M&E industry poised to grow at 13% over next five years

The Indian media and entertainment industry is slated to grow at a compounded annual growth rate (CAGR) of 13 per cent over the next five years to Rs 1,09,100 crore, according to a report by the Federation of Indian Chambers of Commerce and Industry (Ficci) and research firm KPMG. The gaming and the animation segments are expected to lead among all others with an expected CAGR of 32 per cent and 18.7 per cent respectively over the next five years.

The industry witnessed a tough phase in 2009 recording a marginal growth of 1.4 per cent to Rs 58,700 crore due to the economic slowdown and reduction in advertising spends. However, despite the slowdown, the TV industry grew 6.8 per cent in 2009.

The film industry contracted 14 per cent in 2009. Over the next five years, the industry is projected to grow at a CAGR of 9 per cent and reach Rs 13,700 crore. Growth drivers for the sector would include expansion of multiplex screens resulting in better realisations, an increase in the number of digital screens facilitating wider releases, higher cable and satellite revenues, improving collections from the overseas markets and ancillary revenue streams like DTH, digital downloads, etc, which are expected to emerge in future.

In the last year, the print media industry showed a very moderate growth of 2 per cent as there was a decline in advertisement revenues, which was partly offset by the growth in circulation revenues. The industry is projected to grow at a CAGR of 9 per cent and reach around Rs 26,900 crore by 2014.

Radio, like other sectors, was affected by the recession too. However, it is expected to grow at a CAGR of 16 per cent over 2010-14 and reach a size of Rs 1, 640 crore by 2014.

The size of the Indian music industry was estimated at around Rs 830 crore, up from Rs 730 crore in 2008, implying a growth of 14 per cent during the reporting period. It is expected to grow at a CAGR of 16 per cent over 2010-14 to reach Rs 1,720 crore. Gaming is expected to be the fastest growing sector in the M&E industry. While the sector showed a 22 per cent growth in 2009, it is expected to grow at a CAGR of 32 per cent in the next five years to reach Rs 3,200 crore by 2014.