FICCI-KPMG-Report-13-FRAMES

05
The power of a billion: Realizing the Indian dream
New media continued its growth trajectory in 2012 (albeit slightly slower
than the previous years), with estimated growth in advertising revenues of
close to 40 percent 1 over last year. Coming in at approximately INR 22 billion
in revenue in 2012, digital adspend reached approximately 6.7 percent of the
total M&E industry advertising revenue.
As predicted last year, the mobile story has begun to play out in India, with
the user base expanding significantly over last year. The devices are getting
cheaper, access better and time spent longer, leading to significant shifts in
content consumption habits of large sections of the Indian audience. This
audience, however, remains under-monetized – primarily due to a decline
in on-deck revenues, sluggish ad rates and under investment in distribution
platforms that allow customers to pay for content effectively.
One of the biggest challenges facing this industry in realising its full potential
will be the ability to create distribution platforms with enough critical mass
that provide users with a rich experience and transact seamlessley (even for
small ticket sizes). There is increasing consensus in the industry is that it is
no longer possible to prevent content from being made available on-line. The
recourse for content owners is to invest and create credible platforms where
users can consume content effectively and at the same time work towards
effective policing of piracy.
89
Connectivity and access continues to get better
As expected, mobile and wireless connections continued to drive the
growth of internet penetration in India. By the end of 2012 there were 124
million internet connections in India, a rise of 41 percent over last year.
Over last year fixed line connections grew by 11 percent. Over the same
period, wireless connections have grown by almost 50 percent, outlining the
importance of mobile data access in the overall digital economy 1 .
Going forward, the total number of connections is expected to surpass 380
mn by 2017, with wireless connections comprising nearly 90 percent of all
connections added over 2012-2017. The projected growth is slightly lower
than last year primarily due to continued uncertainty over 4G roll-out and
continued uncertainty in the telecom environment 2 .
India - Internet connections, 2012-2017P
Source: KPMG in India analysis
01. KPMG in India analysis
02. Industry discussions conducted by KPMG in India
© 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.