India Media Entertainment Report 2019

India’s digital
future
Mass of niches
KPMG in India’s Media and

Entertainment report 2019
August 2019
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India’s digital future

Mass of niches
We would like to thank all those who have contributed

and shared their valuable domain insights in helping us
put this report together.
• The information contained in this TL report ‘India’s digital future – Mass of niches’ is of a general nature
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Table of contents
1. Foreword 6
2. Executive summary 8
3. India’s digital demography: A path to 2030 18
4. Segments 34
Digital - Crossing the Rubicon 36
TV - Waking to a new reality 54
Print - The oldest pillar still standing 66
Films - Content triumphs 76
Animation, VFX and post production - Turning imagination into reality 88
Gaming - Well played 102
Out of home - Embracing digital 112
Radio - Waiting to be heard 120
Music - In tune with the masses 130
5. The media and entertainment industry in ASPAC markets - 142

At the forefront of the digital revolution
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6. Themes 160
NTO - A paradigm shift 162
Regional markets - Moving into the limelight 170
Skill development - The learning imperative 176
Digital privacy - You are being watched 184
Digital content - Bridging the monetisation gap 188
Cord cutting - Early adopters embracing change 192
Original content on OTT platforms - Capturing mindshare 198
E-sports - One for the team 204
Monetisation of sports leagues - Show me the money 210
Centralised marketing system - Connecting the dots 216
M&A deal trends 220
Tax landscape 224
7. Technology trends in M&E sector 230

5G: What can M&E sector expect? 232
Future disruptors 240
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6 Foreword
Foreword
We are delighted to share the KPMG in India’s media and entertainment
report 2019. The report – in its eleventh year of publication – is distinctive this
year as we explore what we believe will become one of the central themes
of the industry in the near term; an examination of India’s digital demography
from now to 2030.
Why is the profile of India’s digital demography relevant? As KPMG in India’s
media and entertainment 2018 report had outlined, digital disruption has made
it vital for media businesses to pivot to a direct to consumer model. With this
transition comes the imperative to invest in better understanding the end
consumer. Segmentation and demographic, psychographic and behavioral
profiling will all become increasingly important, as they have historically been
in other consumer businesses.
By 2030, we estimate that there will be a billion people in India who
are connected to the internet. While there will expectedly be significant
heterogeneity among consumers, it is still possible to draw insights into
their behaviour and thereby develop broad archetypes. For example, the
largest segment of the digital user base in 2030 will be what we are calling
the ‘Digital Enthusiasts’; a category that will include a majority of the early
adopters of the internet, as well as the Millennials and Generation Z who
will be entering their prime working years. This group is accustomed to
leveraging the power of the internet in their everyday lives from finances,
travel, entertainment and livelihood. The Digital Enthusiasts also becomes
more sizeable over time due to an upward progression of users from the
‘Digital Mainstream’ buoyed by their growing prosperity and greater comfort
and confidence in going online. In 2030, digital media and entertainment
expenditure in itself is unlikely to be perceived as a luxury. With digital
consumption becoming ubiquitous, the differentiation across consumer
archetypes therefore will be more around their level of digital sophistication,
cultural factors, demographics etc. combined with the ability to spend on
hardware and immersive experiences.
In all, as our report outlines, while there may be bumps in overall consumption
levels as economic sentiments shift and technology continues to disrupt,
the secular trend for media and entertainment consumption in India is most
decidedly favourable.
We hope you find this report timely and insightful.
Satya Easwaran
Partner and Head
Technology, Media and Telecom
© 2019 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
Foreword 7
Foreword
There are telling signs that the Indian economy is slowing down. The government
lowered its GDP estimate for FY19 from 7.2 per cent earlier to 7 per cent, which is
the lowest level in five years. Despite the apparent downturn in overall economic
growth, the media and entertainment industry (M&E) in India posted a solid growth
of 13 per cent during FY19 to reach a size of INR1631 billion. TV remains the largest
segment within M&E but digital and online gaming are the fastest growing.
The term ‘digital revolution’ has become somewhat of a cliché, but there can be no
other way to explain the extent of digital integration in our lives today. With no major
constraining factors, digital is expected to be a dominant force going forward and in
FY23, it is likely to be the second largest segment after TV and attract the highest
marketing spend among all media formats. As digital behaviour evolves, there
seems to be a growing consensus that in the future, subscription models will have
a greater role in monetisation of digital platforms. However, as digital consumption
becomes ingrained in our lives, data privacy is a growing concern and it is imperative
for organisations to be prudent with respect to managing user information and other
data.
TV faced significant headwinds in FY19 and in fact grew at a lower rate than was
projected last year primarily on account of the delay in implementation of the
NTO. TV advertising spend was subdued as marketers waited to examine the
net impact on number of subscribers, as also pick up across various genres. NTO
implementation dawns a new reality for the TV industry where consumer demand,
economics and distribution dynamics is expected to drive long-term business
sustainability, though systemic inefficiencies have currently limited consumer
choice.
The print industry, currently the second largest in India, has been kept buoyant
largely due to growth in regional advertising revenues, which is compensating for
the slow growth in circulation. English print circulation has declined in absolute
numbers following growing digital migration, which is reflected with growing
pressures on ad monetisation. More generally though, regional audiences and their
demand for content in local languages has been one of the recent defining trends,
also benefitting, besides print, almost every other segment of M&E.
Looking forward, it will be hard to ignore the pessimistic signals emerging from
global economies. A fear of the financial contagion is real and the Reserve Bank
of India has cut interest rates as it acknowledges that the growth outlook for
FY20 might not meet earlier expectations. However, these cyclical events while
impacting short-term performance, are unlikely to alter the strong fundamentals and
momentum of M&E consumption, especially digital, in India. We remain upbeat on
the prospects for both.
Girish Menon
Partner & Head
Media & Entertainment
8 Executive summary
Executive
summary
Executive summary 9
Introduction film segments contributed to the performance of the

The global economic activity has significantly weakened, sector. Further, the continued increase in high speed
especially in the second half of 2018 on the back of internet penetration and mobile consumption has led
escalation in US-China trade tensions and financial to an evolution of consumption habits and distribution
tightening alongside the normalisation of monetary channels, resulting in the emergence of new business
policy in the larger advanced countries. While real Gross models, which have significantly added to the overall
Domestic Product (GDP) growth slowed from 3.8 per M&E pie.
cent in 2017 to 3.6 per cent in 2018, it is projected The digitisation and evolution of consumption has had a
to decline further to 3.3 per cent in 2019.1 With 2019 positive impact on the lesser penetrated rural markets
starting on a soft note, the second half of the year and with regional markets also emerging as the next
is expected to be better with pickup expected to be growth frontier, there is an increasing demand in terms
supported by accommodative policies by central banks of media consumption across both traditional and
of major economies.2 digital media, w.r.t these markets. This ever expanding
In tune with the global economy, India’s real GDP reach of media distribution, coupled with the relatively
growth rate marginally declined from 7.2 per cent in 2017 strong fundamentals of the economy have resulted in a
to 7.1 per cent in 2018.3 While the growth for 2019 is robust advertising growth for the industry across both
estimated at 7.3 per cent4, the country has yet to recover traditional and digital media in FY19.
from the slowdown in consumption over recent quarters Going ahead, with digital media distribution and
with lending activity from NBFCs witnessing a steep consumption taking centre stage, traditional businesses
decline in recent times.5 However, the festive season will need to innovate around their business models to
along with the government scheme for liquidity support stay relevant. However, given the vast demographic of
to NBFCs6 is expected to drive uptick in consumptions in the country, the growth of digital media in the short to
the latter half of 2019. medium term does not spell doom for traditional media.
The slowdown in consumption had a moderate impact Rather, there is scope for a harmonious co-existence.
on some sectors in the Indian media and entertainment With an expected greater focus on monetisation of
(M&E) industry, which grew by 13.3 per cent in FY19, emerging digital business models, and favourable
to reach a size of INR1.63 trillion, with a CAGR of 11.5 regulatory and operating scenario across traditional
per cent over FY15-FY197. While there was an impact businesses, the M&E industry in India is likely to
of the slowdown on TV and print advertising, the continue soaring, with an expected CAGR of 13.5 per
strong growth displayed by the digital, gaming and the cent over FY19-FY24, to reach a size of INR3.07 trillion.
1. World Economic Outlook, International Monetary Fund, April 2019 5. Liquidity crunch leads to lending crisis, Forbes India, June 2019, accessed on 15 August
2. World Economic Outlook, International Monetary Fund, April 2019 2019
3. Real GDP Growth, International Monetary Fund, accessed on 15 August 2019 6. Budget scheme for liquidity support to NBFCs rolls out, Economic Times, August 2019,
accessed on 15 August 2019
4. Real GDP Growth, International Monetary Fund, accessed on 15 August 2019
7. KPMG in India analysis, 2019
10 Executive summary
India’s digital demography adapt to serve this large user base optimally.
With a rapid uptake of digital media consumption, it is Our hypothesis is that the digital consumer in 2030 will
imperative for organisations to segment and understand likely be (1) non-English speaking (2) mobile phone user
the current and prospective digital India. The erstwhile (3) from a developed rural area/non-metro urban setting
early digital adopters – those who consumed content on (4) who is increasingly willing to pay for content online.
the internet even prior to the massive fall in data prices Based on socio-economic data and commonly observed
in 2016 – were a fairly homogeneous group but the user consumption characteristics, we have developed four
base of 563 million8 broadband subscribers today, is main consumer archetypes that we believe helps
much larger and more diverse. We have attempted to build a framework for easier analysis of these billion
study what the projected Indian digital billion by 2030, consumers.
means to businesses and how their strategies must
Type User base ( millions) Profile parameters
HH Income profile Language Primary mode

Content
2018 2025 2030 (current) – USD/ of digital of digital
preferences
annum consumption consumption
Global content and

tent-pole, original
Primarily Smart
Digital Indian programming
18 50 75 >70,000 English and connected TVs
Sophisticates tailored for the urban
Hindi and mobile
audience, typically
behind a paywall
Mainly
Well known global
smartphone led
Hindi/regional franchises may find a
with partial TV
Digital 190 370 530 language as niche audience but
8,500-70,000 streaming
Enthusiasts well as pockets predominantly, it will
among the
of English be Indian narratives
higher income
that will be popular
groups
Free content available

online or bundled
Digital 310 380 410 Hindi/regional plans with OTT players
4,000-8,500 Smartphones
Mainstream languages through telcos and
other distribution
platforms
Sporadic digital access on account of either poor connectivity or irregular income.

Fringe 10 20 35 Limited socio-economic mobility to move to the digital mainstream. Digital
User
consumption likely to be restricted to mobile messaging and free bundled content
Source: KPMG in India analysis, 2019
8. TRAI performance indicator reports, March 2019
Executive summary 11
There is likely to be significant progression in Implications for digital businesses

sophistication of digital users over the next decade • Technology will underpin business models -
due to the following factors: income effects and Technology and associated tools such as artificial
greater affordability alongside availability of high speed intelligence, will provide the much needed direction
internet and growing consumer confidence with digital around decisions relating to content creation,
engagement. distribution and monetisation for digital businesses
• The majority of new users will be connected by 2025
• The race for reach – Distribution ecosystems are
– an addition of close to 300 million – with only the
set to become stronger. Role of value chain partners
long tail remaining to be added by 2030
like OEMs, DTH, ISPs, and telcos is likely to grow as
• The additions to the digital enthusiasts between 2018 creators look at multiple avenues to reach the end
and 2030 will be mainly on account of a significant consumer
upward progression of users from the digital
• Monetisation – Micro-segmentation of target
mainstream
markets in an increasingly upwardly mobile economy
• The entry of millennial and generation Z into the would be essential for effective monetisation.
workforce will also be represented by the growth in
• Collaboration across the value chain – In a crowded
the number of digital enthusiasts, which will emerge
marketplace, collaboration across players in the value
as the largest category of users by 2030
chain would be essential to grow optimally.
• The maximum incremental additions – entirely
new digital users – will primarily be into the digital
mainstream and a small number into the fringe
category.
Size of Indian media and entertainment industry
Industry performance - Historical

Overall
Growth in FY19 CAGR
industry size FY15 FY16 FY17 FY18 FY19
over FY18 (FY15-FY19)
(INR billion)
Digital* 47 65 86 121 173 43.4% 38.5%
TV 490 552 595 652 714 9.5% 9.9%
Print 268 288 308 319 333 4.5% 5.6%
Films 127 137 145 159 183 15.1% 9.6%
Animation
47 53 62 74 88 18.7% 17.2%
and VFX
Gaming 24 28 32 44 62 41.6% 26.4%
OOH 22 26 29 32 34 5.0% 11.2%
Radio 20 23 24 26 28 6.2% 8.6%
Music 10 11 13 14 17 15.3% 13.0%
Total 1,055 1,183 1,295 1,440 1,631 13.2% 11.5%

*Beginning FY18, the OTT video and audio subscription revenues are being recognized under the digital segment. Prior to FY18, the OTT video and audio subscriptions were nominal
Advertising -
Growth in FY19 CAGR
Overall industry FY15 FY16 FY17 FY18 FY19
over FY18 (FY15-FY19)
size (INR billion)
Digital
47 65 86 116 160 37.6% 35.8%
advertising
TV 160 184 203 224 251 12.1% 11.9%
Print 180 192 204 211 221 5.0% 5.3%
OOH 22 26 29 32 34 5.0% 11.2%
Radio 20 23 24 26 28 6.2% 8.6%
Total 428 490 547 609 693 13.9% 12.8%

• The digital segment continued to be the torchbearer Importantly, with a sharp increase in consumption on
of growth of the industry in FY19, with a 43.4 per cent OTT platforms, the revenues from digital rights saw
growth taking the overall segment (including digital a substantial increase in FY19, with the sub-segment
advertising and subscription revenues from OTT growing the fastest at 30 per cent in FY199, albeit
video and audio) to INR173 billion in FY19. The rapid from a smaller base.
growth in infrastructure led to a spurt in demand for
• The animation and VFX segment witnessed a strong
content and the resultant consumption was driven
growth of 18.7 per cent in FY19, to reach a size of
by an equal focus on the supply of digital content by
INR87.7 billion. The primary factors underpinning
platforms. Within the digital segment, the advertising
the robust growth in the animation sub-segment
sub-segment grew by approximately 38 per cent in
were an ever expanding audience for animation
FY19, with digital now forming a key part of media
content on OTT and rising demand of animation
strategies across industry verticals. The growth in
services from non-entertainment sectors such as
regional consumption also led to the emergence
education, healthcare, etc. The VFX sub-segment in
of new avenues for digital advertising. The digital
FY19 saw stereo scoping work flowing to India from
subscription sub-segment is also starting to emerge
international markets; and a rise in VFX demand, not
as significant, especially for the fast growing OTT
just from Hindi movies, but even from South Indian
video.
films. These factors contributed to the strong growth
• Television revenues grew at a rate of approximately of the segment as outlined above.
9.5 per cent in FY19, a similar rate as in FY18,
• The gaming segment was amongst the outperformers
reaching a size of INR714 billion. The lower than
in the M&E industry in FY19, growing at a rate of 41.6
expected growth was due to the long-drawn
per cent, to reach a size of INR62 billion with robust
process of NTO implementation which disrupted the
growth in both ARPUs and the number of gamers
subscription and advertisement revenues in the last
in India (estimated at 300 million by FY19) driven by
quarter. Also, uncertainty around channel viewership
rapid and significant digital adoption. Alongside the
and reach in the new regime led to marketers pulling
widely played casual games, real money games have
back from TV advertising starting January 2019.
been one of the key catalysts for the upswing in
This has led to blackouts and lack of clarity resulting
ARPUs.
in temporary loss of subscribers for many MSOs.
Advertising spends were also hit by a consumption • The Out of Home (OOH) segment grew at a muted
slowdown due to the slow growth witnessed by the rate of 5.0 per cent to reach a size of INR34 billion,
overall economy in the last quarter of FY19. much lower than the expectations. The primary
reasons include a ban on all forms of outdoor
• The print sector witnessed a subdued growth of 4.5
advertising in Bengaluru after the High Court order of
per cent in FY19 to reach a size of INR333.2 billion.
removal of posters, banners, flexes starting August
While advertising remained the growth driver for the
2018 along with hold back of OOH spending by
segment in FY19 as well, muted circulation growth
brands in Q4 FY 19 in view of anticipated political
of 3.5 per cent in FY19 was observed on account of
campaigns.
a decline in English circulation growth on the back of
faster digital adoption. While advertisement revenues • The radio industry also witnessed a muted growth of
grew in Hindi by 7.5 per cent, industry discussions 6.2 per cent in FY19 to reach a size of INR28 billion;
indicated that the election spends were lower than as newer stations auctioned in the batch 2 of phase III
expected, especially in the regional markets; leading continued to operate at a lower capacity of 45-50 per
to a lower than expected growth of the industry in cent. Also, auction for phase III was yet again delayed
FY19. during the year which also resulted in a lower growth
than envisaged.
• FY19 was an excellent year for the film industry, with
the segment experiencing a higher than expected • The music industry saw a robust growth rate of 15.3
growth of 15.1 per cent in FY19 over previous year per cent in FY19, reaching a size of INR17 billion
on the back of robust box office collections, with with digital continuing to lead the way. Exponential
more than thirteen movies crossing INR1 billion at growth in user engagement applications such as
the Indian box office. This was the best performance TikTok has created a new monetisation avenue for
in the past decade at the box office, as content took the music industry. Share of regional music in overall
centre-stage and small budget movies turned out to music consumption in the country has been rising and
be box office money-spinners. Also, regional films stands at around 32 per cent in FY19 due to increased
displayed strong growth as the audiences’ propensity accessibility of audio streaming platforms in markets
to consume content in local language increases. beyond Tier I and Tier II cities.
Industry performance - Projected

Overall industry CAGR
FY19 FY20 FY21 FY22 FY23 FY24
size (INR billion) (FY19-FY24)
Digital 173 234 303 386 492 621 29.1%
TV 714 824 935 1,025 1,121 1,215 11.2%

Print 333 346 360 375 390 409 4.2%
Films 183 198 214 228 242 260 7.3%
Gaming 62 88 119 154 200 250 32.2%
Animation and VFX 88 103 121 140 161 184 16.0%
OOH 34 37 40 44 48 52 9.3%
Radio 28 31 34 38 41 45 10.1%
Music 17 19 22 26 30 35 15.8%
Total 1,631 1,880 2,148 2,415 2,725 3,070 13.5%
Advertising - CAGR
Overall industry FY19 FY20 FY21 FY22 FY23 FY24 (FY20-
size (INR billion) FY24)
Digital
160 210 266 333 423 539 27.5%
advertising
TV 251 277 314 355 402 455 12.6%
Print 221 231 241 251 262 276 4.5%
OOH 34 37 41 44 48 52 9.3%
Radio 28 31 34 38 41 45 10.1%
Total 693 786 895 1,021 1,176 1,367 14.5%
The Indian M&E industry is expected to grow at a CAGR over FY19-FY24, as an increasing amount
CAGR of 13.5 per cent during FY19 to FY24 to reach of monies start flowing into digital, with some
a size of INR3,070 billion by FY24 with advertising cannibalisation from traditional media as well. Also,
revenues expected to grow at a CAGR 14.5 per cent to attribution and ROI measurement are likely to become
reach INR1,367 billion by then. The digital segment is more accurate, thus increasing the confidence and
projected to become the second largest segment by credibility of digital advertising. As India’s digital
total revenues and the largest segment by advertising demography moves towards a transaction based
revenues in the Indian M&E industry. economy, digital subscriptions are likely to gain
increasing prominence in times to come, though
Key segmental trends
India will remain a predominantly advertising led
• The digital segment is expected to continue to be
market. By FY24, we expect digital advertising to be
the cornerstone of growth as digital consumption the largest medium with 39.5 per cent share of total
becomes deep and ubiquitous. Digital segment is advertising, surpassing TV advertising.
expected to show a rapid growth of 29.1 per cent
• Television continues to be a critical mass monetisation as compared to casual games, is also

entertainment medium and is expected to grow at expected to help in the growth of the segment.
a CAGR of 11.2 per cent on the back of strong TV
• The radio segment is likely to grow at a CAGR of
viewership from rural and urban markets as well as
10.1 per cent over the next five years on the back
continued investment in new regional channels and
of content differentiation and combined offerings
sports properties by broadcasters. Advertisement
to listeners including music, live hyper local news
revenues are likely to be driven by a recovery in
and games/talk shows. The challenges around high
the economy and upcoming events like the 20-over
gestation period, measurement and the long overdue
cricket world cup in 2020. Meanwhile, subscription
phase III auctions continue to hamper the growth of
revenues are expected to see benefits, particularly
this segment.
over the next couple of years due to the new tariff
order, especially in phase 3 and 4 markets. • The OOH segment is expected to grow at a
CAGR of 9.3 per cent from FY19 to FY24 primarily
• Print in India continues to be relevant though
driven by factors such as expansion in transit
changing consumer behaviour and the resultant
infrastructure including airports and metros in metro
advertiser response is likely to continue to result in
cities, development of smart cities and increasing
muted growth at a CAGR of 4.2 per cent from FY19-
transparency for brands on account of improved
FY24. Revenue growth for English is expected to
monitoring technology.
remain sluggish as digital adoption in metro cities
continue to dent revenues, whereas, Hindi and • The Indian music industry is expected to grow at
regional advertising is expected to continue to drive a CAGR of 15.8 per cent over FY19-FY24. The key
revenues driven by increased focus on the northern catalyst for this growth is likely to be audio streaming,
Hindi speaking belt and hyper local advertising. which is expected to grow at around 5 per cent higher
English circulation is expected to continue declining than growth of the overall music industry. Advertising
at about 1 – 1.5 per cent while circulation in Hindi and revenue will be a key growth driver for audio
regional languages is expected to remain stable. streaming platforms as the ad-supported user base
scales up. Partnerships with social media platforms,
• The film industry in India is expected to grow at a
video sharing platforms and gaming consoles are
CAGR of 7.3 per cent from FY19-FY24 driven primarily
likely to continue providing incremental revenue
by theatrical revenue from India and overseas and
growth for the music industry. Category building
growing share of digital rights. In the absence of any
marketing initiatives by audio streaming platforms
significant growth in screen count, more consistent
and increased government initiatives towards curbing
performance across regional markets and deeper
piracy and stream ripping are expected to drive
penetration into overseas markets is expected to
consumption of licensed music into markets beyond
primarily drive theatrical revenues. Digital film rights
tier II cities.
are expected to grow the fastest as OTT platforms
penetrate further across the country and ramp up
their film libraries.
• The animation and VFX industry is expected to grow
at a CAGR of 16.0 per cent from FY19-FY24, on
the back of steady growth in international demand
and growing share of special effects in domestic
productions, with increasing investments into IP
projects being a key lever for Indian animation
companies.
• As digital behaviour becomes more prevalent and
ingrained, the gaming sector in India is expected to
benefit tremendously from this and is likely to display
a strong growth of 32.2 per cent CAGR from FY19-
FY24 on the back of an upsurge in user engagement
on gaming platforms and an expected growth
in in-app purchases. Tier 2 and 3 cities also hold
significant promise and are likely to contribute to the
growth of the segment in the years to come. Further,
growth in Real Money Games (RMG) and fantasy
sports segment, which hold a greater potential for
Key industry themes create customer profiles in a new and unique way.
However, due to cyber and privacy risks, such as
The New Tariff Order (NTO) data breaches, it is causing irreparable damage to
The new tariff order was devised with the motive personal relationships, which are critical in the media
of ushering an era of transparency and equitable and entertainment industry than in any. Regulators
distribution of revenues across the value chain with across the globe have adopted two key approaches in
consumer choice at the centre of change. After addressing the growing privacy concerns by framing
multiple delays, the NTO, which introduced channel omnibus regulatory frameworks and sectorial regulatory
pricing for the first time in the country, was eventually frameworks. Media and entertainment industry should
implemented over the course of the last quarter of FY19 take cognisance of this and work on strengthening data
with consumers facing multiple issues ranging from privacy by wearing the end-user lens rather than just a
blackouts, higher TV bills to confusion over the process regulatory lens.
of channel selection.
Digital monetisation
As per initial trends, consumers are expected to face The primary monetisation model for digital platforms
higher cable/DTH bills for the same number of channels has been advertising over the years to attract users and
in the new regime with the introduction of base fee as build substantial user base. However, with increased
NCF (Network Capacity Fee) of INR130 + taxes even investment in creating original content and acquiring
for availing FTA channels. However, broadcasters, exclusive content to differentiate, it is increasingly
especially the large ones, are expected to benefit becoming difficult to justify a business case with just
from the accrual of higher share of revenues from the advertising as the source of monetisation.
distributors, especially the MSOs. The NTO appears to
be mildly positive for the distributors with content cost Thus, platforms have increasingly started focusing
being a pass-through. In case of a disagreement, the towards subscription revenues through innovative
order has mandated that MSOs and LCOs share the pricing strategies like sachet pricing, content bundling,
network capacity fee and distribution fee in the ratio of regional packs, offline payments, etc. However, key
55:45. This is expected to result in higher realisations for challenges hindering successful digital monetisation
MSOs. include affordable traditional media (Eg: television),
price sensitivity, content fragmentation and consumer
Going forward, the increase in subscription fees for TV readiness. To alleviate these challenges, OTT platforms
may result in some early adopters shifting to OTT for have started exploring monetisation through the
their entertainment needs, especially for niche genres collaboration/syndication route, with partnerships across
like English. telcos, cable/DTH operators, other digital platforms, cab
Regional markets aggregators and hardware platforms. Such strategic
The year 2018-19 saw the emergence of regional as a partnerships have helped digital platforms get access to
major driver across the segments including television, a wide customer base and monetise their content, with
print, cinema, music and OTT. Regional content has led minimal spends on customer acquisition costs.
to widening of TV viewership with about 70 per cent of Skill development in the M&E industry
total channels launched during the year being regional Owing to the digital disruption, the M&E industry
channels. The growth in the Indian print industry is is undergoing a radical shift with new composition
also on account of the increasing readership in regional and requirements emerging as far as the workforce
languages, as English has started to see a decline. is concerned. The capability of the employees
Cinema has also bet big on regional content with a to ideate, innovate and execute in sync with the
significant proportion of movies being produced in Tamil, changing business environment, eventually leads to
Telugu, Malayalam, Kannada, Bengali, Punjabi, Marathi, disproportionate value creation for the enterprise. The
Malayalam and Gujarati. The year also saw an increase same requires constant up-scaling and up-skilling of the
in the investment by OTT in non-Hindi video content. workforce, to meet the need gaps which are arising as
Considering the number of people speaking regional a result of the rapid changes in digital infrastructure and
languages, marketers are tying up with content creators technology.
in regional language using regional media platforms to Organisations would need to adapt their HR and L&D
take into account cultural values and nuances of local strategies to meet this skill gap by focusing on building
languages with the intent of building trust with potential internal capabilities across existing and emerging roles,
customers. placing greater emphasis on employee learning and
Digital privacy experiences; and effectively leveraging technology,
Media companies are now monetising by collecting, both to efficiently manage HR functions as well as help
analysing and processing huge amounts of data to automate learning and development for employees.
Technology trends of broadband infrastructure, coupled with the ease

Key technological innovations in the media and of accessibility of fixed broadband infrastructure,
entertainment sector aim to enhance customer which could be a transformative change in terms of
experience by improving quality and performance, the way media is consumed in India, as well as how
offering newer and more innovative channels for organisations operate. From being a catalyst for cord
content consumption, and bringing in greater operating cutting/shaving through digital distribution, to being an
efficiencies for organisations in the M&E space. enabler for innovations like AR/VR and digital labour, 5G
holds tremendous potential in shaping the M&E industry
A key catalyst for the adoption of technology across of the future. Some of the key technology trends likely
the M&E industry would be the impending 5G rollouts to play out in the Indian M&E space are summarised
in the country. 5G is likely to usher in an evolution below:
8K content and hardware Content Delivery Networks
• Leading TV manufacturers have started releasing 8K • Content Delivery Networks (CDN) significantly
TVs in mature markets like the U.S., China, Japan reduce the site latency, boosts webpage load time,
and Europe reduces bandwidth usage cost and ensures global
availability of content
• With the advent of 5G, streaming of HD content is
going to be more mainstream which can benefit the • AI based predictive acceleration and use of hyper
sales of 8K TVs local CDNs are couple of key trends in this space
• In India, we are yet to see a strong traction in the • India is experiencing significant growth in data
development of 8K content, but is expected to get consumption – specifically with respect to video,
better in the coming years hence the importance of CDNs is bigger than ever
before
Short to medium term impact – Short to medium term impact –
Minimal Adoption rate is high
Digital labour Augmented and Virtual Reality
• Digital labour can be broadly classified into basic • AR and VR continues to disrupt the way media is
robotic process automation, enhanced process created and consumed
automation and cognitive automation based on the
• Big players like Facebook, Google, Microsoft and
maturity levels
Magic Leap are coming up with their innovative
• In the M&E space, digital labour has found use cases products and solutions to the market
in content generation, discovery and regulation, and
• In India, VR content production is gaining traction in
also in support function automation
areas like gaming, tourism, sports, advertising, etc.
• Several start-ups have come up in India focusing on
• While usage of AR/VR is on the rise, widespread
intelligent automation, artificial intelligence, machine
adoption is still in its early stages
learning and big data

Rapid adoption expected Gaining mainstream traction
18
India’s digital
demography
19
20 India’s digital demography
The next bil ion

users market
Ten novel thought habits to reach this new market
• The internet is the NBU’s prime and often sole

leisure economy: Leisure can come at a high price.
Payal Arora However, all people seek it and the lower SECs have
Author of ‘The Next found a cheap alternative in the world of the internet.
Billion Users’ (Harvard The high consumption of films, music, social media
University Press, 2019) content, online pornography, and digital games among
this demographic has served as a key motivational
hook to the mobile internet. We need to shift focus
With recent radical price reductions in mobile phones on pushing what we believe they need to what they
and data plans and diverse digital payment options, the want.
lower socio-economic classes (SEC) have fast come
• Replace mobile first with mobile only: The NBU
online. Many of them are youths. About two billion of
market may not move to secondary and tertiary
the world’s population are young and about 90 per cent
devices like tablets and laptops in their lifetime. They
of them live outside the West1. A majority of lower SECs
are not necessarily mobile-first but rather mobile-
reside in informal settlements and rur-towns, and this is
only as a user group. We need to design applications
likely to double by 20302. These next billion users (NBU)
that start with this as an assumption and fulfil their
are now taking centre stage in the design of future
experiential aspirations through a convergence of
mobile and media platforms but continue to be under-
services within a digital media ecosystem.
examined and misunderstood.
• As mobile usage becomes more intuitive,
This demographic segment has long been a
generational user gaps will increasingly disrupt:
preoccupation of aid agencies and governments but not
By mid-century, projections3 indicate that 16 per cent
the market. Decades of preconceptions about this user
of the world population will be ages 65 and older, up
base as instrumental and utility-driven have led to the
from 9 per cent now. As life span increases and the
derailing of our understandings on their actual mobile
Indian joint family system continues to be a stable
usage and motivations for getting and staying online.
social arrangement4 contrary to expectations of
We need to shift our thinking significantly when catering
growth of the nuclear family, the older demographics
to this new market. The following 10 starting points can
are becoming avid learners and dedicated users of
help approach the NBU market with a fresh take:
1. “The power of 1.8 billion: Adolescents, youth and the transformation of the future”,
UNFPA, State of the world population, 2014
2. World’s cities report, UN Habitat KPMGK2016
3. 2018 World population data sheet with focus on changing age structures, PRB 2018
4. “Actually, the nuclear family is on the decline in India”, Quartz India, July 02 2014
India’s digital demography 21
the mobile internet. Inter-generational socialising, NBU mobile experience significantly, its success rests
re-skilling, prolonged labour, and/or the warding off on well thought out data regulation measures and
loneliness5 are propelling this mobile uptake. Yet, they enforcement. We should not forget that convergent
continue to be a neglected user base. systems have long been the double-edged sword of
efficiency as well as a honeypot for data hackers.
• Gender divide and even decline in mobile uptake
is not just an affordability issue: Women constitute • NBU market research demands going beyond
the majority of the four billion people who are offline analytics-driven methods: Predictive data analytics
today and are up to 50 per cent less likely to be online dominates decision-making on media industry
than men in the same contexts. Barriers to mobile strategies in content production, consumption and
adoption are gender pay gaps and thereby affordability dissemination and platform design. However, with
issues and cultural constraints. However, we need to much of the NBU digital activity behind encrypted
seriously consider also the choice of women to not go platforms such as WhatsApp, building on this method
online due to the increased rates of internet romance can produce skewed and misleading audience
scams, revenge porn, online misogyny6 and other toxic analysis. Big data analytics needs balancing with
online behaviours. The market needs to work closely small-data qualitative work for future planning on NBU
with regulators, designers and other stakeholders to outreach.
ensure a safe and conducive environment for women
to provide the most optimal outreach. • To understand NBU privacy values, we need to
look at their romance economy: We cannot define
• ‘Hyper local’ content may not satisfy this ‘global the NBU market primarily as an economic class. Many
citizen’ base: With the growing focus on regional of them are young teens. Teen psychology explains
language and local content to cater to this rising NBU motivations for tech adoption and media consumption
market, we must not forget that they increasingly view far more than their economic status. Romance is a
themselves as ‘global citizens’7 and aspire to connect key driver for this population and gives insight into
with people, places and ideas beyond their locality. the rationale behind the high risks they take with their
This will influence the persistence of English content, privacy to be seen and heard.
foreign films and music consumption and networking
with strangers on social media. • While privacy is a luxury, the lower SECs have a
long history of conspicuous consumption: Many in
• Voice search needs to optimise socio-cultural the NBU demographic have a limited experience with
factors: Google controls8 more than 90 per cent of personal privacy. Most of the lower SECs live in joint
global searches (and 98 per cent in India). However, family systems in one-room homes in small towns or
the increase in voice search and the growing online compressed informal settlements where interpersonal
audio-visual consumption, particularly among the NBU surveillance is the norm. The mobile internet may
markets, will allow new players into this domain. To allow for some of the first privacy experiences for
get this right, we need to attend to accents, local many among this demographic. While indeed this is a
symbols, and how people actually talk (slang). This luxury experience, they may actually crave for more of
can enhance voice-based search accuracy and positive this than the average middle class user, for instance by
user experience. retreating behind encrypted platforms. This builds on
the decades of evidence of conspicuous consumption
• The drive for digital ecosystems come at a price: of lower SECs for luxury goods and services,
The entry of NBUs in the digital realm led to many reminding us that they are very much an aspirational
of them perceiving Facebook as ‘The Internet’ due class.
to the Free Basics initiative and their limited capital
The views and opinions expressed herein are those of the author and do not
for data. This nurtured the habit of treating Facebook necessarily represent the views and opinions of KPMG in India.
and WhatsApp as a one-stop shop for communication
and services. Jio in India has piloted the convergence
of diverse applications into a singular ecosystem,
and promises to push the frontiers on new kinds
of B2B and B2C partnerships beyond the media
industry. While this convergence can enhance the
5. “India’s ageing population is struggling with loneliness but help is available”,

