MEDIA AND ENTERTAINMENT For updated information, please visit www.ibef.org August 2018 Table of Content Executive Summary……………….….……..3 Advantage India…………………..….……...4 Market Overview …………………….……...6 Recent Trends and Strategies……..……..16 Growth Drivers……………………..............21 Opportunities…….……….......…………….28 Industry Associations……………....….......31 Useful Information……….......………….....33 EXECUTIVE SUMMARY . Indian television market has a opportunity of catering to 100 million homes as 197 million homes out of the total Second largest TV 298 million have TV sets as of 2017. market . In 2017, television viewership in India grew at the rate of 12 per cent y-o-y. In 2017, television market generated a revenue of Rs 660 billion (US$ 10.14 billion). Total of 243 FM channels (21 from the Phase - I and 222 from Phase – II) are operational. Under the phase III, the Cabinet has already given permission to 162 FM channels in 69 cities to operate and 17 cities were provided with licenses to operate in 2017. One of the largest broadcasting market . Telecom Regulatory Authority of India (TRAI) plans to introduce a policy for broadcasting sector with a vision of 2020. The policy aims to usher a new era in the broadcasting sector where MRP of the TV channel will be declared by broadcasters directly to the consumers, and will bring more transparency and choices to the consumers. The animation and Visual Effects (VFX) industry showcased a growth of 24.07 per cent, largely led by a 34.91 per cent growth in VFX industry in 2017. Fast growing animation industry . During 2016-21, the segment is expected to grow at a higher CAGR of 17.2 per cent, largely led by the continued growth in outsourced services and the swelling use of animation and VFX services in the domestic television and film space, respectively. Digitalisation has played the major role in the growth of Indian film industry. The Indian film industry is expected Exceptional growth in to grow at a rate of 11.9 per cent by 2020. film industry . By 2019, cinema exhibition industry in India is expected to have over 3,000 multiplex screens. Total subscriber base for Indian television industry is expected to increase to 195 million by 2019 from 183 Rising no of million in 2017. subscribers . As of March 2018 active DTH subscriber base in the country stood at around 67.53 million. Source: KPMG – FICCI Report, 2016 and 2018; Dish TV Investor Presentation, Ministry of Information and Broadcasting (MIB), NASSCOM, Telecom Regulatory Authority of India (TRAI), Aranca Research, Broadcast India 2018 Survey conducted by Broadcast Audience Research Council (Barc) India 3 Media and Entertainment For updated information, please visit www.ibef.org Media and Entertainment ADVANTAGE INDIA ADVANTAGE INDIA . Entertainment Industry is set to expand at a . Rising incomes and evolving lifestyles have CAGR of 11.80 per cent over 2016–21, one of led to higher demand for aspirational products the highest rates globally. and services. Television and AGV segments are expected . Higher penetration and a rapidly growing to lead industry growth and offer immense young population coupled with increased growth opportunities in digital technologies as usage of 3G, 4G and portable devices would well. augment demand . ADVANTAGE INDIA . From April 2000 to June 2018, FDI . The Government of India has increased the Inflows in Information and FDI limit from 74 per cent to 100 per cent. Broadcasting (including print media) . Measures such as digitisation of cable sector reached US$ 7.17 billion. distribution to improve profitability and ease . Increasing M&A activity. of institutional finance. More big-ticket deals such as Walt . Increasing liberalisation and tariff relaxation. Disney- UTV, Sony-ETV and Zee- . In 2011, Indian Government passed the Star. “The Cable Television Networks . Entry of big players across all segment (Regulation) Amendment Act, 2011” for of industry. digitisation of cable television networks. Notes: AGV - Animation, Gaming and VFX, VFX - Visual Effects, M&A - Merger and Acquisition, FDI - Foreign Direct Investment, Source: KPMG Report 2015, KPMG – FICCI Report, 2016; Dish TV Investor Presentation, Ministry of Information and Broadcasting (MIB), Aranca Research 5 Media and Entertainment For updated information, please visit www.ibef.org Media and Entertainment MARKET OVERVIEW THE ENTERTAINMENT SECTOR IS SPLIT INTO NINE SEGMENTS Television Radio Online Gaming Print Animation and VFX Entertainment Films Out of Home (OOH) Digital Advertising Music Note: VFX - Visual Effects Source: : KPMG – FICCI Report, 2018, Aranca Research 7 Media and Entertainment For updated information, please visit www.ibef.org THE INDIAN ENTERTAINMENT INDUSTRY IS GROWING RAPIDLY . Indian media and entertainment (M&E) industry grew at a CAGR of Market Size (US$ billion) 12.25 per cent from 2011-2017; and is expected to grow at a CAGR of 11.6 per cent during 2016-20 to touch Rs 2,032 billion (US$ 31.53 140.00 billion) by 2020 from Rs 1,308 billion (US$ 19.46 billion) in 2016. The next five years will see digital technologies increase their influence across the industry leading to a sea change in consumer 120.00 behaviour across all segments. 