Media And Entertainment Industry

Media & Entertainment

ROADMAP  Overview of Indian Media & Entertainment Industry  Entertainment sector  India Film Industry – Multiplex  Media Sector  Career opportunities for MBA’s in this industry  Primary Information

Indian Media & Entertainment Industry - Zooming ahead Current Market Size is estimated at Rs. 61,000-crore Expected to reach Rs. 1,05,200-crore by 2013, at a CAGR of 19% Maximum growth expected in Television and Film segments More than 300 national and regional TV channels Close to 1000 films made every year Liberal FDI policies across all the segments of the industry Government focusing on regulations to give further impetus to the industry. Source: IMaCS Analysis, FICCI-PWC Frames 2006 Report

Major constituents Breakup of Indian Media & Entertainment Industry

Outdoor Advertising 2.5% Internet Advertising Live Entertainment 0.3% 2% Television 41.9%

Print Media 30.9%

Radio 0.8% Films 19.3%

Music 2.0%

Key Drivers of the Indian M&E Industry Regulation

Consumerism

Content

Key Drivers

Advertising spend

Pricing

Technology

Guidelines for Foreign Direct Investment in the Indian M&E Industry

1. Advertising upto 100% through the automatic route 2. Films

3. Print Media

for the full value chain like film financing, production, distribution, exhibition and marketing upto 100% (a) up to 100% in publishing/printing scientific & technical magazines, periodicals & journals (b) up to 26% in publishing News Papers and Periodicals dealing in News and Current Affairs subject to a few conditions

Source: IMaCS Analysis

FDI Regulations for Indian M&E Industry…2 Guidelines for Foreign Direct Investment in the Indian M&E Industry a)TV Software Production 100% foreign investment allowed subject to a few conditions b) Setting up hardware facilities, such as uplinking, HUB, etc. upto 49% paid up share capital

4. Broadcasting

c) Cable Network upto 49% of paid up share capital. d) Direct-to-Home Maximum foreign investment of 49% paid up share capital include e) Terrestrial Broadcasting FM to the extent of 20% of the paid up share capital of the company. The licensee should be a company registered in India under the Companies Act. f) Establishment and Operation of Satellite FDI up to 74% is permitted with prior Government approval

Source: IMaCS Analysis

ENTERTAINMENT

TV •STAR TV •ZEE TV •SONY PICTURES

MULTIPLEX •ADLABS FILMS •PVR CINEMAS •INOX LEISURE

AMUSEMENT PARK •ESSEL WORLD

Porter’s Five Forces Analysis of Entertainment Industry

Bargaining Power of Consumer(High)  Consumer can switch channels  Increased globalization  Availability of a variety of alternative sources of

entertainment

Threat of New Entrants(Low)  High sunk costs  High capital requirement  Difficult access to distribution  Steeper learning curve because of mature market

Competitiveness within the Industry(High)  Highly Fragmented Industry  High Fixed Cost  Highly perishable products  Highly diversified rivals

Bargaining Power of Suppliers(Low)  Decreasing bargaining power of suppliers  Increasing number of content providers

Threat of Substitutes

 Film Industry  Significant sporting events like World Cups  Significant cultural events  Print media  Internet

Genrewise Television Viewership Share in India 3% 2% 4%

8%

1%

Mass Entertainment

39%

Hindi Film Channels Kids Channels Regional Channels

5%

English Entertainment Music Channels News Channels Sports Channels

38% Source: TAM Media Research

Largest TV network with 19 channels reaching 90% of the population Entered in 1991 and offers more than 10 channels in mass entertainment, sports, news,, music, movies etc. Pioneers of the Indian Television industry with 22 channels. It is present in broadcasting, cable distribution, production and distribution of films, creation of animation software Present with 3 channels focusing on Hindi entertainment and sports Based in South India with 14 channels in four languages and offers news, movies, music, kids shows. Present in India through two kids channels and has recently bought one more kids channel

Zee Televisions  Launched in the October 1992 & keeps tab with 167 countries  Reach to about 500 million viewers globally including USA,

Canada , Europe, Africa, the Middle East, South East Asia, Australia and New Zealand  Key driver of the growth of cable and satellite industry in India for the last 16 years  Largest producer and aggregator of Hindi programming in the world, with more than 80,000 hours of original programming in the library  Ranked as the ninth most popular brand within a decade of its launch.

