India is the 14th largest Entertainment and Media
(E&M) market in the world, with industry revenues contributing about one per cent of its gross domestic product, according to a CII-PwC report, entitled 'India Entertainment & Media Outlook 2012'.
The report was released in New Delhi on October 29. Among the BRIC (Brazil, Russia, India, and China) countries, India's entertainment
and media market is the fastest growing, followed by China, Russia and Brazil.
"There are two reasons for India growing faster than the other BRIC countries. Firstly, India's market size
is smaller than the other BRIC countries and therefore its growth is faster. Secondly, whether it is advertising related or consumer spending, it is very under-penetrated and therefore India has a large potential to grow in the future," says Smita Jha, Leader, Entertainment & Media, PwC India.
China is the third-largest market in the world and likely to surpass Japan over the next decade to become the second-largest market worldwide, after the US.
Consumers in India spend around $3 to $3.5 (Rs 150-Rs 175) on a cable connection whereas consumers in the US spend approximately $50 per connection. Similarly, in Brazil and China, the rates are high. Movie ticket prices here are also lower and, in general, entertainment-led products are cheaper than they are globally.
The Indian E&M industry, with revenues of about Rs 80,500 crore ($17.2 billion) in 2011, is set to grow robustly over the next few years on the back of steady macro-economic growth, rising spending power and positive demographic indicators. Industry revenues are expected to reach Rs 1.76 trillion ($37.6 billion) by 2016, with a CAGR of about 17 per cent from 2012 to 2016.
Inclusion of internet access as one of the market segments within the E&M industry is the reason growth projections are more optimistic this year. "Without internet access, India's E&M industry's CAGR would be 13 per cent," says Jha.
The internet access and gaming segments have been the fastest growing in India, with annual growth rates of 57 and 33 per cent, respectively. According to the report, the gaming segment, though a small contributor to the overall industry, has been growing due to the rising popularity of mobile, online and social media gaming.
Television, being the largest segment, has been the highest contributor (in terms of revenue addition) to the industry, with an annual growth rate of 16 percent, says the report.