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The high smartphone penetration will help Digital India and media
segments to grow. The Digital India campaign will strengthen the
industries such as video streaming, online music services and gaming in
India by increasing the internet penetration. The World Bank and the
International Telecommunication Unions data indicate that 26% of the
population has access to the internet in India with number of internet
users likely to cross 500 million by end of 2016. The launch of video
streaming services such as Netflix, Hotstar and Voot shows the high
growth potential of digital entertainment services in India.
The Union Budget 2016-17 has proposed basic custom duty exemption
on newsprint. The customs duty on wood in chips or particles for
manufacture of paper, paperboard and newsprint has been reduced to 0
per cent from 5 per cent.
The Union Cabinet has approved the model Shops and Establishment
Act, aimed at generating employment prospects by allowing cinema
halls, restaurants, shops, banks and other such workplaces to remain
open round the clock
Future prospectus
According to the FICCI-KPMG Report 2016, the industry is expected
to grow to Rs 2,260 billion by 2020 at a CAGR of 14.3% during 2015-
2020, which is more than double the rate of growth of global media
Industry.
Currently, advertising revenue in India contributes less than 0.5% of
the GDP, compared to the average 1% contribution across most
developed economies. It is expected that advertising will increasingly
contribute a higher share to the GDP in the coming years and is
projected to double to Rs 994 billion by 2020 growing at a CAGR of
16% during 2015-2020.
The fortunes of the media industry are linked to the growth of the
economy. India is set to grow at a rate of at least 6-7% over the long
term. Rising incomes in the hands of people encourage them to spend
more on discretionary items like media and entertainment. However,
the trend is shifting more towards the online medium.
The demographic profile of India also favours higher spend on
entertainment, with the consuming class forming a sizeable chunk of
the country's total households. Thus, this could lead to the emergence
of a huge consumer base for the various products and services
(including entertainment).
New distribution technologies like DTH, Conditional Access System
(CAS) and IPTV, hold the future of the media industry as increasing
digitization will radically alter the ways in which consumers receive
channels. The mandatory digitization all over India will bring in more
subscription revenues for the broadcasters as opposed to under
reporting of numbers by cable operators at present. Also, continued
growth of regional media and growing strength of the filmed
entertainment sector will also boost growth of the media industry.
The advent of digital platforms will require industry participants to
invest in constant innovation in products and services. Thus, going
forward, innovation will be the key to attract more consumers and
deliver relevant content and services that are profitable too.
With metros, already being saturated, regional markets provide ample
scope for growth in the media sector. In print media, newspapers are
being published in vernacular language. In television, newer channels
are introduced in local languages. Tier II and Tier III cities and towns
are set to drive the Indian consumption story in the next few years.