entertainment - august 2013

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Growth of television industry (in 2011)

Source: KPMG Report 2013, Aranca Research

Note: E - Estimates

With a growth rate of 15.8 per cent in 2011, Indian television industry stood second when compared with BRIC and other

major developed economies

Currently, the television industry in India derives the major share of its revenue from subscription segment (65 per cent)

and the rest from advertising (35 per cent)

The revenue share from subscription segment is expected to reach 69 per cent by 2016, driven by higher penetration of

subscription television

Television segments

2.1%

3.6%

10.6%

14.4%

15.8%

22.5%

United States

UnitedKingdom

China

Russia

India

Brazil

35% 31%

65% 69%

2011 2016E

TV advertising Subscription revenues


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Advertising revenue forecast


Note: OOH - Out Of Home, F - Forecast

Total spending on advertising across all media stood at USD5.5 billion, accounting for 41 per cent of the total industry

revenue in 2011

Advertising revenue is expected to touch USD10.8 billion by 2016 from USD5.5 billion in 2011

Print is the largest contributor, accounting for 46 per cent of the advertising share

Advertising revenue share (2011)

39%

46%

6%

5%4%

TV

Print

OOH

Digital Advertising

Radio

5.05.1

4.9

5.7 5.5 6.17.1

8.1

9.310.8

-10%

-5%

0%

5%

10%

15%

20%

0

2

4

6

8

10

12

2007

2008

2009

2010

2011

2012F

2013F

2014F

2015F

2016F

Total revenue- (USD billion) Growth (%) -RHS


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Source: Company Websites, Business Week, KPMG report 2012 Aranca Research

Notes: M&E - Media and Entertainment

Company Business description

Star India Pvt Ltd

Fully owned subsidiary of News Corporation

Portfolio includes 33 channels in seven languages across various categories such as soaps, reality, news and films

Also manages a portfolio of business ventures including DTH operator Tata Sky, cable system Hathway, channel

distributor STAR Den, news channel operator MCCS, the film production and distribution business Fox STAR StudiosIndia and STAR CJ Home Shopping

Zee Entertainment Enterprises Ltd

Fully owned subsidiary of Essel Group and first listed media company in India

One of the largest producers and aggregators of Hindi programming in the world

An estimated reach of more than 670 million viewers across 168 countries

Pioneer of television entertainment industry in India; launched Zee TV- the countrys first Hindi satellite channel

Range of businesses across the value chain in the M&E industry

Multi Screen Media Pvt Ltd

Fully owned subsidiary of Sony Pictures Entertainment

Comprises of Sony Entertainment Television (SET) and SAB, leading Hindi general entertainment television

channels; MAX, a movies and special events channel; and PIX, a channel that airs Hollywood movies

Its programming spans across various genres including drama, reality, comedy, horror, Bollywood and live events


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Source: Company Websites, The Times of India, Aranca Research

Notes: CAGR - Compound Annual Growth Rate, FY - Financial Year


Bennett, Coleman and Co Ltd

Largest media conglomerate in India

Publishes worlds most widely circulated English broadsheet daily The Times of India and second most widely

circulated financial daily EconomicTimes

Other prominent publications include magazines such as Zigwheels, Filmfare, Femina and Top Gear and Hindi dailies

such as Navbharat Times and Sandhya Times

The group has also diversified into radio and television business

HT Media Ltd

Hindustan Times is the second most widely read newspaper with 3.8 million readers in India

Other prominent publications include the business daily Mint and the Hindi daily Hindustan

The group has also forayed into many adjacent businesses such as print and digital services, internet, radio, and

events and marketing solutions

The companys job portal www.shine.com has over 8.5 million registrations

Living Media India Ltd

India Today and Readers Digest are among Indias most circulated magazines

Other prominent magazine publications include Business Today, Cosmopolitan, Time, Golf Digest, Design Today,

Money Today and The Chartered Accountant

The group has interests in various other businesses such as radio, events, printing, music, television, education and

publishing


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Source: Company Websites, Business Week, Aranca Research


Music Bharti

A wholly owned subsidiary of Bharti Airtel

The largest music company in terms of revenues

Provides mobile-based value-added music services (VAS) such as hello tunes, call back tunes, music on demand,

Mirchi mobile and Airtel radio

Saregama India Ltd

The company owns the largest music archives in India, one of the largest in the world

It uses the music labels Saregama, RPG Music and HMV

The company is making efforts to digitise its catalogue to make inroads into the digital music market and counter

declining physical music sales

Super Cassettes Industries Ltd

The company owns the rights to over 2,000 video and 35,000 audio titles, comprising of nearly 24,000 hours of music

The company has diversified into film production, consumer electronics and mobile phones manufacture

Tips Industries Ltd

The company owns 3,500 titles of which a minimum of 25 have been sold over a million copies, with another 10

selling over 10 million copies

Since 1981, Tips has the highest number of gold and platinum discs to their credit in India

Tips also holds soundtrack copyrights of over 50 Hindi movies and has also ventured into film production

The companys distribution channel serves more than 1,000 wholesalers across country


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Average revenue per user per month (USD)


