates available in January 2001, the Indian film industry has an annual turnover of Rs. 60 billion (approximately US$1.33 billion). It employs more than 6 million people, most of whom are contract workers as opposed to regular employees. As at the start of 2001, a reasonable budget film in Hindi could cost US$1.75 million. A low budget Hindi film can be made for even as low as Rs. 15 million. A big budget Hindi movie can cost in excess of US$30 million. The 'bigness' of the budget is attributable mainly to the high fees paid to 'stars', celebrated music directors, high-end technologies and expensive travel costs to shoot in exotic locations worldwide. At the time of writing, it is believed that 'stars' like Shah Rukh Khan and Salman Khan are paid Rs. 20 million (US$440,000) per film. Film Federation of India is the apex body of film industry in India whose objective is to popularize the cinema, to provide a place to members for meeting etc. India has a National Film Development Corporation (NFDC) which finances some films. A few film makers, who would find it hard to obtain finance from the regular sources, have been financed by the NFDC. However, NFDC cannot be considered to play a central role in the film industry because it finances too few films which, too, are not of the type that has made the Indian film industry so vibrant. The Indian film industry is projected to grow from US$3.2 billion in 2010 to US$5 billion by 2014 at a CAGR of 14.1%.Growth is expected to come from the expansion of multiplexes in smaller cities, investments by foreign studios in domestic and regional
productions, the growing popularity of niche movies and the emergence of digital and ancillary revenue streams. This market is witnessing rising investments from Indian and foreign studios, with a gradual shift in favour of regional films as compared to Hindi films. Studios are also releasing dubbed versions of popular Hollywood films, while multiplexes are increasing their screenings of regional movies. Demand drivers for the Indian Film Industry Increasing disposable incomes: Disposable incomes have been rising at a CAGR (FY 2000-2007) of 10.3%. The share of recreation in disposable income is expected to increase at the rate of 8% annually. Hence, the expenditure on recreational activities such as film viewing has increased. No. of screens – Multiplex & single screen: The southern states of Tamil Nadu, Karnataka, Kerala and Andhra Pradesh account for 59% of the number of theatres of India, while servicing only 22% of the population. Across India, the number of multiplex screens is expected to increase from 1,350 in 2007 to around 5,000 by 2012. The number of single screens in the same time is expected to reduce from 8,841 to 7,500.
Fig: Demand drivers for the Indian Film Industry
Average ticket prices: Average ticket price in single screens is around Rs 13 while Rs 110 in multiplexes. Most of the new multiplexes are planned in Tier II cities (with lower ticket prices). Hence, multiplex ticket prices are expected to reduce from Rs 110 in 2007 to Rs 80 in 2012. Increase in the number of multiplexes is positively influencing the average ticket prices with the overall average ticket prices expected to rise from Rs 22 in 2007 to over Rs 35 in 2012.
Number of movies released: In 2007 alone 1,146 different films were released and this trend is increasing at around 8-10% YoY. The number of films has reached a stable state in terms of numbers and is expected to grow only at around 5% YoY. Also, the Indian film segment is no longer dominated only by Hindi movies. In 2007, 241 Telugu films and 76 Bhojpuri films were released.
Globalization of the Indian film industry: Indian producers are improving the international marketability of large budget Indian movies by building partnerships with international screenwriters, composers and technicians. International film studios are also producing and distributing Hindi and regional movies. Of the top six international movie studios, four are involved in distributing or producing Indian movies. A number of Indian film studios and M&E companies are also expanding their international footprint by acquiring international theatre chains and production studios.
