(Last updated: 16 Apr 2011)

Trends and opportunities

The market

The Indian media and entertainment industry is one of the fastest growing industries in the country. Its various segments—film, television, advertising, print and digital among others – have witnessed tremendous growth in the last few years.

According to a 2009 report jointly published by the Federation of Indian Chambers of Commerce and Industry (FICCI) and KPMG, the media and entertainment industry in India is likely to grow at a compound annual growth rate of 12.5 per cent per annum over the period between 2009-13 and US$20.09 billion by 2013.

Television

According to the study by FICCI and KPMG, the television industry, which is currently valued at about US$4.63 billion, will expand by 14.5 per cent between 2009 and 2013.

Digital distribution platforms such as direct-to-home (DTH) and mobile TV are transforming the industry. Mobile TV – where content will stream in on mobile phones – is poised to grow with the advent of 3G.

Music

Industry experts estimate that the current size of the music industry is about US$149 million. The industry is likely to grow to become a US$164.56 million industry by 2012.

For a considerable amount of time, cassettes and CDs have accounted for most music sales, future growth is expected to come from non-physical formats such as digital downloads and ring-tones, among others.

The important driver for the music industry over the coming years will be digital music, and its share is expected to move from 16 per cent in 2008 to 60 per cent in 2013.

Radio

The radio industry is forecast to grow at a compound annual growth rate of 18 per cent over 2009-13, reaching US$391.15 million in 2013 from the present US$170.87 million in 2008.

Advertising

The television advertising industry is expected to reach US$3.12 billion in 2013 from the estimated size of US$1.75 billion in 2008, which translates into a growth of 12.2 per cent on a cumulative basis, over the period.

Internet advertising is projected to expand by 32 per cent over the next five years to reach US$411.74 million in 2013 from US$102.94 million in 2008. Also, the share of online advertising is projected to grow from 2.3 per cent in 2008 to 5.5 per cent in 2013.

Digital media advertising (Internet, mobile and digital signage) is expected to emerge as the medium of choice for advertisers.

Digital advertising on newspaper websites will increase at a 6.8 per cent compound annual rate to US$8.3 billion in 2013 from US$6 billion in 2008, increasing its share of total newspaper advertising to 9.1 per cent from 5.4 per cent in 2008.

Out-of-home advertising spend to be US$308.8 million in 2008. This figure is projected to almost double in 2013 to US$ 514.67 million.

Cinema

The Indian film industry is the largest in the world in terms of number of films produced per year. The FICCI-KPMG study values the Indian film industry at US$2.11 billion and projects its growth at 9.1 per cent until 2013.

The opening of the film industry to foreign investment coupled with the granting of industry status to this segment has had a favourable impact, leading to many global production units entering the country.

According to a report by CII-AT Kearney, the share of international markets in total box office collections is estimated to increase from eight per cent in 2006 to 15 per cent in 2010. Consequently, many domestic players like Yash Raj Films, Reliance-Adlabs and UTV, among others, have set up distribution arms overseas. Also, content for areas such as music and television have a huge potential international market.

Print/Publishing

The print industry is projected to grow by 5.6 per cent over the period 2009-13, reaching US$4.26 billion in 2013.

Magazine publishing is expected to grow at a higher rate of 6.5 per cent as compared with newspaper publishing which is expected to grow at 5.6 per cent over the five year period between.

A survey carried out by research firm Valuenotes Database, spanning 237 consultants, publishers and service providers reveals that India continues to be a favoured destination for publishing outsourcing.

Digital media

The Indian animation industry will grow from the current US$362 million to US$811.2 million by 2013.

A considerable number of Indian special effects artists and animators are moving up the ranks of established US animation studios such as Walt Disney and DreamWorks Animation SKG and are also creating a niche for themselves in the special effects market as well.

