FICCI-KPMG-Report-13-FRAMES

Recommendations

Info

10 The power of a billion: Realizing the Indian dream Roundup of the key trends and themes for growth Over the last couple of months, our team met with over a hundred senior stakeholders across TV, Films, Print, Gaming and Animation/ VFX, Radio, OOH, advertising and new media sectors. We present in this report, a consolidated point of view on what shaped these sectors over calendar year 2012, and what could be the game changers going forward… Digitization of film and TV distribution infrastructure Digitization of distribution has brought in the promise of more sustainable and profitable business models across media sectors. traditional media. However India remains a growth market for ‘traditional’ media evidenced by the growth last year in TV audiences, radio listenership, and footfalls in theatres. India is an outlier country where print is still a growth market. There is growing overseas demand for quality Indian animation/ VFX work at affordable pricing. New media co-exists as an additional and growing distribution platform. The need of the moment is the development of multimedia symbiotic models for reaching and monetizing all audience segments. Macro economic indicators – rising literacy, continued urbanization, growing consumption, especially among younger sections of population, are expected to continue to drive the penetration of and growth in traditional media. © 2013 KPMG, an Indian Registered 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. The year 2012 heralded the much awaited start to digitization of cable. Despite some hiccups, Phase 1 saw significant progress in implementation of mandatory digital access system (DAS) across the four metros. Industry now hopes to realize benefits over the medium term – including enhanced ability to monetize content, greater transparency and equitable revenue share across the value chain, lower burden of carriage fees and hence increased ability to invest in differentiated and sophisticated content. Phase 2 digitization across the next 38 cities is anticipated to move ahead on similar lines, albeit with some delay vis a vis planned timelines. Digital distribution has also enabled the films sector to make a comeback this year. The industry has achieved 77 percent digitization of screens and expects to be close to 100 percent digitized in the next 18 months to 2 years 8 . Today 80-90 9 percent of films are distributed digitally vis a vis 50 percent 10 physical prints in 2010. These developments have resulted in an increased ability to invest in differentiated content, marketing, and widespread releases – all contributing to greater audience engagement and unprecedented box office success across big and small budget movies alike. Overall - digital technology is expected to drive the M&E sector’s growth in a challenging macro environment, by spurring on end-user spending and transparency. Growth in new media The rapid increase in mobile and wireless connections continued to drive the growth of internet penetration in India. With better access, through cheaper and smarter devices, audiences (especially youth) are consuming more content and are getting increasingly engaged. Key beneficiaries are the emerging new media segments, which include internet advertising, online classifieds, and gaming, all of which are on a rapid growth path. Going forward, better uptake of 3G connections and the beginnings of the 4G rollout are expected to spur growth further. 4G technology will enable greater uptake in services including Live TV, HD video/ audio streaming, real time online gaming, high speed data downloads and uploads and could enable introduction of new innovative offerings. The industry looks forward with great hope to an aggressive rollout of this technology by the telcos. With traditional media still going strong Across the world, technology futurists envisaged that the explosion in new media would drive audiences away from 08. Industry discussions conducted by KPMG in India 09. Industry discussions, Information shared by UFO 10. Hitting the High Notes, FICCI-KPMG Indian Media and Entertainment Industry Report 2011 Greater sophistication of and segmentation in content The content sector has traditionally been inhibited by challenges of lack of transparency, niche audience measurement, and broadcast economics not supportive of investing in targeted content. Hence we have seen the dominance of GECs in television, a majority of films targeted at a mass market, most radio channels playing similar mainstream film music, and relatively lower production quality. 