Subhashish Mazumdar,Sr. V.P., Hinduja Group
The largest segment of Indian media and entertainment sector, India's television industry, is expected to grow at a CAGR of 15 percent, while print media is expected to grow at a CAGR of 8.6 percent. India is one of the highest-spending and fastest-growing advertising markets globally. The country's expenditure on advertising is estimated at 15.5 percent in 2016, and is expected to grow by 11.2 percent in 2017.
Television segment, which continues to hold highest share of spending, is expected to grow by 11 percent in 2017, led by increased spending by packaged consumer goods brands and e-commerce companies (Source: KPMG reports). The foreign direct investment (FDI) inflows in the information and broadcasting (I&B) sector (including print media) in the period April 2000 to December 2016 stood at USD 6.3 billion (data of DIPP).
When we look at the electronic media environment in 2016, we find that while cable operators and MSOs are governed by the Cable Act, broadcasters have to merely follow the downlinking regulations and adhere to programming and advertising code under the Cable Act. DTH and HITS operators have to abide by the specific guidelines available in their respective policies.
As is known, India today accesses the Internet mainly through mobiles and tablets. To cater to these huge audiences, broadcasters have launched mobile applications on which all forms of content, including live and stored video content, are available. Recently, the world's largest OTT aggregators have also launched commercial operations in India. None of these mobile products are currently regulated, except under a self-regulatory code, if adopted by the content suppliers.
The TV distribution sector has been undergoing the digitization exercise for the past few years, and is primarily in an investment phase. Globally, we have seen that such digitization is followed by a consolidation wave. The domestic consolidation would be likely eventually followed by strategic inbound investments by large global players. The Indian multiplex and TV broadcasting sectors have been the early movers as far as domestic consolidation is concerned.
Large TV networks have also been growing inorganically, with a view to expand their respective bouquets in terms of markets and/or genres. These players have benefited from economies of scale, channel packaging and bundling, and increased bargaining power with the digital cable/DTH industry.
Year 2016 also saw first signs of digital headwinds reaching India, with over 40 players launching OTT platforms and all traditional media players showing increased interest for investment in digital content, technology, and platforms. The rapidly changing media consumption patterns, lower cost of Internet connectivity and smart phones, and increasing time spent on social media platforms have resulted in exponential growth in the digital media segment.
As of now, there seem to be no clear winners, with both SVOD and AVOD platforms witnessing a series of transactions and growth in viewership. While all these players are initially investing in content and technology, there can be eventually a consolidation of such platforms to benefit from the increased subscriber base. As an opportunity for future, the ad dollars will move to the digital domain on the back of improved analytics and measurement solutions. Accordingly, traditional media players will attempt to dominate this space. With a constantly evolving traditional media landscape, impacted by the digital transformation across the value chain, traditional media groups can rise up. The new regulatory framework of TRAI will provide a tectonic shift for the broadcasting and distribution platforms and the new wave of digitization across the media and entertainment value chain.
The synergies of digital distribution platform along with the new-wave digital of multi-screen and any-time viewing will need new innovative models of growth and customer requirements. The content viewing is shifting from channel to program viewing with multi-gadget and multi-platform through satellite, Internet, or the classical fiber chain. The digital applications-driven ease for customers and channel partners are the way for new models of integrated hybrid business of the old classical regime and the new order of the digital, which cannot be wished away.
The Government of India and the Telecom Authority of India have provided a continuous impetus for harmonizing and channelizing the media industry, primarily in broadcasting distribution for a gigantic growth.