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Hittin the High Notes Hitting the High Notes FICCI-KPMG Indian Media and Entertainment Industry Report 2011 kpmg.com/in Hitting the High Notes © 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. entity. (“KPMG International”), a Swiss with KPMG International Cooperative and a member firm of the KPMG network independent firms affiliated KPMG, an Indian Partnership © 2011 All rights reserved. entity. (“KPMG International”), a Swiss with KPMG International Cooperative and a member firm of the KPMG network independent firms affiliated KPMG, an Indian Partnership © 2011 Hitting the High Notes © 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. entity. (“KPMG International”), a Swiss with KPMG International Cooperative and a member firm of the KPMG network independent firms affiliated KPMG, an Indian Partnership © 2011 All rights reserved. entity. (“KPMG International”), a Swiss with KPMG International Cooperative and a member firm of the KPMG network independent firms affiliated KPMG, an Indian Partnership © 2011 FOREWORD Welcome to the 2011 edition of our annual Indian Media and Entertainment (M&E) industry 2010 has been the year of resurgence for the India Media & Entertainment (M&E) industry. The report. At the very outset, FICCI would like to thank KPMG, our Knowledge Partner, for their year saw growth in advertising revenues for the industry as a whole after the subdued ongoing commitment to the conceptualization and development of this report at our behest. performance of 2009 owing to the impact of the economic turmoil world over. Subscription revenues continued to grow at a healthy rate as India is still a nation with low media penetration Bolstered by increased advertising spends in 2010, the M&E industry witnessed a significantly and significant growth potential. improved growth rate compared to 2009. The year was full of interesting developments with an influx of new content distribution platforms, growing regional markets, surge in DTH subscriber Some the cost optimization initiatives adopted in the previous year continue to benefit industry base, and the eventual 3G auction and rollouts. Over the next few years, these trends are players. Many companies also have begun to deepen their focus on consumers and their expected to change the dynamics of the M&E industry, and the future looks extremely understanding of media consumption behavior through robust research . This year we requested promising! some senior industry executives to share their experiences on the benefits of monitoring consumer behavior and internalizing the same in content and audience strategies. However, the media universe is increasingly becoming more complex, specialized and fragmented. Today for media businesses, it has become essential to understand rapidly The year saw landmarks in terms of the highest grossing Indian film, unprecedented growth in changing consumer behavior and preferences. These learnings could then be utilized to help the DTH platform, digital music sales surpassing that of the physical formats, onset of 3G and build focused content, marketing and delivery strategies for each target audience segment. the government's regulatory push towards digitization and addressability. Moreover, in order to become high performance enterprises, companies will need to evolve in a We are looking forward to 2011 being a very exciting year in terms of growth for the industry manner in which they distribute content over secure platforms, optimize costs and adopt best with increasing penetration of traditional and new media, evolving content and delivery practices in operations. platforms and improving top line and bottom line growth for companies. The overall M&E market in India is expected to grow at a compounded annual growth rate of 14 percent per annum FICCI acknowledges the valuable inputs provided by the Media & Entertainment industry through 2015 to reach INR 1.3 trillion. Factors like the potential for penetration of different players who have graciously devoted time to share their views in helping KPMG put this report mediums, greater segmentation of audiences and catering to individual niches, growth expected together. from regional markets, government and industry players' push for digitization, increasing mobile and broadband penetration and consolidation are pointing towards a very promising future for the whole industry. Yash Chopra Karan Johar Chairman, Co-Chairman, Our attempt to bring forth the trends and analysis for the sector has been done after extensive discussions with senior stakeholders of the Indian M&E industry. KPMG is grateful to them and FICCI Entertainment Committee FICCI Entertainment Committee all others who contributed towards the building of this report. Rajesh Jain Jehil Thakkar Executive Director Executive Director Head - Media and Entertainment Performance & Technology KPMG in India KPMG in India © 2011 KPMG, an Indian Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. entity. (“KPMG International”), a Swiss with KPMG International Cooperative and a member firm of the KPMG network independent firms affiliated KPMG, an Indian Partnership © 2011 All rights reserved. entity. (“KPMG International”), a Swiss with KPMG International Cooperative and a member firm of the KPMG network independent firms affiliated KPMG, an Indian Partnership © 2011 FOREWORD Welcome to the 2011 edition of our annual Indian Media and Entertainment (M&E) industry 2010 has been the year of resurgence for the India Media & Entertainment (M&E) industry. The report. At the very outset, FICCI would like to thank KPMG, our Knowledge Partner, for their year saw growth in advertising revenues for the industry as a whole after the subdued ongoing commitment to the conceptualization and development of this report at our behest. performance of 2009 owing to the impact of the economic turmoil world over. Subscription revenues continued to grow at a healthy rate as India is still a nation with low media penetration Bolstered by increased advertising spends in 2010, the M&E industry witnessed a significantly and significant growth potential. improved growth rate compared to 2009. The year was full of interesting developments with an influx of new content distribution platforms, growing regional markets, surge in DTH subscriber Some the cost optimization initiatives adopted in the previous year continue to benefit industry base, and the eventual 3G auction and rollouts. Over the next few years, these trends are players. Many companies also have begun to deepen their focus on consumers and their expected to change the dynamics of the M&E industry, and the future looks extremely understanding of media consumption behavior through robust research . This year we requested promising! some senior industry executives to share their experiences on the benefits of monitoring consumer behavior and internalizing the same in content and audience strategies. However, the media universe is increasingly becoming more complex, specialized and fragmented. Today for media businesses, it has become essential to understand rapidly The year saw landmarks in terms of the highest grossing Indian film, unprecedented growth in changing consumer behavior and preferences. These learnings could then be utilized to help the DTH platform, digital music sales surpassing that of the physical formats, onset of 3G and build focused content, marketing and delivery strategies for each target audience segment. the government's regulatory push towards digitization and addressability. Moreover, in order to become high performance enterprises, companies will need to evolve in a We are looking forward to 2011 being a very exciting year in terms of growth for the industry manner in which they distribute content over secure platforms, optimize costs and adopt best with increasing penetration of traditional and new media, evolving content and delivery practices in operations. platforms and improving top line and bottom line growth for companies. The overall M&E market in India is expected to grow at a compounded annual growth rate of 14 percent per annum FICCI acknowledges the valuable inputs provided by the Media & Entertainment industry through 2015 to reach INR 1.3 trillion. Factors like the potential for penetration of different players who have graciously devoted time to share their views in helping KPMG put this report mediums, greater segmentation of audiences and catering to individual niches, growth expected together. from regional markets, government and industry players' push for digitization, increasing mobile and broadband penetration and consolidation are pointing towards a very promising future for the whole industry. Yash Chopra Karan Johar Chairman, Co-Chairman, Our attempt to bring forth the trends and analysis for the sector has been done after extensive discussions with senior stakeholders of the Indian M&E industry. KPMG is grateful to them and FICCI Entertainment Committee FICCI Entertainment Committee all others who contributed towards the building of this report. Rajesh Jain Jehil Thakkar Executive Director Executive Director Head - Media and Entertainment
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