Silver Talkies, May 03 2018
6. Slumdog romance: Facebook love and digital privacy at the margins, Arora and
Scheiber, Media, Culture and Society 2017
7. Identity 2016: Global citizenship rising, poll suggests, BBC News, April 28 2016
8. Statcounter GlobalStats
India’s digital
demography:
A path to 2030
Introduction The internet in India becomes more
There is no doubt anymore that India is enamoured equitable
with the internet. There was a group of people in It is now a well reported fact that India has the
India – around 2009 million of them – who consumed world’s cheapest mobile data at USD0.25 per GB11
content on the internet even prior to the massive fall but affordability is only one aspect of greater internet
in data prices in 2016. Since then, broadband internet inclusion12. It is therefore encouraging to see India
subscribers have more than doubled to 563 million doing better on regional and gender parity parameters
as of March 201910. In this section, we attempt to alongside, with improvements in both rural penetration
examine how the digital user base will continue to grow and number of female users.
and cover diverse socio-economic and demographic
segments, towards a projected billion users in the Among Asian countries, India scores well on
country by 2030. affordability, readiness and relevance but poor network
infrastructure – especially mobile speed and latency
– lowers its availability score. India is ranked 47th out
of 100 countries globally on internet inclusion, with a
regional rank of 10 out of 2113.
9. Broadband subscribers, TRAI performance indicators for QE September 2016

10. Broadband subscribers, TRAI performance indicators for QE March 2019
11. How the pursuit of leisure drives internet use, The Economist, June 08, 2019
12. The Inclusive internet Index 2019, Economist Intelligence Unit
13. The Inclusive internet Index 2019, Economist Intelligence Unit
Internet subscribers per 100 population Internet subscribers per 100 population
Urban Rural Female Male

2017: 77 | 2018: 94 2017: 15 | 2018: 24 2017: 39 | 2018: 42 2017: 61 | 2018: 58
Source: TRAI performance indicators Source: KANTAR IMRB - 21st edition ICUBETM 2019
Favourable social and economic levers will drive connectedness
India is digitising faster

than every other country
barring Indonesia with India is projected to have
digital consumption being a smartphone user base of
embraced by both the 829 mn by 202215
private and public sectors
of the economy14
Digital India programme

India will benefit from its
launched in July 2015
population demography
promotes broadband
even in 2030 when the
connectivity in rural India,
median age will be 31 years
public internet access
compared to 42 years in
through the Common
China and 40 years in
Service Centres network
the US
and e-governance
14. Digital India: Technology to transform a connected nation, McKinsey Global Institute, March 2019
15. CISCO VNI 2018
Digital consumer archetypes: Their profile and transitions

Why is the profile of the digital billion relevant? As the using these tools to better understand their user and
KPMG in India’s media and entertainment report 2018 improve targeting savvy.
had outlined, many businesses are pivoting to a direct
With a billion Indians connected, we believe that the
to consumer model. Erstwhile business to business
digital consumer will primarily be a (1) non-English
to consumer segments (B2B2C) such as studios and
speaking (2) mobile phone user (3) from a developed
broadcasting are directly engaging with their consumers
rural area/non-metro urban setting (4) who is increasingly
in their digital avatar. Market research, consumer
willing to pay for content online.
segmentation and their demographic, psychographic
and behavioral profiling have always been leveraged Based on our research, we predict that there will
by consumer goods industries, and the insights gained emerge four broad categories of consumers that
therein inform their key business decisions. More and together capture the defining characteristics of the
more, media and entertainment companies will also be digital user base.
Digital Mainstream: 310 | 59%
Consumer Digital Enthusiasts: 190 | 36%

Digital Sophisticates: 18 | 3%
archetypes in 2018 Fringe users: 10 | 2%
(in mn, %)
Total: 528 million

(in mn, %)
Total: 820 million

(in mn, %)
Total: 1050 million
The development of these consumer archetypes is There will likely be significant progression in
based on certain fundamental building blocks and sophistication of digital users over the next decade
assumptions about the digital user base. For example: due to the following factors: income effects and
greater affordability alongside availability of high speed
• The propensity to pay for digital content increases with
internet and growing consumer confidence with digital
the ability to do so, as this is a discretionary personal
engagement.
expenditure
• The majority of new users will be online by 2025 – an
• The attraction of a personal, private device for media
addition of close to 300 mn – with only the long tail
and entertainment consumption will be hard to replace
remaining to be added by 2030
and the smartphone (or a variation of a personal
device) is likely to remain omnipresent even in 2030 • The incremental additions – entirely new digital users
– will primarily be into the Digital Mainstream and a
• While there is likely to continue to be an aspiration
small number into the Fringe category
to learn and use English for professional and
social mobility, the primary language of media and • The additions to the Digital Enthusiasts between 2018
entertainment in this country in 2030 will be local and 2030 will be mainly on account of a significant
languages upward progression of users from the Digital
Mainstream
• Digital media and entertainment expenditure will not
be perceived as a luxury and the differentiation across • he emergence of Millennials and Generation Z into
T
consumer archetypes will be more around the ability the workforce will also be represented by the growth
to spend on hardware, and immersive experiences like in number of Digital Enthusiasts, which will be the
AR/ VR rather than just OTT consumption for example. largest category of consumers by 2030
Digital Sophisticates Socio-economic profile

Wealthy, urban, tech-savvy
Income profile (HH, current)

>USD70,000 per annum
Language of digital consumption

Primarily English and Hindi
Primary mode of digital consumption

Smart connected TVs and mobile
Content preferences
Global content and tent-pole, original
2018 Indian programming tailored for the
18 mn (3% of online users)
urban audience, typically behind a
2025 paywall
50 mn (+32 mn, 6%)
2030
75 mn (+25 mn, 7%)
Profile of the Digital Sophisticates
Erstwhile “Early
High barriers to entry
Adopter” has Likely to have multiple Mimics the preferences
here and growth will
evolved into “Digital paid audio and video and behaviour of a
only come through
Sophisticates” at the digital subscriptions, global digital user but is
an evolution and
top income bracket embrace partial cord and will continue to be
progression of users
shaving and complete in the minority in India
rather than direct
most financial
inclusion of the
transactions online
unconnected
Higher incomes and
greater sophistication
in digital behaviour will
result in the transition
of “Digital Enthusiasts”
to the “Digital 16. KPMG in India analysis 2019 based on
primary and secondary research
Sophisticates” category
over time
Digital Enthusiasts Income profile (HH, current)

USD40,000 – USD70,000
(14 mn in 2018, 41 mn in 2030)
USD8,500 – USD40,000
(176 mn in 2018, 489 mn in 2030)

Hindi/regional language as
well as English

Mainly smartphone led with partial TV
streaming among the higher income
groups
2018
190 mn (36%) Content preferences
2025 Well known global franchises may find
370 mn (+180 mn, 45%) a niche audience but predominantly,
2030 it will be Indian narratives that will be
530 mn (+160 mn, 50%) popular
Profile of the Digital Enthusiasts
Category I of users Category II of users

• Most of the early adopters are now “Digital • Progression of higher income bands of the “Digital
Enthusiasts” Mainstream”
• Early adopters show higher propensity to spend,
which would suggest they are older
• Older users, however, potentially hesitant to spend
on multiple OTT and music streaming subscriptions Category III of users
and retain traditional TV C&S connection for genres • India will have 370 million Generation Z consumers
suited to pay TV (sports, news etc.) by 203017 who enter their prime earning years
• Adoption of the internet will be quicker and more
comprehensive than other archetypes with the only
limiting factor being ability to spend
17. Future of Consumption in Fast-growth
Consumer Markets: India, World Economic
Forum and Bain & Company, January 2019
Digital Mainstream Income profile (HH, current)

USD4,000 – USD8,500

Hindi/regional languages

Smartphone
Content preferences
Free content available online or
bundled plans with OTT players
through telcos and other distribution
platforms
2018
310 mn (59%)
2025
380 mn (+70 mn, 46%)
2030
410 mn (+30 mn, 39%)
Profile of the Digital Mainstream
Majority of this Tipping point for digital consumption occurs when

Almost entirely mobile- the average annual income exceeds USD4,00018
segment came online
led consumption (INR280,000) and there are approximately 97 million
post 2016
households just in the income bracket of USD4,000
– USD8,500 in India in 201819
Primary entry point for Large non-urban,

digital users in India non-English speaking
18. “India’s internet consumption will more
than double by 2025: Rajan Anandan”,
across time period population driving exchange4media, January 17, 2019
19. Future of Consumption in Fast-growth
consumption of local Consumer Markets: India, World Economic
language content (Hindi Forum and Bain & Company, January 2019
and regional)
Fringe Users Profile of the Digital Fringe
Sporadic digital access Lack of

on account of either awareness
poor connectivity compounded by a
in remote areas or lack of motivation
irregular income as opportunities
to leverage the
internet are also
limited
Much harder to
graduate into “Digital
Mainstream” as they
Digital
2018 don’t have the required
consumption
10 mn (2%) socio-economic
is likely to be
mobility
2025 restricted to
20 mn (+10 mn, 7%) mobile messaging
2030 and free bundled
35 mn (+15 mn, 3%) content.
Digital user transitions
800
700
600
185 530
Population in million
500
400 212 370
300 25.0
190
200
32.0
100
0
2018 To Digital From Digital 2025 Less Addition 2030
Sophisticates Mainstream
+ Milennial and Gen Z
The graph shows how the composition of Digital alongside there will be an entry of users from the Digital
Enthusiasts - the largest segment by 2030 - will Mainstream into this segment. Young, tech-savvy
change over time. More wealthy users will move out Millennial and Generation Z users will also help grow
of Digital Enthusiasts and into the Digital Elite, and this category.
Shifting consumer trends and behaviours

We conclude this section with a summary of the key (age 20-35 years in 2030) would have grown up
trends at play through to 2030 and their implications with technology with Millennials being the first
for digital businesses: generation to be considered as digital natives.
Generation Alpha (born post 2015) is comfortable
• The absolute size of the market – even in the
with a touch screen from a few months old and
smallest niche – is large
speaking to voice assistants by the time they can
The number of people online will double by form words. All three of these generations will
2030. But more importantly, there will be an embrace the internet and technology not as a tool
upward mobility within the consumer segments but a deeply integrated aspect of everyday life.
such that at the top-most end where household
incomes exceed USD70,000 per annum (around • But first, leisure
USD125,000 in 2030), there will be a growth of 3x There are greater differences in the digital
to 75 million people by 2030. behaviour online of users in developed and
developing countries in such categories as reading
• And the largest digital segment will move from
the news and accessing health information
consuming to transacting
online but hardly any gap when it comes to their
By 2030, the Digital Enthusiast will emerge as entertainment habits20. Watching videos, playing
the single largest digital user group in India, games online and listening to music are equally
straddling the Digital Sophisticates and the popular activities in both wealthy and emerging
Digital Mainstream. Digital Enthusiasts will economies. It will be a few more years before the
help shift the Indian digital story from one of internet is leveraged for learning as much as for
passive consumption to deeper engagement leisure in India.
and transactions. Consumer readiness, which is
typically the challenge in enabling users to transact
online, is high among this group as it includes both
Millennials – who are considered the first digital
natives – as well as Early Adopters.
• Diminishing differences
In terms of access to and comfort with the
internet, there will be an increasingly marginal
difference in the rural-urban, male-female and even
young-old profiles. For example, both Millennials
(between 35-50 years in 2030) and Generation Z
20. “How the pursuit of leisure drives internet use”, The Economist, June 08, 2019 and
“The Next Billion Users: Digital Life Beyond the West” by Payal Arora, 2019
Implications for digital media businesses

• Technology will underpin business models along with Indian movies, Hotstar originals and
In the digital economy, a direct to consumer latest episodes of Indian TV shows. The more
model is popular and it’s most often the end expensive Hotstar Premium, which has both a
user who transacts with the business rather monthly and annual subscription option at INR299
than an intermediary. But with a potential market and INR999 respectively, has been positioned for
of a billion, how will decisions around content a different target audience with the addition of
creation, distribution and monetisation be made? latest international shows and movies. The micro-
Technology and associated tools such as artificial segmentation of the market and consumer is
intelligence, will provide the much needed implicit.
direction. The availability of large – hopefully • Competition versus collaboration
increasingly accurate – information on the
However, there is also growing recognition
consumer is perceived as one of the advantages of
that the capabilities for content creation and its
the digital disruption in media and entertainment,
monetisation through marketing and distribution
and the feedback loop powered by technology will
are different, and competitors in one area could
inform most business decisions.
become collaborators in another. For example,
• The race for reach Asian OTT player HOOQ partnered with Hotstar
Distribution ecosystems are only set to become to offer its Hollywood content to viewers of
stronger making it progressively more difficult for Hotstar Premium21. Similarly, there are reports of
business to opt-out of a network of alliances and Zee5 being in talks with Amazon Prime to offer
partnerships. The role of aggregators – OEM, DTH, its content added or bundled alongside Amazon
ISP and telcos – will continue to grow and bundling Prime22. Such partnerships provide significant
will likely become the norm for all categories distribution leverage and depth in the content
of consumers. Stand-alone digital products and library while consolidating audiences in a crowded
services will have to contend with the significant marketplace. A trend we expect will only gain
value creation generated by this ecosystem momentum in the year to come.
for content creator, distributor and consumer.
Consolidation appears inevitable.
• Monetisation through micro-segmentation
Monetisation strategies are becoming more
innovative in a highly competitive market as
players vie for greater reach. On the product and
pricing side, OTT players are rolling out sachet
pricing, specific content genre bundles and cash
on delivery options to attract the diverse digital
citizenry. Hotstar for example launched a new
annual subscription plan ahead of IPL 2019 –
Hotstar VIP – which works out to INR1 a day
and gives the subscriber access to live cricket
including cricket, premier league and Formula 1
21. “HOOQ’s Hotstar deal puts spotlight on divergent strategies in Asian

video”, Variety, October 10, 2018
22. “Amazon Prime Video, Zee5 in talks for platform deal”, July 15, 2019
Vernacular and video:

The future of digital
content
Today, India is amongst the top three countries in the
world when it comes to digital consumption of services,
Umang Bedi second only to China23. We are also second when it
President, comes to digital adoption of media and entertainment
dailyhunt services. India has emerged as the top market for
Google Play Download worldwide in the year 2018,
according to The State of Mobile 2019 report. This
means that among all the countries, India had the
When Videsh Sanchar Nigam Ltd. (VSNL) first opened maximum number of Android app downloads in 2018.
up cyberspace to the Indian public on 15 August 1995, Internet messaging apps such as WhatsApp and
I wonder if they had foreseen the revolution that would Facebook are very also popular in India. These apps are
follow. From dial-up modems to 4G, we have come a some of the biggest drivers of Internet use in India. They
long way with over 600 million internet subscribers not only help people connect to others but also give
in 2018. With 4G internet and Reliance Jio, it led to access to different kinds of share-worthy content. While
a dramatic transition in the content consumption their reach is good, there is a growing demand from
patterns of internet users in India. With 5G just around consumers for hyper-localised, vernacular content that
the corner, we can expect further disruption of data platforms such as Dailyhunt are addressing.
consumption patterns. Digital content providers will have
to make strategic decisions to meet the new demands The evolving digital content ecosystem
of this growing audience and help their organisations English content attracted the first 200 million people
stay competitive. online in India. The remotest corners of India are now
getting online thanks to access to regional and video
So, what’s driving India’s growth story?
content. Internet usage will become universal in Real
The Indian media and entertainment sector is poised to Bharat, and this is something Internet-driven content
kickstart a new era of growth. The support for growing businesses have to keep in mind. Now, digital content
digital infrastructure and a focus on personal content companies are required to cater to a heterogeneous
consumption has set the scene for the media and audience that prefers to consume quality content in their
entertainment sector to produce more content than ever native language.
before across different languages and genres.
23. Referenced in KPMG’s #IndiaTrends2018: Trends Shaping Digital India report
Going ahead, we also expect to see universal access to Our focus on vernacular content has been our greatest
content and simple and intuitive navigation as a basic advantage. We have led the vernacular conversation for
requirement. It is essential that navigation and discovery over a decade now, even when it was unfashionable to
go hand-in-hand. Digital platforms cannot always expect do so. With our large digital platform, we have a pulse
users to enter what they want to see. Platforms will on what users think, feel, read and watch. What has
need to start intuitively and intelligently recommending helped us win and retain our audience is our focus on
new content based on the user’s previous choices, like providing immersive experiences across content genres.
Netflix does. We provide a stronger content graph for the customers
with new-age formats of content, including a big focus
In a bid to serve over a billion users, platforms will have
on video, wide distribution and deeper personalisation.
to be open to partnerships with diverse content players
We are an app that is Made in India, by Indians for
and publishers across formats with a focus on video.
Indians in local Indian languages.
Stringer networks, professional content creators, citizen
journalists are all viable content partnerships today. We For all these reasons, we believe that digital content
see the tremendous scope for consumption across producers and aggregators must build new competitive
entertainment, gaming, news and hyper-local content differentiators and realign their portfolios. They need
genres in the coming days. to stay focused on creating high-quality vernacular
content, intuitive products and services and great
Tomorrow’s world
recommendation engines. All of these must be focused
Our experience at Dailyhunt is that digital and mobile- and aligned on the end consumer residing in Real
first businesses need to keep pace with industry trends Bharat.
and act accordingly. That’s how we grew from being a
mobile value-added services (VAS) start-up to becoming Views are personal, and do not represent the views of
India’s largest local language content and discovery KPMG in India
platform. Our mission is to be the Indic platform The views and opinions expressed herein are those of the author and do not
empowering a billion Indians to discover, consume necessarily represent the views and opinions of KPMG in India.
and socialise with content that informs, enriches and
entertains.
34
Segments
35
36
Digital
Crossing the Rubicon
37
38 Digital
Digital
Crossing the Rubicon
Digital consumption powers on
There continue to be strong enabling factors beats overall growth in internet users at 29%. Internet
encouraging greater consumption of content on access is also more equitable and the growth in rural
the internet in India. It is reflected in the growth in users is ~3x that of urban for FY19.
broadband internet subscribers at 37% for FY19, which
Digital user base
March 2018 March 2019 Change (%)
Total internet subscribers (mn) 494 637 29%
Internet subscribers per 100 population 38 48
Broadband internet subscribers 413 563 37%
% of total internet subscribers 84% 88%
Mobile wireless subscribers (mn) 472 614 30%
% of total internet subscribers 96% 96%
Source: TRAI performance indicators
Urban versus rural access
March 2018 March 2019 Change (%)
Urban internet subscribers (mn) 348 410 18%
Rural internet subscribers (mn) 146 227 56%
Source: TRAI performance indicators
Digital 39
Key factors influencing the growth of digital consumption1,2,3,4,5,6,7
Second Growth in Cheapest Growth in Growth in Growth in

highest smartphone mobile data average data online video average
per capita users in India to in the world usage per content to mobile data
consumption ~340 Mn in 2018 (INR18.5/ subscriber per meet the download
of online video (2015 – 200 mn). GB) (2015 – month to 8.7 demands from speed to
in the world 11% growth in INR313/GB) GB in 2018 325 million 9.93 Mbps
feature phones (2016 – viewers as of in Nov’18
shipments, 0.88 GB) FY19 (Nov’17 – 8.88
higher than mbps)
smartphones
growth in 2018.
Credible digital ecosystem in place
ACCESS SUPPLY
• Smartphone shipments touch • User generated content in
a record high regional languages already
popular
• Telecom infrastructure and
connectivity scores improve Digital
consumption • OTT players also investing in
• Voice technology to help building their regional
on-board more uses content libraries
1. The state of online video 2018, Limelight Networks ; accessed on 04 April 2019 5. TRAI performance indicator reports
2. India’s mobile data is cheapest globally, Times of India ,March 2019; accessed on 04 April 6. India ranked 111th in mobile internet and 65th in fixed line broadband speeds: Ookla,
2019; How low-cost data is powering India, Fortune India, Dec 2018; accessed on 04 April Times of India ,December 2018; accessed on 04 April 2019
2019 7. KPMG in India 2019 analysis based on primary and secondary research
3. TRAI performance indicator reports
4. Smartphone Penetration In India Is On The Rise, Set To Reach 37.3 Crore Users In 2019,
India Times, January 2019
40 Digital
Access Voice-assist will further progress linguistic

At 142.3 million, smartphone shipments touched a democratization. India is already witnessing this shift
record high in India in 20188 against a backdrop of zero from keyboard to voice, with 30 per cent of all Google
to marginally negative growth in shipments globally searches last year being voice driven10. Globally, India
during the same period. India is among the top five leads with the highest percentage of voice search
countries globally with the most improved score on the and commands amongst internet users at 51 per cent
GSMA mobile connectivity index. followed by China at 49 per cent11.
Use of voice search and voice commands - % of
GSMA mobile connectivity index9 internet users
Change in score
India 51%
2014-2017
India overall score change 15 China 49%
Affordability 26 Indonesia 45%
Infrastructure 18 Global average 39%
Content 9 Global average 39%
Consumer readiness* 6
* Consumer readiness is a reflection of the general

literacy levels and gender parity reflected through the
access to and engagement with mobile technology.
8. IDC
9. State of mobile internet connectivity 2018, GSMA
10. Indian consumers say big hello to voice based devices, Business Standard, February 10
2019
11. We are Social 2019
12. YouTube hits 265 monthly active users, Livemint, April 09 2019
13. YouTube will speak in your language more, Economic Times, October 15 2018
Digital 41
Supply users watched videos in a regional language13. Many

Much of the video viewing in India is happening in a local OTT players are also investing in building their regional
language and YouTube, which has ~265 million unique, content libraries to match the demand from these
active users12 has reported that over 95 per cent of its audiences.
Growth in regional content libraries of OTT players
Amazon
Eros
Zee5 SonyLiv Hotstar VOOT Alt Balaji Prime Hoichoi Netflix
Now
Video
Tamil Y Y Y Y Y Y N Y Y
Telugu Y Y Y Y Y Y N Y Y
Marathi Y Y Y Y Y Y N Y Y
Malay-
Y Y Y N Y Y N Y Y
alam
Bangla Y Y Y Y Y Y Y Y Y
Kannada Y N Y Y N Y N Y Y
Bhojpuri Y N N N Y N N N N
Gujarati Y Y Y Y Y Y N Y Y
Source: KPMG in India analysis, 2019 based on secondary research
Components of digital monetisation

Digital monetisation can be achieved in two ways:
Advertising
revenues
At present, advertising
revenues comprise over 90% of
DIGITAL all digital revenues. However,
MONETISATION digital subscription revenue
growth is likely to exceed the
growth in digital advertising,
Subscription albeit on a much smaller base.
revenues
42 Digital
Digital revenue projections (FY20-FY24)

CAGR
INR bn FY19 FY20P FY21P FY22P FY23P FY24P
(FY19 – FY24)
Digital advertising 160 210 266 333 423 539 28%
Audio streaming
1 2 3 4 6 9 48%
subscriptions
OTT video platform
12 22 34 48 62 74 44%
subscriptions
Total 173 234 303 386 492 621 29%

The digital market in India is set to become the second and be behind TV in its aggregate revenue. By FY24,
largest within media and entertainment by FY22 when the digital market will be half that of TV in the Indian
it reaches INR386 billion. It will move ahead of print economy.
Digital advertising
The digital advertising market can be estimated in terms purposes of this section we have provided a break-up of
of formats – video, display, search and classifieds – or revenues by formats.
platforms – social media, gaming etc. – and for the
Historical performance of digital advertising (FY15-FY19)
INR bn FY15 FY16 FY17 FY18 FY19 CAGR
Total digital ad spend 47 65 86 116 160 36%
Annual growth rate (%) 38% 33% 35% 37%
Digital 43
Trends in digital advertising study pointed out, even programmatic advertising, which
is supposedly more efficient, can only accurately identify
Share of regional languages set to grow
whether a digital user is male or female 50 per cent of
While English continues to be the language of the the time18.
internet, this is unlikely to be the case in a few years.
Hindi will be the most used language on the internet in CPM and CPC (cost per click) are making way for other
India while Marathi, Bengali, Tamil and Telugu speaking more conversion-oriented metrics such as cost per lead
internet users are expected to form 30 per cent of the or acquisition (CPL or CPA). This has been driven in a
total Indian language internet user base . The digital large part by the challenge presented by ad-fraud that
advertising market does not yet reflect this profile of the was estimated at over USD1.63 billion in India or around
consumer with only around 8 per cent of total spend in 9 per cent of global ad fraud in 201819. A conversion can
a regional language at present, but industry experts we either be a completed activity that shows user interest
spoke to say that the share could be over 30 per cent in and engagement – such as an email sign up – or a macro
the next three years15. conversion in the form of a transaction.
Market is concentrated but new avenues emerging Attribution at the forefront of conversations
Industry representatives we met concurred that, as In the complex and often long journey from awareness
is the case globally, digital advertising spend is highly to purchase, the consumer experiences touch points
concentrated with Google and Facebook together within apps and websites in a range of formats from
accounting for between 70-80 per cent16 of the market search, video and display. An accurate understanding
in India. In FY18, Google reported revenues of INR93 of the conversion rates by channel, whether it’s
bn from its India operations, with 69 per cent17 accruing organic, paid or social, will allow for a more efficient
from ad sales on its platform. reallocation of spend. Taking this further is the online-
offline attribution model where GPS, wi-fi and Bluetooth
However, new avenues are emerging as trends point trackers monitor physical movements – and purchases
toward a preference for video based formats in digital – as well. The concerns around digital privacy have been
advertising within brand-safe, narrow-cast environments; widely acknowledged and in many ways addressed with
a criterion many user-generated content platforms have the GDPR, and the emergence of offline surveillance will
fallen short of in the past. With the growing popularity of only bring with it a new set of challenges on this front.
OTT platforms in India, there is a general sense that they
will become an increasingly important avenue for digital BFSI leads in adoption of digital in marketing spend
media buying in the near future. While FMCG spends the largest amount on digital
advertising compared to other industry segments,
Performance metrics replace views and clicks
as a proportion of its total budget, it’s at 16%20. BFSI
In the brand versus performance debate, marketers however allocates nearly 38% of its overall marketing
are beginning to assert that digital advertising needs spend to digital platforms, followed by consumer
to be outcome rather than output-based. Few digital durables (36%) and e-commerce (31%)21. As ROI
platforms are able to provide accurate data points of measurement and attribution tools become more
their audiences to enable targeted marketing and CPM sophisticated, there is likely to be a greater shift in
(cost per mille) has been under pressure in India for a advertising spend in favour of the digital medium given
while now due to excess inventory. As a recent global its growing adoption and popularity among the populace.
14. Indian languages are storming the internet, Express Computer, July 25 2018 18. The shameful state of online advertising, Medium, September 11 2018
15. KPMG in India analysis based on industry discussion 19. At USD1.63 bn India accounted for 8.7% of global digital ad-fraud in 2018, Hindu Business
16. KPMG in India analysis Line, March 12 2019
17. Google India posts 30% increase in revenues, Economic Times, October 11 2018 20. Dentsu Aegis Digital report 2019
21. Dentsu Aegis Digital report 2019
44 Digital
Digital advertising market projections (FY20-FY24)
CAGR
INR bn FY19 FY20P FY21P FY22P FY23P FY24P
(FY19 – FY24)
Video 53 77 102 141 197 276 39%
Search 51 67 85 101 119 140 22%
Display 46 55 66 78 92 106 18%
Classified 9 11 12 14 15 17 12%
Total digital ad spend 160 210 266 333 423 539 28%
The digital video advertising revenues also consist of the revenues from OTT video platforms including YouTube in India, both in terms of the
value as well as in terms of the value chain contribution as well.
The digital advertising market is set to become the the CPMs are also likely to see some growth from
largest among all media – TV, print, radio, OOH – at FY21 onwards, contributing to the overall growth of
INR423 billion by FY23 as ad-spend gets increasingly the segment. Video ads on OTT platforms are likely to
redirected towards digital media from traditional formats. constitute the bulk of the segment revenues, with the
display ads slowly losing significance and fading away.
Digital video advertising includes the ad-spend on
video across all digital formats from social media, OTT
Can advertising be consumer centric?
platforms including YouTube, gaming, news and other
websites. The share of video is the highest today – and Business models in media and entertainment have all
growing at the fastest rate – among all digital advertising pivoted around the consumer in the last few years.
formats, compared to a few years earlier when search It’s only a matter of time before this change occurs
dominated. India has already emerged as the fourth for revenue models as well. Advertising is effectively
largest consumer of mobile video ads globally22. a tax on the poor26 and consumers pay by giving up
their time and privacy. When people are provided with
Pressure on CPMs as inventory grows flexibility and convenience in content consumption,
Growing inventory has however caused a downward their initial response is to ignore the implicit cost
pressure on advertising rates, with the CPMs (cost of advertising. As they become more invested and
per thousand impressions) for major platforms like attentive to their digital consumption experience, the
YouTube falling by ~15-20%23. The CPMs for YouTube value that they place on their time spent increases.
ranged between INR175-225, while the CPMs for other Conversely, the advertising tax burden becomes
broadcast backed and independent OTT platforms were greater.
in the range of 1.5-2x of the YouTube CPMs24, owing to
The first step towards subscription exacerbates this
a different mix of content present on these platforms.
sentiment as ad-free digital consumption enhances
However, in terms of the contribution to revenues,
the overall experience, making ad-fuelled “free”
YouTube still dominates the online video segment. This
digital media less bearable. What is interesting to
could see a change going ahead as a wide and different
note is that increasingly there are, mostly global at
range of content on other OTT platforms like Hotstar,
present, examples of businesses that also benefit
VOOT, Zee5 etc. provides advertisers with an alternative
from more creative revenue streams rather than
medium to showcase their brand.
relying solely on advertising. Gaming companies were
But video will continue to gain share at the expense one of the first to recognise this as they adopted
of other formats freemium models, pay to play, rewarded videos and
Advertising growth will also be driven by the digital built a better product that brought and kept gamers
billion coming onto the online video bandwagon, with engaged with the high quality of content. Advertising
close to 580 million OTT consumers by FY24, spending won’t be displaced anytime soon, especially in a
30+ minutes on online video platforms per day25. With largely mass-consumption, value-driven and nascent
the proposed third party digital measurement systems digital market like India but there are early signs of
coming into place in India over the next 12 months, changing consumer preferences.
22. Pitch Madison advertising report 2019 25. KPMG in India analysis based on industry discussions
23. KPMG in India analysis based on industry discussions 26. Scott Galloway
24. KPMG in India analysis based on industry discussions
Digital 45
OTT Video
Of the digital content landscape in India, the OTT video global digital video majors, traditional content creators
sub-segment has seen the maximum traction in the or telecom companies, everyone has jumped onto the
last couple of years. With more than 30 OTT video OTT bandwagon, in order to acquire the elusive digital
platforms in the country, and a rapid growth in video customers who can potentially yield great value over the
consumption, the landscape has evolved rapidly across long run. A snapshot of the OTT ecosystem is outlined
the entire value chain. Whether it is large broadcasters, below:
Indian OTT market28
Indian OTT Market
Eco-System
Companies with
TV Distributor Telecom Companies Broadcasters Independent companies and platforms
content presence
Den Networks (Den Vodafone Play, Idea Content on

