FICCI-KPMG-Report-13-FRAMES

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14 The power of a billion: Realizing the Indian dream TV Industry size Growth in number of paid C&S households Source: KPMG in India Analysis, Industry discussions conducted by KPMG in India Note: Figures are rounded to nearest integers and may not add up exactly to column totals Source: KPMG in India Analysis, Industry discussions conducted by KPMG in India Strong growth in TV sales continues Approximately 14 5 million television sets were sold in India in 2012. A large proportion of these television sales represent replacement of old television sets, institutional TV sales, and a second or third TV set entering a household. As per Information and Broadcasting (I&B) ministry estimates, institutional and multi TVs account for approximately 17 percent of television sets in metro cities. LCD and LED panels are estimated to account for 40 percent of sales in 2012 and this share is expected to rise to close to 100 percent by 2017. Television Sales © 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. Source: Industry discussions conducted by KPMG in India Note: 1. Years indicate year ended 31 March 2.TV sales reported in last year’s report have been revised basis Industry discussions conducted by KPMG in India Paid C&S penetration of TV households expected to increase to 91 percent by 2017 The number of C&S households in India increased by 11 million in 2012, to reach 130 million. Excluding DD Direct, the number of paid C&S households is estimated to be 121 million. This paid C&S base is expected to grow to 173 million by 2017, representing 91 percent of TV households. 05. Industry discussions conducted by KPMG in India
The power of a billion: Realizing the Indian dream 15 Snapshot of the TV industry value chain The TV industry value chain consists of content production, broadcasting and distribution. Content production • In general, production costs continue to be linked to inflation; artist costs however, have increased • Cable digitisation is expected to create significant opportunities for content providers, including: -- Existing channels investing in content, and upgrading content quality -- Narrower targeted offerings, to segments which are currently served by ‘one size fits all’ offerings, which will require more localised content -- Launch of new niche channels, which may see a viable business case on the back of reduced carriage fees • Broadcasters believe that content is under-invested and with the improving economics on account of digitisation, investment in content is expected to grow Broadcasting • 2012 continued to be a challenging year for the industry, with a lower-thanexpected advertising revenue growth. However, the long-term outlook remains positive and the industry expects advertising revenues to grow at a 14 percent CAGR from 2012-17 • Subscription revenues increased in 2012, but this seems to be attributable to better negotiation through consolidated entities (MediaPro, One Alliance, India Cast etc.), rather than to digitisation in Phase 1 • The benefit of phase 1 and phase 2 digitisation in terms of growth in subscription revenues is expected to be seen over 2013 and 2014 • In digitised areas, carriage costs appear to have declined. At the same time, TAM’s increased coverage of Less than Class I (LC1) markets has resulted in some of the carriage savings being redirected to increase reach in LC1 markets • Growth is expected to be driven by a sharp increase in subscription revenues, while carriage costs are expected to rationalize in metro markets Distribution • Phase 1 of cable digitisation kick-started, and met with varying degrees of success in the four metros. However, the consumer has warmed to the concept of digitisation • Industry discussions suggest that the digitisation in Phase 1 cities may not all be addressable yet. MSOs are in the process of verifying their customer base, and updating their systems before packages are deployed • Completion of Phase 2 digitisation is likely to get delayed by 9 to 12 months. Out of the 38 cities identified for phase 2 digitisation, approximately 40 percent of C&S households are already digitised • It is important to continue the momentum and ensure that digitisation of cable gets completed; else there may be a risk that even Phase 1 cities may regress to a mélange of analogue and digital cable © 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.
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05 The power of a billion: Realizin
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The smartphone is a very sophistica
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Music The success of the iTunes mod
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06 Round up of the year that was Th
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FICCI 2013 143 “ The Amendments t
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© 2013 KPMG, an Indian Registered
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09 Outlook for the year The power o
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11 Technology The power of a billio
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Acknowledgement We acknowledge the
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FICCI-KPMG-Report-13-FRAMES

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