RADIO
Radio broadcasting in India started in British India in 1923 with the Radio Club of Bombay. All India Radio (AIR) was established in 1936 which is one of the largest radio networks in the world including the AIR FM. AM, FM and even Satellite Radio have made a huge impact on the Industry in India. Most of the media houses either already have a presence in the industry or are looking to get a license in the next round. Famous stations are Radio Mirchi (of the Times Group) Radio City, Red FM, Big FM, Fever, Radio One etc. Till 1990 Indian economy was closed, no private player was allowed to enter and Akashwani has the sole responsibility to cater to the wide and culturally diverse
Indian consumer base. In the last 5 years, the Radio industry in India has seen a CAGR of approximately 20% and has grown to a size of around Rs. 8.3 billion in 2008. By the end of the 2010, there were 245 active radio stations in India and had a market size of INR 10 billion. It registered a cumulative growth rate of 11 percent from 2007 to 2010. The industry is projected to grow at a CAGR of 20 percent over 2010- 2015 and is expected to be INR 25 billion in terms of revenue. Phase III privatization of the radio FM is expected to add 839 new radio stations in 294 cities. The government has approved Foreign Direct Investment (FDI) in FM radio channels to 26 percent from the current 20 percent. Ministry of Information and broadcasting is planning to release additional frequencies in all markets, automatic renewal of license at the end of the initial term of the license of the term. One of the major reasons for such an interest in the industry is the increased profitability. The government has cut the license fees to 1/10th of the previous amount.
Different technologies in broadcast radio:
Amplitude modulation (AM) is a technique used in electronic communication, most commonly for transmitting information via a radio carrier wave. Frequency modulation (FM) is a form of modulation that represents information as variations in the instantaneous frequency of a carrier wave. FM is commonly used at VHF radio frequencies for high-fidelity broadcasts of music and speech. Today radio is used for many forms of communication from long distance satellite communications to the personal cell phones that are widely used. In addition to this wireless communications are becoming more important for data as demonstrated by the rapid growth in Wi-Fi
HD radio ("hybrid digital" or "high definition") is a brand name of a method of digital transmission of AM and FM radio stations. The HD Radio system is unique which allows stations to broadcast crystal-clear audio and a variety of text-based services, as well as more FM channels, without changing to new frequency bands. Hybrid system is a system in which digital signals are sent along with the analog carrier as the standard for AM and FM
broadcasting in the United States. FM stations can offer multiple channels (called "Multicast" channels) on the same frequencies allocated to analog radio stations.
Internet radio Internet radio e-Radio is an audio broadcasting service transmitted via the Internet. Broadcasting on the Internet is usually referred to as webcasting since it is not transmitted broadly through wireless means but is delivered over the World Wide Web. The term "eRadio" suggests a streaming medium that presents listeners with a continuous stream of audio to which they have no control much like traditional broadcast media. With the coming of more channels, and the emergence of lifestyle advertising, radio will become a push and pull medium. As said earlier, is not just making a comeback but is being reincarnated into a new avatar. Common frequency band includes the following: • AM radio - 535 kilohertz t - 1.7 megahertz • FM radio - 88 megahertz - 108 megahertz AM radio has been around a lot longer than FM radio. The first radio broadcasts occurred in 1906 or so, and frequency allocation for AM radio occurred during the 1920s. In the 1920s, radio and electronic capabilities were fairly limited, hence the relatively low frequencies for AM radio. FM radio was invented by a man named Edwin Armstrong in order to make highfidelity (and static-free) music broadcasting possible. He built the first station in 1939, but FM did not become really popular until the 1960s. .
The media and entertainment industry consists of many different segments under its folds such as television, print, and films. It also includes smaller segments like radio, music etc. Entertainment Industry in India has registered an explosive growth in last two decades making it one of the fastest growing industries in India. From a single state owned channel, Doordarshan in the 1990s there are more than 400 active channels in the country. As per the recent report by PricewaterhouseCoopers (PwC), Indians are likely to spend more on entertainment in the coming years with a steady growth in their disposable income. And as per the combined survey report by KMPG and FICCI, the entertainment industry in India is expected to expand by 12.5% every year and is likely to reach US$ 20.09 billion by the year 2013. The industry pegged at INR 5808 billion in 2009 as compared to INR 3565 billion in 2005. The Indian Media & Entertainment Industry grew by US$ 12.9 billion in 2009 to US$ 14.4 billion in 2010, a growth of 11 per cent, according to a report by the Federation of Indian Chambers of Commerce and Industry (FICCI) and research firm KPMG. The report also states that backed by positive industry sentiment and growing media consumption, the industry is estimated to achieve growth of 13 per cent in 2011 to touch US$ 16.2 billion. As the industry braces for exciting times ahead, the sector is projected to grow at a CAGR of 14 percent to reach US$ 28.1 billion by 2015.