Freemium SVOD AVOD
TV+) movies & TV Youtube
Videocon D2H Hotstar, Amazon Prime

JioT V, Jio Cinema Saregama Youtube
(Direct to mobile) SonyLIV, ZEE5 Video
Tata Sky (Mobile & Airtel (Airtel TV & YRF Web

SVOD MX Player
Binge) Pocket TV) Series
Dish TV (SMRT
FilterCopy Sun NXT SHAREit Tubi TV
stick & Watcho)
TVF Play AVOD YuppTV NextGtv
Freemium Voot HungamaP lay Spuul
Eros Now, ALT

BoxTV
Balaji
AVOD HOOQ TVF Play
ShemarooMe Vuclip Arre
Hoichoi
VEQTA
27. To win over Indian audiences, OTT platforms need to understand the sensibilities of 28. OTT an imperative sans cash generation, Emkay Research, 31 July 2018
Bharat, YourStory, January 25, 2019
46 Digital
OTT video platform revenue projections
CAGR
Revenues (INR bn) FY18 FY19 FY20P FY21P FY22P FY23P FY24P
(FY19-24)
OTT video platform
17 27 43 62 81 98 110 33%
advertising
Digital video
4 12 22 34 48 62 74 44%
subscription
Total digital video
21 39 66 96 129 160 184 37%
market
The above numbers are a representation of the advertising revenues of OTT video platforms including YouTube in India. The same have been
arrived at through a combination of primary and secondary research
Market trends • But telco partnerships will remain important

Distribution Telco partnerships have also emerged as an important
source of subscription/syndication revenue for the
• Direct subscriber base to contribute more in the OTT platforms, with a significant 30-35 per cent
future contribution to the overall subscription revenues in
The subscription revenues have registered a nearly FY19. Platforms like ALT Balaji, Eros Now etc. are
3x increase in FY19, totalling INR12 billion, with examples of players who have substantial revenue
contributions from both direct subscription revenues contribution coming from telco distribution.
of OTT platforms, as well as those from the telco
While majority of the subscription revenues are
partnerships. Direct subscriptions contributed around
expected to come from direct subscriptions, the
65-70 per cent and the rest were realizations from
revenue from telco partnerships is also expected
telco partnerships.
to achieve a robust growth, although slower as
Our industry discussions indicate that there could compared to direct subscriptions.
be close to 11-14 million direct paid subscriptions in
• Distribution strategy and depth
FY19, including Amazon Prime subscriptions. Owing
to the relatively higher price points and the wider OTT players across the board have been focusing on
e-commerce appeal associated with Netflix and developing a robust distribution strategy to have a
Amazon Prime respectively, these two platforms widespread presence across their target audiences
accounted for a bulk of the direct subscription and across various device ecosystems. Thus, alliances
revenues. Owing to a robust slate of live sports, with telecom operators, Cable TV / DTH operators,
international library and live TV content, Hotstar Original Equipment Manufacturers (OEMs) and others
also contributed significantly to the overall direct are being actively forged to ensure an optimum
subscription revenues of the industry in FY19. distribution depth.
We expect the direct subscriber base in India to

rise to as much as 55-65 million by FY24, driven by
availability of high quality content curated for different
audiences; and continued growth in the digital
infrastructure and the digital payments landscape in
the country.
Digital 47
Partnership with telcos

Content partnerships with telecom companies have emerged as the preferred distribution
channel for OTT players. Such partnerships not only help to expand the reach but also helps
boost subscription income for these players
Partnership with TV/broadband players

Various OTT players have partnered with DTH operators through integration of apps into the set
top boxes, allowing the user to access the services with a dedicated remote button. Services
like Tata Sky Binge provide the user with a dedicated hardware to access the OTT apps on their
Television sets, irrespective of whether the TV has a ‘Smart’ functionality or not
Partnership with Original Equipment manufacturers

OTT Players have partnered with different hardware manufacturers including smartphones, Smart
TVs, streaming devices, gaming consoles etc. to allow users to easily access these apps on their
preferred devices
Cross-platform partnerships
Some players have also forged partnership among themselves to mutually benefit each other
and also with social media platforms (such as Facebook) to broadcast their content. For example,
‘Arre’ has partnered with ‘Sony Liv’, ‘Yupp TV’ and ‘Facebook’ for content distribution
Monetisation and engagement

IPL 2019 on Hotstar
• Pricing innovations to boost subscriptions
• Social interaction added for viewers watching IPL
Over the past few months, OTT players with an SVOD
or freemium model have started to innovate around • Watch N’Play game that offered tangible payouts for
their pricing strategies, across different variables like winning the contests
subscription duration, payment mode and bundling
• Partnership with Swiggy allowed customers to order
different types of content. While majority of the
food without missing live cricket
players have started to offer shorter duration packs
(weekly and monthly), some players are also bundling
regional / international content separately to cater
Indian Idol (10th season) on SonyLIV
to different viewer segments. In order to cater to
a wider user base in India, some players are also • “Sing-Along” initiative allowed users to sing along
experimenting with cash payments. with Indian Idol contestants
• Interactivity on OTT - Fostering engagement • The best “Sing-Along” entry every week was
In a bid to create highly engaging experiences for featured on the TV show, giving users their moment
users, OTT platforms have tried to experiment with of fame on national television
different types of interactive elements ranging from
contests / games that can be played in parallel while
viewing live video content to dynamic flows of video Black Mirror: Bandersnatch on Netflix
content.
• An interactive adventure movie that allows viewers
to choose their own path through the story with a
series of multiple choice questions
• The company plans to try interactives for other
genres like comedy, romance and horror
48 Digital
Content expand the breadth of original and movie content

• Original content as a key differentiator available across multiple regional languages like Tamil,
Telugu, Bengali, Kannada, Malayalam, and Marathi.
OTT services attract a more individualistic audience
For example, Prime Video has dubbed popular Hindi
compared to the family viewers in a country
originals like Inside Edge and Breathe to Tamil and
dominated by single TV households. Hence, the
Telugu. In addition to originals, Prime Video has also
content on these platforms needs to appeal to
tried to increase depth in their regional library by
different consumer sensibilities and have an element
dubbing English movies like Alpa, Rampage, etc. to
of freshness. While OTT players can attract their
Tamil and Telugu. Similarly, Hotstar has used dubbing
chosen target audience for sampling content with
to launch the Hindi web-series Criminal Justice in six
a few originals that appeal to them, depth in such
regional languages – Tamil, Telugu, Kannada, Bangla,
digital-native original content becomes vital to ensure
Malayalam and Marathi.
consumer stickiness in the long run.
In a highly competitive environment with more Global expansion: Catering to new geographies
than 30 OTT platforms in India, as players look
After making inroads in the Indian market, many OTT
to differentiate themselves, massive capital
players have started to expand internationally by launch
commitments have been made by platforms for
geography specific offerings to increase monetization for
building libraries of diverse original content over the
their content. While the pricing of these SVOD players in
last couple of years.
global markets has tended to be higher than their Indian
services, prices also vary across different geographies.
Original content: Long form (more than 20
minutes) and short form (less than 20 minutes) For example, Star India has discontinued the distribution
of its TV channels in the U.S.A. and Canada and offers
• Long form content has grown with players like content only through its VOD service in the two
Netflix, Prime Video, Zee5 and Alt Balaji focusing on geographies30. Star India has also launched Hotstar in
creating originals with episodes ranging from 20 to parallel to its existing TV offerings the U.K.31 However,
60 minutes subscription in U.S.A and U.K. is nearly 7 times and 5
• Short form content is highly popular on social media times more respectively than the annual subscription of
platforms like Facebook, YouTube, Snapchat, etc. Hotstar in India.32
• Short form is also receiving due attention from Zee5 has recently been launched in Malaysia in order on
OTT platforms like Eros Now and Hoichoi who are catering to the Tamil diaspora in the country.33 Zee has
building their short form content libraries with short plans to launch its VOD platform Zee5 in geographies
stories, comedies, interviews, etc other than the U.S.A. over the course of 2019 with
prices ranging from USD 2 to 10 per month depending
• Growing regional focus on the geography.34
Indian language internet users are expected to grow
to 536 million by 2021 from 234 million in 201629. As
nine out of 10 new internet users in India are likely to
be Indian language users it is vital for OTT players to
cater to this audience in their native language. As a
result, OTT platforms have started to focus on building
a library of regional content that includes movies and
originals over the past 12-18 months.
Most of the VOD platforms have content offerings
in regional languages. But such content has been
restricted to select movies along with a handful
of original shows, if any. However, dubbing has
emerged as an effective tool for players to quickly
29. Indian Languages – Defining India’s internet, A Study by KPMG in India and Google, April 34. Zee Entertainment forays into 190 countries with digital platform, ZEE5, Business Line,
2017 October 2018, accessed on July 15, 2019
30. Hotstar launches its premium service in US and Canada, Gadgets 360, September 2018, 35. Discussions with Industry Participants
accessed on July 15, 2019 36. “Why two music-streaming giants have entered India in less than a month”, Quartz India
31. Star India’s Hotstar launches in United Kingdom, Economic Times, September 2018; March 2019 story accessed on 17 July 2019
accessed on July 15, 2019 37. “TikTok owner to challenge Spotify and Apple with Music Service” Bloomberg May 2019
32. How to Watch Hotstar in USA / UK (Unblock Outside India), FireStickTricks, June 2019, story accessed on 17 July 2019
accessed on July 15, 2019
33. Zee5 unveils Tamil subscription packs for Malaysia and Singapore, Indian Television,
January 2019, accessed on July 15, 2019
Digital 49
Audio streaming Ltd., the owner of popular video sharing app TikTok is
The base of monthly active users (MAUs) on audio planning to enter the market in 201937. The incumbents
streaming platforms reached 165 million in FY19 up from including Gaana, JioSaavn, Hungama etc. have
110 million in FY18, registering a healthy growth of 50 focused on both the ad-supported and subscription-
per cent35. As a result of this strong growth, multiple based models. However, the new entrants are highly
international music streaming platforms such as Amazon focused on subscription-based model and as a result,
Prime Music, YouTube Music and Spotify have entered the industry is likely to train its attention on realizing
the market over the last one year36 while ByteDance monetisation.
Music streaming market performance
Revenues CAGR
FY19 FY20P FY21P FY22P FY23P FY24P
(INR bn) (FY19-24)
Advertising 10 12 14 16 18 20 14%
Paid subscriptions 1 2 3 4 6 9 48%
Total music
11 14 17 20 24 29 20%
streaming market
Source: KPMG in India analysis 2019 based on primary and secondary research; the above numbers account for music streaming on YouTube in India.
Music streaming’s share of overall music industry process, expand the subscriber base through freemium
revenue was estimated at 70% in FY19 and this share is plans.
further expected to go up to 82% by FY2438.
Original content to become the differentiator
Advertising spend on audio streaming platforms at Given the fierce competition in the market, music
an inflection point streaming platforms are focusing on original music as a
Audio streaming monthly active user base has grown differentiator as currently there is very little variation in
at around 50 per cent in FY19 over FY18. This strong music catalogues of platforms. They are also trying to re-
growth in user base is expected to continue going position themselves as audio streaming platforms rather
forward. Music streaming platforms are also building than music streaming platforms by increasing their focus
massive data sets generated out of users’ music on podcasts across genres – science and tech, pop
consumption habits. The platforms are leveraging culture, business, spiritual etc.
these two drivers and are opening up space for brands
Voice activated search and personalised
to engage meaningfully with their user base. As the
recommendations key to building user engagement
ad-supported subscriber base reaches sizable scale,
fill rates are likely to improve as advertising budgets Users sometimes struggle with discovery of Bollywood
shift from traditional audio mediums to audio streaming and regional titles on music streaming platforms as they
platforms. typically search album names and song names rather
than artist names. Voice activated search goes a long
Focus on growing subscriber base way in reducing user friction in this regard. Improving
While the paid subscriber base only accounted for the efficiency of voice activated search feature will
around 1 per cent of total MAUs as of March 201939, this be key for music streaming platforms when it comes
share is projected to increase as the platforms focus to building user engagement, especially in markets
on offering attractive subscription plans and bundled beyond Tier II cities. Platforms are also investing in
offerings. Streaming platforms are also likely to focus machine learning capabilities to provide personalised
on category building marketing activities to organically recommendations.
increase the consumption of licensed music and in the
38. KPMG in India analysis 2019 based on primary and secondary research
39. Discussions with Industry Participants
50 Digital
Conclusion
On the demand side, there is enough and more third-party OTT video content on its app to build
evidence of India’s fascination with the internet and loyalty and social engagement of users40. Paytm,
increasing affordability has also ensured that access is India’s leading digital payments and wallet company,
more equitable. With over 30 OTT platforms, multiple launched Paytm First Games with a mix of free and
audio streaming options and an emerging gaming paid games and already reports 30 million registered
ecosystem, there is more diversity in the content on users41 within a year.
offer as well.
The fundamentals to power digital consumption in
Network infrastructure, the key link between India are strong on the demand, supply and enablers
demand and supply, is also receiving attention. front. Its continued growth and strong performance
The Government of India launched the Digital India is however predicated on data costs remaining low,
programme with the vision to transform India into a which while unlikely to rise, could be the spoke in
digitally empowered society and knowledge economy. the proverbial wheel. However, with the addition of
Announcements on Fibre to the home (FTTH) and 5G internet subscribers towards a projected billion users
will only hasten the process of developing a reliable, by 2030, the sheer volume in the market opportunity
high speed telecom infrastructure, which is the within every niche should generate substantial
backbone of every digital economy. economies of scale to all players. And more
importantly, the composition of the internet user base
Finally, the trend of convergence and the emergence
will see a shift in favour of a populace that is more
of digital platform companies that was highlighted in
confident in using digital technology for their everyday
last year’s KPMG in India’s media and entertainment
lifestyle needs; a category we are calling the Digital
report continues to remain relevant. In fact, there are
Enthusiasts in this report.
now a broader range of businesses in India looking
to build out their media and entertainment services
including e-commerce and digital payment companies.
Flipkart has recently announced its plans to include
40. “Flipkart set to add video streaming and regional interface to attract the next 100-200 41. “Gaming platform Paytm First Games to raise USD25 million”, Yourstory, August 02, 2019
million new users”, Ecoomic Times Brand Equity, August 06, 209
Digital 51
Industry perspective
India could not have asked for a more rapid As digital consumption scales up and with much
creation of a vibrant digital media community, more granular data on viewership being made
which had its genesis in telecom but its dominant available as a consequence, competitive advantage
impact in media and entertainment consumption. in the long run will vest with Digital video players
Consumers who began their digital journey with who can sharply segment their audiences and
telco bundled content will transition to other come up with a mix of varied service/ content and
platforms as their consumption behaviour and price point offerings.
preferences evolve. TV – the traditional bastion of
media and entertainment – will be most impacted
and over the medium to long term, we can expect
the cord shaving movement to gather steam in
India as well.
Saurabh Yagnik
Neeraj Roy Executive VP – Revenue
Founder and CEO Strategy and Consumer
Hungama Digital Media Insights
Entertainment Ltd. Sony Pictures Networks
India Pvt. Ltd.
Digital media in India will see a shifting of capital As distribution models evolve, there will be
from user acquisition to building IP, as retention broadly two pricing models for content. Not so
and stickiness is heavily dependent on the content much app versus telco-bundled, as much as an
library on offer to the user. Original content will a-la-carte version that will be all-in with 4K and
emerge as the differentiator here although catch- AR/ VR on smart devices and a bundled offering
up television including sports will continue to typically aggregated by telcos and ISPs that will
dominate screen time in the short term, primarily be priced more competitively. The construct of the
on account of a supply advantage. digital market is going to allow for greater micro-
segmentation of content and consumer across
social, demographic, geographic and urban/ rural
lines.
Rishika Lulla Singh

Ajay Chacko
CEO
Co-founder and CEO
Eros Digital
Arre
52 Digital
As streaming video services create high quality, The video OTT market in India is evolving, on
differentiated Original content, customers will both – SVOD and AVOD – with platforms acquiring
become even more discerning about their content capabilities to offer end to end marketing solutions
preferences. And rapidly increasing disposable to brands by narrow-basing the target audiences.
incomes, insatiable demand for engaging As the content on most of these platforms is
content and a growing desire for better quality curated, brands looking for a safe and controlled
experiences will give a big boost to subscription environment for video advertising are likely to have
based services that keep customers as the central a preference for these platforms in the long run.
focus.
Gaurav Gandhi
Tarun Katial
Director & Country General
CEO
Manager
Zee5 India
Amazon Prime Video
While TV shows and movies comprise bulk of Marquee original content often serves as the hook
the video content on OTT platforms and breed that popularizes a platform. However, to sustain
familiarity for consumers, live sports and original a consumer’s interest over a longer time frame,
content enables high customer engagement and there needs to be sufficient depth of content.
is vital in order to attract new customers to the Viewers also spend considerable time viewing
platform. Digital-first soaps, CaC Sketches (Content around
content), Catch-up TV Movies, as well as Original
Web series
Uday Sodhi
Gourav Rakshit
Business Head – Digital
COO
Sony Pictures Networks India
Viacom18 Digital Ventures
Pvt. Ltd.
The views and opinions expressed herein are those of the quoted person/s
and do not necessarily represent the views and opinions of KPMG in India.
Digital 53
54
TV
Waking to a new reality
55
56 Television
Television
Waking to a new reality
Performance of the TV industry
Revenues Growth in CAGR

FY15 FY16 FY17 FY18 FY19
(in INR billion) FY19 over FY18 (FY15-FY19)
TV industry 490 552 595 652 714 9.5% 9.9%
Advertisement 160 184 203 224 251 12.4% 11.9%
Subscription 330 368 393 428 463 8.1% 8.8%
Source: KPMG in India analysis, 2019; based on primary and secondary research
The television industry was estimated at INR714 billion body further extended this deadline to 31 March 20192
in FY19, a growth of 9.5 per cent from FY18, having with the consumers facing issues while migrating
grown at a CAGR of 9.9 per cent between FY15- to the new regime which introduced the system of
FY19. The market size in FY19 includes advertisement selecting channels for the first time in the country.
revenues of INR251 billion and subscription revenues of
INR463 billion1. Advertisement revenues
The television segment had a good year for the Television advertising grew at a rate of 12.4 per cent in
first three quarters of FY19, but the challenges in FY193, slightly lower than expected, due to the pullback
implementation of the New Tariff Order (NTO) and the from advertisers in the last quarter of FY19. Not only
resultant uncertainty around viewership and subscription did the Indian Premier League (IPL) and Free-to-air
renewals affected both the advertisement and (FTA) continue to deliver a strong performance, the
subscription revenues in the last three months of FY19. advertiser mix also remained largely similar to last year
The new regulatory framework was in force from 29 with FMCG, telecom and auto sectors contributing more
December 2018, but the Telecom Regulatory Authority than two-thirds of the spends on television advertising in
of India (TRAI) had provided the distributors time till India4.
31 January 2019 to enforce the same. The regulatory
1. KPMG in India analysis, 2019, based on primary and secondary research

2. Deadline extended: DTH, Cable TV customers can select channels till March 31,
Financial Express, February 2019, accessed on 14 July, 2019
4. Pitch Madison Advertising Report 2019
Television 57
The IPL advertising growth was robust in FY19 with While the C&S universe was reported to have expanded
a week of the twelfth season also falling in the fiscal to 197 million households by end of 2018 with digital
year as IPL 2019 started earlier owing to the Cricket cable gaining the most, there was an erosion in the
World Cup 2019 schedule. IPL 2018 contributed about active subscriber base in the last quarter with a decline
INR18-20 billion to the TV advertising kitty with 15 per of nearly 12-15 million9 households in the overall C&S
cent increase in TV impressions over the last season on HH base. The potential reasons for this decline were
account of increase in regional viewership.5 non-renewal of subscriptions, transition of subscribers
to alternate sources of entertainment such as OTT
However, the ambiguity in terms of viewership and
(although this was only minimal as per our industry
subscriptions, following the extended period of NTO
discussions) and certain blackouts owing to the
implementation and the ratings embargo by BARC for
implementation of the NTO. As a result, subscription
seven weeks starting from February 20196 resulted
revenues took a hit in the last quarter with subscribers
in advertisers starting to hold back on TV advertising
facing multiple issues, including higher cable bills, while
spends from January 2019. While the top GECs and
transitioning to the new regime.
movie channels continued to attract marketers, the
niche genres like infotainment, lifestyle, youth, music, The Average Revenue Per User (ARPU) was relatively
etc. suffered the most on account of the uncertainty flat for both DTH and cable operators in the first three
around their reach and viewership in the new regime7. quarters before seeing an increase by 10-25 per cent in
Some of the brands chose to either re-allocate part of the last quarter due to the minimum payouts on account
TV spends to other media or hold back ad monies for of the Network Capacity Fee (NCF) of INR130 + taxes,
high impact events like the general elections and Indian especially for Phase 3 and 4 subscribers whose ARPUs
Premier League8 scheduled later in the year. were reportedly much lower before the regime change.
While the active subscriber base declined, growth in
Subscription revenues ARPUs covered up a large part of the decline in the
subscription revenues, leading to an overall growth of
Subscription revenues grew at a modest 8.1 per 8.1 per cent for the year FY19.
cent in FY19 to reach INR463 billion, with the NTO
implementation hiccups costing growth in the last
quarter.
Television universe (in million) FY18 FY19
Pay C&S households 153 150
Cable 91 83
DTH 62 67
DD FreeDish 30 33
Total 183 183
Source: KPMG in India analysis, 2019; based on primary and

secondary research
5. IPL 2018 attracts 202 million viewers on Hotstar, 51% surge from last year, Business
Standard, June 2018, accessed on 14 July, 2019
6. TRAI issues show cause to BARC India for not publishing TV ratings online, Economic
Times, April 2019, accessed on 14 July, 2019
7. Based on industry discussions
58 Television
The broadcaster industry size
Revenues (in INR billion) FY15 FY16 FY17 FY18 FY19 Growth in FY19 over FY18
Broadcaster industry 238 273 300 331 372 12.3%
Advertisement 160 184 203 224 251 12.4%
Subscription 78 89 97 107 120 12.1%
Television broadcasters had a robust growth of 12.3 paying more for watching the same number of channels
per cent in FY19 to reach annual revenues of INR372 or are contend with lesser number of channels at their
billion, with approximately 68 per cent of the revenues disposal. As per industry discussions, some choice
contributed by advertising10. Advertising and subscription is taking place at the higher end of the subscription
income for broadcasters grew at more than 12 per cent pyramid, leading to lower TV bills, however, the same is
each with subscription revenues growing faster than definitely accompanied by a lower number of viewable
the TV industry subscription revenues as broadcasters channels at the disposal of the consumers.
started to realise the benefits of NTO in the last quarter Further, the uptake of pay regional channels, especially
of FY19 by getting a higher share of the consumer-level top GECs and movie channels, has remained firm in
subscription from DPOs. the regional markets in the new regime, particularly
As per our industry discussions, the share of in the Southern markets. Contrary to this, the uptake
broadcasters in the end consumer revenues increased of niche channels has suffered in the new regulatory
from approximately 33 per cent to approximately 40-45 environment as broadcasters focused on creating packs
per cent for DTH operators, while for cable operators, that ensured pick-up of their GEC and movie channels12
the same increased from approximately 20-25 per with DPOs building on top of them with FTAs at their
cent to approximately 30-35 per cent. This sharing of disposal. While niche channels belonging to larger
revenues across the TV value chain augurs well for broadcasters are likely to do better than others in the
broadcasters in the long run. long run owing to the network effects enjoyed by their
parent company, they will still need to be innovative in
Key themes underpinning the television order to survive and remain relevant in the long run.
segment The implementation of the NTO has also been facing
NTO – The change is finally here significant on ground challenges, with customer
The new tariff regime finally saw light this year with education forming a major part of the challenge. As
implementation of the new regulations taking place over per our industry discussions, there have been cable TV
the course of the last quarter of FY19. As the viewers blackouts in some areas, while the overall TV universe
migrated to the new regime, disruptions are already has shrunk as outlined earlier. However, despite the
visible in the TV industry even before the dust finally same, efforts are underway from all stakeholders to
settles. ensure a complete implementation of the regime.
While the tariff order has granted the choice of channel In times to come, viewership and reach for the TV
selection to customers, initial trends indicate that the universe is likely to change as the effects of NTO start
monthly bills of viewers wishing to watch the same to play out. With consumer choice being a central part
number of channels as earlier has gone up significantly. of the new regime, broadcasters will need to renew
Further, with a fixed payout of INR130 + taxes (assuming focus on content quality to ensure survival and pick-up
the DPOs charge the maximum mandated NCF), the of their channels. Niche genres on TV, in this new era,
ARPUs have increased across all the markets with the are expected to be under pressure from rival offerings
Phase III and Phase IV markets witnessing massive on digital platforms. The english channels are also likely
growth of 30-35 per cent11 in average realisations. to encounter challenges in terms of viewership and
This choice of channels has come at a dearer price for subscription in the new regime.
individuals at the lower end of the ARPUs who are either
Television 59
DD FreeDish – Recent auctions bring a setback In order to sustain the viewer interest on the FreeDish
The Free-to-Air (FTA) genre continued to do well in FY19, platform, the FTA channels (especially in the Hindi GEC
in terms of both viewership and ad revenues. Hindi and Hindi Movie genre) on the platform need to ensure
GECs and Hindi movies maintained their dominance that the content is refreshed at frequent intervals and
over the FTA viewership, owing to the strong presence is able to engage the audiences on a sustainable basis.
of DD FreeDish in the Hindi Speaking Market (HSM). Ad If these channels are not able to maintain viewership
rates on FTA channels continued to be under-indexed and reach, advertisement monies flowing to them may
compared to their Pay TV counterparts. However, the see a substantial dip with advertisers starting to look at
advertising revenues flowing in from these channels alternatives to achieve their targeted GRPs.
has been growing and reached about INR18-20 billion Key private channels available on FreeDish17
in FY1913 , which comprised nearly 8 per cent of the
industry advertisement revenues. Genre Key private channels available
A major development on the FTA front in FY19 was
major broadcasters; Star TV, Zee Entertainment Manoranjan TV, Big Magic, Dangal,
Hindi GEC
Enterprises Limited, Sony Pictures Network India Zee Hindustan
and Viacom18 deciding to pull out their FTA channels
from the DD FreeDish platform in the auctions held in Sky Star Movies, B4U Movies, NT8,
February 2019.14 As a result, popular FTA channels in Ashirwad, Enterr10, Maha Movie,
Hindi Movies
the Hindi GEC genre (like Star Utsav, Star Bharat, Zee Manoranjan Movies, Movie House,
Anmol, Rishtey and Sony Pal) and Hindi movie genre Wow Cinema One
(like Star Utsav Movies, Sony Wah, Zee Anmol Cinema
and Rishtey Cineplex) went off air from 1 March 2019. Aaj Tak Tez, India News, News 18
This decision to pull out of the FTA platform happened Rajasthan, Lok Sabha, Rajya Sabha,
to coincide with the implementation of the new tariff Surya Samachar, India TV, News
and interconnect regulations and was a part of a longer Nation, NDTV India, News 18 India,
term strategic call taken by most broadcasters to move News
News 18 UP/Uttrakhand, News State,
towards a pay market.15 This meant that erstwhile UP/UK, News 24, Republic Bharat, Aaj
flanking FTA channels like Star Bharat, Sony Pal, Zee Tak, ABP News, Zee News, RT, Aryan
Anmol and Rishtey Cineplex became pay channels that TV National, ABP Ganga
were priced very attractively compared to regular GEC
and movie channels in order to attract FTA users to the Sports Star Sports First
pay market.
Although the uptake of paid versions of these erstwhile Sony Mix, 9XM, Masti, B4U Movies,
Music
FTA channels in the new tariff regime has not been Zing, MTV Beats
very encouraging, the broadcasters are more inclined
towards pursuing a strategy that nudges viewers to pay Big Magic Ganga, Bhojpuri Cinema,
for good quality content and do not want to offer the Regional Dabangg, Fakt Marathi, Sky Star
same content for free even after a windowing period. It Entertainment Telegu, Sky Star Bangla, Enter 10
remains to be seen if this strategy pays off in the near Bangla, Oscar Bhojpuri
term and whether broadcasters will continue to pursue
the same even in the coming FreeDish auctions Aastha, Sanskar, RT, Astha Bhajan,
next year. Devotional Satsang, Subh TV, Vedic TV,
Chardikala Time TV, Arihant TV
Meanwhile, Prasar Bharati netted about INR3.9 billion16
from 40 FreeDish slots sold under the e-auctions held in
TV Shopping Home Shop 18
February 2019. The auctions also saw an increase in the
regional flavor with the addition of channels like ’Fakt Note: List of channels as on 15 June 2019
Marathi’ to the FTA mix on FreeDish.
14. Big broadcasters to pull-out channels from DD Free Dish, Television Post, February 2019,
accessed on 15 July, 2019
16. DD Free Dish e-auction: Prasar Bharati nets Rs 395 cr from sale of 40 Free Dish DTH
slots, Indian Television, February 2019, accessed on 15 July, 2019
17. DD FreeDish website
60 Television
Regional languages: Continuing to drive growth English channels on TV: Fighting for survival
The regional language viewership on TV continued to The English language channels on TV have been
see strong growth in 2018 supported by new channel struggling to gather any momentum over the past
launches and live sports streaming in local languages, couple of years, with most of them forming a part of the
with the regional advertising market growing faster than long tail of TV channels present in India, and the market
the market at more than 16 per cent in FY1918. for English channels seeing a de-growth in FY1924.
General entertainment channels continued to remain In addition, the introduction of the new regulatory order
the most preferred choice for regional viewers. While in the last quarter of FY19 has added to the challenges
43 per cent of the total GEC viewership in 2018 came with the uptake of English pay TV channels taking a
from Hindi, the four south language markets together hit and channels expecting a drop of 25-30 per cent
matched up to Hindi in terms of sheer size with the in their revenues post the NTO.25 Only the channels/
average consumption per day for these languages at broadcasters who have been able to place themselves
nearly 2.5 hours a day, much higher than that of Hindi i.e. the English cluster in sufficient number of DPO
which was about 1.7 hours a day.19 packs are likely to find decent pick-up.
While viewership in the southern market grew at a While the English watching audience is relatively
steady 7 per cent, regional viewership growth in 2018 smaller in India, the widespread availability of English
was driven by Bhojpuri (38 per cent), Odia (36 per cent), (entertainment and movie) content on OTT platforms,
Assamese (31 per cent) and Marathi (26 per cent)20. that offer a personalised, convenient, appointment-
Regional viewership benefitted significantly from sports free viewing experience, has been one of the key
consumption in local languages with nearly 36621 million factors for a shift in consumption from TV to digital for
people viewing sports content in regional languages in English content. Further, the nature of select English
2018. IPL 11, which was broadcast on 17 channels with (entertainment and movies) content does not lend itself
live feed in eight languages (English, Hindi, Tamil, Telugu, well for family viewing, especially in a market like India.
Kannada, Bangla, Marathi and Malayalam), managed This further pushes these consumers to move away
to get a significant 23 per cent of its total viewership from TV based subscription/viewing to consumption on
in regional languages22. In addition to the availability of OTT platforms for English content.
sports programming in multiple regional language feeds
As a result of the prevailing conditions, in times to
for the first time, the industry also witnessed multiple
come English TV channels will need to be creative in
regional channel launches during the year.
positioning themselves and experiment with different
While multiple General Entertainment Channels like business models in order to sustain and thrive as TV
Sony Marathi, Zee Keralam and Sun Bangla (FTA) made channels.
their debuts during the course of the last fiscal year,
Colors Kannada Cinema was one of the only movie
channels to be launched during the period. Sports
broadcasting in regional feeds received a huge leg up
last year due to the IPL and resulted in the launch of
new dedicated regional sports channels like Star Sports
1 Telugu, Star Sports 1 Kannada and Star Sports 1
Bangla. Broadcasters continue to believe strongly in
the regional growth story and have announced plans to
launch new entertainment, movie and sports channels
for the regional markets over the course of FY20. As the
south markets mature, this growth is expected to come
from the relatively under-indexed languages like Marathi,
Bangla, Odia and Gujarati.23
18. Based on industry discussions 22. What India Watched 2018, BARC, April 2019, accessed on 16 July, 2019
19. What India Watched 2018, BARC, April 2019, accessed on 16 July, 2019 23. Based on industry discussions
20. From content to genre, regional channels reaped benefits of localization, Business Stan- 24. Based on industry discussions
dard, December 2018, accessed on 15 July, 2019 25. KPMG in India analysis, 2019, based on primary and secondary research
21. What India Watched 2018, BARC, April 2019, accessed on 16 July, 2019
Television 61
Changing face of TV distribution

