India set for media boom/However, print is still very strong in the countryside, where the digital infrastructure often remains at a nascent stage.

India set for media boom

NEW DELHI: The media and entertainment sector is due to experience rapid growth in India over the next five years, with television and digital set to be the primary beneficiaries.

FICCI, the trade body, and KPMG, the business services firm, estimated that the industry expanded by 12% in 2011, reaching a value of Rs728bn ($14.6bn).

This figure was pegged to hit Rs823bn in 2012 and Rs932bn in 2013, with similarly impressive growth anticipated to 2016, when revenues should come in at Rs1.4tr.

More specifically, advertising accounted for Rs300bn of returns in 2011, a 41% share. Adspend levels rose by 13% overall last year, although this constituted a slowdown from 17% growth in 2010.

By medium, television, by far the country's leading medium, accrued Rs329bn from subscriptions and advertising in 2011. It is forecast to more than double in size, to Rs735bn, by 2016.

Primarily, this improvement will result from rising penetration, as only 60% of Indian households are currently included in television audience, a percentage due to increase significantly.

Elsewhere, print media saw an 8.4% lift in demand in 2011, claiming Rs209bn, measured against Rs193bn in 2010. Although this channel should remain India's second largest in the near term at least, growth is going to slow.

The internet is the most likely to gain as a result. While online currently takes a relatively modest 4% of advertising budgets, several emerging trends are expected to combine and drive this figure upwards.

"Smartphones, tablets, PCs and gaming devices all form the foundation of a new wave in media usage," the study said. "This is gradually impacting the way content is being created and distributed as well. Multiple media including TV, films, news, radio, music are being impacted with this change."

However, print is still very strong in the countryside, where the digital infrastructure often remains at a nascent stage. Regional TV stations broadcasting in local languages are also in a good position here.

"National advertisers are looking at these markets as the next consumption hubs and the local advertisers are learning the benefits of marketing their products aggressively," the study argued.

FICCI and KPMG also reported that radio revenues climbed by 15% in 2011 year on year, while out-of-home advertising witnessed a 7.6% increase on the same metric.

Data sourced from Economic Times, Business Standard, afaqs; additional content by Warc staff, 13 March 2012