2012 saw the exit of channels such as BBC English entertainment and BBC CBeebies targeting kids, on account of economic challenges such as carriage fee payouts that were prohibitive for standalone niche channels A key outcome of the push in digitization will be the ability to increase production budgets and invest in differentiated genres and multilingual content. We have already discussed, how digitization in films has supported greater investments in content and marketing in films sector with great results in 2012. Digitization of distribution infrastructure in TV is also expected to improve broadcast economics, (with lower carriage fees, more equitable distribution of subscription revenues across the value chain and the ability to increase ARPUs). In turn this could drive more investments in production quality, and niche and targeted genres of content/ packaging in the medium term Phase 3 licensing, and anticipated provisions for permitting multiple frequencies in a city, would encourage investments in differentiated content for the Radio sector. Internet and mobile platforms are a cost effective enabler to reach diverse audience segments with tailored content. For example, special genre internet radio stations of players such as Radio Mirchi, Radio City, and multiple genre music libraries available for download online. The Indian audiences could look forward to more targeted and engaging content in the medium term Regional markets remain key centres of growth Advertisers continue to see higher growth in consumption from key regional markets. Hence regional media continues on a strong growth trajectory especially in the print and television sectors. Key media players are focusing on selectively expanding their presence in regional markets that are seeing higher rates of advertising revenue growth, and better insulation from slowdown than metros, which may be close to saturation in many cases.
The power of a billion: Realizing the Indian dream 11 For example Bennett Coleman & Co. launched Bengali daily ‘Ei shomoy. Going beyond regional GECs, broadcasters launched several sub-genre channels in regional markets. Zee and Star both launched their Bangla movie channels – Zee Cinema Bangla and Jalsha Movies. Star owned Asianet Communications also launched Asianet Movies, the first satellite movie channel in Malayalam. Gujarati dailies Sandesh and Gujarat Samachar launched their news channels – GS TV News and Sandesh TV. Film studios are also building a regional films pipeline. Reliance Big Pictures, Disney UTV Motion Pictures and Eros International are increasingly investing in the regional space. Hollywood films are expanding their revenue potential by dubbing across regional languages such as Tamil and Telugu. Phase 3 licensing in the radio sector is also expected to garner particular interest in key regional markets. Coming LIVE to you With changing lifestyles, there is an increase in media consumed out of home. Brands are also increasingly keen to connect with consumers via ‘experiences’ to ensure greater recall and amplification of brand values. Activations/ events are now increasingly a key facet of radio and print media solutions. Live music events/ festivals have been successful in attracting widespread audiences and engaging youth across key cities. Increased consumption of music/radio/ video on-the-go via mobile and in cars provides opportunities for real time mobile, location-based advertising. The Out of Home (OOH) advertising sector has also seen higher rates of growth in transit advertising. There is hence an increased need to provide 360 degree solutions to advertisers and provide multiple platforms to reach out to consumers wherever they are. Revenue models still advertising dependent M&E is still an advertising dependent industry in India. Hence it remains sensitive to the impact of business cycles. While the print sector saw some increases in circulation revenues, and increases in cover price in some areas, cover prices still remain significantly lower than global counterparts. Established pracitces, competitive pressures from within the sector and from TV, and the threat of digital migration, are likely to keep prices under pressure. In the TV sector, digitization has the potential to increase ARPUs and improve the share of subscription revenues to the broadcasters. Early indicators suggest that carriage costs have already dropped somewhat in Metros after Phase 1 digitization. Most companies are yet to see significant revenues from digital content. Dampeners include limitations in measurement systems, decline in on deck revenues, and under investments in distribution platforms. There is a need for innovative or hybrid pricing models to cause a shift Overall, engaging consumers through more targeted offerings, innovative pricing and packaging models, and better quality of production, should enable players to get better realization for content. Regulatory and policy support Regulatory interventions have been a key enabler of growth for the sector. Anticipated developments in 2013 such as continued cable DAS rollout, Phase 3 licensing for Radio, and 4G rollout, will spur growth from the medium term. However, continued and unflinching government support is needed. There is a need for measures to aid