With digital consumption on the rise, the TV distribution across the country. The platform will offer 1,000 hours
industry is increasingly realising the importance of of library content including movies and short films. In
keeping customer needs at the centre of their decision- addition, it will have short form originals along with user-
making. As a result, traditional distributors are now generated content in Hindi, Kannada and Telugu. The
looking at the digital distribution landscape to ensure company also plans to foray into Bhojpuri and Gujarati
relevance in the years to come. content to have a deeper regional presence. To start
with, the company will provide the service to all its
Tata Sky, for example, has collaborated with VOD
subscribers for free28.
players like Hotstar, Sun NXT, Eros Now and Hungama
Play to launch their new digital content service, Tata These steps taken by TV distributors to provide all
Sky Binge.26 The service, priced at INR249 per month, video entertainment related services (linear television
offers digital video content from the above mentioned or digital) at one place are to ring fence their subscriber
platforms along with 5,000 movie titles from the Tata base while fending off threats posed by telecom
Sky VOD library and catch-up TV content for seven days. companies that are offering their own OTT video
services by aggregating linear and non-linear video
Hathway, one of the largest cable TV and broadband
content.
service providers in the country has chosen to partner
with Netflix and offer OTT video services to its Further, with telcos starting to emerge as major
subscriber base through an OTT set-top-box (STB). In distributors of content through their data pipes (both
addition to providing a billing facility for Netflix, the wireless and wireline) and the imminent launch of FTTH
company will offer a free 12 month subscription to Sun services by Reliance Jio, the distribution landscape of
NXT along with the new STB.27 the television industry is likely to witness disruption in
the times to come.
On the other hand, Dish D2H has launched its own OTT
video platform called Watcho targeting young millennials
26. Tata Sky Binge Service Launched to Offer Digital Content Through Special Edition Amazon
Fire TV Stick, Gadgets 360, May 2019, accessed on 16 July, 2019
27. Hathway partners with Netflix to offer seamless streaming over STB, Economic Times,
September 2018, accessed on 16 July, 201
28. Dish TV forays into OTT segment with Watcho, April 2019, accessed on 16 July, 2019
62 Television
Future of the television industry – On a steady footing
Revenues (in INR billion) FY19 FY20P FY21P FY22P FY23P FY24P CAGR (FY19-24)
TV industry 714 824 935 1,025 1,121 1,215 11.2%
Advertisement 251 277 314 355 402 455 12.6%
Subscription 463 547 621 670 719 760 10.4%
The television industry is projected to reach a size of platforms continues to rise, some marketing dollars
INR 1,215 billion by FY24, growing at a robust CAGR of are likely to start shifting towards digital platforms, the
11.2 per cent over FY19-24.29 The growth across both the impact of which has been factored into our projections.
advertising and subscription sub-segments is highlighted
Subscription revenues
as below:
The subscription revenue is likely to see an accelerated
Advertising revenues growth in FY20 to INR547 billion, growing by 18 per cent
Advertising revenues are expected to grow at a healthy from INR463 billion in FY19 after recovering from the
CAGR of 12.6 per cent from FY19-24, recovering from after-effects of the new regulations on account of the
the blip in the last quarter of FY19. following factors:
The advertising revenues for FY20 are estimated to • A large chunk of the subscribers that did not pay
grow at a steady rate of 10.3 per cent30 to reach INR277 for cable in the last quarter of FY19 due to the
billion. This growth is expected to be relatively lower uncertainties around the new tariff order are expected
than FY19, owing to the macroeconomic slowdown to come back over the course of FY20, reinstating a
being observed since the last few quarters, which had bulk of the pay TV base
led to a fall in domestic consumption and is likely to
• Implementation of the TRAI tariff and interconnect
also have an impact on the a advertising revenues.
guidelines has resulted in higher ARPUs for a majority
However, the following growth factors are likely to play
of the consumers with monthly bills rising sharply at
out resulting in the above mentioned steady growth. The
the lower end of the spectrum
growth is likely to be driven by the following factors:
-- ARPUs in the Phase III and IV markets are
• Revival in ad spends by marketers following the
expected to increase by 20-30 per cent31
stabilisation of viewership on TV channels post the
implementation of NTO • Migration of some DD FreeDish users to the lower
end pay TV packages on account of the pull back of
• Expected robust viewership of the 50-over Cricket
popular erstwhile FTA channels from the platform
World Cup in 2019
• Rising HD subscriber base is expected to result in
• Ad sales are likely to become solution oriented and
better realisations
encompass different forms of media (TV, OTT, other
digital platforms) Over the next five years, subscription revenues for the
TV industry are expected to grow at a CAGR of 10.4
In the long run, the overall TV advertisement revenues
per cent to reach a size of INR760 billion by FY2432. The
are expected to grow on the back of strong TV
growth is likely to be more front ended with FY20 and
viewership from both rural and urban audiences; as well
FY21 witnessing a higher increase on account of the
as continued returns from investments being made
benefits accruing from the implementation of the tariff
by broadcasters in new regional channels and sports
order, especially from Phase III and IV markets.
properties. As the scale of content consumption on OTT
Television 63
Broadcaster industry estimates
Revenues (in INR billion) FY19 FY20P FY21P FY22P FY23P FY24P CAGR (FY19-24)
Broadcaster industry 372 443 511 573 648 724 14.3%
Advertisement 251 277 314 355 402 455 12.6%
Subscription 120 166 198 218 246 269 17.5%
The revenues of broadcasters are expected to reach next couple of years as the benefits of revenue sharing
INR724 billion by FY24, growing at a strong rate of start to flow in, particularly from digital cable operators.
14.3 per cent from FY19-24 on the back of subscription After the next couple of years, subscription revenues are
revenues which are estimated to grow at a CAGR of likely to be largely driven by the ARPU increase across
17.5 per cent during the same period33. Subscription the industry.
revenues are expected to see a substantial jump in the
Conclusion
From a relatively subdued last quarter in FY19 on Distributors, at one end, would need to start being
account of the implementation of the NTO, the TV more consumer-centric in their thinking and evolve
industry is expected to find its mojo back in FY20 as to offer a suite of services across various distribution
the benefits of the new tariff regime start to flow in. models in order to stay relevant to their target
With regional viewership growing and digital getting audiences. On the other hand, broadcasters would
traction for live and catch-up TV, television is likely need to increasingly think of themselves as content
to continue being the dominant mode of media studios who can reach their end-user through multiple
consumption in the country. modes of distribution that address linear and non-
linear consumption requirements.
However, challenges to the existing business models
of distributors and niche channels are visible at the
horizon with digital consumption gaining traction.
Players will need to adapt and change swiftly in order
to continue being relevant and valuable in the value
chain.
64 Television
Industry Perspective
While the broadcasters were used to seasonality Transparency and Technology, in my opinion,
when it came to advertising, subscription tended are the two key important aspects which will
to remain constant across the year. However, the boost the Media & Entertainment sector. The
introduction of NTO has introduced seasonality convergence of Art & Technology is the key to
in subscription and reach for TV channels with a successful approach in this highly competitive
fluctuations visible during festivals, vacations, environment. Our industry is blessed with rich
school exams and so on. and immense creative potential, which needs
to be further unleashed and capitalized in order
to drive innovation and most above, to generate
employment.
Mr. N.P. Singh
CEO
Sony Pictures Networks
Punit Goenka
India Pvt. Ltd
MD & CEO
ZEEL
The size of the M&E industry in India is well

poised to reach USD 100 bn by 2025 with the
The sports genre, especially the international
digital user base crossing 1 billion by then.
sports content, has been able to command a
Regionalization will play a big role in driving this
premium in ad sales as it brings a high level of
user base. In the broadcast sector, regional
customer engagement along with it and is one
GECs are likely to be the biggest beneficiaries
of the few genres that is consumed by a bulk of
following the NTO as viewership share of
the audiences in the 16-24 years age bracket.
regional content on TV will continue to increase
and normalize with the share of regional
audiences. In films, we are already seeing rapid
growth of Regional Cinema markets hitherto Mr. Rohit Gupta
perceived to be very small. All this coupled with President – Network Sales
growth in smart phones and affordable data and International Business,
plans will dial up access for content on mobile Sony Pictures Networks
with multiple business models to monetise the India Pvt. Ltd
same. Regionalisation, Digital and Data Analysis
will be the three key vectors for the growth of
M&E Industry.
Regional markets have outperformed industry

Sudhanshu Vats growth and are expected to be the drivers of ad
Group CEO and MD growth for the TV industry with the next wave of
Viacom18 regional content expected to be in languages like
Marathi, Bangla, Oriya and Gujarati.
Mr. Anuj Gandhi

Group CEO
Indiacast Media
Distribution Pvt. Ltd
Television 65
In the world of TV & Digital, the consumer is The regional television market is outstripping
spoilt with several choices. With the introduction the average TV industry advertising growth by a
of channel pricing in the TRAI tariff order, healthy margin. It has been buoyant and resilient
the consumer gets further empowered to with an increase in investment and original
make choices. Hence, it is imperative for the programming hours. Regional TV programming is
broadcasters to be more customer obsessed extremely focused, targeted and relatable as the
and create content which is socially relevant and content is grounded in local culture, customs,
deeply embedded in culture, to make sure the traditions and values thereby amplifying its
consumer chooses us. resonance with viewers.
Punit Misra
CEO
Domestic Broadcast Ravish Kumar
Business, Zee Entertainment Head – Regional TV Network
Enterprises Ltd Viacom18
In the times to come, distributors will need to

become more customer centric in their approach
and provide a bouquet of services that includes
internet, TV, OTT, home security and other such The implementation of the NTO was a tiresome
offerings as a single bundle in order to compete and long process for the distributors with a lot
and thrive. of pressure on the customer support function,
especially the call centers, to clear the confusion
from the minds of the consumers. While
consumers did wait for more clarity before
Mr. Ashok Mansukhani subscribing to TV again, majority of the pay TV
Vice Chairmain subscribers have come back and are mostly
Indusind Media opting for best fit packs created by DPOs or a
Communications Ltd combination of broadcaster packs.
Rajeev Dalmia
CFO
While English Broadcasters are likely to grapple Dish D2H
with the challenges posed by changes in tariff
rules and Digital in the near term, English is
likely to emerge as a larger medium and may
even vie to be the primary language of content
consumption in India in the longer term due to
its aspirational nature.
Mr. M.K. Anand

CEO and MD
Times Network
The views and opinions expressed herein are those of the quoted person/s and do not
necessarily represent the views and opinions of KPMG in India.
66
Print
The oldest pillar still standing
67
68 Print
Print
The oldest pillar still standing
The print media industry survived ups and downs over a Advertising remains the growth driver, growing at 5.4
period of time with FY18 witnessing a rough patch due per cent CAGR from FY15 to FY19 and accounting for
to disruptions caused by the implementation of the new 66 per cent4 of total print revenues. Muted circulation
GST regime, RERA regulations and demonetisation with growth by 3.5 per cent5 in FY19 is primarily on account
the lowest growth in a decade at 3.4 per cent. Despite of decline in the English publications due to faster
stabilisation of these regulations and the general adoption of digital platforms. Magazine print revenue
elections in 2019, the industry posted a subdued growth continued to decline at 4.5 per cent6 CAGR while
of 4.5 per cent1 in FY19. While this brought a much newspapers have been driving growth at 6.1 per cent7
needed growth impetus, the high cost of news print CAGR from FY15 to FY19. Whilst, there is growth in
impacted profitability adversely. FY19, the CAGR for the print industry is slowing down
and is low compared to other traditional media sectors
Though, globally the print industry is on the decline with
(TV and Radio).
newspaper’s share of global advertising spend falling
from 37 per cent in CY08 to 12 per cent in CY182, the
Indian print industry continued to buck trends and grew
at 5.6 per cent CAGR from FY15 to FY193.
Size of India’s print industry

Growth in FY19 CAGR
INR billion FY15 FY16 FY17 FY18 FY19
over FY18 (FY15 - 19)
Advertising 179.6 192.2 204.3 210.7 221.2 5.0% 5.4%
Circulation 88.7 96.1 104.0 108.2 112.0 3.5% 6.0%
268 288 308 319 333 4.5% 5.6%
Source: KPMG in India analysis based on primary and secondary research, 2019-20
1. KPMG in India analysis based on primary and secondary research, 2019-20

2. Advertising Expenditure forecasts, Zenith, March 2019
Print 69
Segment wise revenue

INR billion FY15 FY16 FY17 FY18 FY19 Growth in FY19 over FY18
Newspaper 254.0 274.1 295.0 306.4 321.3 4.9%
Magazine 14.3 14.2 13.3 12.5 11.9 -5.0%
268.3 288.3 308.3 318.9 333.2 4.5%
Advertising revenue
English 66.2 69.2 71.6 72.8 73.8 1.5%
Hindi 55.5 59.8 64.3 66.6 71.6 7.5%
Regional 57.9 63.2 68.4 71.3 75.8 6.4%
179.6 192.2 204.3 210.6 221.2 5.0%
Circulation revenue
English 31.1 32.6 33.9 34.3 33.9 -1.3%
Hindi 29.9 33.3 36.7 39.1 41.5 6.1%
Regional 27.7 30.2 33.4 34.8 36.6 5.3%
88.7 96.1 104.0 108.2 112.0 3.5%
Print media is the second largest platform While local advertisers drove growth in regional
for Indian advertising after television language, industry discussions indicated that election
spends were lower than expected leading to a growth
Globally, print advertising has been on a downward
of 6.4 per cent11 in FY19. English publications continue
trend with share of print in global advertising falling to
to be plagued by the digital medium with advertisers
12 per cent in CY188. However, print continues to be the
preferring digital and print bundled solutions leading to
second most important platform for Indian advertising
muted growth.
expenditure with its share amounting to 32 per cent in
FY199 as opposed to 35 per cent in FY18. While FY18 Despite an increase in the Directorate of Advertising
was a challenging year for the industry, the stabilisation and Visual Publicity (DAVP) advertisement rates in print
of the new GST regime, recovery post demonetisation media by 25 per cent, advertisement budgets have
and RERA regulations have brought some normalcy in remained the same thereby not allowing for higher
advertising expenditure. contribution. Further, the MIB notification stopping
the practice of publishing tender notices in print was
Advertisement revenue in FY19 grew on the back of
projected to have a major impact on the industry.
growth in Hindi, as Hindi is able to command a higher
Based on industry discussions, its effect was minimal
price in tier 1 cities due to a growing readership base.
as government departments continued to favour print
This coupled with an election push in northern Hindi
media.
speaking states where advertising volumes drove
revenues resulted in advertising revenue growth of 7.5
per cent10 in FY19
8. Advertising Expenditure forecasts, Zenith, March 2019 10. KPMG in India analysis based on primary and secondary research, 2019-20
9. KPMG in India analysis based on primary and secondary research, 2019-20 11. KPMG in India analysis based on primary and secondary research, 2019-20
70 Print
Print advertising revenue by sector for CY17 and CY18
CY18 CY17
14% 14%
33% 32%
14% 14%
10% 10%
4% 4%
4% 6% 4%
5% 6%
4% 5% 6% 5% 6%
FMCG Auto Education Real estate Retail

Fashion/jewellery BFSI E-commerce HH durables Others
Source: The Pitch Madison Advertising report, 2019 and 2018
While there is no major sectoral shift in advertising, fast moving consumer goods (FMCG), Automobile and
Education collectively still contribute 38 per cent of total print advertising12 in CY18.
Circulation - Regional and Hindi language newspapers are leading the charge
Circulation in FY18 was driven by Hindi and regional publications, with regional accounting for 42 per cent (versus 39
per cent in FY17)13 of total circulation as regional newspapers continue to grow in tier II, tier III and rural areas.
Total circulation volume in FY18 Total circulation volume in FY17
Regional Regional
42% 39%
English English
12% 12% Hindi
Hindi
49%
46%
Source: The Registrar of Newspapers of India, Annual report FY18 and FY17
Regional languages circulation share FY18 Regional languages circulation share FY17
11% 16%
4% 2% 13% 14%
5% 4%
5% 5% 14%
15%
6% 7%
8% 16%
8%
15%
17%
14%
Gujarati Telugu Marathi Urdu Malayalam

Odia Tamil Kannada Bengali Others
Source: The Registrar of Newspapers of India, Annual report FY18 and FY17
12. The Pitch Madison advertising report, 2019

13. The Registrar of Newspapers of India, Annual report FY18 and FY17
Print 71
Despite a decline in overall circulation volumes in Advertisers are increasingly looking for Hindi print media
FY17and FY18, circulation revenue increased by 3.5 options in Tier 1 cities due to the growing readership of
per cent14 in FY19 on the back of Hindi and regional Hindi publications in these locations. This has resulted
language newspapers and marginal increase in cover in advertisement rates for Hindi in Tier 1 cities being
prices by certain publications. higher than English due to a better value proposition
by a growing and loyal base of Hindi readers. English
Circulation revenue in English newspapers experienced
advertisement rates surpassed that of Hindi in other
a decline of 1.3 per cent15 in FY19 due to increasing
geographies, primarily on account of the status factor
competition from digital thus pushing English
associated with the English language in Tier 2 and Tier 3
publications into prioritising the development of their
cities and English commanding a better rate than other
digital strategy. On the other hand, while regional and
languages in general. However, this did not result in
Hindi publications also have digital platforms, they are
higher revenues in FY19.
in a unique position to deliver local news along with
national content on both platforms (newspaper and
While high newsprint prices, increased pressure on
digital).
margins in FY19, a drop in price towards the end of
the year is expected to provide some respite
Key trends in the Indian print industry
Hindi language experiences a marginal increase in Newsprint prices per tonne (USD)
advertising volumes while English is on a downward
trend 1,000
780
Ad volumes by language 800 733
643 578 548
574 535 550
600
CC in million CY18 CY17 Growth
400
Hindi 118 115 3%
200
English 86 92 -7%
-
Regional 135 135 -
338 342
Source: The Pitch Madison Advertising report, 2019 Source: Newsprint prices in downward cycle; Indian printer publisher; 11 March 2019
Newsprint prices rise by 5.5% in one month; Business standard; 26 July 2016
There has been a noticeable shift in advertising volumes

from English newspapers to Hindi and regional during
CY18 as compared to CY1716. Although on an overall USD rate (INR/USD)
basis, advertising volumes have declined in CY18,
80.0 69.9
election advertising in Q4FY19 provided some stimulus 65.4 67.0 64.5
60.4 61.1
to advertising volumes resulting in muted growth of 54.4
volumes in FY19 over FY18. 60.0
47.7
Hindi now dominates advertising pricing across 40.0

Tier 1 cities
20.0
Language wise average ad rates per sq. cm

-
FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19
4,000
Avg Ad rates per sq cm
3,000 Source: websites: www.investing.com; www.ofx.com
2,000
1,000
-
Tier I cities Other regions
Hindi English Regional
Source: Rates for business advertisements from releasyMyAd.com accessed on 15. KPMG in India analysis based on primary and secondary research, 2019-20
19 June, 2019 and KPMG in India analysis, 2019-20 16. The Pitch Madison Advertising report, 2019
72 Print
Indian print industry witnessed one of the highest IRS –Key takeaways23,24
increases in newsprint prices in a decade with prices
rising from USD535 per tonne17 in FY16 to USD780 per IRS readership - Hindi newspapers
tonne18 in September 2018. This has been primarily on
Dainik Jagran 70,377
account of China’s campaign against environmental 73,673
pollution resulting in the ban on imports of pulp and
Dainik Bhaskar 45,105
paper waste for newsprint production19. This in turn 51,405
led to steep increases in newsprint imports causing
Amar Ujala 46,094
global prices to rise. Coupled with the depreciation of 47,645
the rupee from INR65.4 in FY16 to INR69.9 in FY1920,
Rajasthan Patrika 16,326
newspaper publishers saw their margins affected by 18,036
8 – 10 per cent on an average19.
13,492
Prabhat Khabar
Prices started to ease up post October 2018 and 14,102
reduced to USD550 per ton21 in March 2019. Whilst Readership (in thousand)
there is no immediate impact of the reduction, the IRS 2017 IRS 2019 Q1
industry believes the effect of this will show from
Q2FY20 onwards.
IRS readership - English newspapers
Digital medium – looming large
Globally, the digital medium has been making inroads 13,047
The Times of India
into the print industry. Digital has been slowly but surely 15,236
chipping away at the Indian print industry, with English 5,300
The Hindu English
being the first to bear the brunt of early adoption. With 6,226
the availability of affordable smartphones and data, The Economic 3,103
the industry believes that Hindi and regional will begin Times 3,701
the inevitable transition to digital soon. This has led to Mumbai Mirror 1,813
2,165
many traditional print publications prioritising their digital
strategy and focusing on combining the text and video The Indian Express 1,599
1,855
format. Videos add visual appeal while monetisation is
Readership (in thousand)
possible through pre roll and mid roll ads.
IRS 2017 IRS 2019 Q1
Battle against fake news
The Indian print industry continues to engage readers
in spite of the proliferation of digital platforms. While IRS readership - Regional newspapers
fake news poses a challenge to digital and social media
Daily Thanthi 23,149
platforms, industry leaders believe print publications 24,054
benefit from higher credibility and brand loyalty due to
Lokmat 18,066
better editorial standards. Print publishers with a digital 19,691
presence are considered more reliable than their ‘pure Malayala 15,999
digital’ counterparts as print publishers uphold a similar Manorama (D) 17,477
editorial standard for their digital platforms.
Eenadu 15,848
Magazines shifting their focus from print to event 15,673
and digital revenue Mathrubhumi 11,848
12,951
Magazines contributed a marginal, approximately
4 per cent20 to the total Indian print industry in FY19 Readership (in thousand)
and continue to decline due to the popularity of digital IRS 2017 IRS 2019 Q1
subscriptions. While print still contributes the largest
share to their revenue, magazine publishers have started
focusing on digital and events to supplement declining
print revenues22. Regional magazines are usually not
revenue generating as they are given as add-ons along
with newspapers, while niche English magazines 17. Newsprint prices rise by 5.5% in one month, Business standard; 26 July 2016
18. Newsprint prices in downward cycle; Indian printer publisher; 11 March 2019
focused on being luxury or event driven are expected to
19. How China’s fight against pollution torpedoed India’s newspaper industry; The Print;
survive going forward. 20 march 2018
20. Websites: www. Investing.com; www.ofx.com
21. Newsprint prices in downward cycle; Indian printer publisher; 11 March 2019
23. The Indian Readership survey 2019, Q1
24. The Indian Readership survey 2017
Print 73
• As per IRS 2019 Q1, Hindi dailies continue to • Population concentrated in the NCCS A/B/C
dominate the list of top 10 publications with only one categories are concentrated in urban areas, with 81
English newspaper featuring on the list (Times of per cent of this class living in urban locations. NCCS
India) A/B/C categories are generally highly educated and
have a higher disposable income making them a more
• Urban population accounts for approximately 34 per
desirable audience for advertisers.
cent of the total population, growth in readership
is equally seen from urban and rural population • Of the total population surveyed in IRS 2019 Q1 37.3
which has come primarily from Hindi and regional per cent stated they have read a newspaper in the
newspapers. previous 30 days, up from 36.8 per cent population
that was surveyed in IRS 2017.
• Readership among rural population grew by
approximately 5 per cent on the back of Hindi and • Magazine readership showed an increase of 12
regional languages, with English remaining flat in rural per cent in 2018 over the previous year, with urban
areas. Whilst, urban readership grew by approximately magazine readership growing by 9 per cent while rural
5 per cent with an even spread in English, Hindi and growing by 12 per cent
regional languages.
Based on IRS 2017, the most coveted readership and
• New consumer classification system (NCCS) advertising consumer markets – the middle income and
categorisation of ‘D/E’ shrinks from 40 per cent of the the rich –both grew at approximately 5 per cent over the
total population in 2017 to 38 per cent in IRS 2019 Q1 population surveyed in IRS 2014. Approximately 63 per
NCCS D/E categories are generally less educated and cent of the population surveyed have completed school,
have a lower disposable income. Consumers aspire 10 per cent are graduates and 27 per cent are illiterate.
to move from the NCCS D/E categories to the A/B/C These metrics were not commented on in IRS 2019 Q1.
categories.
Future outlook
CAGR
Revenues (INR billion) FY19 FY20P FY21P FY22P FY23P FY24P
(FY19 - 24)
English
Advertising 73.8 74.7 75.5 76.5 77.6 79.2 1.4%
Circulation 33.9 33.4 33.1 32.8 32.5 32.1 -1.0%
107.7 108.2 108.6 109.2 110.1 111.3 0.7%
Hindi
Advertising 71.6 75.9 80.4 85.3 90.4 97.2 6.3%
Circulation 41.5 43.6 45.7 48.0 50.4 53.0 5.0%
113.1 119.4 126.2 133.3 140.8 150.1 5.8%
Regional
Advertising 75.8 80.1 84.7 89.3 94.0 99.6 5.6%
Circulation 36.6 38.6 40.6 42.8 45.1 47.5 5.3%
112.5 118.7 125.3 132.1 139.1 147.1 5.5%
Grand total 333.2 346.3 360.1 374.6 390.0 408.5 4.2%
74 Print
Over the next five years, the print industry is expected of digital casts an increasingly large shadow on its
to grow at approximately 4.225 per cent primarily on growth. The industry has an eye on the digital space
the back of advertising revenue, which will continue to as new streams of monetisation become available and
dominate the revenue pie. investment in digital assets increases. The industry is
also expected to increase cover prices going forward
Hindi and regional newspapers are expected to grow
to cover losses and combat the 10 per cent customs
driven by a focus on hyperlocal content and penetration
duty imposed by the central government on the import
in Tier 2 and Tier 3 markets. As literacy rates continue to
of newsprint in the FY20 budget. While this increase in
improve, especially in age groups from 15-24, readership
cover price may impact circulation in the short-term, it is
of Hindi and regional publications is also likely to grow
likely that this will not have an adverse long term impact
Circulation of English publications is expected to as Hindi and regional publishers tend to have a loyal
continue its downward trajectory, as the presence customer base.
The new-age advertisers are primarily concerned If we look at magazines the same way we
about two things – ‘measurability’ and looked at them a decade ago – when your
‘personalisation of campaign impact’ and hence circulation ran into lakhs and advertising was
increasingly demanding more and more result- booming – we might as well shut shop. What
oriented and integrated advertising campaigns stays the same is the importance of deeply-
between digital and print. A stand-alone approach reported, well-researched, high-impact features
for either of the mediums is not viable in the presented attractively. That will allow you to
future. Print majors have to wake up to the fact leverage the (accurate) perception of being a
that their competition is not other publications high-end quality product by doing various other
or medium, but large digital ecosystems such as things.
Google or Facebook that defies the conventional
definition of media.
Brian Carvalho
Editor
Pradeep Dwivedi Forbes India
Former CEO
Sakal Media Group
There is way to look at it. The rise of digital over

the last 7-8 years has helped the news category
to expand its consumer base. It has also forced
Revenue from government advertising largely the existing mediums of print and television
remained flat in FY19 despite 25 per cent increase to innovate and establish uniqueness. Door
in DAVP ad-rates, due to stagnant advertising distribution channel, hyperlocal coverage and
budget of the government leading to a decline in credibility are the three strong factors for print
volumes. to keep growing especially in Tier2/3 markets.
Variety, Vernacular, Video and Voice will remain
the pillars for AV mediums.
Kaliyuga Easwarasamy
CFO
The Printers Mysore
Vinay Maheshwari
Executive Director & CEO
Sakshi Media Group
Print 75
Hindi as a story continues to play a central role in Government has withdrawn the exemption on
print media business growth. Despite negative newsprint in this Union Budget and has imposed
sentiments, regional print players will see a a customs duty of 10 per cent. At present, the
growth of around 8-10 per cent. The reason being annual demand of newsprint in India is 2.5 million
a lot of retail, lifestyle and e-commerce giants ton of which 1.5 million ton is imported. Current
entering the Tier II and Tier III markets giving capacity of Indian newsprint producers is of 45
impetus to regional print players due to rising gsm category, having lower yield vs 40 and 42
trend of consumption in these markets. We have gsm which comprises 83 per cent of imports.
also been witnessing a change in the approach of Additionally, domestic mills do not produce light-
clients whether MNC or Masala and Agarbatti - all weight coated and uncoated papers. Further,
want solutions. With digital consumption on a rise, India has no natural advantage in newsprint
advertisers look at print as a complete package manufacturing given limited availability of inputs
with activations, digital and contextual marketing. like fibre, clean water and energy. Since India
This will impact the margins of print media does not have vast forest cover, domestic mills
business. are heavily dependent on imported mix-waste as
the source of fiber, which has plastics and other
harmful contaminants.
Probal Ghosal Mohit Jain

Director Executive President
Amar Ujala Limited The Times of India Group
Across the world there is more support for For the last couple of years the newspaper
print media, which continues to deliver credible advertising has been under immense pressure,
journalism. This is a very strong counter to social this however has been more accentuated in
media, which creates sensational news. We have English medium as opposed to languages
already seen print players positioning themselves (including Hindi). What also did not help the
in digital, with strong emphasis on quality and matter was an adverse commodity cycle on
credible journalism. Advertisers prefer their brands newsprint rates coupled with rupee depreciation.
to be associated with credible news sources and Digital media is gaining currency, however there
this is a positive trend for us. The next step will be are other unique challenges of fake (unverified)
to monetise this online and move to a paywall like news et all, also given the fast evolving nature of
the New York Times and Washington Post. the same it needs to be seen how it pans out for
advertisers and indeed for the business model/s.
Advertising is a “derived demand” business and
therefore unless the financial health of the various
Jayant Mammen Mathew
sectors improve substantially, overall advertising
Executive Editor and Director
will remain under pressure. We have seen this
Malayala Manorama
trend many a times in the past as well.
Piyush Gupta
Group CFO
HT Media Limited
76
Films
Content triumphs
77
78 Films
Films
Content triumphs
Size of India’s film industry
Revenues Growth in CAGR