SWOT analysis of Zee Entertainment Strengths

Weaknesses

•High viewership ratings •Complete bouquet of channels •High subscription revenues

•Lagging behind Star Plus •Problem of attrition •Increase in operating costs

Opportunities

Threats

•Benefit from the robust growth of •Slowdown in India's economic the Entertainment and Media sector growth •Digitization •Increased competition •Declining viewership and revenue share of GEC channels

Financial Performance  Ad Sales Up 25%; Net Profit Up 21% in Q2 FY10 Consolidated Sep 09

Jun 09

QoQ

Net Profit

1109

913.2

21.44%

Revenue

5405

4759.3

13.57%

Expenses

3897

3664.2

6.35%

Ad Revenues

2476

1979.6

25.08%

Subscription Rev

2435

2409.8

1.05%

DTH Subscription

514

467

10.06%

Rs. Million

Star TV  Launched in 1991  Leading the Indian television industry for 5 years  Expected to continue growing rapidly and reach INR 371

billion by 2010  Extended business to filmed entertainment, television production, cable systems and wireless and digital services in Asia in partnership with other companies  Employees at STAR is approximately 1,800 in Hong Kong, India, Taiwan, Mainland China, Dubai, Singapore, Korea, the Philippines, Pakistan, Thailand, Japan and London

OPPORTUNITIES  STAR has expanded by launching several regional

channels  Prime source of growth, as much of the untapped potential is in the rural markets

Sony Pictures  Subsidiary of Sony Corporation of America  Provides entertainment to about 130 countries  Specializes in Movies, Television, Home Entertainment

and Games  Available on the World Wide Web

SWOT analysis of Zee Entertainment Strengths

Weaknesses

•High viewership ratings •Complete bouquet of channels •High subscription revenues

•Lagging behind Star Plus •Problem of attrition •Increase in operating costs

Opportunities

Threats

•Benefit from the robust growth of •Slowdown in India's economic the Entertainment and Media sector growth •Digitization •Increased competition •Declining viewership and revenue share of GEC channels

Rating Points & Market Share

Indian Film Industry  Raja Harishchandra (1913), by Dadasaheb Phalke, was the first film

made in India.  Largest in the world in terms of number of films produced per year.  FICCI-KPMG study values US$ 2.11 billion and projects growth at

9.1 per cent till 2013.

Contd…  90 years old, accorded the status of industry only in

2000.  Has 11500 existing screens, 95% are standalone, single

screens.  China - 65,000 screens & US - 36,000.

Growth Drivers  Increasing investment in film production  Reducing shelf life of movies making multiplex the ideal

format for distributors  Encouraging regulatory environment  People willing to pay for quality

Risk & Concerns  Slowdown in content supply  Alternative entertainment avenues  Mall development delays  Uncertainty over entertainment tax  Great success of IPL

Breakup of Indian films market 1%

8%

15% 45%

17% 10%

Source: IMaCS Analysis, Industry estimates

2% 2%

Hindi

Crossover Hindi

Tamil

Telugu

Foreign

Malayalam

BengalI

Others

Key Players in Multiplex  PVR Cinemas  INOX Leisure  ADLABS Films  FAME India  CINEMAX

PVR Cinemas  JV between Priya Exhibitors Private Limited and Village

Roadshow Limited  began its commercial operations in June 1997  As of 2009, PVR has a total of 106 screens in 26 multiplexes

across India  India's largest multiplex, PVR Bangalore, which has 11 screens.

PVR  Aggressive expansion plans-100 screen in coming two

years  Leading Multiplex operator- 18 million patrons in FY08,

highest numbers among all the multiplex players  Entertainment tax burden to decline

INOX Leisure  Diversification venture of the INOX group into

entertainment and is a subsidiary of Gujarat Flourochemicals Ltd.  first multiplex in Pune in 2002  operates 29 multiplexes and 105 screens in 20 cities

INOX Leisure  Expansion in tier I and tier II cities  Top 25 cites - compelling growth stories Crisil Research  E-Tax exemptions- operates 29 properties but pays

entertainment tax only on 10 of them

ADLABS Films  In 2001, the company entered the burgeoning multiplex

business  Key player - production, distribution, exhibition  400 screens spread across India, US, Malaysia and

Mauritius.  Has produced like Gangajaal, Namastey London, Singh

is Kinng etc.

ADLABS Films  Integrated Play on the M & E Sector – gives competitive

edge at each level of the value chain  Expansion through acquisitions – acquired Rave cinema

& Lotus Five star  Future Plans - to release 6-7 movies per year

MEDI A PRIN T NEWSPAPE R THE TIMES GROUP

ELECTRO NIC MAGAZIN E •INDIA TODAY

TV •AAJ TAK

•THE HINDU GROUP

•BUSINESS WORLD

•NDTV

•INDIAN EXPRESS GROUP

•OUTLOOK

•Z NEWS

•THE ECONOMIST

•STAR NEWS

•CNBC TV 18

RADI O

INTERN ET

Print Media  Current size: Rs 10,900 crore  CAGR: 12%  Projected size by 2010: Rs 19,500 crore