curtailment of piracy and encourage investments to support further growth. Co-production treaties, rationalization of entertainment tax, government support to encourage formal skill development and training and incentives for animation/vfx and gaming are important areas of policy and regulation that need attention. Gaps in availability of skilled M&E professionals The M&E sector could be a noteworthy employer across creative, technical and business areas. With the growth in TV and Radio broadcast channels, in skill intensive sectors of film, animation, gaming, VFX, the demand for qualified talent is only set to escalate. In the talent driven media sector, companies could potentially differentiate based on ability to attract and retain the right people (for example, in the knowledge intensive content development sector or RJ dependent radio sector). However the industry is hampered by a talent crunch across sectors. At the same time, changes including digitisation, growth in multilingual markets, new technologies and convergence, require additional skill sets. The industry has successfully experimented with bringing in people from other industry backgrounds. Key stakeholders have expressed a need for investments in credible media institutes, with quality faculty and a relevant and dynamic curriculum. Under the National Skill Development Policy 2009, National Skill Development Council (NSDC) has constituted a Media and Entertainment Skill Council (MESC), which will focus on the television, print, films, radio, animation, gaming and advertising industries. It plans to setup Institutes focusing on technical, creative and business talent. It will work closely with NSDC to train more than 11.7 million people over the next 10 years in skills such as lighting, scriptwriting, electric work and tailoring. This will hopefully prove a critical step in bridging the skill gap. In summary, the vision set out for the sector, of engaging communities, entails reaching out and understanding multiple segments, creating greater connect, and leveraging this connect to influence for the greater social good. The industry is undergoing transformation, driven by digital technologies, opportunities for further penetration of the billion strong market, and an enabling regulatory framework. At the same time, it remains sensitive to the economic situation, and a lot will depend on its ability to manage the risks of continued shortage of skilled manpower, and ability to spur end user pricing across segments. It is a time for introspection, and a time for innovation, to see how companies can harness the powers of new technologies and convergence to realize its vision. © 2013 KPMG, an Indian Registered 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.
Page 1 and 2: This heading style is set in Univer
Page 3 and 4: The power of a billion Realizing th
Page 5 and 6: Radio too, is set for the - roll ou
Page 7 and 8: 42 Print Regional to the rescue 58
Page 9 and 10: 01 The power of a billion: Realizin
Page 11: The power of a billion: Realizing t
Page 15 and 16: 02 Introduction The power of a bill
Page 17 and 18: The power of a billion: Realizing t
Page 59 and 60: 57 Hiring and retaining talent The
Page 63 and 64:
The power of a billion: Realizing t
Page 65 and 66:
Page 67 and 68:
Page 69 and 70:
Page 71 and 72:
Page 73 and 74:
Page 75 and 76:
Page 77 and 78:
Page 79 and 80:
Page 81 and 82:
Page 83 and 84:
Page 85 and 86:
Page 87 and 88:
Page 89 and 90:
Page 91 and 92:
05 The power of a billion: Realizin
Page 93 and 94:
Page 95 and 96:
The smartphone is a very sophistica
Page 97 and 98:
Page 99 and 100:
Page 101 and 102:
Page 103 and 104:
Page 105 and 106:
Page 107 and 108:
Page 109 and 110:
“ With brand advertising gatherin
Page 111 and 112:
Music The success of the iTunes mod
Page 113 and 114:
Page 115 and 116:
Page 117 and 118:
06 Round up of the year that was Th
Page 119 and 120:
Page 121 and 122:
Page 123 and 124:
Page 125 and 126:
Page 127 and 128:
Page 129 and 130:
Page 131 and 132:
Page 133 and 134:
Page 135 and 136:
Page 137 and 138:
Page 139 and 140:
Page 141 and 142:
Page 143 and 144:
Page 145 and 146:
FICCI 2013 143 “ The Amendments t
Page 147 and 148:
Page 149 and 150:
Page 151 and 152:
Page 153 and 154:
Page 155 and 156:
Page 157 and 158:
Page 159 and 160:
© 2013 KPMG, an Indian Registered
Page 161 and 162:
09 Outlook for the year The power o
Page 163 and 164:
Page 165 and 166:
Page 167 and 168:
Page 169 and 170:
Page 171 and 172:
Page 173 and 174:
Page 175 and 176:
11 Technology The power of a billio
Page 177 and 178:
Page 179 and 180:
Page 181 and 182:
Page 183 and 184:
Page 185 and 186:
Page 187 and 188:
© 2013 KPMG, an Indian Registered
Page 189 and 190:
Page 191 and 192:
Page 193 and 194:
Page 195 and 196:
Page 197 and 198:
Page 199 and 200:
Page 201 and 202:
Acknowledgement We acknowledge the
show all

FICCI-KPMG-Report-13-FRAMES

Create successful ePaper yourself

Delete template?

Save as template?