FY15 FY16 FY17 FY18 FY19
(in INR billion) FY19 over FY18 (FY15-19)
Theatrical revenue
India 95.5 100.8 101.4 108.9 124.9 14.7% 6.9%
Overseas 8.2 10.8 12.3 14.8 17.2 16.1% 20.3%
Other streams
Cable and satellite
15.0 15.8 15.5 16.1 18.0 11.8% 4.5%
rights
Music rights 2.8 3.0 3.1 3.4 3.6 7.0% 6.3%
Digital rights - - 4.9 6.2 8.1 30.0% 29.3%
In-cinema
5.3 6.7 7.8 9.5 11.4 20.0% 21.2%
advertising
Total 126.8 137.1 145.0 158.9 183.2 15.3% 9.6%
Source: KPMG in India analysis based on primary and secondary discussions
FY19 was a groundbreaking year at the Indian box needed impetus. Hollywood films have been thriving
office, which delivered its best box office performance in India and FY19’s release; ‘Avengers: Infinity War’
in the past decade as content took centre-stage with earned the highest gross collection at India’s box office2.
movies of diverse budgets succeeding at the box office1. Overseas markets continued to grow at a steady rate
Regional cinema continued its surge - southern cinema for Indian films. While other segments remained stable,
consolidated its position while other regional markets advent of OTT platforms has made business dynamics
continue to see traction due to increase in multiplex of content production more favourable for industry
penetration in Tier II and Tier III cities along with the players.
growing supply of regional content providing the much
1. KPMG in India analysis based on primary and secondary discussions, 2018-19 2. Bollywood floks – Highest Grossing Hollywood movies in India on 29 April 2019
Films 79
Key drivers for growth of film industry in Overseas collections of Indian films in FY19 grew slower
India at 16.1 per cent3 on the back of tepid performance of
the China market which was partially offset by greater
In FY19, domestic box office collections grew by 14.7 spread of overseas successes across multiple mid
per cent3 driven by ‘2.0’, ‘Sanju’, ‘Uri - The Surgical budget movies. The China potential is constrained by
Strike’ and ‘Simmba’ while in all thirteen movies crossed limitation on number of releases and long time gaps,
INR1 billion domestic Net Box Office Collection (NBOC), though this is expected to grow in contribution going
highest ever in any financial year4. Further, domestic forward. Recently, Saudi Arabia lifted its ban on cinema
NBOC of top 50 movies increased from INR24 billion in which opened up a new market for Indian films; ‘Gold’
the previous year to INR38 billion and eleven movies in and ‘Kaala’ released in that market.
the current year earned domestic NBOC of INR0.6 billion
to INR1 billion as against seven in the previous year4. In FY19, C&S rights showed an improvement and grew
Critically, regional films have been a vital component of by 11.8 per cent5 on the back of strong demand for
this growth in domestic NBOC. some of the larger projects (both in Hindi and regional
languages) coupled with box office successes of a
FY19 saw a lesser number of Hollywood movies number of mid budget movies.
releasing in India, though the box office performance of
Avengers: Infinity War coupled with success of ‘Captain A key ongoing change has been the growing
Marvel’, ‘Jurassic World: Fallen Kingdom’, ‘Deadpool 2’, contribution of digital rights, which has grown by 30
‘The Nun’ and ‘Mission: Impossible – Fallout’ more than per cent5 in FY19 in line with the previous year driven
made up for the lower number of releases by heavy demand by OTT platforms who consider new
movies as a key differentiator. Additionally, with a
growing emphasis on regional audiences, OTT platforms
are also investing in building regional libraries.
Net box office collection of top 50 India movies Number of INR1 billion movies
38 14 13
40
12
27 27 28
30 25 24 10 9 9
8 7 7 7
20
6
10 4
2
- -
FY14 FY15 FY16 FY17 FY18 FY19 FY14 FY15 FY16 FY17 FY18 FY19
Domestic Net Box Office Collection (in INR billion) Number of INR1 billion movies
Source: Box office collection, 2019 and Box office collection, 2018, www.bollywoodhungama. Source: Box office collection, 2019 and Box office collection, 2018, www.bollywoodhungama.
com, accessed on 22 July 2019 and KPMG in India analysis based on primary and secondary com, accessed on 22 July 2019 and KPMG in India analysis based on primary and secondary
discussions, 2018-19 discussions, 2018-19
3. KPMG in India analysis based on primary and secondary discussions, 2018-19 5. KPMG in India analysis based on primary and secondary discussions
4. Box office collection, 2019 and Box office collection, 2018, www.bollywoodhungama.com,
accessed on 22 July 2019 and KPMG in India analysis based on primary and secondary
discussions, 2018-19
80 Films
Key themes
Movies collecting more than 50 per cent of NBO Total year-wise footfall for Inox, PVR and
after first week in 2019 Cinepolis
Uri – The Surgical Strike 71% 191

160 163
AndhaDhun 63% 149
Tumbbad 57%
Badla 57%
Raazi 54%
Stree 54%
K.G.F – Chapter 1 52%
Badhaai Ho 52% Footfalls in millions
% NBOC after first week FY 16 FY 17 FY 18 FY 19

Source: Box office collection, 2019 and Box office collection, 2018, www.bollywoodhungama. Source: Indians bought record number of movie tickets last year, Business standard, accessed
com, accessed on 22 July 2019 and KPMG in India analysis, 2018-19 on 4 August 2019
ATP in 2019 and 2018 Average occupancy in 2019 and 2018
197 28%
Inox Inox
193 26%
207 36%
PVR PVR
210 31%
180 185 190 195 200 205 210 215 0% 10% 20% 30% 40%
2019 2018 2019 2018
Source: PVR investor update Q4 2018-19, 10 May 2019 and Inox Leisure Limited – Investor Source: PVR investor update Q4 2018-19, 10 May 2019 and Inox Leisure Limited – Investor
Presentation – May 2019 Presentation – May 2019
Industry at all times was content driven but the current Surgical Strike’ had the longest box office run of thirteen
year saw movies high on star cast/budgets under- weeks6.
perform, while movies like ‘Uri - The Surgical Strike’,
This is also reflected in an increase in an increase of
‘Andhadhun’ ‘Badhaai Ho’, ‘Stree’ ‘Raazi’ and ‘Badla’
17 per cent in footfall at 191 million at7 the top three
with small budgets but strong themes delivered robust
multiplex chains PVR, INOX and Cinepolis. Excluding
box office numbers. While some large movies such as
the performance of ‘Baahubali’ series, which was an
Thugs of Hindostan, Zero and Race 3 under performed,
exception in FY18 and FY17, footfalls were stagnant in
the number of movies earning more than 50 per cent of
recent years. In the current year, the occupancy of PVR
lifetime domestic NBOC post first week has increased
and INOX was 36 per cent8 and 28 per cent9 as against
substantially when compared to previous year6 as this
31 per cent and 26 per cent in the previous financial
year, seven movies earned majority of their domestic
year.
NBOC in the extended box office run and ‘Uri - The
6. Box office collection, 2019 and Box office collection, 2018, www.bollywoodhungama.com, 8. PVR investor update Q4 2018-19, 10 May 2019
accessed on 22 July 2019 and KPMG in India analysis based on primary and secondary 9. Inox Leisure Limited – Investor Presentation – May 2019
7. Indians bought record number of movie tickets last year, Business standard, accessed on
4 August 2019
Films 81
Regional box office continues its stride
Language-wise number of films produced in India
10% 9%
25%
12%
35%
14%
3%
7%
20%
Hindi Kannada Telugu Tamil Malayalam Marathi Gujarati Other regional languages
Source: Certified Films 18-19, www.producersguildindia.com accessed on 22 July 2019 by
KPMG and KPMG in India analysis based on primary and secondary discussions, 2018-19
The audience’s propensity to consume content in local In 2018-19, the regional cinema continued to grow;
language has been increasing and in recent times South market produced 45 per cent of the total content
regional films are breaking language barriers as they and contributed 42 per cent of domestic theatrical
cross over with dubbed versions to other markets collection, followed by Hindi movies at 39 per cent.
especially Hindi market. India’s highest grosser at Other regional markets produced 35 per cent of the
the box office is ‘Bahubhali – The Conclusion’ which content; however, their contribution was only 7 per cent
originally was a Telugu film but the movie crossed over of domestic theatrical collection10. 2018-19 was a great
to all India markets to earn INR10 billion at domestic year for Tamil cinema, ‘2.0’ considered as India’s most
NBOC for all languages. expensive movie released which collected INR6.16
billion worldwide11, and other four movies ‘Petta’
Marketwise per cent share in domestic ‘Viswasaw’, Sarkar and ‘Kaala’ had gross collection of
collection-2019 more than INR1.5 billion worldwide12. Similarly, after
previous years ‘Bahubali: The Conclusion’, Telugu
Hollywood movies like ‘Rangasthalam’, ‘Bharat Ane Nenu’ ‘Aravinda
movies Sametha’,’ F2’ and ‘Geetha Govindam’ put up a strong
12% box office performance. Malayalam cinema witnessed
muted growth this year. The surprise came from
Other regional
Kannada cinema, as ‘K.G.F’ collected INR2.19 billion at
movies
Hindi movies the India box office13.
7%
39%
The gamut of regional cinema has widened beyond
South Indian languages to other language markets like
Marathi, Gujarati, Punjabi and Bengali. This year Marathi
films like ‘Naal’ and ‘Ani... Dr Kashinath Ghanekar’
posted decent performances at the box office. The
Punjabi film industry has boomed in the past couple of
South movies years and delivered a stable performance at box office.
42% The year saw Gujarati films like ‘Chaal Jeevi Laiye’,
‘Shu Thayu’ and ‘Sharato Lagu’ earning total collection
Business standard - The race for Hindi blockbusters digital rights, HYPERLINK “http://rediff. of INR0.34 billion, INR0.21 billion and INR0.175 billion,
com” rediff.com, accessed on 23 July 2019 by KPMG
respectively14. ‘Chaal Jeevi Laiye’ has emerged as the
Source: KPMG in India analysis based on primary and secondary discussions, 2018-19
highest ever grossing Gujarati film14.
10. KPMG in India analysis based on primary and secondary discussions, 2018-19 13. Yash reveals he has approached sanjay dutt for kgf chapter, Indiatoday accessed on 23
11. 2.0 box office collection here closing business rajinikanths movie, IBtimes accessed on July 2019 by KPMG
22 July 2019 and KPMG in India analysis 2018-19 14. Gujarati Movies box office collections, youdem.tv.com, accessed on 23 July 2019
12. Tamil box office collections - mtwikiblog.com, accessed on 23 July 2019 by KPMG
82 Films
Digital rights on the rise Technology - the future growth engine

The economics of film production has undergone an The Indian film industry has come a long way and is
overhaul as digital rights have tilted the dynamics of film fully digitalised today, thus last mile connectivity has
making in favour of production studios. The number improved providing deeper and speedy penetration at
of OTT platforms has grown from nine in 2012 to over a cheaper price. Industry believes that the next wave
thirty in 2019 driven by affordable data. OTTs are of growth will also be technology driven. For example,
investing heavily in acquiring film libraries, for example ‘2.0’ was fully shot with a 3D camera and was recorded
Amazon Prime acquired twelve films out of the highest in 4D audio to overall augment the audience experience.
thirty grossing Hindi films this year, followed by Netflix Recently, Samsung’s LED cinema was introduced by
acquiring nine15,16. PVR and INOX, enabling high-dynamic-range display,
high-quality pictures, 3D and sound which can be used
It was widely believed that with rise of OTT
to view sports, games and concerts. Multiplex chains
platforms, the box office collections of films would be
like PVR and INOX offer different kinds of viewing
impacted. However, industry players believe they are
experience such as IMAX, 4DX and ONYX. Another
complimentary to box office and provide an additional
technological change that the Indian film industry is
stream to monetise for production studios as there is a
keenly awaiting is use of blockchain to distribute movies
gap of six to eight weeks between the theatrical release
which is already being utilised in Hollywood, with a view
and digital release of films and in today’s times, there
to deter piracy.
are only handful of movies which have extended box
office runs. Thus, television and OTT platforms may also Government push to the industry
co-exist, until internet penetration grows which may lead The government effective January 2019, to incentivise
to value of C&S and OTT rights stabilising. cinema viewing, reduced GST rate on cinema tickets
costing below and above INR100 to 12 per cent and 18
Number of rights acquired in 2018-19 from percent from existing 18 per cent and 28 per cent earlier,
30 highest grossing films of the year respectively16. Cinema owners are looking to pass on
12 the GST benefit to end consumers which will reduce the
ticket prices and surge the footfall in future.
9
8 In the interim budget speech of 2019, the entertainment
industry managed to get a rare mention wherein
the Central Government announced single window
3 clearance mechanism for permissions required for
2 shooting films, which was so far only being accorded to
foreign film makers. This might encourage Indian film
makers to shoot in India instead of opting for foreign
Netflix Amazon Zee5 Hotstar Others locales.
Prime
Number of rights acquired in 2018-19 While the film industry has grown manifold in India, it
is still riddled with the plague of piracy, especially in
Source: KPMG in India analysis based on primary and secondary discussions, 2018-19 this digital age to combat the same, the Cinematograph
(Amendment) Bill, 2019 (Bill) was introduced in the Rajya
Number of rights acquired in 2017-18 from Sabha on 12 February 2019 to amend the Cinematograph
30 highest grossing films of the year Act, 1952 (Act) which proposes three year imprisonment
13 and/or penalty of INR1 million; this law is expected to be
passed in the future.
9 Screen penetration remains low
Currently in India there are approximately 9,600
6 6
screens of which 2,950 are multiplex screens17 and
the multiplexes earn more than half of Indian theatrical
1 revenues18. India’s current cinema screen penetration is
the lowest in the world after China, the U.S. and the U.K.
at six screen per million of population. China is usually
Netflix Amazon Zee5 Hotstar Others
Prime quoted as an example for exponential increase in screen
count from 9,000 screens in 2011 to 60,000 screens in
Number of rights acquired in 2017-2018
2018.
Source: Business standard - The race for Hindi blockbusters digital rights, rediff.com,
accessed on 23 July 2019 by KPMG
15. KPMG in India analysis based on primary and secondary discussions, 2018-19 17. INOX Investor Presentation 2019 and KPMG in India analysis based on primary and
16. Business Today - Reduction of GST in ticket prices to make the cinema viewing much secondary discussions, 2018-19
more affordable, 23 December 2018 18. KPMG in India analysis, 2018-19 KPMG in India analysis based on primary and secondary
Films 83
Estimated number of screens in India However, the India market is a tad different. Around
195 multiplex screens were added in FY19 which is at
6,765 6,641 similar levels to previous periods. Infrastructure growth
in India is comparatively slower and there is difference
in per capita income between the two countries. The
average occupancy in India is less than 40 per cent
2,760 2,955 currently thus available capacity is also not fully utilised.
Also, average ATP in India is very low compared to the
U.S. and China due to, among other things, larger share
of single screens with low ticket prices and regulated
ticket prices in few regional markets. Another deterrent
in increasing the screen count is the complex regulatory
2017-18 2018-19
framework.
Multiplexes screens Single screens
Source: INOX Investor Presentation 2019 and KPMG in India analysis based on primary and
secondary discussions, 2018-19
The script ahead

Segments FY19 FY20P FY21P FY22P FY23P FY24P CAGR (FY19-24)
Theatrical revenue
India 124.9 132.8 142.0 147.9 153.6 162.0 5.3%
Overseas 17.2 19.0 21.2 23.2 25.5 28.0 10.2%
Other streams
Cable and satellite rights 18.0 18.9 19.9 20.6 21.2 22.1 4.3%
Music rights 3.6 3.9 4.2 4.5 4.8 5.1 7.0%
Digital rights 8.1 10.5 13.1 16.4 19.6 23.6 23.9%
In-cinema advertising 11.4 12.8 14.0 15.5 17.0 18.7 10.4%
Total 183.2 197.9 214.3 228.1 241.7 259.5 7.2%
Source: KPMG in India analysis based on primary and secondary discussions, 2018-19
The film industry in India is expected to growth at a ‘Super30’, multi-lingual ‘Saaho’ being lined-up in the first
CAGR of 7.3 per cent19 driven by theatrical revenue half of the year. Further, multiplex chains are looking for
from India and overseas, digital rights and in-cinema organic expansion into new markets across India. The
advertising. C&S rights and music rights are expected regional industry also has strong releases in the next
to grow at a muted rate. year and the market is only expected to expand further.
Also, with China and Saudi Arabia markets opening
Indian box office performance was remarkable this
up, overseas collection of Indian films may continue to
year and to sustain similar success in the future the
conquer box offices across the globe.
studios need to produce quality content to keep pace
with changing audience preferences for more innovative Digital rights pricing is likely to continue to see an
thinking in terms of content and contemporary issues, upswing as OTT platforms further penetrate the India
expenditure and execution. The industry believes FY20 audience and scale up their film library. Pricing of C&S
will repeat the success of this year with big releases rights is expected to undergo adjustment due to impact
such as ‘Avengers Endgame’, ‘Bharat’, ‘Kabir Singh’, of OTT platforms.
19. KPMG in India analysis based on primary and secondary discussions, 2018-19
84 Films
Case study - Technology, taking ‘amplification’ to a new level!

“Ever since cinema theaters came into existence action and special EFX generators in the cinema,
more than a century ago, their underlying objective allowing one to ’feel’ the movie’s motion, jolts, pokes,
has been to offer an experience, which is larger-than- wind, water and even scents. The in-seat features
life, bigger, better, and above all, amplified. The fact like neck-tickler, back poker, air blast, water blast,
that the business of cinema exhibition is still peaking seat popper, rumbler, leg-tickler, etc. along with
and gaining strength, proves that an ‘amplified’ the theatre’s atmospheric interventions like snow,
experience has remained the decisive pull in bringing fog, rain, bubbles, strobe and scent will leave the
people to cinemas, and still remains a key objective audience enthralled. Who would have thought in the
for the operators. Indian cinema industry, that a usually nondescript seat
armrest, would play host to theatre effects, and get
The effort to ‘amplify’ has been on, forever. Thus,
patented for that.
screens got bigger, projections became sharper, and
sounds got sweeter, crisper and clearer. Thanks to The 270 degree multi-projection technology, ScreenX,
the creators of various technologies, the journey has offers a panoramic 270-degree movie watching
seen a lot of constructive ‘amplification’ over the experience to the audience. It allows the audience
decades. to go beyond theme of the traditional movie screen,
utilising a proprietary system to expand select scenes
With consumers’ awareness levels peaking,
of feature films to the left and right walls on each
aspirations with regards to entertainment at an all-
side.
time high and technology taking the centre-stage,
the challenge just got more interesting. While the We also introduced Samsung’s ONYX LED screen
seasoned tech-warhorses continue to innovate, there offering more powerful, captivating and larger than life
are new players in the fray as well, who are adding to content. Through HDR refinement, guests get a more
this ‘amplification’ journey. detailed, textured and visually rich content because
it is 10 times brighter than a conventional projector
While the experience with the sound, projection and
and the infinite contrast ratio. Samsung ONYX is
screens kept getting better, interestingly enough,
unaffected by ambient light, it upholds consistent and
cinemas got the silent parts of the theater talking as
distortion-free picture quality that keeps audiences
well – the seats and the side walls.
engaged and keeps it close to realism.
The launch of India’s first MX4D® EFX Theatre at
Technology is opening up new opportunities in the
our multiplex Inorbit Mall, Malad, Mumbai, ushered
cinema exhibition space and we keenly await every
a new level of cinema 4D technology, providing a
new intervention. There cannot be a more opportune
totally enveloping environment, where the viewers
moment than now, to thank the creators of the
can ’feel’ the action on the screen from the built-in
immersive technologies, but also demand more from
motion and effects in the seats and theatre walls.
them, in a pursuit of ‘amplifying’ the experience of
The theatre seats move in sync with the movie
patrons.”
Alok Tandon
CEO
INOX
The views and opinions expressed herein are those of the quoted
person/s and do not necessarily represent the views and opinions of
KPMG in India.
Films 85
2019 was a fascinating year where the Indian box Indian Film exhibition industry driven by multiplexes
office saw double digit growth with content being has been expanding its footprint across India
the star that beckoned audiences to theatres. to markets where the box office continues to
Collections of Hollywood and regional films also be dominated by local language films. The film
achieved a new high as Indian movies continued exhibitors are coexisting within the industry
to transcend boundaries leading to growth of with other distribution platforms such as OTT,
international box office collection, especially from Broadcasting etc, 2018-19 was one of the best year
the China market. Digital distribution of films in last decade. This exhibits that film content is
over OTT platforms has also opened up additional improving and also there is an innate, social need
monetisation avenue for production studios. for people to go out and entertain themselves.
Kamal Gianchandani
Ajit Andhare Chief of Business Planning
COO & Strategy,
Viacom18 Studios PVR Limited and CEO,
PVR Pictures
Smaller films, high on concept, have been doing India has only recently begun to understand
well at the box office. Audiences want to see the need for film and media education, as the
strong, gripping and entertaining stories on the demand for content increases the industry is in
big screen. With content taking centre-stage, dire need of training and upskilling. The industry
the demand for content producers and writers needs specialised artists and technicians who are
has seen growth by manifold in the industry well versed in fundamentals of content creation.
as audiences’ hunger for diverse content Institutes like WWI play a vital role in this
consumption continues to grow across screens- ecosystem – by training and educating their
theatrical to digital platforms. graduates in the latest techniques and accreditations
to a global standard, and preparing them for future
success of the nation’s entertainment industry.
Shariq Patel
CEO Rahul Puri
Zee Studios Head of Academics
Whistling Woods
International
Today, the audience is more acceptable towards stories beyond typical masala films and
the recent box office performance has given much needed respite to film industry which
was grappling with threat from piracy and increased production cost.
Kulmeet Makkar
Chief Executive Officer
Producers Guild of India
86 Films
The supply side of the industry must be looked at The Indian film ecosystem has been fast-
to create market efficiencies, as there is too much evolving on the back of increased online
focus on the demand side, which is being led by the penetration and growth in the number of
integration of technology, media and telecom. The cinema screens which is also reflective in
industry must focus on how it can build capacity customers’ growing preference for movies.
to create sustainable careers for Talent across The online purchase of movie tickets and other
various skill levels and categories and at the same out-of-home entertainment has proportionally
time invest in developing screenplays that push increased, aided by improved and affordable
the envelope on a global level. The setting up of data connectivity with the payment ecosystem
a single window mechanism for easing filming simultaneously developing beyond credit
in India and the recognition of the audio-visual and debit cards to include UPI and wallets as
sector by the Economic Survey 2019 as one among modes of payment for transactions. Over the
the 12 Champion Service sectors for focused years, both content as well as the process
development, will help create supply side scale. of consuming such varied content have
transformed considerably. This means that
both, the in-cinema experience as well as
the booking experience carry equal weight in
Vikramjit Roy building a wholesome entertainment journey for
Head – Film Facilitation Office the consumer. The cinema viewing experience
National Film Development in the country has improved greatly leading
Corporation to more footfalls for cinemas and deeper
penetration across markets beyond metros.
Infact regional content as a whole has been
improving greatly and is a significant contributor
to the film industry nationally. The trend for such
films and the rising user demand to watch such
Indian cinema industry has been going through the content, reflects the ever-evolving consumption
best of its times. As we define 2018, it has seen patterns of audiences across regions and
the emergence of content based movies which has languages when it comes to cinema.
revolutionized the segment with many box office
hits in 2018-2019. As satellite connectivity linked
with digitization enabled this change in the sector,
the industry saw a dramatic development and
progress in the way people perceive and embrace Mitesh Shah
cinema as a premium mode of entertainment. A Head - Finance
by-product of this phenomenal growth in box office Bookmyshow
collections is an equally phenomenal growth in
in-cinema advertising. Box office successes have
reinforced advertiser’s confidence in the medium
and given them opportunity to leverage in-cinema
advertising more often. They are now keen to
advertise through the year as opposed to title-
based advertising earlier. Indian cinema advertising
industry is one of the fastest growing mediums in
the country today with market size of over Rs. 1000
crore, currently growing at a rate of around 20 %
annually, which is the highest in the sector.
Kapil Agarwal
Joint Managing Director
UFO Moviez
Films 87
88
Animation, VFX and

post production
Turning imagination into reality
89
90 Animation, VFX and post production
Animation, VFX and

post production
Turning imagination into reality
The animation industry continues to grow on the back of Animation continues its double digit
content demand from television (TV), digital platforms, growth in India
commercials and films. While over many years, the
The Indian animation industry registered a growth of
work-for-hire model primarily drove studio margins, the
12.9 per cent in FY19, with revenues amounting to
long-tail advantages of having own registered characters,
INR19.3 billion. While animation services continue to
brands and content have driven players towards
dominate the revenue pie, the animation IP production
investing in local IPs. Indian broadcasters and studios
is fast catching up, growing at a CAGR of 12.3 per cent
have been working towards delivering TV content that is
(twice that of animation services) during FY14-FY19.
rich, entertaining and customised to local tastes. In the
recent past, the film animation space in India is starting
to see a few film titles either hitting the big screen or
getting a launch pad in the form of digital platforms.
Animation industry’s performance Amount in INR billion
Growth in FY19 CAGR

Segment FY15 FY16 FY17 FY18 FY19
over FY18 (FY15-19)
Animation services 8.2 8.5 9.1 9.8 10.7 8.9% 6.0%
IP production 5.2 5.7 6.3 7.2 8.6 18.4% 12.3%
Total 13.4 14.2 15.4 17.1 19.3 12.9% 8.5%
Source: KPMG in India’s analysis based on primary and secondary research
Key growth drivers growing slower compared to IP production, the services

segment continued to account for the majority of
International projects continue to drive demand for revenues in the animation industry, accounting for a
animation studios’ services share of 55.6 per cent in FY19.
The animation services emerging from India have
continued to gain traction among international Episodic continue to account for a lion’s share:
production houses, particularly due to cost efficiency Services work for 11 or 22 minutes episodic content
and improving quality. While cost in India is 1/3rd to for TV and OTT platforms accounted for 58 per cent in
1/4th of North America and 25 per cent lower than FY19, followed by revenues from film and advertising.
countries such as Korea and Philippines, the quality of The Indian animation studios have worked with major
Indian animation services has improved immensely. international producers such as Sony, Disney, BBC,
Other benefits such as cultural synergies (huge English- 20th Century Fox, Warner Bros., DreamWorks, Viacom,
speaking base in India), studio infrastructure and a Turner, among others.1 The work for episodic content
robust M&E industry have seen foreign producers is now no longer just coming from the TV production
flocking toward Indian animation services. Albeit houses. However, Indian studios have gained some
traction with the OTT players too.
1. Demand For Homegrown Animation Content Growing, Broadcast and Cable Sat, 3 April 2019
Animation, VFX and post production 91
Animation services for international films witnessing The OTT allure continues to drive content
a healthy increase: Though only a handful of studios, production:
with Assemblage Entertainment at the forefront, are OTT platforms have given producers an avenue to
involved in animation work for films, the segment is still experiment with new ideas, stories and characters,
the second biggest revenue generator. while also giving them a range of audience that is
Animation in advertisements —both traditional and not restricted to TV screens. The animation studios,
digital— finding its footing: Though ads contribute including Green Gold, Cosmos Maya and Toonz
about 16 per cent to the total animation services Animation have been appointed or are in discussions to
revenue, the share of animated content in Indian ads is produce new shows.
still miniscule. Considering India is home to more than Broadcasting continues to be the backbone of Indian
900 TV channels, the potential is enormous. The BARC’s animation:
proposed plan to bifurcate kids’ viewership data further
Broadcasters continue focusing even more on
into two age groups — 2 to 8 years, 9 to 14 years, would
commissioning original animated shows and building
be a welcome move as this would give advertisers a fair
their own library rather than simply licensing content.
idea about pre-school viewership and their preference
The number of kids’ channels now stands at 24, paving
for animated content.
the way for a much higher demand for local content.
Animation no longer restricted to just entertainment Though the share of digital has surpassed in the overall
industry: A number of start-ups has mushroomed IP production revenue pie, the importance of TV content
in cities such as Chandigarh, Ahmedabad, Gurugram cannot be ignored as catch-up TV too contributes to
owing to rising demand of animated content from non- the digital revenue stream. While viewership on OTT
entertainment sectors – education, healthcare, real- is growing and a host of English TV genres have been
estate, industrial trainings, etc. The ‘Others’ category affected greatly in terms of audiences, the kids’ genre,
share that currently stands at one per cent is expected on the other hand, continues to rely on TV for growth.2
to grow stupendously over the next five years and
Growing proclivity for original IPs driving the L&M
capture a significant share in the pie.
segment:
The licensing and merchandising (L&M) segment
Break-up of India’s animation services —
accounted for a share of 17 per cent in the animation
by segments in FY19
production pie in FY19. There has been a growing
demand amongst studios for agencies that provide
Episodic content holistic licensing and branding solutions concerning
(TV+OTT); 58% domestic expansion, increasing IP awareness, symbiotic
business deals etc.3
Films; 25% Animated films continued to get a cold shoulder
Traditional from production houses:
advertising; 12% While attempts are being made to attract audiences to
theatres to watch local animated features, their share in
Digital IP production continued to be non-existent even in FY19.
advertising; 4%
Others; 1% Break-up of India’s animation production —

by segments in FY19
Source: KPMG in India’s analysis and estimates, 2019-20
Note: Others includes animation work pertaining to segments such as Augmented Reality
(AR)/Virtual Reality (VR), gaming, simulation, education, medical, industrial, etc.
Digital; 53.5%
The original animation IP rush continues
Television; 29.8%
Push towards local originals is allowing Indian studios
to create IPs with strong monetisation potential. The Licensing &
animation IP production segment was estimated at Merchandising;
INR8.6 billion in FY19, growing at 18.4 per cent from 16.5%
INR7.2 billion in FY18.
Films; 0.2%
2. OTT has been favourable for animated content, Indian Television, 1 March 2019 Source: KPMG in India’s analysis and estimates, 2018-19
3. Spark Magazine, Animation Express, December 2018
Kids’ viewership insights
Total TV Kids channels

Despite growing popularity of OTT
apps, TV viewership is growing in
India and so is Kids viewership 03:19:18 03:28:41 03:34:35 00:59:52 01:09:46 01:14:10
2016 2017 2018 2016 2017 2018
Content mix on Kids channels is skewed more ..which in part could be

towards boys… due to few female protagonists
61 per cent boys and There are a number of male characters such as
39 per cent girls watch
animated content on TV
61% 39% Chhota Bheem, Motu Patlu, Rudra, Kisna, Little
Singham, etc.
However, Indian TV lacks a female protagonist in
animated shows
Higher urban viewership for kids channels… ..however the gap shall reduce with inclusion of audio
feeds for kids content
Urban viewership is Kids channel viewership in 2-14