Fig: Share of various segments in Media and Entertainment sector
FILM INDUSTRY
Films are the most important form of entertainment in India. Film industry in India is among the largest in the world in terms of films produced (approximately 800) with more than 1,000 films produced every year in more than 20 languages which include films in Hindi, Bengali, Tamil, Telegu, Punjabi and Malayalam. Approximately twentythree million Indians go to see a film every day. India also has the highest number of theatre admissions. The Indian film market derives almost 90% of its revenue from non-English language movies, largely dominated by Hindi films, followed by South Indian films and other regional films. Bollywood accounts for 46 percent of the total Indian film industry revenues film industry experts. According to unofficial estimates available in January 2001, the Indian film industry has an annual turnover of Rs. 60 billion (approximately US$1.33 billion). It employs more than 6 million people, most of whom are contract workers as opposed to regular employees. As at the start of 2001, a reasonable budget film in Hindi could cost US$1.75 million. A low budget Hindi film can be made for even as low as Rs. 15 million. A big budget Hindi movie can cost in excess of US$30 million. The 'bigness' of the budget is attributable mainly to the high fees paid to 'stars', celebrated music directors, high-end technologies and expensive travel costs to shoot in exotic locations worldwide. At the time of writing, it is believed that 'stars' like Shah Rukh Khan and Salman Khan are paid Rs. 20 million (US$440,000) per film. Film Federation of India is the apex body of film industry in India whose objective is to popularize the cinema, to provide a place to members for meeting etc. India has a National Film Development Corporation (NFDC) which finances some films. A few film makers, who would find it hard to obtain finance from the regular sources, have been financed by the NFDC. However, NFDC cannot be considered to play a central role in the film industry because it finances too few films which, too, are not of the type that has made the Indian film industry so vibrant. The Indian film industry is projected to grow from US$3.2 billion in 2010 to US$5 billion by 2014 at a CAGR of 14.1%.Growth is expected to come from the expansion of multiplexes in smaller cities, investments by foreign studios in domestic and regional
productions, the growing popularity of niche movies and the emergence of digital and ancillary revenue streams. This market is witnessing rising investments from Indian and foreign studios, with a gradual shift in favour of regional films as compared to Hindi films. Studios are also releasing dubbed versions of popular Hollywood films, while multiplexes are increasing their screenings of regional movies. Demand drivers for the Indian Film Industry Increasing disposable incomes: Disposable incomes have been rising at a CAGR (FY 2000-2007) of 10.3%. The share of recreation in disposable income is expected to increase at the rate of 8% annually. Hence, the expenditure on recreational activities such as film viewing has increased. No. of screens – Multiplex & single screen: The southern states of Tamil Nadu, Karnataka, Kerala and Andhra Pradesh account for 59% of the number of theatres of India, while servicing only 22% of the population. Across India, the number of multiplex screens is expected to increase from 1,350 in 2007 to around 5,000 by 2012. The number of single screens in the same time is expected to reduce from 8,841 to 7,500.
Fig: Demand drivers for the Indian Film Industry
Average ticket prices: Average ticket price in single screens is around Rs 13 while Rs 110 in multiplexes. Most of the new multiplexes are planned in Tier II cities (with lower ticket prices). Hence, multiplex ticket prices are expected to reduce from Rs 110 in 2007 to Rs 80 in 2012. Increase in the number of multiplexes is positively influencing the average ticket prices with the overall average ticket prices expected to rise from Rs 22 in 2007 to over Rs 35 in 2012.
Number of movies released: In 2007 alone 1,146 different films were released and this trend is increasing at around 8-10% YoY. The number of films has reached a stable state in terms of numbers and is expected to grow only at around 5% YoY. Also, the Indian film segment is no longer dominated only by Hindi movies. In 2007, 241 Telugu films and 76 Bhojpuri films were released.
