The Entertainment industry has become an inseparable part of life for Indians. This powerful media– Entertainment, dictates the lifestyle of the country. The entertainment and media industry is expected to reach Rs. 2,272 billion by 2018 growth at a compound annual growth rate of 15%, according to a PwC-CII report released on Tuesday, while the television sector is expected to continue its robust growth to reach Rs. 846 Billion at a CAGR of about 15 percent by 2018. The robust growth of the Indian M&E industry can be best heard in the words of Farokh T. Balsara, Media & Entertainment Leader, Ernst & Young India: “The M&E industry in India has been, and will continue to be, one of the biggest beneficiaries of India’s favorable demographics. Being one of the youngest nations in the world, with high volumes of content consumption, a vibrant indigenous content creation industry, and a favorable regulatory framework makes India an attractive investment destination for global M&E companies.”
Impact of Digital Video on movie industry
Movies have become part of our lives and movie stars honored as demigods! Movie industry being a prime player in the entertainment industry, has more than 1,500 movies produced every year and its size is estimated to be close to INR. 150 Billion. The industry evidenced an impulse growth where movies are collecting an enormous amount of 800 crores by capturing the scope existing in the foreign markets. The recent sensational movie Bahubhali collected about INR 650 crores in Telugu alone and this is a rare feat for a regional cinema. Aforetime this digital video era, people were unaware of any aspects of the movie before its release.
Due to this Digitalization of cinema chain, huge transition in the business has been observed, specifically, the cinema advertisement in the form of promotions has picked up the movie business to new heights. Also, Rajinikanth’s Kabali movie trailer created huge buzz by crossing one crore views in just two days, which is a huge pre-release success prior to its release and this advertisement buzz resulted in the movie to collect more than 650 crores irrespective of mixed talk in the public. Such is the impact created by the movie advertisement in skyrocketing the movie business. One of the research conducted by the hollywoodreporter.com states that: “Indian cinema advertising recorded a healthy 25 percent growth in 2014, touching revenues of $57 million (rupees 3.4 billion). This sector is expected to grow by 20 percent to $68 million in 2015.”
This situation is an outcome of moviegoers transforming into internet video users, where the audience of the movie are prepared and a curiosity is kindled in their mind, even before the movie is released; by making available timely video updates about the interesting elements of the movie (in the form of teasers, trailers, motion posters etc). It is estimated that box office revenue would be about 174.1 billion Indian rupees. The increase in video viewers stands out to be the reason for taking the entertainment industry business into a new horizon. The below figure, showcases the exponential growth of the Indian movie market:
This vast scope has attracted many foreign players to enter into our industry and make some huge profits, some of them are:
Branding Industry Triggered by Entertainment Industry
The huge craze for movies has made the movie stars as celebrities and demigods. As these demigod’s status has turned out to be a great opportunity for the Ad industry, as they have a vast reach than any other medium, wherein these actors are made to endorse their products. These movie stars are being paid very heavily, such that their income is quadrupled times higher than their one-year movie remuneration. As stated by TOI Amir Khan earns approx. 60 crores in a year through endorsements. It is estimated that 70% of the income of movie stars comes from endorsements. The below table gives the Forbes list stating the actors and their earnings:
|Salman Khan||Rs 244.50 Cr|
|Shah Rukh Khan||Rs 202.40 Cr|
|Amitabh Bachchan||Rs 196.75 Cr|
|Akshay Kumar||Rs 172.00 Cr|
|Hrithik Roshan||Rs 85.00 Crt|
|Aamir Khan||Rs 80.47 Cr|
|Deepika Padukone||Rs 67.20 Cr|
Animation and VFX – Redefining the Entertainment Industry Conceptually and Economically
The M&E industry triggered the growth of animation and VFX industry with, wherein currently India is having 300 animation, 40 VFX and more than 90 VFX studios with 15,000 professionals (as per the Indian Express). Indian studios have directly worked on top charted movies like “How to train your Dragon, Game of Thrones, Maleficent, Interstellar, Rio 2, and so on. The India animation industry has drawn the attention of the entire is because of its cheap labor and effectiveness to understand respective country culture and development in accordance to their sensibilities.
As per the FICCI-KPMG 2015 report, it is estimated that this industry has generated whooping revenues of Rs.51.1 billion in the years at 13.8% growth rate in 2015 and estimated to rise to 95.5 billion by 2020 (as per news18). The result of these consequences resulted in the escalation of FDI investments in I&B segment mounted to US$ 4.55billion by 2015.
There have been invincible efforts have been headed by the Indian government to offer a helping hand to the media industry through “Make in India”.
March of TV towards Digitalization
Television stands out to one of the most momentous factors in triggering the vast growth of the entertainment industry. TV is an intimate part of every Indian household. You hardly find an Indian house without a TV or that hasn’t watched TV, such is the penetration TV has in Indian. As per IBEF, It is estimated that 75% of Indian households have TV, 7 DTH operators, 7800 satellite TV channels, 6,000 MSO’s, 60,000 local cable operators (approx.) and with 168 million TV householders India ranks 2nd in the world. With this vast outreach the revenue size of the Indian TV industry is projected to be INR 975 Billion by 2019. This outreach triggered the Ad industry to exploit this opportunity, because of which TV Ad industry is having nearly 40% share in the overall of advertising revenue in India and by 2020 the revenue is estimated to be Rs. 99,400 crores at 15.9 growth rate (As per IBEF). In the era of movie advertisement business catching the spree, TV outreach impacted movie business in a huge way, where, as per the hollywoodreporter.com, the Television-based movie advertisement revenue is expected to be more than $3.7 billion in the year 2015.
Figure: Projections of TV industry size.
Source: FCCI-KPMG-2015 Source: KPMG
Figure: Stats on subscribers of various forms of broadcasting technologies.
For more than a half a decade, the traditional and cable based television networks overjoyed and moreover decreed the video consumption in India. With India having 350 million internet users, 200 Million smartphone users and 80% of overall internet video usage coming from smartphones, raised a new scope for internet based TV. 70% of the video content consumed over the internet is observed to be entertainment stuff. This context creates unwraps the huge potential for internet-based video services and for video on demand services. This potential can be observed from the market scope of VOD, wherein the Revenue for VOD service is quantified to $213.8 million at the end 2016.
To exploit this viewer base in a bigger and smarter way, evolved OTT. The abilities of OTT has been extensively utilized in the western markets and restricted by internet speeds in India. Recently we have seen Reliance JIO creating a breakthrough in availing greater internet speeds at lower rates, shows the game plan of Reliance to explore greater opportunities with its well established OTT infrastructure. Adding to Reliance, we see other mobile operators working out to avail these sort of offers to the public, to gain bigger from the OTT markets. Yesterday we saw Vodafone releasing OTT app. This shows the future of OTT in revolutionizing the entertainment industry and in turn digital video content revenues.
With the way the digital video ecosystem is progressing in an Impulsive and stabilized rate will for sure make India as one of the “SUPER POWER IN M&E INDUSTRY”.