61 per cent while rural
is 39 per cent for kids
61% 39% years age group 71% Hindi
Urban kids are more comfortable

channels.
in English, and their parents also 21% English
intend to prefer English as a viewing

language for them (while regional
languages garner higher eyeballs
8% Regional
in rural)
Share of domestic kids content in TV
Recognizing the potential 2016 2018

of home-grown content,
broadcasters are changing the 33% 39%
content mix on kids’ channels…
Domestic International
… channels with mix kids content showcase higher viewership compared to channels predominantly
airing international content
• Nick recorded a viewership of 58% from Indian Healthy viewership among 2-8 year olds forchannels
content, followed by 56%, 54% and 52% by Pogo, airing international content; with 45% viewers
Discovery Kids, and Sony YAY! Channels respectively watching Disney channel, and 40% and 43%
watching Disney XD and Hungama respectively
• Cartoon Network, which airs a mix of international
and domestic content, garnered 49% viewership
from the 2-8 years age group, and 51% from kids
aged 9-14 years
Source: ‘000 impressions, Week 1-32, BARC, 2018
Key trends in the Indian animation space Creators find newer ways to increase engagement8
Broadcasters betting their monies on home-grown In order to gain more traction for their IPs, broadcasters
shows and regional content have embraced several avenues to reach out to a
Indian animation studios are investing in originals with multitude of kids and animation fans, including:
the budgets for such shows doubling in the last decade, On-ground events: In September 2018, Sony YAY
and content portfolio shifting in favour of home-grown celebrated Teacher’s Day by bringing the second season
shows.4 There is a growth in appetite among the of its flagship initiative, Heroes behind the Heroes. The
broadcasters, with a number of them commissioning initiative acknowledged renowned personalities across
newer shows and that too with a much larger library. many fields such as tennis, choreography, film direction/
Earlier while 13 or 26 episodes were commissioned production/screenwriting, music. The event was
during the launch of new IPs, now broadcasters promoted by the company’s IP - KickO.9
are straight away giving green light to 100 to 200
episodes for the new IPs. For instance, Viacom18 has Contact programmes: In February 2019, Nickelodeon
commissioned 200 episodes for yet-to-be launched launched its immersive school contact programme
‘Golmaal Jr’. The producers have also been betting their that will reach out to 250 schools across several cities,
monies on regional content. Major broadcasters are including Mumbai, Delhi, Bengaluru, Hyderabad,Pune,
airing kids’ content in several languages. For instance, Kolkata, etc. Backed by the company’s characters, Rudra
Viacom18 is focusing on increasing its original content and Shiva, the programme will focus on a series of fun
across the three channels to 205 hours in FY20 from and interactive games and activities in classrooms.10
105 hours in FY19. Nick Jr. has announced its plan to Gamifying IPs: Discovery Kids’ has been able to
add four new language feeds to its existing audio feeds increase its reach over the last few months, partially led
in four languages — Hindi, Tamil, Telugu and Kannada.5 by the Little Singham game, which has garnered more
Similarly in April 2018, Discovery Kids introduced its than five million downloads.11
new show Little Singham, which instantly gained
The animation films space emerging from obscurity
success. In FY20, the broadcaster is planning to double
series content library from the existing pipeline of 156 Indian animation studios are gradually foraying into the
episodes. In order to expand its reach in Tamil Nadu, animated feature film space. Compared to only one film
Andhra Pradesh and Telangana, Discovery Kids launched release in FY18, four Indian animated features were
Tamil and Telugu audio feeds in FY19.6 released in FY19 and according to our discussion with
industry expert, 12 feature productions are already lined
Live action producers joining the animation up for theatrical release in FY20. In order to attract
bandwagon7 audience to theatres, studios such as Green Gold,
TV production houses, engaged in producing live action Cosmos Maya, Toonz Animation, Bhasinsoft, Vaibhav
TV series, are testing the waters with animation content. Studio, Golden Robot, Reliance Animation, etc. are
Such studios are leveraging their in-house writing and experimenting with relatable characters, appealing
creative talent (and in doing so, keeping them creatively narratives and fresh music. For instance, Green Gold
refreshed), infrastructure and cash flows from live action Animation’s Hanuman Vs Mahiravana took a page out of
shows to try out new concepts and eventually turn them the global studios’ book. The film was made across five
into pilots. countries and involved several studios and artists from
• In January 2019, Sphereorigins, a Mumbai-based the U.S., Japan, Australia, Mexico and India. Growth in
production firm with around 6,500 hours of content digital platforms and broadcasters experimenting with
produced for leading broadcasters acquired an longer duration animated content (75 to 90 minutes)
animation studio, Hopmotion have also created more room to try out novel concepts
and methods of story-telling.11
• Contiloe Pictures, having produced thrillers, historical
and mythological fiction, which require extensive VFX, Novel tools and technologies to spawn changes in
has set up an animation facility in Odisha, to add to its the animation landscape
current facility which is in Mumbai. The studio plans In light of rising cost of the licences, a number of players
to increase the hours of animation output for both are choosing open source software that gives artists the
broadcast and OTT platforms requisite freedom to create a wide variety of artwork
• Swastik Productions is remaking its previously and simplifies the process of animation.12
produced live action historical and mythological shows
as animated series.
4. Demand for homegrown animation content growing; India no longer just an outsourcing 9. Sony YAY! Launches Season 2 Of ‘Heroes Behind The Heroes’, Mumbai Live, 5 September
hub, Money Control, 2 April 2019 2018
5. Viacom18 goes bullish on its three kids channels - Nick, Nick Jr and Sonic, Brand Equity, 10. Nickelodeon launches an immersive school contact programme, Indian Television, 11
May 2019 February 2019
6. Discovery Kids launches Tamil, Telugu language feeds, Exchange4Media, March 2018 11. Indian indie animators are bullish about 2019’s prospects for the industry, Animation
7. Spark Magazine, Animation Express, April 2019 Express, 31 December 2018
8. Spark Magazine, Animation Express, October 2018 12. Open source softwares and the Indian AVGC industry, Animation Express, 27 July 2018
Animation industry outlook

Real-time rendering is fast replacing the traditional The animation industry revenue is expected to surpass
rendering techniques used for visualisation with a render INR36 billion by FY24, growing at a CAGR of 13.8 per
engine that is capable of rendering on the fly, in real cent during FY19-24. While animation services are pro-
time.13 Players such as Disney have already incorporated jected to account for the majority share of animation pie,
the technology into its pipeline of animated features, TV the coming years are likely to witness increasing activity
shows and short films.14 in the original IP production space.
Animation industry’s potential

Segment FY19 FY20P FY21P FY22P FY23P FY24P CAGR (FY19-24)
Animation services 10.7 11.8 13.1 14.9 17.0 19.3 12.5%
IP Production 8.6 10.0 11.6 13.3 15.3 17.5 15.3%
Total 19.3 21.7 24.7 28.2 32.2 36.7 13.8%
Break-up of India’s animation — by segments (FY24P)
Animation services IP production
Episodic content Digital; 58%

(TV+OTT); 46%
Television; 28%
Films; 16%
Films; 1%
Traditional
advertising; 15% Licensing &
merchandising;
Digital 13%
advertising; 8%
Others; 15%
Source: KPMG in India’s analysis and estimates, 2019-20 Source: KPMG in India’s analysis and estimates, 2019-20
Animation services: Globally, the content consumption that currently account for less than 1 per cent in the
on digital platforms has gained significant pace, with revenue pie are likely to gather about 15 per cent share
a number of players joining the OTT bandwagon. The by FY24.
intense competition in the market has compelled players
IP production: In addition to Hindi and English kids’
to broaden their content portfolio and invest in original
content, regional animated shows are expected to drive
and exclusive IPs across genres, including kids. While
content demand, on both TV and OTT platforms. The
Disney’s streaming service is all set to launch towards
launch of new kids’ channels such as Star Movies Kids
the end of 2019, Netflix reported that 60 per cent of 139
and continued investments by OTT video players would
million Netflix’s audience worldwide watches kids and
also add to the slate of new IPs. The share of digital
family content on its platform every month.15 According
revenue is expected to further go up from 53 per cent
to Ofcom, pre-schoolers spend more than eight hours
over the next five years, given the strong demand for
per week watching online services. The growing
original IPs from OTT players such as Netflix, Amazon
demand for kids’ animated content globally is expected
Prime, Hotstar, Voot Kids and rising revenues for kids
to propel demand for Indian studios services over the
channels (for the likes of ChuChu TV, WowKidz, etc.) on
next five years. Further, the non-entertainment sectors
YouTube.16
13. Trends in Real-Time Rendering, Arch Daily, 15 October 2018 15. Netflix’s Quest for World Domination Includes a Diversity in Animation, NDTV, April 2019
14. Disney Television Animation Is Exploring Real-Time Rendering With ‘Baymax Dreams’, 16. KPMG in India’s analysis and estimates, 2019-20
Cartoon Brew, 15 August 2018
VFX industry in India

The Indian VFX industry has matured from a largely Globally, VFX in digital video has also seen significant
outsourcing destination to one with growing domestic traction with significant increase in episodic production
demand. Domestically produced films from the budgets which in turn has allowed content developers
Baahubali and the Robot franchises have demonstrated to invest in VFX. Although in early stages, India is also
audience interest in quality visual effects content and seeing similar trends with the major OTT players having
has opened the door for more effects-heavy productions announced a gamut of original productions, the scope
across Hindi and regional films, in turn bolstering work and the volume of work for Indian VFX players are likely
pipelines of domestic studios. to grow.
VFX and post-production witnessing an unprecedented growth in India

VFX and post-production industry’s performance
Growth in FY19 CAGR
Segment FY14 FY15 FY16 FY17 FY18 FY19
over FY18 (FY14-19)
Total VFX and post-
28.2 33.1 39.0 46.9 56.8 68.4 20.4% 19.4%
production
India’s VFX and post-production industry was pegged at took around five months to complete.18 The makers from
INR68.4 billion in FY19 having grown at a CAGR of 19.4 the Southern film industry are also exploring and experi-
per cent over FY14-19. menting further with genres such as superhero, science
fiction and survival thriller.
Key growth drivers
Stereoscopic 3D conversion bolstering the demand
India continued to be amongst the preferred out- for post-production in India: On the back of factors
sourcing countries for VFX: such as people skills, pipeline management, strong
While cost continues to be a pivotal factor for foreign relationships with major production studios and their
studios in narrowing down India as an outsource desti- position on the experience curve, Indian studios have
nation, the quality of the talent has also been improving, continued to attract post-production jobs, both domestic
moving gradually towards global standards. India is no and international, such as stereo conversion (2D to 3D),
longer viewed as a cheap option to offshore tasks such video editing, colour grading and corrections, sound re-
as rotoscoping and matchmoving, and domestic stu- cording and editing, and dubbing, amongst others. With
dios have been attracting more complex VFX jobs from the growing popularity of 3D content in Hollywood, India
Hollywood. has witnessed an upsurge in 2D to 3D conversion work
VFX work taken long strides in domestic projects: in the recent years for both new and old films.
The improving quality of talent has also reflected in the Growing workforce supply: On the back of huge
increasing use of VFX in domestic films, though the Indi- demand from the West, the industry witnessed a much
an film industry has a lot of ground to cover in terms of needed shift in workforce mindset. As against five
matching international VFX budgets and standards. The years back, the workforce now recognised the potential
year 2018 saw Indian film studios offering a larger slate of VFX and post-production industry in India and thus,
of experiential viewing for the viewers. Movies such as the industry saw a growing ingress of talent. While the
2.0, Zero and Thugs of Hindostan saw extensive use of demand for VFX work has been growing in the past few
visual effects. While an estimated INR700 million were years from both international and domestic projects, the
spent on VFX in Zero, which featured around 5,000 VFX increasing workforce enabled firms to operate at a much
shots, 2.0 on-boarded 10 different VFX studios to work higher capacity.19
on the special effects, and more than 3,000 technicians
from around the world contributed to the film.17 Further,
Tamil cinema provided India’s first space film, Tik Tik Tik.
The film saw 85 minutes of graphics and VFX, which
17. With more money and new focus on special effects, 2018 was an eventful year for Indian 19. Industry discussions conducted by KPMG in India, 2019-20
VFX industry, Money Control, 11 January 2019
18. Tik Tik Tik: Breaking down the visual effects in India’s first space film, Indian Express, 22
June 2018
Key trends in the Indian VFX and post- Start-ups in the South emerging as VFX game
production space changers
The VFX start-up space in the South has seen growing
Special effects on TV catching up with films
traction with production houses from the regional
As TV content budgets have been increasing, TV film industry teaming up with home-grown tech start-
content is seeing greater investments into VFX ups specialising in novel technologies. A number of
globally. The quality difference in VFX between major start-ups have come up in cities such as Hyderabad,
blockbusters and TV shows is diminishing, with major driven by favourable policies for ease of doing business
VFX houses working on both in equal measure. Special and an ecosystem that encourages mentorship and
effects for TV are being developed using the same tools development.
and processes used for tent pole films.
Film producers and private investors have also been
While the VFX budgets for Indian TV shows are growth catalysts. For instance, in 2018, Anthill Ventures,
not commensurate with their global counterparts, an investment and scaling platform dedicated to early
domestic producers’ penchant for effects-driven growth stage start-ups, along with Suresh Productions,
shows is growing. Mythological, fantasy and historical a film production and distribution player, launched Anthill
TV shows are seeing productions featuring the use Studio to focus on co-innovating solutions in technology
of grand backdrops, sets, landscapes and creatures areas such as AR/VR, Artificial Intelligence (AI), VFX,
made possible by the use of VFX. For instance, Swastik real-time cloud rendering, and Big Data.23
Productions, having produced 25 shows across different
genres, recently expanded their studios with a facility Kannada film space is also seeing an increase in the
dedicated solely for VFX.20 Despite increasing demand, number of local start-ups that are taking VFX to a higher
challenges persist. Since the mythology and fantasy level. Bengaluru based start-ups such as Om Studio,
genres demand a great degree of effects, workflows Thought Cloud Studios, MRT Studios and Videogyan
come with tight deadlines and low production budgets have been primarily creating content for Kannada films.
from producers, which hamper the quality of shows. Further, as the Kannada film industry increasingly
transitions into more realistic story-telling via movies
OTT platforms, a new gateway to high-quality VFX such as U-Turn, Rama Rama Re and Lucia, the concept
OTT has opened new doors for VFX-rich content as of invisible effects could open up several doors for these
evident from a gamut of exclusive shows and original start-ups.24
programmes that are being launched by players such
Technologies disrupting VFX and post-production
as Amazon Prime, Hotstar, Alt Balaji, Netflix, Zee5,
etc. Increasing digital video consumption has been a workflows
springboard for content creators, widening the quantum In a bid to establish more efficient production pipelines,
of possibilities in terms of how stories can be told. it has become critical for VFX studios to stay on top
These also include the use of VFX, that producers of technology trends. This is particularly significant for
previously fell short on budgets for. mid-sized studios that lack capital to build up to the scale
of bigger houses and face challenges in staying afloat.
Consumers’ growing expectations for content to have Advances in VFX and post-production technology have
the same level of cinematic quality once reserved for spurred studios into trying out novel ways to disrupt
theatres has, in turn, been an advantage for the VFX workflows. Technologies such as cloud rendering, AI,
and post-production community, adding to studios’ software-as-a-service (SaaS), game engines for real-time
work pipelines. Artists are now involved in bringing production and light-field capture are finding suitors
theatrical production quality to digital streaming series,
and the increasing use of VFX has reflected in several across the VFX and post-production space.
shows garnering plaudits recently. For instance, Netflix’s SaaS is gradually proving attractive for VFX studios as it
Altered Carbon, Lost in Space and Stranger Things allows for rational means to keep track of expenses. The
have been nominated in the Outstanding Special Video Jungle Book’s use of game engines for virtual production
Effects category at the Emmy Awards.21 Digital has has ushered the VFX community towards a greater
opened up a plethora of monetisation opportunities for adoption of products from companies such as Unreal
studios in India as VFX players such as Prime Focus and Unity. Artificial intelligence and machine learning
have been offering their services to on-demand content are being leveraged to induce automation in a number
providers, delivering VFX and DI for both international of areas, including rendering, character animation,
shows and home-grown productions such as Sacred camera tracking, motion capture, image processing,
Games.22
20. Swastik Productions expands its VFX Studios, Ad Age India, 13 March 2019 23. Anthill Ventures and Suresh Productions launch Anthill Studio, Economic Times, 19 July
21. Netflix’s Largesse: a nod to superlative VFX-work, Animation Express, 6 February 2019 2018
22. Prime Focus extends its services to Netflix and Amazon Prime, Exchange4Media, 6 July 24. Bengaluru based start-ups emerge as game-changers in VFX in the Kannada Film Industry,
The News Minute, 16 May 2017
rotoscoping, etc. Further, more studios are turning also experimenting with VR projects in order to push
towards cloud due to the scalability and security it offers the medium of film-making and convey narratives.
in order to meet the growing content demand and global Studios are also trying out several genres, such as 360
production schedules.25 Going forward, technologies degree films, animated shorts, interactive experiences
such as 5G could further amplify connection speeds and and documentaries.26 For instance, in 2018, Double
improve latency, opening doors to cloud processing in Negative, a studio based out of the U.K., collaborated
real-time and enhancements in post-production speeds. with Australia-based White Spark Pictures for an
immersive VR documentary about Antarctica, titled The
Visual Reality (VR) pushing storytelling to new
Antarctica Experience. The project used 360 degree
places
3D video technology to give viewers the experience of
VR-driven content, although in its formative stages, is flying in a helicopter over glaciers and moving around
likely to become a major segment in the entertainment icebergs in an inflatable boat.27 Also, in August 2018,
space in the coming years. Major studios such as Technicolor Experience Center (owned by Technicolor)
DreamWorks, Fox and Warner Bros. have been making launched Mars Home Planet, a VR Experience, that gave
investments in the technology and have also established a glimpse of life on planet Mars.
dedicated divisions for VR content. Film directors are
Outlook
VFX and post-production industry’s potential Amount in INR billion
Segment FY19 FY20P FY21P FY22P FY23P FY24P CAGR (FY19-24)
Total VFX and

68.4 81.4 96.1 111.8 129.1 147.2 16.6%
post-production
Source: KPMG in India’s analysis based on primary and secondary research
The VFX and post-production industry in India is inconceivable earlier — particularly in case of TV shows,
expected to chart a compounded annual growth of are now becoming a reality. Further, viewers’ appetite for
about 17 per cent, with revenues amounting to INR147.2 rich, photorealistic, seamless imagery, and immersive
billion in FY24. With steady growth in international content is growing, compelling production houses
demand and growing share of special effects in and digital players to invest in VFX-rich storytelling
domestic productions, VFX will continue on its growth formats. The ability of Indian studios to develop specific
trajectory over the next five years. We expect a gradual capabilities and compete with their foreign counterparts
shift in mix towards a greater share of domestic demand on both price and skill would continue to enable them
and digital content requirements for VFX. to cater to the demand of high-end as well as labour
intensive VFX and post-production jobs such as stereo
Original local productions are becoming a selling point
conversion.
for OTTs globally, which in turn is driving demand for
VFX and post-production as the budgets that were
25. Google partners with Sony Pictures Imageworks to launch an open-source VFX render
manager, Tech Crunch, 24 January 2019
26. Filmmakers Are Embracing VR, But Are Audiences Ready For VR Feature Films?, Forbes,
17 October 2018
27. DNEG supports new Antarctic immersive VR experience, DNEG, 9 July 2018
Conclusion
The Indian animation, VFX and post-production challenges in acquiring fresh talent, in terms of base
industry is expected to more than double in the knowledge and prolonged onboard training time.
next five years, growing at a CAGR of 16 per cent Further, a huge proportion of Indian studios still have
between FY19 - 24.28 However, the challenges a high dependency on external financial support,
pertaining to shortage of required talent and funds epitomising the challenge of sustaining businesses.
are holding back the sector from achieving its true Though alternate funding avenues such as private
potential. equity and venture capital are opening doors and
exhibiting focus on this industry, a much higher rigor
Developmental challenges such as conceptual
is needed at this hour. Addressing certain roadblocks
design, storytelling and prototyping are the hurdles
along the way is likely to help the industry in
that domestic creators are facing owing to skill gap
traversing a much steeper growth path. The industry
prevalent in the industry. The curriculum updates for
could look at the following to support studios scale
local animation and VFX courses have been slower
up and mitigate challenges through collaboration and
than desirable. This has led to the studios facing
cooperation.
Building an animation and VFX community within a designated space that supports pro-
Building an duction, learning, mentoring and networking and catalyses creativity among young talent.
ecosystem Also, regional partnerships with other South East Asian countries to build stronger IPs can
be looked at.
The government could (1) provide financial support to institutions that invest in advanced
Investing in training tools/instruments for students (2) facilitate first-hand experiences on the said tools
education for teachers and students, before they get involved in production and venture into the
market.
Experimenting
Information exchange between schools and animation studios could help avoid mismatch
with knowledge
between curriculum and industry skills. Knowledge exchange programmes where anima-
exchange pro-
tors can give lectures and hands-on showcases could help create industry-ready talent.
grammes
Stakeholders should focus on imparting both technical and business skillsets to make
Diversifying talent their businesses more sustainable. These could include skills around concept/character
knowledge development, storytelling, project management, business management, sales and mar-
keting etc.
In addition to the funds from the government and trade associations, other funding
Expanding funding
avenues such as crowd-funding could be explored. Monetary support and pledges from
avenues
viewers can go a long way in supporting budding artists and fledgling studios.
Prasar Bharati could play an important part in establishing a dedicated FTA kids’ channel,
Making way for a talks for which have been going on for the last few years. With its unparalleled penetration
dedicated channel compared to cable and satellite channels, a FTA public broadcasting kids’ channel could be
for kids a differentiator, as already witnessed with countries such as the U.S., Canada and China,
which have public broadcasting for kids.
28. KPMG in India’s analysis based on primary and secondary research
Animation
The animation industry has seen steady growth as The skill gap is a major concern for the Indian
local broadcasters have commissioned shows and animation and VFX industry. However, the efforts
continue to invest in local content. The time has of Media and Entertainment Skill Councils
come for the industry to dream big and this can (MESC) and industry partnerships with several
happen if 1) players partner to produce shows not universities over the last five years have shown
just for domestic market but for the global market; positive results. Formal education in creative and
2) government operationalises co-production performing arts through schools and universities
treaties that India has signed with countries such is the sole answer to catching talent at a younger
as Canada; 3) a public kids broadcaster DDKids, a age. In the newly proposed National Education
vital piece that is currently missing from the Indian Policy 2019, industry is making an effort to get
animation ecosystem, is launched; and 4) enough a level playing field for vertical such as creative
emphasis is given to skill development. and performing arts, design thinking, sports, etc.
alongside Science and Commerce at school and
even higher education level.
Munjal Shroff Ashish S K

Director & COO – Graphiti Founder – Punnaryug
Co-Chair FICCI Animation, Artvisoin Pvt Ltd
VFX, Gaming and Comics Chairman FICCI Animation,
(AVGC) Forum VFX, Gaming and Comics
(AVGC) Forum
From a domestic broadcast perspective, until Indian IPs are here to stay, here to delight kids
a few years ago, a significant part of the work and capture their minds and hearts. The connect
was being handled by a limited number of large, that locally created and curated content has made
established studios. However, the exponential with the audiences has been unparalleled. It is no
growth of kids entertainment channels in the surprise that the maximum ratings in the category
market has paved the way for a vast number of comes from these IPs. With the investment in
small production studios to flourish since both Indian IPs across different genres, formats and
the large studios as well as the broadcasters regional languages growing year on year, the
outsource work to them directly. This in turn has momentum in local IP production is only going to
given a boost to the industry ecosystem, and increase further in the country.
with the right kind of checks and balances, this
ecosystem has now become sustainable for all
players.
Nina Elavia Jaipuria

P. Jaya Kumar Head - Hindi Mass
CEO Entertainment & Kids TV
Toonz Media Group Network
Viacom18
VFX
The media and entertainment industry is a true Technology is disrupting the VFX space in a big
representation of a knowledge sector. The value way. Studios are developing their own technology
of Indian media is increasing at an exponentially tools in order to do things differently and create
faster rate than its topline revenues. This is due a competitive edge. With technologies such
to the fact that the quality of creative talent and as AI starting to automate a number of manual
technologists in the industry are making it an processes, VFX pipeline moving to cloud could
“ideas industry”. The business is now innovated emerge as a game changer allowing studios
through design driven emotions that creates to work seamlessly across the world, and also
contemporary content across new opening up opportunities for viewers on the
media platforms. consumption side.
Biren Ghose
Country Head Jesh Krishna Murthy
Technicolor India & President, Founder & CEO
ABAI Anibrain
OTT has emerged has a beacon of growth for

VFX. Digital platforms are hungry for content, with
shows such as Sacred Games and Ghoul not only
focusing on content but also on the production
values. However, there is a risk of quantity
superseding quality and producers would have to
be wary of the kind of content they put out.
Merzin Tavaria
Creative Director & General
Manager
DNeg India and Co-Founder,
Prime Focus Ltd.
KPMG in India.
102
Gaming
Well played
103
104 Gaming
Gaming
Well played
Digital revolution has been the primary contributor to the remarkable growth of online
gaming in India. On the back of growing penetration of smartphones with bigger screen
size and improved display pixel ratio, low data costs, improved bandwidth, growth in
micropayments and rise in disposable income, the number of online gamers in India has
risen exponentially over the last couple of years.
Classification of online gaming
Platforms
Mobile PC Consoles
Genres
Casual gaming Real Money Online

(mobile centric) Games (RMG) e-sports
Gaming 105
Historical estimates of gaming in India
Growth in FY19
Industry size FY15 FY16 FY17 FY18 FY19 CAGR(FY15-19)
over FY18
INR billion 24.3 27.6 32.4 43.8 62.0 41.6% 26.4%
Source: KPMG in India analysis 2019 based on primary and secondary research
Online gamers in India
In million FY18 FY19 FY20P FY22P
Number of gamers 269 300 365 440

Growth in top countries by app store downloads (2016 – 2018)
Worldwide China India US Brazil Indonesia
35% 70% 165% 5% 25% 55%
Global app downloads exceeded 194 billion in 2018 gaming

Source: The state of mobile 2019: App Annie report
Key underlying trends and themes

User engagement gains further traction in India
In the year 2018, the user engagement on gaming With the younger audience continuing to hold the
platforms scaled to new heights and is soon expected to maximum share, 2018 also witnessed older audience
approach the global average. engaging themselves on gaming platforms. Nearly one-
third of the gaming population is aged over 35 years in
India.1
Growth in playing time globally
Global India
Time spent 26-45 years 25%
7.11 on gaming
(hours per
week) 6.92 18-25 years 9.9%
Source: State of online gaming report 2019 - Limelight Networks

Source: State of online gaming report 2019 - Limelight Networks
1. Kantar IMRB report – Understanding mobile gaming in India 2018
106 Gaming
More women are now playing mobile games Also, women are 79 per cent are more likely to spend
Online gaming has traditionally been a male dominated money on mobile games through in-app purchases.3 In
leisure activity but more recently it has attracted a lot India, the number of female gamers stands at 45 per
of attention from female audiences too with female cent.4 In 2017, women gamers in China outnumbered
gamers surpassing male gamers in certain genres. men on the world’s most popular battle arena mobile
Female gamers are now equally inclined to this mode of game, Honour of Kings at 54 per cent.5 In the coming
entertainment. times, gaming publishers are likely to launch more
women inclusive games to further penetrate this
Global observations2
segment.
Mobile continues to account for the majority share
in online gaming
Gaming continues to be one of the most preferred
online leisure activities, with about 50 per cent of
smartphone users in India playing mobile games6.
Globally, mobile gaming has surpassed PC and consoles
60% in its contribution to overall market revenues with the
puzzle mobile share of mobile gaming increasing from 18 per cent in
game app users – 2012 to 51 per cent in 2018. While PC and consoles are
Women growing at a CAGR of two to three per cent, mobile
gaming is growing at 26 per cent7 globally.
India is already one of the top five markets for mobile
gaming in terms of number of users8. Mobile gaming
holds a lion’s share, close to 80 – 90 per cent in the
overall online gaming pie9. PC and console gaming
are projected to report muted growth, catering to a
limited, albeit engaged, audience while mobile gaming
is expected to gain at their expense given its inherent
flexibility and convenience. Casual games of skill and
strategy are the most preferred genres. Hard core
gaming demands time and dedication along with access
to PCs or consoles, therefore, appealing to a smaller set
of audience.
Top games of 2018 in India by consumer spend
App Developer
1 Teen Patti Octro
2 Coin Master Moon Active
3 8 Ball Pool Miniclip
63% 4 Teen Patti Gold Moonfrog
action and adventure
mobile app game 5 PUBG Mobile Tencent
users – Men
6 Candy Crush Saga Activision Blizzard
7 Clash of Clans Supercell
8 Ultimate Teen Patti Play Games24X7
2. More Than 2.4 Billion People Will Play Mobile Games This Year, According To Analyst |
Forbes.com, 6 March 2019 9 Lords Mobile IGG
3. Women are 79% more likely to spend more money on mobile games: Study | Money
Control, 21 August 2018 10 Zynga Poker Zynga
4. Kantar IMRB report 2018
5. Tencent is bringing China’s biggest game to the rest of the world – theverge.com, Source: The State of Mobile 2019 – App Annie (all mobile operating systems combined)
December 2017
6. Kantar IMRB report – Understanding mobile gaming in India 2018
7. Mobile Revenues Account for More Than 50% of the Global Games Market as It Reaches
$137.9 Billion in 2018 | Newzoo
8. India among top 5 markets for mobile gaming, Economic Times, August 14, 2018
9. Industry discussions conducted by KPMG in India
Gaming 107
Large console and PC games are now curated tournaments being held to determine the ultimate
for mobile platforms winner.14 This change in approach and well supported
Many gaming publishers have now launched mobile infrastructure is driving growth of the online real money
optimised versions of console and PC games. These gaming engagement by 30-35 per cent and constitutes
games meet the requirements in terms of quality and approximately INR24 billion15 .
experience while offering the convenience of the mobile Social gaming helps create communities and
device. Multiplayer battleground game, PUBG which increase stickiness with PUBG gaining prominence
was originally a PC game, was extended to mobile
Beyond sheer entertainment, gaming platforms are
phones in March 2018 and as on May 2019, the game
emerging as community networks that are enabling a
has crossed 200 million downloads globally, on all
gamer to connect, share experiences and understand
mobile operating systems and, has achieved over 30
the fellow competitor. Hitwicket, an online game
million daily users.10 Also, some of the other globally
platform, has introduced a gifting feature that allows
renowned games such as Fortnite, Asphalt Legends,
one to gift points to fellow gamers. And, it is interesting
Alto’s Odyssey, etc. are widely accepted on mobile
to note that gamers who form part of the older target
platforms11. Given the scale and progress that a mobile
group have gifted to young gamers whom they have met
platform offers, the lighter versions of games are
on this platform16. Similarly, Mech Mocha’s ‘Hello Ludo’
likely to continue to attract eye balls and increase user
which was launched in October 2018, has introduced
engagement.
an in-game voice chat. In the span of six months since
Slow but noticeable improvement in monetisation its launch, it has become popular with regional Indian
While free-to-play games continue to dominate, there users, with more than 25 minutes being spent per daily
has been a noticeable development and increase in active user and 60 minutes for real-time voice chats17.
popularity of freemium models, where a gamer either Approximately 46 per cent of the Indian PUBG players
makes an in-app purchase for an additional boost or to use the in-game voice chat feature to not only discuss
move further in the game. In India, 28 per cent gamers game tactics but also discuss non-PUBG topics at
are now willing to make an in-app purchase for an length18. With growth in mobile gaming, this culture of
additional boost and points in their gaming experience.12 social engagement is expected to flourish in the
It is the casual gaming segment however, largely ad- coming years.
supported, which is witnessing this change. Expectedly,
gamers from an older demographic have a higher
propensity to spend on games13. Also, growth in fantasy
sports and other real money gaming platforms is likely to
accelerate monetisation even further.
Online real money games are gaining popularity
The online Real Money games (RMG) comprises -
rummy, poker, daily fantasy sports and quiz games.
While the country has played real money games since
earlier generations mostly in the form of card games,
the online versions of RMG faced some initial hiccups.
However, these games have started to witness
tremendous uptake over the past couple of years.The
growth in online RMG is clearly attributed to shift in
mindset of today’s Indian consumer. Traditional card
games like teen patti and rummy are widely accepted
on online platforms today given the emotional connect
and mass appeal that they carry. The fourth edition
of Rummy Premier League was hosted between 22
November 2018 to 22 December 2018 by Junglee
Games that saw participation by over 1.63 lakh people
and was played over the course of a month, with 1,765
10. Five reasons why PUBG the most popular battle royale game in India | www.news18. 15. Industry discussions conducted by KPMG in India and KPMG in India analysis
com, May 22, 2019 16. Industry discussions conducted by KPMG in India
11. PUBG Mobile, Fortnite to Asphalt 9: Top most popular mobile games of 2018 | Indianex- 17. Mech Mocha Game Studios ties up with US firm Agora.io, insidesport.com, April 2019
press.com, December 24, 2018
18. 40 per cent players use PUBG as a social communication channel: Research, Indiatoday.
12. Kantar IMRB report, 2018 com, 12 December 2018
13. Industry discussions conducted by KPMG in India and KPMG in India analysis
14. Rummy Premier League 4: India’s most sensational rummy tournament sends people
into frenzy, Business Standard, 7 Jan, 2019
108 Gaming
Fantasy sports gains prominence Investors continue to remain interested

