Growing digitization and improving demographics are leading drivers for M&E industry growth

  • Share

Mumbai, 06 December, 2011 – The Indian Media and Entertainment (M&E) industry registered revenues of US$16.3 billion in 2010 and is expected to be in excess of US$25 billion in the next four years, according to EY’s report - ‘Spotlight on India’s Entertainment Economy’. The study released today shows that India’s growing digital media consumption and favorable demographics are key drivers for the media and entertainment industry’s future growth.

Enticed by economic liberalization, near double-digit annual growth, a fast-growing middle class and a huge volume of demand for leisure and entertainment, there has been a surge in investment by global media companies in India. The Indian media and entertainment industry now finds itself at a new turning point – digital media. A surge in mass broadband adoption is expected, led by the launch of 3G and 4G services. By 2015, 90% of India's projected 187 million broadband subscribers will access the net through wireless devices. This presents global M&E companies with exciting opportunities to develop '”anytime, anywhere”' content that caters to a new generation of Indian digital consumers.

“The M&E industry in India has been, and will continue to be, one of the biggest beneficiaries of India’s favorable demographics,” said Farokh Balsara, EY’s media and entertainment leader for Europe, Middle East, India and Africa. “Having one of the world’s youngest populations, high volumes of content consumption, a favorable regulatory framework and growing digital adoption, makes India an attractive investment destination for global media and entertainment companies.”

Key findings from the report include:

  • India’s increasing per capita income, growing middle class and working population are generating huge domestic demand for leisure and entertainment. The country has more than 600 television channels, 100 million pay-television households, 70,000 newspapers and produces more than 1,000 films annually.
  • India has diverse regional markets with distinct cultures, languages and content preferences. These markets provide global media and entertainment companies with a variety of opportunities to deliver localized content.
  • India’s favorable regulations and reforms are creating investment opportunities for global media and entertainment companies.
  • The newspaper industry, which is facing declining readership in many international markets, continues to thrive in India, driven by increasing literacy rates, consumer spending and the growth of regional markets and specialty newspapers. Newspapers account for 42% of all advertising spend in India, the most of any medium.
  • The mandatory digitization of India's television distribution infrastructure is driving growth of digital cable and DTH and creating a need for these companies to fund expansion.
  • The third phase of radio license auctions, expected soon, will see radio networks expanding their reach to add around 700 radio stations across the country.

“The growth strategies in most companies in the US and Western Europe are linked to India and other emerging markets,” said John Nendick, Global Media and Entertainment Leader at EY. “However, to succeed in India, global media and entertainment companies need to navigate unique challenges in the areas of content localization, distribution and pricing, regulations and piracy.”

According to the report, the two greatest challenges faced by media and entertainment companies doing business in India are low average revenues, with the Indian average revenue per user among the lowest in the world; and piracy, which is rampant in India and accounts for in excess of US$4 billion per year.

For more information, please contact:
Name: Padma Chourey
Ph. No.: +91-22-61921322/ +91-9920555480


-ENDS-

About EY
EY is a global leader in assurance, tax, transaction and advisory services. Worldwide, our 152,000 people are united by our shared values and an unwavering commitment to quality. We make a difference by helping our people, our clients and our wider communities achieve their potential.


EY refers to the global organization of member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit www.ey.com. This news release has been issued by EYGM Limited, a member of the global EY organization that also does not provide any services to clients.