Globalization of the Indian film industry: Indian producers are improving the international marketability of large budget Indian movies by building partnerships with international screenwriters, composers and technicians. International film studios are also producing and distributing Hindi and regional movies. Of the top six international movie studios, four are involved in distributing or producing Indian movies. A number of Indian film studios and M&E companies are also expanding their international footprint by acquiring international theatre chains and production studios.
RADIO
Radio broadcasting in India started in British India in 1923 with the Radio Club of Bombay. All India Radio (AIR) was established in 1936 which is one of the largest radio networks in the world including the AIR FM. AM, FM and even Satellite Radio have made a huge impact on the Industry in India. Most of the media houses either already have a presence in the industry or are looking to get a license in the next round. Famous stations are Radio Mirchi (of the Times Group) Radio City, Red FM, Big FM, Fever, Radio One etc. Till 1990 Indian economy was closed, no private player was allowed to enter and Akashwani has the sole responsibility to cater to the wide and culturally diverse
Indian consumer base. In the last 5 years, the Radio industry in India has seen a CAGR of approximately 20% and has grown to a size of around Rs. 8.3 billion in 2008. By the end of the 2010, there were 245 active radio stations in India and had a market size of INR 10 billion. It registered a cumulative growth rate of 11 percent from 2007 to 2010. The industry is projected to grow at a CAGR of 20 percent over 2010- 2015 and is expected to be INR 25 billion in terms of revenue. Phase III privatization of the radio FM is expected to add 839 new radio stations in 294 cities. The government has approved Foreign Direct Investment (FDI) in FM radio channels to 26 percent from the current 20 percent. Ministry of Information and broadcasting is planning to release additional frequencies in all markets, automatic renewal of license at the end of the initial term of the license of the term. One of the major reasons for such an interest in the industry is the increased profitability. The government has cut the license fees to 1/10th of the previous amount.
Different technologies in broadcast radio:
Amplitude modulation (AM) is a technique used in electronic communication, most commonly for transmitting information via a radio carrier wave. Frequency modulation (FM) is a form of modulation that represents information as variations in the instantaneous frequency of a carrier wave. FM is commonly used at VHF radio frequencies for high-fidelity broadcasts of music and speech. Today radio is used for many forms of communication from long distance satellite communications to the personal cell phones that are widely used. In addition to this wireless communications are becoming more important for data as demonstrated by the rapid growth in Wi-Fi
HD radio ("hybrid digital" or "high definition") is a brand name of a method of digital transmission of AM and FM radio stations. The HD Radio system is unique which allows stations to broadcast crystal-clear audio and a variety of text-based services, as well as more FM channels, without changing to new frequency bands. Hybrid system is a system in which digital signals are sent along with the analog carrier as the standard for AM and FM
broadcasting in the United States. FM stations can offer multiple channels (called "Multicast" channels) on the same frequencies allocated to analog radio stations.
Internet radio Internet radio e-Radio is an audio broadcasting service transmitted via the Internet. Broadcasting on the Internet is usually referred to as webcasting since it is not transmitted broadly through wireless means but is delivered over the World Wide Web. The term "eRadio" suggests a streaming medium that presents listeners with a continuous stream of audio to which they have no control much like traditional broadcast media. With the coming of more channels, and the emergence of lifestyle advertising, radio will become a push and pull medium. As said earlier, is not just making a comeback but is being reincarnated into a new avatar. Common frequency band includes the following: • AM radio - 535 kilohertz t - 1.7 megahertz • FM radio - 88 megahertz - 108 megahertz AM radio has been around a lot longer than FM radio. The first radio broadcasts occurred in 1906 or so, and frequency allocation for AM radio occurred during the 1920s. In the 1920s, radio and electronic capabilities were fairly limited, hence the relatively low frequencies for AM radio. FM radio was invented by a man named Edwin Armstrong in order to make highfidelity (and static-free) music broadcasting possible. He built the first station in 1939, but FM did not become really popular until the 1960s. .