The fantasy sports segment in India has gone through a The online gaming segment has witnessed an incredible
massive transformation since the last two decades of its transformation since the last few years. To bank on
launch. growing demand, India has observed progress in various
gaming start-ups. Between 2014 and Q12019, the total
venture capital funding in Indian gaming start-ups was
USD337 million which is growing at a CAGR of 22 per
cent.21 The segment has also witnessed increased
overseas investments and partnerships given its growth
7x growth in 25x growth in trajectory. Alibaba-backed digital payments start-up
number of number of users Paytm and Hong Kong’s AGTech Holdings launched a
fantasy sports in fantasy sports
gaming platform Gamepind; Youzu launched local casual
operators (June 2016 –
February 2019) strategy games last year. Vietnam-based StomStudio
(2016-2018) also partnered with mobile game publisher Gamesbond
to create mobile games in India.22 Tencent holdings
invested USD100 million in fantasy sports platform
Source: Fantasy sports to have 100 million users in India by 2019, the journey has just begun, Dream11.23
Financial Express, June 2018
Evolving into a lucrative career option
Advent of sports leagues like kabbadi, badminton, Gaming has come a long way in India and the segment
football, etc. have played a crucial role in driving is now seeing the light of day. Given the success of
engagement of fantasy sports. Also, improved digital mobile games and corporate funds being pooled in,
infrastructure and corporatisation have aided progress in the segment is breaking stereotypes when it comes to
this segment. pursuing it as a career. It is now attracting talent across
Gaming is being embraced by a variety of businesses the value chain - artists, programmers, designers, app
developers, etc. The sector has witnessed surge in the
Various sectors that are transactional in nature are using number of professional gamers, catapulting e-sports
gamification to strengthen their user base. It is now into the league of professional sports. With voice and
viewed as one of the key advertising and marketing chat messages being embedded in various apps, it
tools to attract the right target audience, drive user also provides an opportunity to simultaneously cater
engagement and ensure customer stickiness. Within to a gamer’s needs. Similarly, professional gaming
the M&E sector, allied players are also keen to explore tournaments have taken a centre stage in the past
gaming offerings to drive user engagement. SonyLIV couple of years. As prize money of these tournaments
launched an AR-enabled gaming platform, with an aim continues to rise, more people are considering video
to reach out to 50 million new users in the growing OTT gaming as a professional career.
market.19 In the recent past, in-app games from non-
gaming companies like Zomato Cricket Cup, Swiggy
Match Day Mania, PayTm First Games, Tez Shots by
Google Play are some of the examples that showcase
growing interest of players in this segment.20 Also,
monetisation models have evolved with time as games
are getting more immersive. Loyalty points, incentivised
ad-viewing, discounted transactions, etc. are some of
the innovative approaches to drive engagement.
19. SonyLIV launches Augmented Reality games, Hindu Business Line, 1 July 2019
20. Payments & food delivery apps use games to increase subscribers, Economic Times, 29
June 2019
21. The Game Is On For Indian Gaming Startups, inc42.com, May 2019
22. How Digital Gaming In India Is Growing Up Into A Billion-Dollar Market, forbes.com,
September 2018
23. Tencent leads $100 mn investment in fantasy sport platform Dream11, vccircle.com, 6
September 2018
Gaming 109
Industry projections
With a rise in ARPU levels alongside the increase in the estimated at INR62 billion in FY19 with a compounded
number of gamers, online gaming in India reported a growth rate of 32 per cent predicted over a five year
nearly 40 per cent growth year-on-year for the twelve period.
month period ended March 2019. Online gaming was
CAGR
Industry size FY20P FY21P FY22P FY23P FY24P
(FY19-24)
INR billion 87.8 118.5 154.0 200.2 250.3 32%
Real money games have been one of the key catalysts coming time with improved focus on user engagement,
to upswing ARPUs that picked up the pace in the recent innovations and refinement in overall gaming experience.
past. These numbers are only expected to rise in the
Future outlook
Mobile games are likely to continue to dominate
and hold a lion’s share in the segment. With growth
in engagement and willingness to spend, in-app
purchases on gaming platforms are also set to
rise in the times to come. Tier 2 and 3 cities hold
a promising story and may accelerate the growth
further. Also, the segment is expected to attain
gender parity in the coming time given the rise
in women gamers. Emerging technologies like
augmented reality (AR) and virtual reality (VR), while
at nascent stage of adoption in India, but could
benefit the sector in the coming years. Also, the
recent announcement of Google’s cloud gaming
service, Stadia is expected to make a console-
like gaming experience more accessible and
mainstream, without the need of a hardware box.
Likewise, fantasy sports hold a promising future
and are expected to gather further momentum. The
current ambiguity around classification of online real
money games (RMG) as a game of skill and chance
can hinder or dampen its progress. Therefore, it is
imperative to address this concern which is acting as
a major roadblock. Lastly, gaming and sports industry
bodies and federations will play a pivotal role to
socialise gaming and aid further development.
110 Gaming
The All India Gaming Federation represents more India has come a long way as far as perception
than 30 members in four main genres of online of gaming is concerned. Industry has
real money gaming: fantasy sports, rummy, seen gamers progress from free to play to
poker and online e-sports. These genres in online freemium gaming platforms. Today a gamer
gaming grew around 35 per cent in the previous has a willingness to pay for his/her means of
year and we only expect this momentum to entertainment. While it still comprises a smaller
continue. The biggest obstacle however remains segment but, there has been a positive shift
the ambiguity in categorising online real money in the mindset which is noteworthy. On our
games as those dependent on skill and the lack platforms, gamers in the age bracket of 30-40
of a unifying central regulation for online real years have a higher propensity to pay. Also, it is
money skill gaming. This hampers flow of capital interesting to note that gaming as a segment is
as well as avenues for distribution online. AIGF now providing multiple avenues to a consumer
has been created as an industry body to today, from casual gaming to pursuing it as a
develop self-governing standards, full time career option.
codes of conduct and bye-laws for members to
abide by towards establishing online real money
skill gaming as a safe, credible and enjoyable
source of entertainment for Indians Ankush Gera
Founder and CEO
Junglee Games
Roland Landers
CEO
All India Gaming
Federation (AIGF)
Downloads and usage of mobile games are

increasing exponentially in India every year,
what is really encouraging is the trend of
revenue increasing with more people willing to
pay especially where modes of payments are
opened up.
Anuj Tandon
CEO
Yoozoo Games India
Gaming 111
We have seen a definitive shift on our platform Content is a key driver for growth and customer
from casual gaming to more immersive, engagement. With users gaining traction on
emotion-driven experiences. Social gaming has various gaming platforms be it casual or real
become very important in increasing stickiness money games, it is imperative to innovate and
and the “fear of missing out” and peer pressure improvise various gaming metrics to ensure
is a big motivator. Hitwicket has built strong customer stickiness. The current progress in
online-offline communities that form alliances online gaming sector would make it over USD 1
and have shared virtual experiences. Another billion industry in the next two years.
trend from last year has been the increase in
the number of women who are playing online.
On Hitwicket II, we have around 23 per cent
women gamers compared to 11 per cent in our
Sudhanshu Gupta
earlier versions. An interesting insight we have
CEO
observed is that female gamers tend to have a
Paytm First Games
higher propensity to pay and make a purchase
earlier in the game. We see their share of total
revenue increasing gradually.
Keerti Singh The views and opinions expressed herein are those of the quoted person/s and do not
CEO Co-founder and Vice
President, Growth
Hitwicket
112
Out of home
Embracing digital
113
114 Out of home
Out of home
Embracing digital
Introduction Further, despite being a mass media, OOH can be easily

OOH (Out of Home) is a versatile advertising medium customised to meet the varied needs of brands and
on account of various advantages it offers over other marketers across sectors. Creatives, size, location of
forms of media such as high coverage in terms of area, sites, as well as duration of campaigns can be tailored
better brand positioning, given the larger size of image to suit the client’s requirements. Moreover, it is able to
and higher target audience reach of ~80 per cent.1 These provide a high volume campaign in specific locations
advantages are even more prominent in metro and tier for a fixed period of time, and hence it can be used
I cities. Typically, brands are willing to pay more for the extremely well for tactical campaigns.
exclusivity and quality that premium OOH sites like
digital screens at airports offer.
Historical numbers and KPIs

Growth in FY19 CAGR
Industry size FY15 FY16 FY17 FY18 FY19
over FY18 (FY15-19)
INR billion 22.3 25.5 28.6 32.0 33.6 5% 11.2%
Source: KPMG in India analysis based on primary and secondary research
The OOH industry has witnessed close to 11 per cent 2018, the High Court ordered the removal of posters,
Compounded Annual Growth Rate (CAGR) over the last banners, flexes and hoardings for one year because the
five years, growing from INR20 billion in FY14 to INR34 civic body had not renewed or issued licences for them.2
billion in FY19.1
Further, most political parties started spending for
FY19 did not see a significant growth in OOH advertising central elections which were held in 2019, post March
expenditure, partly due to the ban on all forms of 2019; hence the positive impact on revenues is likely to
outdoor advertising in Bengaluru.1 Starting from August be felt in FY20.3
1. KPMG in India analysis 2019 based on industry discussions

2. “BBMP bans all types of outdoor ads for a year”, The Economic times, Aug, 2018
Out of home 115
Segregation of OOH revenue The controlled versus non-controlled environment

principle is also responsible for one of the core
distinctions in trends between Indian OOH and global
OOH. While digital OOH (DOOH) contributes to nearly
Regional 30 per cent of OOH revenue globally, this contribution
Airport
42% has been limited to ~INR100 crore (3 per cent) in India.4
27% The increase from 2 percent in the last year to 3 per
Other
51% cent this year has primarily been observed in metro
Other transit cities.
media
17% Key trends and themes
Digital OOH – still at a nascent stage in India, but
Mall media picking up pace
5% One of the major reasons for low adoption of DOOH is
that advertisers prefer to take such bets only in specific
controlled environments (such as airports and malls),
where instances of vandalism, exposure to elements
The airport segment is one of the most significant and overall maintenance is relatively lower. Even in
contributors to OOH growth. While airports in New Delhi other controlled environments such as railway stations,
and Mumbai have been the major contributors to the wagons and metros, DOOH has failed to pick up pace
OOH story, the segment is also witnessing traction from in India. Further, roadside DOOH expansion is almost
smaller airports situated in tier 2 and tier 3 cities. These blocked due to various restrictive regulations in major
airports, while featuring in nationwide media plans, tend metros.
to get a lion’s share of their advertising monies from
However going forward, DOOH is expected to see an
local retail players who are using airport OOH not only
increase in adoption. Digital outdoor advertisements
for reach but also for brand building.
are becoming increasingly dynamic. Digitally connected
The revenue contribution from airport segment was the billboards can be altered in real time, linked to social
highest at 27 per cent in 2019, followed by other transit media networks and offer interactive content. For
media like trains, buses, etc. and 5 per cent from mall example, in order to promote their air purifiers, LG and
media. The balance was contributed by other indoor Times OOH displayed real time data on air quality and
media like buildings, hubs, etc. and road facing media, displayed it on digital billboards at airports in Delhi and
including roadside hoardings, billboards, bus stop/ Mumbai.5
metro hoardings, etc. The airport segment is a popular Another reason brands are expected to increase their
model for advertisers as it provides them a controlled use of DOOH is that the cost to brands can be kept in
environment for experimentation and innovation. check. Since it allows multiple brands to block slots
on one display board during the day, it splits the cost
Proportion of digital OOH (DOOH) of inventory between media owners and reduces each
one’s spend.8
Digital
3% Integration of Internet of Things (IoT) in DOOH
Another area which could contribute to DOOH growth
is IoT. Interactive outdoor creatives, combined with
customer information and increasing data analytics
capabilities, can provide advertisers with targeted and
customer-specific DOOH media plans. For example, IoT
can be used to track, which customers were exposed
to a particular ad, who engaged with that ad and other
Non-digital metrics to determine user engagement. Though this is
97% at a nascent stage currently, the next wave of growth in
DOOH can come from these areas.

5. “NEONS OOH Conference: Industry experts on how DOOH still has a long way
to go in India”, Exchange4Media, March 2019
116 Out of home
Media planning for OOH campaigns – technology to Growth in transit infrastructure

play a key role Expansion of transit infrastructure, primarily airports
Historically, brands have depended on in-house teams, and metros across the country is expected to provide a
which conduct research and use their prior experience boost to OOH advertising.
to carry out the initial planning for site selection. The
industry is in an immediate need of a technology-backed Currently, 10 Indian cities have metro rail infrastructure
paradigm shift in the media planning area, which will of over 500 km. The Government has announced that an
help brands identify cities, locations, and even streets additional 15 cities are expected to implement metros
that can provide them high returns based on their over the next few years.7
target group profiling and segmentation. Advertisers
The Government of India has also undertaken an
are increasingly insisting on Return on Investment
initiative to launch airports in smaller towns and cities
(ROI) benchmarking, proper planning of outdoor sites,
with the Ude Desh ka Aam Nagrik (UDAN) initiative. This
metrics on site performance and correctness of billing.
can provide an excellent opportunity for brands, which
Development of effective planning tools and a scientific
are looking at engaging population from smaller cities
approach to site selection is expected to lead to better
where they see organic growth for multiple product
distribution of ad inventory based on customer segment
lines. Some of the categories that may invest heavily
to be targeted.
in these sectors include FMCG, banking, telecom and
Monitoring of OOH campaigns – need for automobiles.
standardised tools
Development of smart cities
Monitoring is a key component in the lifecycle of
advertising as it keeps a check on the accuracy of An area that could provide impetus to OOH is the Smart
creative deployment and campaign implementation. Cities campaign of the Indian government. These cities
In the age of geo-tagging, and lower cost of data over can be positioned as model cities to the rest of the
mobile network, the sector is hoping for single industry country on how OOH and specifically DOOH can be
accepted technology platform which could help brands used effectively in non-controlled environments as well.
get comfort over the performance of their advertising This requires defining terms of usage at the contracting
spends in OOH. stage, providing long term rights to licensees and
maintaining such sites.
Once these systems are in place, the lack of control in
open, public areas can be reduced to a certain extent, OOH regulatory landscape – appointment of single
which may, in turn, propel the sector to grow faster regulatory body expected to increase transparency
than its historical growth rates. However, the current in the sector
offerings in the industry are restricted to specific sites/ One of the core problem areas of the OOH sector is
locations/vendors. Further, there are no industry-wide the large number of regulatory constraints applicable
standard tools, which can be used by OOH players for on the sector. OOH, primarily located in public areas,
monitoring of campaigns, which results in ineffective is subject to multiple regulations subject to traffic,
comparisons of campaign effectiveness. To make aesthetics, licensing and structural safety. While OOH
the current technology solutions more acceptable, players bet big monies on various sites as part of their
concerns of cost effectiveness, robustness and linearity revenue projections, a large number of projects fail
of reporting need to be addressed. The measurement to materialise due to policy/regulation deadlock. The
system needs to be easy to implement, affordable, regulatory landscape also does not allow digital media at
tamper-proof, and with a user interface that enables various places in the country. The Municipal Corporation
clients and agencies to monitor multiple dashboards at of Greater Mumbai (MCGM) is set to implement new
the same time. regulations, which will ban hoardings on top of rooftops,
The Indian Outdoor Advertising Association unveiled terraces and hoardings that come under high-tension
a new initiative where Display Metrics India, working wires.8
with Ipsos India and MGE Data of Czech Republic, A single body could be appointed to take charge of
are developing metrics for OOH displays. Their work licensing and approving site plans to address concerns
involves mapping inventory and monitoring site displays of OOH players.9
and then combining those with traffic intensity data and
travel survey data. They are launching their initiative in
Delhi, followed by Mumbai, before expanding to other
metro cities.6
6. “India’s OOH sector tackles lack of metrics”, WARC, Jan 2019 8. “The new OOH regulations and what needs to be done”, Printweek, April 2019
7. “15 more cities will soon have metro rail in India” The Economic Times, October, 2018 9. KPMG in India analysis 2019 based on industry discussions
Out of home 117
OOH industry projections
CAGR
Industry size FY19 FY20P FY21P FY22P FY23P FY24P
(FY19-24)
INR billion 33.6 37.1 40.5 44.1 48.1 52.4 9.3%
Although the growth of the OOH market in FY19 was infrastructure including airports and metros in metro
muted, FY20 is expected to see a significantly higher cities, development of smart cities and increasing
growth, primarily driven by the central election spending transparency for brands on account of improved
which took place post March 2019, the cricket World monitoring technology.10
Cup and IPL. Further, many brands which had postponed
their campaigns on account of elections are expected to In conclusion, the OOH market in India is going through
run them in FY20, which will add to the overall growth. a transformation, with digital OOH gradually gaining
These factors are expected to lead to a growth of around traction with an increase in usage of data and analytics
10 per cent in FY20. for customer targeting. However, restrictive regulations
in metros and lack of standardised tools for planning and
Post FY20, the industry is expected to increase monitoring of OOH campaigns still remain major pain
at a CAGR of around 9 per cent growth till FY24 points for the sector.
primarily driven by factors such as expansion in transit
10. KPMG in India analysis, 2019 based on primary and secondary research
118 Out of home
The key stakeholders in the OOH industry in India The OOH industry in India needs an industry body
need to collaborate and use one universal tool for which can represent the opinion of the players
planning and monitoring, which will lead to higher with regard to regulation and create transparency
efficiency, and bring in more visibility for brands in for advertisers.
the planning and monitoring process.
Pawan Bansal Archana Aggarwal

COO VP Media
Jagran Engage Airtel
Digital OOH has been growing in the Planning, execution and monitoring are the three
controlled environment like airports, metro pillars for any OOH campaign. Now, the time has
rails and malls rapidly, but roadside digital come for these three things to have scientific
expansion is almost blocked due to restrictive answers backed by data and supported by logic.
regulations within cities. This will help the clients optimise their OOH
spends and get greater ROI.
Pramod Bhandula Amit Kapoor

Executive Chairman MD
JCDecaux India US Advertising Agency Pvt. Ltd.
The views and opinions expressed herein are those of the quoted person/s and
do not necessarily represent the views and opinions of KPMG in India.
Out of home 119
120
Radio
Waiting to be heard
121
122 Radio
Radio
Waiting to be heard
The year 2019 was a year of tepid growth and critical III was to bring expansion of the private FM networks
time was lost due to indecisiveness over the next batch throughout the country with a greater focus on tier
of the phase III auctions. The phase III auctions, which II and tier III cities. A majority of these channels are
have the potential to exponentially grow the industry expected to now feature in the next batches of auctions.
have been inconclusive since 2013, constant delays and A shift in the reserve price strategy from population size
the lack of clarity being the primary hindrances. to looking at the market potential of the city could see
more players participating for more than 600 channels in
Out of the 163 stations successfully auctioned in Phase
the C and D category
III, 148 stations have gone live. A major focus of Phase
Size of the radio industry

Growth FY19 CAGR
over FY18 (FY15-19)
INR billion 19.8 22.7 24.0 25.9 27.5 6.17% 6.68%
While the radio industry’s last five years (FY 2015-19)

CAGR is at 6.68 per cent1, the growth during the FY 19
has remained weak at of 6.17 per cent1.
The industry saw impetus coming from the increase
in spends due to elections. While the real estate
sector continued to face slowdown, the sector spends
on radio continued as a means to liquidate existing
inventory. The automobile industry is going through a
tough period, but it too continued to spend on radio
to promote new launches. The festive season saw
the E-commerce players increasing their advertising
spends as the economy slumbered out of after-effects
of demonitisation and GST. Other industries like FMCG
and the media and entertainment sector held on to their
share of the advertising pie.
1. KPMG in India analysis based on primary and secondary research
Radio 123
Snapshot of industry-wise split of advertisers on radio for FY 2018-192
Media and
Government FMCG Ecommerce BFSI Automobile
Entertainment
15% 9.1% 8.3% 8.2% 7.4% 7.4%
By By By By By By
3.1% 0.2% 0.5% 1.1% 1.7% 1.7%
Share of advertisement pie Change in advertisement share from FY 2017-18
In terms of advertisement, the industry estimate of ad in newer cities in category C and D to 18-24 minutes2
rates varied across cities from over INR60 per second2 in in the metros. During the festive season, for some
the metros to INR15 per second2 in certain tier 3 cities. channels the ad time is over 30 minutes2 thereby having
To use ad rates as a reference point, it further provides a negative impact on the listenership experience. In an
evidence that the population may not be the only industry competing with digital and other streaming
factor in determining the potential of the market. Other services for user attention, the broadcasters need to
matrices like spending power, demographics, etc. also find a fine balance between monetisation of popular
need to be considered. programmes and quality listenership experience in order
to remain relevant.
Due to the sluggish economy, pricing continued to be
under pressure and growth has come mainly due to In terms of the overall share, radio advertising is 8-9
increase in utilisation. Inventory utilisation continues per cent2 internationally, whereas in India it remains
to be high in the A and A+ category cities whereas the constant at around 3-4 per cent2.
newer stations are now operating at inventory utilisation
As at the end of June 2019, 381 FM radio stations are
of around 45-50 per cent2. The average inventory per
operational in 107 cities3. A snapshot of key players in
hour fluctuates from as low as 8-10 minutes per hour2
the industry is as below:
Entertainment Reliance
Radio Music
Network Sun Broadcast DB Corp HT Media Others
network Broadcast
India Network
No. of
73 63 58 39 30 15 103
channels
No. of Cities 65 62 58 39 30 12 75
Source: KPMG in India analysis based on primary and secondary research.

3. List of 381 operational Private FM Radio stations as on 18.06.2019, Ministry of Information
and broadcasting, accessed on 3 July 2019
124 Radio
The industry has seen consolidation over the past two which together make up the 360 degree solution for
years, post the expiry of the mandatory lock-in period the advertisers, is believed to grow in future10. Several
and the trend has continued in the current year. Bollywood celebrities are now connecting with their
fans through radio. This year saw Karan Johar, Kareena
With the uncertainty around the auctions, there is still
Kapoor Khan and Vidya Balan amongst others to
potential for larger players to fill in gaps in their reach (in
transition as RJs11. With growing competition, having a
terms of cities/towns) through inorganic growth. Large
popular voice helps a radio station to reach out to more
capital investment coupled with long gestation period
audience, innovate and add more star value to their
act as a barrier for new aspirants (from outside the radio
content.
industry) to enter this sector and therefore the trend of
consolidation within the industry seems to be the logical Radio going international
way forward to the larger players.
Indian radio operators who are also expanding their
Keeping pace with other mediums, radio players have geographical footprints by expanding in overseas
continued to innovate and integrate their existing countries – USA, UAE and Bahrain. These markets
content in digital space. This has provided radio have a large population who are of Indian origin who
operators with monetisation opportunities and expanded do not have easy access to local Indian content. The 24
their existing revenue streams. For instance, Radio City hour stations play a combination of Bollywood music,
which has online stations which can be accessed at any infotainment and comedy in addition to airing the show
time on the convenience of the listeners. Radio Mirchi of popular Indian RJs12.
has also started licensing its original content to multiple
platforms, including national OTT players8 to cash-in on Consolidation
the same convenience of content being available on
With the mandatory lock-in periods coming to an end,
demand.
the industry is witnessing consolidation. Subject to
Influencer obtaining regulatory approvals, Music Broadcast Limited
(MBL) has decided to acquire the radio business of
The role of radio jockeys (RJs) have evolved from Reliance Broadcast Network Limited (RBNL) which
captivating the listeners through narrative and music comprises 58 pan India stations of BIG FM for an
to being media influencers. Radio has now become enterprise valuation of INR1,050 crore. Forty stations
a livelier medium, more like social with users being will be retained and the balance 18 stations will be
able to share their views. RJs are now able to connect surrendered13. MBL currently has 39 stations and with
with more people, share more content through social the acquisition of BIG FM, their geographical presence
media. Radio restricts RJs to the duration of the specific will expand to 79 stations spanning 69 cities. MBL had
programme that they are hosting on air and social media also announced the acquisition of the radio division of
has become their extension of thoughts. Ananda Offset Private Limited (Friends FM) by way of
From using the radio platform to encouraging people a slump sale. This acquisition gives MBL access to the
for a cause, the radio stations have truly contributed Kolkata market14.
in resolving social issues. There have been multiple This year saw another acquisition by HT Media Limited
campaigns initiated during the year with Radio City’s of 51 per cent stake in Next Mediaworks Limited of
“Kar Mumbaikar”9 initiative to free Mumbaikars from seven radio stations taking their tally to 22 stations
rain woes, Red FM’s “Bachpan Bachao Aandolan”9 spanning 15 cities15.
to end child labour, Radio Mirchi’s “Road pe dikhegi
tabhi to chalegi”9 campaign for promoting cycles, MY Consolidation has some interesting by-products – it
FM’s “Halla Bol”9 for helping listeners with one issue allows for economies of scale to develop. But it will
affecting their city and BIG FM’s “Big Green Ganesha”9 also allow for added differentiation between the brands.
for promoting environmental conservation and Where frequencies are available so rarely, it will allow for
sustainability. interesting differentiation to be created.
Radio no longer remains a medium for only music as it
offers a package of multiple components like live hyper
local news, engagement of listeners with RJ through
games/talk shows and music. Ground activations, music
streaming and concerts are areas of growth for the FM
companies. The radio + on ground + digital package,
4. What does acquiring BIG FM mean for Music Broadcast Limited, exchange4media, 31 9. Noteworthy social campaign done by various Radio stations in 2018, radioandmusic, 25
May 2019 September 2018
5. Music Broadcast to acquire Ananda Offset’s Friends 91.9 FM radio, livemint, 24 April 2018 10. KPMG in India analysis based on primary and secondary research
6. Radio One acquisition strengthens our position in metros: Harshad Jain, HT Media, 11. Celebrities go on air, Deccan Chronicle, 2 March 2019
exchange4media, 14 May 2019 12. Radio Mirchi starts operations in the US, exchange4media, 28 January 2019
7. Radio City launches digital platform, radiocity.in, exchange4media, accessed on 3 July 13. Music Broadcast Limited – Investor Presentation for Q1 FY 2020
2019
14. Music Broadcast to acquire Ananda Offset’s Friends 91.9 FM radio, livemint, 24 April 2018
8. Radio Mirchi starts licensing original content to multiple platforms, exchange4media, 23
July 2019 15. Radio One acquisition strengthens our position in metros: Harshad Jain, HT Media,
exchange4media, 14 May 2019
Radio 125
Disruptions in the radio industry fans live through the social media platforms, which
provide an instant visual connect which radio lacks. In
Measurement system terms of the hyper-local advertising and local news, with
The measurement system continues to be a cause of advance location tracking services and increasing use
concern for the industry. Addressing this challenge has of AI, social media platforms are able to customise the
the potential to attract high quality advertisers to invest advertisements exactly to individual users’ tastes and
in radio. Different stations have resorted to different preferences. Local news is now being circulated through
ways to measure their audience as the industry lacks instant messaging platforms, thereby further reducing
unified audience measurement system. While there the reliance of the consumer as a source of local news
have been initiatives taken by the Association of Radio and updates.
Operators of India (AROI) and Media Research Users Social media platforms also provide the number of
Council (MRUC), it has remained a work in progress16. views/hits instantly in a transparent manner. This
Different players in the industry are using different ways solves a key problem of measurement associated with
to combat this lack of measurement. For instance, some any form of media. Advertisers are able to know the
players are using Indian Readership Survey as a tool to customer feedback and react to it almost on a real-time
measure the listenership; some others are using data basis.
provided by Radio Audience Measurement (RAM) by
TAM media Research; some players have also appointed Policy changes that can contribute to the
independent market research companies or completely success of radio
developed their own surveys to track the listenership.
Lowering of the reserve price
While these attempts do mitigate the lack of
Auctions for the second batch of Phase III held in
measurement to some extent, from an advertiser’s
2017 drew a lukewarm response. It is anticipated that
standpoint radio continues to be a judgment and
the government may seek remediation measures. An
intuition based buy.
alternative to the high reserve price could be a revenue-
sharing model without any reserve price. Benchmarking
Rise of smartphones
the reserve price with the advertisement potential of the
India has now become the world’s second largest
cities can also be considered18. While setting a reserve
smartphone market with a user base of 400 million17
floor price is necessary, the auction methodology should
making it a preferred mode of consumption of media
also consider actual bids which should provide for a
for the masses. This trend is fueled by affordable data
reduction in the reserve price based on actual demand.
prices, availability of large diverse content, affordability
of the new range of smart phones and convenience.
Freedom to broadcast news
A downside to an ever evolving technology in the
smartphone space is that more and more smartphone The government adopted a mixed approach to
makers are excluding the humble radio receiver in order permit broadcast of news on Radio. Private FM radio
to pack in the maximum features in the minimum size of broadcasters have to carry the AIR news bulletins on
the smartphone. Listeners are then compelled to access an ‘as is’ basis, in an unaltered form, restricting the
the radio content through digital streaming. While radio free speech in the process and restricting content
companies have gone digital in order to capture this differentiation to attract new listeners. In addition, the
smartphone audience, video on demand is becoming commercials which are broadcast during news bulletins
more popular than merely streaming audio online. Radio have to be carried along with the news in totality19.
companies are using the power of their influencers in Private radio operators are not excited by the fact that
order to mitigate this impact. they broadcast news sourced from All India Radio. They
feel the move infringes on their right to present news
Social media platforms in a format suited to them, and would make all radio
channels sound alike. Most large radio broadcasters
The traditional strengths of radio are now under
are part of large media groups and have their own
increasing threat from social media platforms. Radio has
new content and pride themselves on credibility and
banked on the popularity of the RJs and their connect
independence.
with the masses; these RJs are now interacting with
16. No unified measurement: So, how does the radio industry work?, exchange4media, 27 18. Radio frequency auctions: No one’s tuning in, operators say reserve prices too high,
August 2018 Financial Express, 21 February 2019
17. Pitch Madison advertising report, 2019 19. Terms and Conditions, News on Air – News Services Division, All India Radio News,
accessed on 3 July 2019
126 Radio
Frequency
In order to increase the number of stations in
popular metros with a higher consumer appetite, the
government should consider decreasing the minimum
space between the stations from the current 800 MHz.
This is also in line with the TRAI recommendation in
order to increase the number of stations available in
metros. This may potentially lead to rationalisation of the
advertisements run during peak hours thereby improving
the listenership experience. To draw an analogy, the city
of Mumbai has nine radio stations where as the city of
New York has 45 radio stations20.
Road ahead
With an estimated CAGR for FY 2019-24 of 10.08 per
cent and estimated industry size of INR 44.5 billion21 by
FY 2024, the radio industry is heading towards a slower
growth rate. Pending clarity on when the next round of
auctions will be held, we have not considered in any
growth from the launch of stations not yet auctioned
and existing phase III stations are expected to reach
their full potential over the next three years.
Projected size of the radio industry
CAGR
Industry size FY20P FY21P FY22P FY23P FY24P
(FY19-24)
INR billion 30.5 33.7 37.6 40.5 44.5 10.08%
Radio is among the last free-to-air medium with a witnessing the decrease in line with global trend.
relatively large reach, and therefore it continues to However, the number has been fairly stable in the
be an important mass medium. For now, it is able to U.S. This is primarily because of more number of car
fend off competition from the ever increasing internet commuters in the U.S. who prefer listening to radio.
penetration. Given the high gestation period and the
With the 2019 elections done, the industry is awaiting
challenges around measurement, if the long overdue
the government’s intervention to provide clarity on
phase III auctions are not rolled out soon, radio industry
the next batch of the phase III auctions, resolve the
may be running out of time and may not be able to
copyright issue and deregulate the industry.
sustain in this increasingly evolving market.
The radio listenership is decreasing at a rate of 1 per
cent22 globally. The Europe and Asian countries are
20. Radio could be three times bigger than it is now: Prashant Panday, exchange4media,
3 December 2018
22. CRISIL research
Radio 127
128 Radio
The ask of media advertisers has shifted The acquisition of the BIG FM network operated
from buying media inventory to demanding by RBNL, subject to regulatory clearances
“Solutions”. We have developed solutions will make MBL the largest radio player in the
that go beyond Radio and straddle other media country with 79 frequencies with minimal
verticals including print, TV, OOH, on-ground, overlap, covering majority of the FM footprint of
digital and social media. We are not restricted the country. We believe the consolidation that
to developing the solutions for our advertisers the industry has witnessed will bring further
but executing them as well. Another shift in efficiencies in business operations and improve
the tide is from merely using digital platforms the medium’s ability to attract advertisers of
for marketing and communication purposes, significant scale and size.
to becoming a full-fledged digital publisher.
We have extended our FM content to digital,
creating digital-first content, adding a digital leg
to on-ground events and even creating digital
only web-radios. Apurva Purohit
Having built a successful test model of creating President
engaging video content, the focus would be Jagran Prakashan Ltd.
on two separate revenue streams – brand
integration into the content and licensing to
platforms on multiple formats and in multiple
geographies.
With focus on the millennial generation, multi-