Note: F - Forecast

Presence of analog cable and higher contribution has led to

lower Average Revenue Per User (ARPU) level, which is

around USD3.0 for a digital pay television

However, with higher scope of introduction of new and

niche channels with digitisation, ARPU levels are expected

to increase

3.03.1 3.1

3.13.12.9

3.13.3

3.7

4.2

4.6

2011 2012 2013F 2014F 2015F 2016F

Analog Digital


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Consolidation will be the major route to grow inorganically

for entertainment companies in order to expand their

portfolios and enter into new regions

A few big deals have come about, the most notable ones

being Walt Disney-UTV and TV18-ETV (together amounting

to around USD700 million)

Mergers and Acquisitions (M&A) deals during 2011-2012

Acquirer Target Deal dateDeal value

(USD

million)

Gujarat Telelinks

V&S Cable

Private Limited April -2012 -

Educational

Trustee Company

Metronation

ChennaiTelevision

Mar-2012 3.2

Walt Disney UTV Feb-2012 300

TV18 Eenadu Group Jan 2012 395

Samara Capital Newswire18 Dec-2012 18.8

BlackstoneJagran Media

NetworkJul-11 46.9


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Source: Company Annual Reports, Aranca Research

Television content

Motion pictures

Games content

Broadcasting

Television content

Motion pictures

Games content

Broadcasting

Started as a

content provider

for Doordarshan

Ventured intointernet

content

creation and

aggregation

Launched IPO as

UTV Software

communications

Ltd

Launched

Hungama TV

Disney becomes a

majority share holder

with a stake of 32.1%

Deal with Disney

to dub its content

into Indian

languages

Acquires

Indiagames Ltd,

enters gaming

software and

content

Became worlds

first company to

record over 100

million downloads

on Nokia store

1990 1996 2000 2004 2005 2007 2008 2012

Interactive


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Size of major industry segments (USD billion)


Note: CAGR - Compound Annual Growth Rate

Television will continue to be the lead contributor to the

overall industry growth. The segment is estimated to expand

to USD15.6 billion by 2017 (CAGR of 18.5 per cent since

2012)

Radio, Animation & VFX, Gaming and Digital advertising

are emerging as the fast growing segments

During 201217, these segments are expected to expand ata CAGR of:

Digital advertising (41.6 per cent)

Gaming (28.8 per cent)

Radio (21.2 per cent)

Animation (20.1 per cent)

0.0 5.0 10.0 15.0

Music

Radio

Gaming

Out of Home

Digital Advertising

Animation and VFX

Films

Print

Television

2017F 2012


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Size of the animation industry in India

(USD million)

Source: KPMG Report 2013, Aranca Research;

Note: F - Forecast VFX - Visual Effects, CAGR - Compound Annual Growth Rate

Animation encompasses three key segments; these are Animation Entertainment, Visual Effects (VFX) and Custom

Content Development

Indias animation industry has been growing steadily; from a size of USD355 million in 2007, the sector is forecasted to

post a CAGR of 18.0 per cent to reach USD1.4 billion over 200717

Share of sub-segments in Indias

animation industry (2012)

16%

20%

64%

Animation VFX

AnimationEntertainment

Custom Content

Development

0.40.4 0.4 0.5

0.60.6

0.70.9

1.0

1.2

1.3

2007

2008

2009

2010

2011

2012

2013F

2014F

2015F

2016F

2017F

CAGR: 14.3%


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Source: Media and Entertainment in India: Digital Road Ahead by Deloitte,Aranca Research;

Notes: * We have portrayed the intensity of opportunities in each segment based on the extent

of Indian players current presence in that segment

Gaming can be classified under three segments Personal Computer Games (PC), MobileGames, ConsoleGames

and OnlineGames

Revenues from Console gaming are expected to reach USD343.8 million by 2017E from USD144.5 million in 2012.

Revenues from Mobile and PC & Digital TV are expected to grow to USD329.1 million and USD96.9 million by 2017 from

USD104.2 million and USD32.9 million, respectively in 2012

Opportunities* for Indian gaming firms across the segments value chain

Concept

CreationPre-production Development

Post- Production

and TestingFinal Testing

Console Very Strong Strong Good Good Good

Mobile Good Good Good Good Good

PC Strong Strong Good Good Good

Online Strong Strong Good Good Good


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Indian Motion Picture Producers Association (IMPPA)

"IMPPA HOUSE, Dr Ambedkar Road, Bandra (West), Mumbai - 400 050

Tel: 91-22-26486344/45/1760

Fax: 91-22-26480757

Website: www.indianmotionpictures.com/imppa/index.html

The Film and Television Producers Guild of India

G-1, Morya House, Veera Industrial Estate,

Off Oshiwara Link Road, Andheri (W), Mumbai - 400 053

Tel: 91-22-66910662

Fax: 91-22-66910661

E-mail: [email protected]

Website: www.filmtvguildindia.org

Newspapers Association of India (NAI)

A -115, Vakil Chamber, Top Floor, Vikas Marg, Shakarpur, Delhi - 110092

Tel: 91-9971847045, 9810226962E-mail: [email protected]

Website: www.naiindia.com


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Year INR equivalent of one USD

2004-05 44.95

2005-06 44.28

2006-07 45.28

2007-08 40.24

2008-09 45.91

2009-10 47.41

2010-11 45.57

2011-12 47.94

2012-13 54.31

Exchange Rates (Fiscal Year)

Year INR equivalent of one USD

2005 45.55

2006 44.34

2007 39.45

2008 49.21

2009 46.76

2010 45.32

2011 45.64

2012 54.69

2013 54.45

Exchange Rates (Calendar Year)

Average for the year


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entertainment - august 2013

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