With the literate population on the rise, more people in rural and urban areas are reading newspapers and magazines today

Print Media

1.Newspaper  First printed newspaper of India was in English edited &

published by James Augustus Hicky on 29th January 1780.  Was named ‘Bengal Gazette’ which came out  Digdarshan was the first Hindi newspaper - April 1818

Top key players News paper Founded Avg. Daily IRS (2008) players Circulation (2008) Times of India

1838

3.14 million

13.3 million

The Hindu

1875

1.45 million

5.2 million

Hindustan Times

1924

1.14 million

4.8 million

Electronic Media News Channels  Continues to grow at 8-10 per cent annually  About 10-12 per cent of total advertising money spent on television goes to

news channels.  In 2007 news channels generate about Rs 7 billion in advertising revenues,

compared to Rs 6.2 billion in 2006

•Aaj Tak •CNBC TV 18 •CNN •Headlines today •NDTV •Star NEWS •Zee News

NDTV  Founded in 1988 by its current chairman and director,

Prannoy Roy, an eminent journalist.  Has more than 1,000 employees  Its three national news channels NDTV 24/7, NDTV

India, and NDTV Profit

ZEE NEWS  Located in Mumbai a 24 hour Hindi news channel and is

a part of Zee News Ltd (ZNL).  Comprise of hard news, social service programmes, crime

related news, lifestyle, sports, entertainment, business and health related news as well.

CNBC TV 18  CNBC TV18 is a business news channel, a joint venture of

CNBC and Television 18 India Limited, and is considered as India`s number one news medium.  Currently, CNBC TV18 is available in over 28 million

households in India.

STAR NEWS  Star News, a 24-hour Hindi news channel offers its

viewers news that is relevant to contemporary India. The programming of this channel covers the full spectrum of news ranging from politics to business.  Launched in the year 1998, Star News was previously a bilingual channel when it was in partnership with NDTV, featuring news in both- English as well as Hindi.

AAJ TAK  Launched on 31st December 1999 premium 24-hour

Hindi news channel.  Reach of more than 45 million viewers in India.  Found a place in the Limca Book of Records, the Indian equivalent of Guinness Book of World records.  Recognised for the receiving the highest number of SMSs as responses to contests, poll, etc.

Relative Shares of Hindi News Channels (2008)

Relative Share Of English News Channels (2008)

CONTD……

Careers for MBA’s in M & E industry  Event Management  Production Management  Celebrity management  Brand Management  Business Development & Consulting

Event Manager: To coordinate activities of staff and convention personnel to make arrangements for group meetings and conventions

Marketing Manager, Media: To determine the demand for products and services offered and identify potential customers

Channel Sales Manager: Ensure execution of the developed sales strategies, plans and advertising or promotional programs

Business Development Manager: To Plan, direct, or coordinate the operations & develop strategic alliances and partnerships for Media And Entertainment companies

Journalist: Collect and analyze facts by interview, investigation, or observation. Report and write stories for newspaper, news magazine, radio or television

Brand Manager: To maintain and promote brand names through various methods

Production ManagementTo help in the production of films, serials, news and entertainment channels

Entertainment Industry

Internet Advt.

Media Network Industry

Printing & Publishing Industry

Primary Informations  DNA (Newspaper): DNA (Mumbai) launched its first

edition on 30th July (2005) targeted at a young readership  Merger of SL Media (49%) & Bhaskar Group  Started in Pune with 25,000 copies & currently touched 1,00,000 copies  No. 2 in Pune: TOI - 1.5 lacs subscription DNA- 1 lac subscription

 Challenges: Brand name of TOI

Attracting readers  Strategy: Yeraly subscription with Rs 299 Initially targeted young readers now focusing family readers also  Future Plan: Expansion in Delhi  MBA opportunities: Yes & they also provide SIP

Sakaal Times  Sakaal Media Group established in 1932  Earlier known as “Maharashtra Herald” focused mainly

on local news  7th May, 2008 relaunched as Sakaal Times as a national newspaper  Challenges: TOI-Pune mirror launched at the same time  Strategy: 1 Year subscription at Rs. 299 News for Women, Health, International & Lifestyle & discontinued Health & International

Contd…..  Impact of Economic Slowdown  Had to close down the newly opened office in Delhi  Ad income declined sharply  Opprtunities: Yes, they do recruite MBA & provide

Internship also except editorial

Conclusion  The future depends on the growth of Indian economy  industry is expected to grow at an annual growth rate of 19%

to reach Rs 83,740 crore by 2010  The expected CAGR of various segments of M & E industry in India till the year 2010 is as follows: Radio - 32%  Music - 1%  Television - 24%  Film Industry - 18%  Print Media - 12%

Presented by Yugesh Kumar Dubey