Digital’s share in the media and entertainment pie

September 21, 2015

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Mumbai, September 21, 2015: India has seen a substantial increase in M&E deal activity in the last year, with digital media becoming the fastest growing segment contributing to 50% of deal volume, according to EY’s 12th M&E Capital Confidence Barometer.

The Indian telecom ecosystem will present a further boost for digital adoption in the country. For instance, India is set to exceed 200 million smartphone users by 2016, toppling the US as the world’s second largest smartphone market. The impending launch of 4G services is also expected to create a surge in broadband adoption.

More importantly, India is far more receptive to foreign M&E content and investment than other Asian countries. Additionally, India also has the largest box office attendance, 160 million pay-TV households and publishes 94,000 newspapers, making it of particular interest for companies looking to invest in the country.

Looking ahead, market consolidation, portfolio diversification, market entry and digitisation are expected to drive deal activity in India as M&E companies seek to gain presence across the value chain.

The survey conducted by EY of more than 1,600 senior executives, of which 70 were from M&E companies, in more than 60 countries conducted by EY for the 12th Global Capital Confidence Barometer shows that confidence in the global economy among the world’s leading media and entertainment (M&E) companies is at its highest point since the global financial crisis. This wave of confidence is fueling their deal pipelines and creating an expected record number of mergers and acquisitions.

Other global key findings include:

  • Executives remain confident in key economic indicators and the performance of their businesses. Eighty-two percent are confident in corporate earnings; 76%, credit availability; 76%, short-term market stability; and 44%, equity valuations and stock market outlook.
  • The greatest economic risks to media and entertainment businesses are political instability, 39%; volatility in commodities and currencies, 27%; slowing growth in key emerging markets, 13%; economic situation in the Eurozone, 11%; regulatory environment, 9%; and deflation, 1%.
  • Despite the high level of confidence in the global economy, cost cutting ranked highest (34%) when executives were asked to list areas of focus in their boardroom, followed by acquisitions, 25%; changing commodity prices, 22%; returning cash to shareholders, 13%; and strategic divestment, 6%.
  • The top markets in which companies will be most likely to invest are China, the United Kingdom, the Netherlands, Australia and the United States.

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EY
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About EY’s Global Media & Entertainment Network
EY’s Global Media & Entertainment network brings together a high-performance, worldwide team of media and entertainment professionals with deep technical experience in providing assurance, tax, transaction and advisory services to the industry’s leaders. Our network of professionals collaborate and share knowledge around the world, to provide exceptional client service and leverage our leading market share position to provide you with actionable information, quickly and reliably.

About EY’s Global Capital Confidence Barometer
EY’s Global Capital Confidence Barometer is a biannual survey of more than 1,600 senior executives from large companies around the world and across industry sectors. This is the 12th biannual Barometer in the series, which began in November 2009; respondents for the 12th edition were surveyed February and March. The objective of the Barometer is to gauge corporate confidence in the global and domestic economic outlook, to understand boardroom priorities in the next 12 months and to identify emerging capital practices that will distinguish those companies building competitive advantage as the global economy continues to evolve. In this survey, 70 respondents were from media and entertainment companies.