(Source: 'The Indian Entertainment and Media Industry 2009 report', Federation of Indian Chambers of Commerce and Industry and KPMG)

Tariffs, regulations and customs

The government has initiated major reform measures:

• Permitting 100 per cent foreign direct investment (FDI) through the automatic route for the film industry and advertising.
• Allowing 49 per cent foreign holding in cable TV and direct to home.
• Allowing 100 per cent FDI in non-news publications and 26 per cent FDI in news publications.
• The government has allowed 100 per cent FDI in fax editions of magazines and newspapers.
• Recently, the government allowed companies with core business in news segment but hived off non-news business, to raise funds from overseas beyond the stipulated FDI limit of 26 per cent. Such companies can raise and route funds from overseas through its non-news arm, which will not be calculated as foreign investment.
• The FM radio sector was opened to FDI with a 20 per cent cap.
• Permitting the setting up of up-linking hubs for satellite up-linking by private TV broadcasters from Indian soil.
• Giving industry status to the films segment.
• Opening FM radio operations to the private sector.
• The government has allotted US$50.13 million in the current Five-Year-Plan for various development projects for the film industry. The funds will be utilised to set up a centre for excellence in animation, gaming and visual effects.
• The government has approved the policy for headend-in-the-sky (HITS) operators, a technology that will provide digitised cable content to viewers across the country.

Industry standards

All film equipment and infrastructure must meet the Bureau of Indian Standards (BIS) guidelines. BIS guidelines are based on British standards. There are no Indian guidelines or regulations concerning post-production services rendered outside the country, in the instance where post-production is carried out in Australia.

Marketing your products and services

Market entry

India is a highly cost sensitive market. Australian companies must offer new and innovative products at highly competitive prices to be successful.

Cost-effective, tailored solutions for the entertainment sector are essential for successful entry into India. Australian companies need to provide detailed brochures and information (including client and project references) for Indians to consider.

Given the size of the Indian market, Australian companies should initially focus on major cities (Mumbai, New Delhi, Kolkata and Chennai) and mini-metros (Hyderabad, Bangalore and Pune).

The nature of the industry requires an appropriate local partner. Given the number of international film festivals, Australian companies should also consider participating in film industry festivals in order to make contact with key people or companies in India’s film and entertainment industry.

Distribution channels

Australian companies looking to enter the entertainment industry in India should consider the following options:

• Appointing a distributor (particularly one with good regional coverage and networks) for product and equipment
• Securing a joint venture partner (for financial support and in-market expertise)
• Operating through a liaison representative or representative office (when market demands justify in market presence)

The leisure and entertainment industry is characterised by both government-owned and private companies. Distributors, that must be members of the Indian Motion Picture Distributors Association, take films to the market place. Australian companies should contact distributors, who will in turn sell to the retail sector.

Australian companies involved in leisure equipment, goods or services are advised to appoint local agents with a track record in promotion and distribution services.

Links and industry contacts

Entertainment-related resources

Film Federation of India – www.filmfed.org/
The Indian Association of Amusement Parks and Industries – www.iaapi.org/

Government, business and trade resources for India

The Associated Chambers of Commerce and Industry of India – www.assocham.org/
Central Board of Excise and Customs – www.cbec.gov.in
Confederation of Indian Industry – www.cii.in
Federation of Indian Chambers of Commerce and Industry – www.ficci.com
National Informatics Centre – www.nic.in

Media

123 India – www.123india.com
India Infoline Limited – www.indiainfoline.com
Express India – www.expressindia.com
India Today – http://indiatoday.intoday.in/site/
Outlook Magazine – www.outlookindia.com
The Times of India – http://timesofindia.indiatimes.com

Contact details

The Australian Trade Commission – Austrade – is the Australian Government’s trade and investment development agency.

Through Austrade’s network of offices in over 50 countries, we assist Australian companies to succeed in international business, attract productive foreign direct investment into Australia and promote Australia's education sector internationally.

For more information on how Austrade can assist you, contact us on:

Australia ph: 13 28 78 | Email: info@austrade.gov.au

A list of Austrade offices (in alphabetical order of country) is also available.