126.20 . The industry provides employment to five million people, including 100.00 both direct and indirect employment as of 2017. 80.00 60.00 40.00 20.00 31.53 28.66 25.76 22.62 19.46 17.95 15.92 14.25 12.74 0.00 11.31 2011 2012 2013 2014 2015 2016 2017 2018 P 2019 P 2020 P 2022 P Notes: P – Projected Source: : KPMG – FICCI Report 2017 & 2018, Aranca Research 8 Media and Entertainment For updated information, please visit www.ibef.org SEGMENTS OF INDIAN ENTERTAINMENT INDUSTRY Size of major industry segments (2017) Size of major industry segments (2020P) 1.77% 2.31% 0.88% 2.12% 1.67% 0.01 TV 2.04% TV 3.35% 4.41% Print Print 5.36% Films 4.55% Films Digital Advertising Digital Advertising 5.61% 8.08% Live events 44.81% Live events 42.42% 11.02% Animation & VFX Animation & VFX Gaming 10.59% Gaming OOH OOH 9.45% Radio Radio 20.57% 18.16% Music Music . Television, print and films together accounted for 75.97 per cent of market share in 2017, in value terms. PVR Cinemas plans to add around 75 screens across India during FY 2017-18, thereby raising its capacity to 650 screens and has a target to achieve 1,000 screens in India by 2020. The number of screens increased to 612 in 2017. Google's video platform, YouTube, plans to increase its user base in India to 400 million, as rising internet penetration in the rural areas will enable the consumers to access videos on their smartphones. The Indian digital advertising industry is expected to grow at a Compound Annual Growth Rate (CAGR) of 32 per cent to reach Rs 18,986 crore (US$ 2.93 billion) by 2020, backed by affordable data and rising smartphone penetration. Notes: P – Projected, OOH – Out of Home, TV – Television Source: KPMG – FICCI Report 2017, Economic Times, Aranca Research 9 Media and Entertainment For updated information, please visit www.ibef.org TELEVISION, ONE OF THE LARGEST AND FASTEST GROWING SEGMENT . In 2017, television market generated revenue of Rs 660 billion (US$ BroadcastersVisakhapatnam Revenue port traffic Forecast (million (US$ tonnes) billion) 10.19 billion). In 2017, broadcasters advertising revenue was Rs 267 billion (US$ 4.10 billion) and is forecasted to reach Rs 368 billion (US$ 5.49 8 billion) by 2020. 7 5.49 . In 2017, broadcasters subscription revenue was Rs 99 billion (US$ 1.52 billion) and is forecasted to reach Rs 125 billion (US$ 1.86 5.00 6 billion) by 2020. 4.53 4.10 5 4 3 2 1.75 1.86 1.52 1.63 1 0 2017 2018E 2019E 2020E Subscription Revenue Advertising Revenue Notes: E – Estimated, TV – Television Source: KPMG – FICCI Report 2018 10 Media and Entertainment For updated information, please visit www.ibef.org RADIO, ANIMATION and VFX, GAMING AND DIGITAL ADVERTISING ON HIGH GROWTH PHASE . Radio, animation and VFX, gaming and digital advertising are also IndustryVisakhapatnam size of emerging port traffic segments (million (US$ tonnes) million ) emerging as fast growing segments. During 2016-20, these segments are expected to increase at CAGRs of: 4,000.0 • Online Gaming (27.5 per cent). 3,500.0 3,475.6 • Digital Media (24.9 per cent). • Animation (20 per cent). 3,000.0 • Live Events (18 per cent). 2,500.0 . With increasing use of internet and other digital resources, Digital 2,342.9 Advertising is expected to grow at the fastest rate among peers like 2,000.0 print media, radio and outdoor advertising. 1,768.8 1,773.7 . India digital advertising market has reached Rs 8,202 crore (US$ 1,500.0 1,241.3 1,691.2 1.27 billion) in 2017 and is forecasted to grow at a CAGR of 32 per 1,405.4 998.7 cent to reach Rs 18,986 crore (US$ 2.95 billion) by 2020. 855.5 1,000.0 1,194.7 1,055.1 . Advertising expenditure in India is expected to grow 13 per cent 968.8 824.9 year-on-year to Rs 69,346 crore (US$ 10.71 billion) in 2018. 500.0 620.6 . Expenditure on digital advertisements in India is expected to 397.2 447.2 increase at CAGR of 30.8 per cent between 2016-21, as internet - penetration and data consumption increases in the country. FY2016 FY2017 FY2018E FY2020E Online Gaming Digital Media Animation & VFX Live Events Note: VFX- Visual Effects; E --Estimated FICCI Report 2017, Aranca Research, CAGR mentioned in the slide is based on Rs figures Source: FICCI Report 2018, Aranca Research, Digital First Journey report by KPMG, Digital Advertising Report by Dentsu Aegis Network 11 Media and Entertainment For updated information, please visit www.ibef.org ADVERTISING REVENUES Advertising revenue share (2017) Advertising revenue (US$ billion) 9 30 17.50% 8 27.8 25 7 8.16 TV 7.36 6 20 37.00% 6.86 6.00% Print 5 6.13 5.88 17.6 15 5.48 1.00% 5.47 Radio 4 5.39 4.00% 16.5 3 12.5 10 Cinema 11.3 2 9.6 Outdoor 7.4 5 1 5.2 Digital 0 0 2010 2011 2012 2013 2014 2015 2016 2017 35.00% Total Growth Rate% .