Media economy with special reference to Indian market

The Indian media and entertainment industry comprise of print, electronic, radio,
internet and outdoor segments. With the government aggressively pushing in for
digitization of TV, Multi System Cable Operators (MSOs) are expected to lose 15-
20% of their subscribers to DTH (direct-to-home) services. India is a fast digitizing
market and the consumer shift towards digital services can be seen through the
increase of digitized households.

The players in the electronic media can be classified into a three-link chain. First
are the studios (including the animation studios), which comprise the hardware
part of the industry, the second are the content providers and the third link
comprises the distribution trolleys, which include the cable and satellite channels,
multiplex theatres, MSOs and the DTH players.

In India, the ratio of advertising expenditure to GDP is less than 0.5%.

Interestingly, Print and TV media contribute over 75% of the advertisement spend
in a year. At present, advertising revenue accounts for around 0.38 per cent of
India’s gross domestic product.

Of the more than 70,000 newspapers printed in India, around 90% are published in
Hindi and other vernacular languages. There are over 800 private satellite TV
channels, permitted by the Information and Broadcasting Ministry.

In the electronic media, entry barriers are high for broadcasting since it is very
capital-intensive. It involves the cost of leasing the transponder, setting up up-linking
facilities, setting up pre and post-production facilities.

Competition is high in print media, especially in Hindi dailies. The print sector
includes listed entities like Jagran Prakashan and HT Media. Regional print media too
is seeing increasing competition. Competition is high amongst broadcasters
especially for general entertainment channels. The space includes listed entities like
Zee TV, TV 18, UTV, NDTV and Sun TV.

The industry provides employment to 3.5-4 million people, including both direct
and indirect employment in CY 2017. India’s advertising revenue is projected to
reach Rs 1,232.7 billion (US$ 18.4 billion) in FY23 from Rs.608.3 billion (US$ 9.4
billion) in FY18.

Television grew at 8.5% primarily due to a dull year for subscription revenues.
Print revenue grew at 7% as English language newspapers continued to be under
stress.

FDI inflows into the Information and Broadcasting sector during April 2000 to June
2018 rose up to US$ 7.2 billion. Demand growth, supply advantages and policy
support are the key drivers in attracting FDI.

New distribution technologies like DTH, Conditional Access System (CAS) and IPTV,
hold the future of the media industry as increasing digitization will completely
modify the ways in which consumers receive channels. The compulsory
digitization all over India will bring in more subscription revenues for the
broadcasters unlike reporting of numbers by cable operators at present.

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.