Prashant Panday
media content creation is what we believe would
Managing Director & CEO
drive the radio industry in the coming years
Entertainment Network
especially in the markets, Indigo operates. Radio
(India) Limited
and social media pointing at each other besides
on ground activations and curated events. With
more innovations including a strong digital play
the days ahead look exciting.
Sanjay Prabhu
Vice Chairman
Radio Indigo FM
Radio 129
As the Indian economy propels to the INR Radio to grow in Real Bharat - In the years to
5 trillion, the radio industry is aggressively come Radio will witness faster growth than
pursuing growth on the back of content curated traditional medium on the back of Private
on the basis of local insights and customised FM stations reaching new markets. The
solutions for brands which can go across other consumption of Radio in tier II & III markets is
mediums apart from radio. We are also betting increasing and nowhere have we seen digital as
big on programmatic, by proposing to invest in a a threat, we believe all the mediums will co-exist
programmatic solution designed to enhance and as each medium has its own strength.
catalyse advertiser experience and also increase
Advertiser realises the potential of this medium
the advertiser base in Tier II and Tier III cities.
in terms localisation and massive reach to top it
This will help the industry to capture a wider
up customized 360 business solution as per the
range of advertisers – from MNCs to smaller
client challenge is our strength
advertisers with minimal budgets through
state of the art frictionless service.
Rahu Namjoshi
Asheesh Chatterjee Chief Operating Officer
Chief Financial Officer & MY FM – DB Corp Ltd
Chief Business Office
Reliance Broadcast Network
130
Music
In tune with the masses
131
132 Music
Music
Tuning with the masses
Introduction
In line with the trends in the global music industry, the worldwide rankings from 19th in 2017 to 15th in 20181.
Indian music industry is witnessing a revival in the last The Indian music industry stood at INR16.6 billion in
few years which is majorly driven by the introduction FY19, having grown at 15.3 per cent over FY182. The
of digital music platforms. The strong growth over the industry recorded a compounded annual growth rate
last year has resulted in the industry leapfrogging in (CAGR) of 13 per cent between FY15 and FY193.
Historical performance of the music industry
Growth in CAGR
FY19 over FY18 (FY15-FY19)
INR billion 10.2 11.2 12.6 14.4 16.6 15.3% 13.0%
Digital content consumption, including online music, Indian music industry revenues by format, FY19E
has been growing quite steadily, resulting in digital
becoming the largest contributor (from 55 per cent 6%
in FY15 to 78 per cent in FY19)4 to the overall growth
7%
and revenues of the Indian music industry. The Indian
consumer is estimated to spend 21.5 hours per week 9%
listening to music, higher than the global average of
17.8 hours a week, indicating popularity of music as an
78%
entertainment option among Indian audiences5. Increase
in digital distribution and consumption of music is being
led by strong growth in broadband subscribers due to
proliferation of smartphones and lower data tariffs.
Digital* Performance rights

Physical Synchronisation
Source: IFPI Global Music Report 2019
* Digital revenue: Includes streaming, mobile personalisation and

1. IFPI Global Music Report 2019 downloads. The share of digital channel has remained unchanged
2. KPMG in India’s analysis 2019 based on primary & secondary research at 78 per cent in FY19 vs. FY18 as increase in share of streaming is
3. KPMG in India’s analysis 2019 based on primary & secondary research balanced out by the decrease in share of downloads.
4. IFPI Global Music report 2019
5. IFPI Global Music report 2019
Music 133
Growth accelerators Genre-wise music consumption, FY19E
Exponential growth in user engagement applications

User engagement applications include apps wherein 8%
the user is allowed to use a visual input with audio input
running in the background to create engaging content. 12%
The music industry has acted as a catalyst in the growth
of user engagement applications. As of April 2019, TikTok 12% 50%
has over 120 million monthly active users in India and
licensed music has played a major part in its growth6. At
the same time, rise of user engagement applications has 18%
also created a new monetisation avenue for the music
industry. Following the success of TikTok, social media
giant Facebook has obtained licences from record labels
to feature music in its applications. Earlier, such content Bollywood International Punjabi
due to lack of licence deals was taken down. In addition
to providing access to licensed music to its large user Tamil and Telugu Other regional
base across Facebook and Instagram, Facebook Inc.
plans to compete with the music app TikTok with its Source: KPMG in India analysis 2019 based on primary and secondary
work in progress application Lip Sync Live7. research
TikTok is also a big hit among the younger population In mid-2016, prior to the democratisation of wireless
and the platform has made rapid headways into the data usage, Bollywood accounted for 65-70 per cent
tier II, tier III and beyond markets. It has contributed to share of music consumption on streaming platforms.
some viral hits – “Lamberghini” song is a case in point. This share has dropped to a little over 50 per cent by
Industry can expect such viral hits more frequently as early 2019 . The share of international music has also
more user engagement applications enter the market decreased from late 2016 due to increased accessibility
and as social medial players allow their subscribers of streaming platforms in tier II and tier III cities9.
to include the use of licensed music in their stories.
All in all, increasing use of licensed music by users to
create appealing content provides a significant growth
opportunity for the music industry.
Increase in consumption of non-Bollywood music

The listeners’ music preferences are no more dictated
by what’s playing on TV and radio and are not restricted
to Bollywood anymore. There has been a surge in
demand for non-Bollywood genres of music including
regional, spiritual, Indian rap, international etc.
6. “With over 120 mn monthly active users in India, how effective will the TikTok ban be?”, 8. Discussions with Industry Participants
The Economic Times, 2019, accessed as on April 17, 2019 9. Discussions with Industry Participants
7. “Facebook Finally Allows Licenced music In Videos, Starts Testing Musical.ly Rival”, tech-
times.com, 2018, accessed as on June 5, 2018
134 Music
Regional music segment accounted for around 32 per Composition of music streaming revenue, FY19E
cent of the market in FY1910. Punjabi music leads the
share of revenue among regional languages. This high
share of Punjabi music also reflects its popularity that
has been built since the mid-90s. The robust demand 10%
for Punjabi music both within India and among NRI
audiences has created monetisation potential for the
artists, both in online world and on traditional TV and
radio platforms. Tamil and Telugu music have always
been popular given the captive audiences of their
respective movie industries. Regional players have 90%
evolved to become more social media savvy by using
tools such as social media optimisation (SMO) to boost
their content.
Going forward, the share of regional music consumption Subscription revenue Ad-supported revenue
is expected to increase while the share of Bollywood
music consumption is expected to go down. However,
the size of the overall pie will also expand substantially. Source: KPMG in India analysis 2019 based on primary and secondary
So Bollywood music consumption, in absolute terms, research; the advertisement vs. subscription revenue mix takes into
will remain large. Access to streaming platforms for account music streaming on YouTube in India.
users in tier II and beyond markets has meant increase
in consumption of local/regional music and this trend In FY19, advertising accounted for around 90 percent
is likely to continue over the medium term. Streaming of music streaming revenue while paid subscriptions
platforms are also focusing on offering regional content accounted for the rest 10 per cent (INR 1.2 billion
to build differentiation. in absolute terms)14. However, with the launch of
subscription-only services such as YouTube Music and
Amazon Prime Music as well as Spotify, which have
Key themes a strong impetus on converting free subscribers into
paid ones, the industry is likely to sharpen its focus
Entry of international platforms spices up music
on realising monetisation. Music streaming platforms
streaming
across the board are offering attractive subscription
The base of monthly active users (MAUs) on audio plans and bundled offers for users. For instance,
streaming platforms is estimated to have increased YouTube Music, Gaana and JioSaavn are priced at
from 110 million in March 2018 to 165 million in March INR99/month while Amazon Prime Music is bundled
2019, registering a strong growth of 50 per cent11. This with Amazon Prime’s INR129 per month plan.
growth has fuelled the interest of international music
streaming platforms - including Amazon Prime Music, Of the total audio streaming subscriber base in India,
YouTube Music and Spotify - which have entered the around 1 per cent are paid subscribers15. In China, which
Indian market over the last one year12. ByteDance Ltd., was a predominantly pirated music consuming market
the owner of popular user engagement app TikTok, is like India, music streaming platforms have achieved 5
contemplating entry into the music streaming market per cent paid subscriber base in a short span of time16.
of emerging countries (including India) with the launch For the music industry as a whole, per capita revenue
planned as early as the third quarter of FY2013. in India stands at 10 cents while the same number for
China is 21 cents and for UK it is USD2017, signifying
tremendous headroom for growth.
10. Discussions with Industry Participants 13. “TikTok owner to challenge Spotify and Apple with Music Service” Bloomberg May 2019
11. Discussions with Industry Participants story accessed on 17 July 2019
12. “Why two music-streaming giants have entered India in less than a month”, Quartz India
March 2019 story accessed on 17 July 2019
Music 135
Global comparison: per capita revenue for music industries in India, China and the UK for 2017
India $0.10
China $0.21
UK $20.00
$0.00 $5.00 $10.00 $15.00 $20.00 $25.00
Source: Vision 2022 – The Indian Music Convention 2018 document
In China, consolidation of music platforms, government Partnerships with social media platforms, video
focus on reducing/eliminating pirated content, increased sharing platforms and gaming consoles open up new
paying ability of users, cheap smartphone and data monetisation avenues for the music industry
availability have all contributed to the music streaming Partnerships with social media platforms, video sharing
success story. Indian music streaming market may platforms, gaming consoles, etc. help the music industry
follow a similar growth trajectory if steps are taken to increase its distribution reach and also open up new
significantly reduce consumption of pirated music. Also monetisation avenues. In its efforts to improve user
the overcrowded nature of the Indian streaming market engagement, the social media giant Facebook Inc.
may make it a prime candidate for consolidation. announced a licensing deal with three Indian labels -
namely T-Series, Zee Music Company and Yash Raj
Synchronisation to get a boost due to targeted Films20. With this licensing deal, it will now be possible
advertising tailored to users’ listening habits for its nearly 300 million users in India to include music
In the global music industry, “Indian music in their stories on Facebook and Instagram. Facebook
synchronisation” is ranked seventh in terms of already has licensing deal in place with Universal Music
revenue18. Synchronisation involves distribution and Group, which is helping the platform offer personalised
placement of sound tracks in feature films, television and interactive music features for its users around the
shows, advertisements, video games, etc. word.
With changes in the advertising sector, the industry Phonographic Digital Limited (PDL), a global digital music
has witnessed increasing emphasis on analytics- collection company, has entered into a partnership with
dependent marketing, which aims to target the relevant Dailymotion, a leading video content discovery platform,
audience with more precision. The ad-supported to offer Indian music content to worldwide audience.
streaming subscriber base, which contributes around PDL is planning to monetise the works of various PDL
85 per cent (excluding 1per cent paid subscriber member artists and labels on Dailymotion which has
base and 14 per cent bundled subscriber base) to the around 250 million monthly users21.
overall streaming subscriber base in India, presents Spotify is now accessible on Sony’s gaming console
a significant opportunity for advertisers to tap into19. platform PlayStation 3 and 4, months after its debut on
Advertisers are increasingly focusing on programmatic Microsoft’s gaming console Xbox one, where it was
advertising tailored to the user’s listening habits. This available since its launch in February 2019. With this
is likely to improve user engagement and therefore deal, more than 50 million songs and 3 billion playlists
increase effectiveness of the ad campaign. In this are now accessible to gamers in India. It works for both
scenario, advertisers can also keep the focus of their paid and free users and doesn’t require subscription of
ad campaign on the targeted customer group. Although Spotify on PlayStation. Spotify is already available on
programmatic advertising is picking up in India, there Sony’s PlayStation globally since 2015.22
is significant headroom for it to grow given its appeal
to the advertisers. The use of music in such tailored ad
campaigns presents a significant growth opportunity for
the music industry.
14. Discussions with Industry Participants 20. “Facebook inks licensing deals with 3 Indian music labels”, Live Mint, 2019, accessed as
15. Discussions with Industry Participants on March 14, 2019
16. Discussions with Industry Participants 21. “Dailymotion & PDL India Join Hands to Bring the Indian Music Industry to Greater
Heights” IndiaTelevision December 2018 story accessed on 22 June 2019
17. Vision 2022 – The Indian Music Convention 2018 document
22. “Spotify is now available on PlayStation in India”, musicplus.in, 2019, accessed on June
18. IFPI Global Music report 2019 06, 2019
19. Discussions with Industry Participants
136 Music
Judicial and legislative interventions bode well for In July 2018, the Union Cabinet approved the
the music industry accession to the WIPO copyright treaty (WCT) and
The verdict by Hon’ble Bombay high court on 23rd April, WIPO performers and phonograms treaty (WPPT),
2019 in Tips Industries Vs. Wynk Music Ltd. held that collectively known as the WIPO Internet Treaties,
online music streaming and digital downloads are not which extend coverage of copyright to the internet
covered under the statutory licensing provision (Section and digital environment23. The Indian music industry is
31D) of the Copyright Act,1957. The verdict makes it likely to benefit from this accession through protection
clear that market dynamics should drive commercial of music industry’s work and creation across the
negotiations between labels and streaming platforms member countries signatory to the treaties. In part due
and streaming should not be clubbed with use of to the accession to Internet treaties, the US Chamber
music in radio and TV broadcast which is subject to of Commerce has ranked India at 36th place in its
price regulations. It needs to be seen how the industry international intellectual property index in 2019, eight
dynamics evolve in light of this decision. places above the previous year’s rankings24.
23. “Cabinet approves accession to WIPO Copyright Treaty, 1996 and WIPO Performance and
Phonograms Treaty, 1996” Press Information Bureau, Government of India, Cabinet, 2018,
accessed as on July 4, 2018
24. “India vaults eight slots to 36th rank in IP index” February 2019 story accessed on 22 July
2019
Music 137
The way forward

The music industry is expected to build on the around 15.8 per cent per annum25. Several factors would
momentum of the last 2-3 years and reach a market underpin the projected growth in the industry.
size of INR34.6 billion by FY24 at a growth rate of
Projections for the music industry
Industry CAGR
FY19 FY20P FY21P FY22P FY23P FY24P
size (FY19-24)
INR billion 16.6 19.3 22.3 25.8 29.9 34.7 15.8%
Source: KPMG in India’s analysis 2019 based on primary & secondary research
The music streaming segment would continue on its Synchronisation revenue would see a strong growth
growth trajectory recording around 20 per cent growth due to increasing use of music in user engagement
per annum through FY24, which is about 5 per cent applications such as TikTok and ad campaigns.
higher than growth of the overall music industry26.
Initiatives of the Government of India, including new
The streaming platforms, especially those with deep
reforms such as the WIPO ratification, will go a long way
pockets or backing of strong conglomerates, are likely
in protecting intellectual property of original creators.
to embark on category building marketing initiatives,
Increased government initiatives towards curbing piracy
which will organically increase consumption of licensed
and stream ripping platforms will be needed to increase
music and in the process, reduce piracy. The freemium
consumption of licensed music. These steps can
plans offered by platforms will continue to drive
increase uptake of audio streaming platforms leading
penetration of licensed music in underserved markets.
to rise in label incomes and a trickledown to creative
As the ad-supported user base of audio streaming
artists, thereby leading to increase in both quantity and
platforms expands, brands will start recognising the
quality of music in India.
meaningful and targeted engagement this user base
can provide supported by data on users’ listening habits.
25. KPMG in India’s analysis 2019 based on primary & secondary research
26. KPMG in India’s analysis 2019 based on primary & secondary research
138 Music
Regional music: The next big frontier in music streaming

Indians are spending a large part of their leisure time regional music by exposing them to adjoint languages.
hooked on to their smartphones, and this has opened For example, if there is a user in Maharashtra who is
up a world of opportunities for OTT players. What is listening to Hindi music, we try to expose a couple of
interesting is that music is no longer the bastion of Marathi songs to the user through interventions to see
urban Indians but proliferation of music streaming if he enjoys Marathi music also. This has worked very
has been far and wide with more than 50 per cent of well for us.
music consumption on Gaana happening in markets
India is currently one of the most promising music
other than the eight key metros. With this growth,
markets in the world and is at an inflection point
the fabric of music consumed by the users has also
right now thanks to cheaper smartphones and 4G
changed significantly. What we experience today is
tariffs. The biggest differentiating factor between
the rich cultural heritage of India being represented
the Indian music industry and other global markets
through music tastes of our users and the experience
is the diversity of music content available in regional
at Gaana is representative of broader changes in the
languages and the affinity users have for songs in
music streaming market.
their mother tongue. To build consumer loyalty, music
Regional music consumption forms more than a third platforms will have to offer a sense of belonging to
of the overall music consumption on Gaana with the users and promote quality regional music to such
Punjabi, Telugu, Tamil, Bhojpuri, Marathi, Gujarati and audience.
Malayalam music ruling the charts. OTT players and
India has a fan for every regional music we have to
music labels are excited about the future prospects
offer.
of regional music content for a simple reason - the
sheer size of the addressable market. As the country’s The views and opinions expressed herein are those of
largest music streaming app, Gaana has registered a the quoted person/s and do not necessarily represent
10X growth in overall consumption and a far greater the views and opinions of KPMG in India.
25X growth in regional music traction in the past two
years. The phenomenal growth in regional music is led
by growth in Punjabi music which now contributes 15
per cent of consumption on Gaana.
Prashan Agarwal
OTT music streaming apps can play a big role in the CEO
future growth of regional music consumption. At Gaana
Gaana, we have started to help users discover more
KPMG in India.
Music 139
140 Music
Industry Perspective
Affordability of data has led to breaking down of Push towards paid subscription model is critical
age, location and language barriers. This, coupled to the long-term sustainability of the music
with explosion of social media 2.0, i.e., the rise streaming ecosystem. Increase in share of
in hyper participative user engagement oriented paid subscriptions would be a win-win for all
applications, has led to the resurgence in the the stakeholders and would increase both
Indian music industry. quality and quantity of creative music in India.
Experiences of USA and China confirm that
this is doable. This, in turn, could open up huge
growth possibilities for the industry.
Mandar Thakur
Chief Operating Officer
Times Music Vikram Mehra
Managing Director
Saregama India Limited
If Singapore’s Esplanade and London’s O2 Arena

are prime tourist attractions which generate
both local employment and revenues for the
With increasing adoption of apps, not only
local exchequer, India’s cities with their diverse
amongst the youth, but consumers at large, the
musical and cultural richness, have the potential
approach to advertising and outreach has also
to host performing centre ecosystems that can
begun to change. Influencer campaigns, which
support cultural tourism, creative industries,
till a year ago were ‘nice to have’, have become
the #Gig Economy and other allied services.
the new normal.
A vibrant live music ecosystem can contribute
over USD500 million to the city’s economy.
Vancouver which is a designated Music City gets
USD520 million in revenues, Glasgow from its
festival earns around USD200 million in terms Arjun Sankalia
of economic contributions. We are hopeful that Director International Music
the state governments encourage a performing and Publishing
centre as part of their smart city roll out. The Sony Music Entertainment
Ministry of Housing & Urban Affairs should India
develop a policy that would encourage FDI
into this sector, which helps preserve culture,
generate employment and an important leisure
component across all ages in a concrete jungle.
Blaise Fernandes
President & CEO
The Indian Music Industry
Music 141
Streaming platforms are leveraging massive Original music content outside of conventional
data sets and sophisticated AI/ML to personalize Bollywood music is set to witness healthy
experiences for hundreds of millions of users. In growth as music discovery increasingly starts
the process, they will create closer relationships taking place on digital platforms. The IP created
between artists and fans in online and offline in this process will have huge monetization
worlds. As part of this experience, platforms are potential on streaming platforms for years to
innovating with advertisers to help them engage come.
with users in relevant, timely and useful ways.
Shameer Tandon
Vinodh Bhat
Founder & Managing Director
Co-Founder, President &
JetSynthesys Music Boutique
Chief Strategy Officer
JioSaavn
KPMG in India.
142
ASPAC markets
143
144 ASPAC markets
ASPAC markets
The media and entertainment industry in ASPAC markets:
At the forefront of the digital revolution
I. Asia Pacific Overview
entertainment in the world (leading countries within the

area: China and Japan). With Asia Pacific to account for
33.8 per cent2 of global ad-spend by 2020, the changing
Darren Yong landscape of advertisers have clearly shifted towards
Asia Pacific Head of TMT digital. 5G will further expand the market opportunities.
KPMG • New ways of consuming and distributing content
The way we consume media has drastically changed
over the past ten years, moving from offline to online.
The Media and Entertainment (M&E) industry is one
Beyond the platforms, business models have also
of the most rapidly evolving, due to its close links with
shifted: from buying units of content (a CD, a DVD,
technological developments. This is particularly true in
a magazine) to subscription-based models offering
Asia Pacific as the region is an early adopter in terms of
unlimited access to a broad catalog of content (Spotify,
technology and mobile consumption. In a market where
Netflix, Medium). The emergence of new disruptive
consumers are more and more demanding in terms of
players on the market has deeply changed consumer
quality and convenience, companies have to continually
behaviors (for the better, cutting down illegal download
fine-tune their business model, their distribution
habits), and forced traditional players to adapt their
scheme, the way they talk to their consumers, and the
business models as well. Advertisers have shifted
way they generate revenue. Major markets like China,
their minds towards capitalizing on these new
India, Japan and Korea have created their own unique
business models with Asia Pacific digital advertising
market opportunities.
reaching 49 per cent3 of total ad spend in 2019.
Dominant trends in the market • Synergies and alliances are here to stay
Media and entertainment (advertising, online and offline
If disruption has hit the industry hard, it has also
press, movies, TV, games, music, and video platforms)
opened the way to synergies between previously
is and has always been a big part of consumers’ lives,
independent subcategories. Telecom and PayTV
and in Asia more than ever. With a smartphone adoption
players are partnering and consolidating with new
rate of 69 per cent and unique mobile subscribers
platforms (Netflix, Hulu, Spotify, Disney) in order
penetration rate of 67 per cent1 in Asia Pacific, Asia
to adapt to new consumption behaviors, Telecom
Pacific region is the biggest market for media and
1. GSM Association 2018

2. Zenith’s “Advertising Expenditure Forecasts” for June 2018
3. Dentsu Ageis Network 2018
ASPAC markets 145
companies have targeted media content, traditional The traditional way of ideating and distributing ads are
TV channels are working with the Telco sub-industry directed towards a platform (mobile apps and internet)
in order to go mobile. Across the board, Telco’s play a where consumers’ attention span is smaller, and
key role as content aggregators in the digital market competition is almost infinite. In an interview published
given the access to the consumer. In 2019 only, by The Financial Times with the CEO of WPP , the
major mergers and/or acquisitions have happened. biggest advertising conglomerate in the world, Sir
AT&T, bought one of the leading media companies Martin Sorrell mentioned feeling the pressure of big
worldwide, Time Warner Inc. Verizon acquired a accounts shrinking their ad spend. While cost-cutting
landmark in the Internet landscape, AOL. The other was mentioned as a reason for that, the founder of WPP
way around, M1, a Singaporean telecom company, also touched-upon a more deep-seated challenge: the
was bought by Singapore Press Holdings and Keppel traditional model of advertising is not adapted to the
Corporation. way brand owners, and marketers promote their brand
today. They seek more clarity and higher integration of
• Social media - the big disruptor
technology. It doesn’t come as a surprise, as marketing
Social media has tremendously impacted the direction has shifted to digital marketing, and marketers and
the M&E industry is taking, with platforms such brand owners now deal with tech companies for their
as Facebook, Snapchat or Instagram empowering advertisement needs: Google, Facebook and Tencent to
consumers to become creators of content name a few.
themselves, be it text, video or photo, taking down
the hegemony of traditional content sources such Advertising agencies are now competing with tech
as newspapers and magazines. Phones being used startups and corporations. Today, their scope of work
increasingly (in terms of the number of phone owners has moved from creating ideas to understanding the
and the number of hours spent on the device daily), latest trends and tactics in digital marketing as well
this is an immense shift for the sector. Social media as supporting their clients in their online advertising
has also broken traditional routes-to-market for players campaigns. The reality is that advertising agencies,
such as newspapers, TV Broadcasters, advertising as big as they may be, cannot ignore this crucial fact:
agencies and brand owners who used to partner with consumers are not watching TV and reading paper
them to promote their brands. magazines anymore, they are on their phone, scrolling
through their Instagram feed, spending time on WeChat
• Gaming takes centre stage or watching videos on Youtube.
The gaming market, with in-app advertising and large
The increasing hegemony of social media and search
investments into content, appears to the next large
engines as the consumers’ go-to to get information is
area of revenue that consumers are spending on. With
putting pressure on the traditional business model and
the gaming market exceeding $70bn4 in Asia Pacific in
pushing information creators and broadcasters to look
2018, the opportunity to target this market has gotten
for new revenue models.
the attention of the global and regional community.
Gaming has become so mainstream in some ASPAC
markets that in 2019, gamers in Japan, Singapore, and
South Korea were watching other people play video In summary
games online more often than they were tuning in to
The new reality of the media and entertainment
traditional broadcast sports5.
industry is technological and fast-paced. The
march of technological development cannot be
Traditional versus New entrants
stopped, and traditional business models have
Both traditional players and new entrants have their to evolve, or risk to fall behind and perish. M&E
stake in the constant evolution of M&E. Traditional TV leaders are now faced with new challenges
(Cable and Pay TV), which has been integrated to Telco coming from disruptive technology such as
offerings over the last ten years, is now faced with Artificial Intelligence and Machine Learning,
the challenge of VOD and Over The Top (OTT) video. and companies, big and small, which are using
The transformation in the way consumers, mainly it to create an ever more compelling, seamless
Generation Z, and millennials consume video content and convenient user experience. The constant
has forced TV broadcasters to adapt by creating their acceleration of technological developments,
own VOD offerings as well as catch-up services. With shortening innovation cycles, will put increasing
the global expenditure on advertising shifting from TV to pressure on the market,
online, the dynamics faced by TV broadcasters impacts delighting consumers, and
advertising agencies. sharpening companies’
strategy and marketing
chops.
4. Statistica 2019
5. The state of online gaming 2019, Limelight Networks
146 ASPAC markets
A
Hikaru Okada
Japan Media and Telecommunications

Lead Partner
KPMG in Japan
Demographic statistics (2018)
Population: 122.23 million6 Urbanization: 92%7 PPP (USD): 44,2778 Median age: 47.39
TMT statistics (2018)
Mobile activity:
Internet Mobile penetration: TV HH Preferred device to
Email (80.2%)
penetration: 89.9% (individual) penetration: go online: Smart
Weather (65.8%)
93%10 94.8% (household)11 95%12 phone (59.7%)13
Transportation (63.4%)14
6. United Nations, DESA/ Population division

7. United Nations, DESA/ Population division
8. IMF data
9. World population review
10. Internet World Statistics
11. Cabinet office
12. Cabinet office
13. Ministry of Inter Affairs and Communications
14. Ministry of Inter Affairs and Communications
ASPAC markets 147
In Japan, among the four mass media – newspapers, Traditional media takes a hit
television, radio and publishing (book, magazine, etc.) – Radio, newspaper and publishing have all also seen
television has historically occupied a significant position. falling revenues over the same period – de-growth of
However, in recent years, with greater penetration 17.2 per cent19, 19.9 per cent20 and 32.1 per cent21 in
of the internet, the presence of conventional media the last 10 years respectively – which clearly underlines
has become less significant with few opportunities to the changing business scenario for traditional media in
engage directly with consumers in the way that digital Japan.
businesses can.
While digital continues to forge ahead
TV is a strong incumbent but viewing preferences
Internet usage, on the other hand, is only increasing and
are changing
now stands at 93.3 per cent22. Of these users, 59.7 per
Television in Japan is mainly terrestrial and viewers cent use smartphones to access the internet and 52.5
enjoy high-quality content for free. Although the usage per cent use PCs.23 Digital advertising has grown to rival
rates for subscription to payable broadcasting (including television with a rise in programmatic advertising spend.
pay-per-view such as broadcasting satellite and Advertisers have shifted their placement away from
communications satellite (BS and CS)/cable TV/internet television advertising because they can measure and
TV and VoD) remain at 13.9 per cent15 currently, it is analyze the effectiveness of their internet advertising
expected that the number of subscribers will increase as with more accuracy and in detail.
the original content library is enriched and large events
such as the Olympics are watched by more people in
the near future.
In Japan, content suppliers have built robust
With the expansion of mobile usage, the environment supply-side business models in which media
for area-free/time-free programs has been established, companies especially television and advertising
and people are spending more of their time on the agencies are closely linked and gather sponsors
internet, which has resulted in a decrease in the for advertisements. In this environment, many
average TV viewing time. Consequently, advertising people are not in the habit of paying for content
revenues on television have decreased by 4.8 per cent and therefore, conventional media still occupies a
in the last 10 years16. Broadcasters are now keen to strong position in the market to some extent.
invest in the life cycle management of their content,
However, the media industry as a whole has
and aim to make profits on a multi-channel and long
rapidly transformed due to changes in consumer
tail basis by enhancing the initiatives of its second
behavior and a shift in ad-spend in response
usage. Broadcasters are also actively promoting the
to the digital revolution. We expect the full-
simultaneous distribution of content to television, mobile
fledged spread of 5G will accelerate the digital
and PC via the internet.
media shift, with the enhancement of two-way
Online gaming is a mainstream and popular pastime interactivity. The content distribution methods
Japan reported the highest number of novice online will be diversified, and we expect that the
gamers at 61.6 per cent17 (novice gamers play less than profit structure will be realigned by the further
four hours a week with a third playing less than an hour) penetration of subscription business models. We
in a recent survey. Japan also had the longest average expect the digital transformation of conventional
duration of game play at 5.14 hours with eight per media to only accelerate further in the near future.
cent reporting more than 15 hours of play18 of the nine
countries in the study.
15. Japan Video Software Association

16. Dentsu Inc.
17. The state of online gamine 2019, Limelight Networks
19. Japan Commercial Broadcasters Association (JBA)
20. The Japan Newspaper Publishers and Editors Association
21. The All Japan Magazine and Book Publisher’s and Editor’s Association/ The Research
Institute for Publications
22. Internet World Statistics
23. Ministry of Internal Affairs and Communications
148 ASPAC markets
B
Seung-Yeoul Yang
Republic of Korea TMT Leader

KPMG Korea
Urbanization:
Population: 51.6 million24 PPP (USD): 41,35026 Median age: 42.627
81.5% (2017)25
Mobile activity:
Internet TV HH Preferred device to
Mobile penetration: Communication (95.2%)
penetration: penetration: go online: Smart
95.8%29 Information Search
99.5%28 97.9%30 phone (94.3%)31
(94.0%)32
24. Korea Statistics Office

25. United Nations Population Division, World
Urbanisation Prospects, 2018 revision
26. IMF data
27. Korea Statistics Office
28. Ministry of Science and ICT, Korea Internet and
Security Agency
29. Korea Information Society Development Institute
30. Korea Information Society Development Institute
Security Agency
Security Agency
ASPAC markets 149
South Korean media and entertainment industry snack culture. In a recent global survey, gamers in South
has rapidly evolved over the past few years. Digital Korea were found to be spending a lot of time watching
transformation enabled by new technologies, network other people play video games online, with 80 per cent
infrastructure and smart devices is changing the way watching weekly33.
creators produce entertainment content, as well as the
Media ecosystems straddle multiple digital
way users consume media. Various innovative business
categories
models, products and services are being developed and
UX (User Experience) in the media and entertainment Platform owners are now aggressively entering the
industry is becoming a core differentiator in this age of media and entertainment ecosystem to seize the future
transformation. business opportunity. For instance, in 2016, one of
the biggest South Korean tech giants, Kakao, acquired
South Korea is among the most digitised countries Melon, a leading music streaming service provider. In
globally January 2019, South Korea’s mobile carrier SK Telecom
South Korea has long had a reputation for technological agreed with three major terrestrial broadcasters to
prowess. Korea is now one of the most digitalized merge their OTT services and a dominant OTT player
countries in the world with 99.5 per cent Internet emerged as the result of this merger. The strategic
penetration rate, 95.8 per cent mobile penetration purposes of these cases were to expand their platform
rate and 97.9 per cent TV household penetration rate by increasing users and be the first-mover in the
in 2018. Nearly 100 per cent of households in South digitized media and entertainment industry.
Korea now have access to the Internet and 87.2 per
Local context is important and homegrown stories
cent of the population holding smartphone is accessing
resonate
Internet wirelessly. According to a survey conducted
by the Korean Ministry of Science and ICT in 2018, The moves made by global players are triggering
the average download speed of LTE mobile broadband significant changes in the Korean media and
exceeded 150Mbps. Fixed broadband subscribers with entertainment industry with local contextualization
gigabit Internet (download speed of 500mbps-1Gbps) of content. Netflix entered the Korean market in
service occupied 40.5 per cent of total households using 2016 penetrating the Korean OTT market, with local
broadband services. subscribers increasing at an exponential speed. Another
important aspect is that such global OTT giants are
In April 2019, South Korea launched the world’s first investing a significant amount to the South Korean
nation-wide 5G mobile network. Various new media original series production. Such investment has led to
content, ranging from cloud gaming services to VR the creation of high-quality local series. One recent
(Virtual Reality) and AR (Augmented Reality) content example is a horror series called “Kingdom”. The series
are expected to be developed in the coming years. achieved a global hit with favorable comments from the
Such technological development not only spurs the Netflix global users.
emergence of the new media services but also the way
we express in the traditional media industry. Highly The global success of K-Pop
advanced CG (Computer Graphics) technologies adopted Korean pop music, also known as the K-Pop, is also
in today’s Korean film industry are creating scenes becoming a global cultural phenomenon. A range
beyond imagination. Additionally, 5G has the potential to of digital channels such as Youtube, Facebook and
revolutionize the way we create, distribute and consume Twitter allowed artists to create original content and
media. communicate directly with the global audience. Korean
artists including BTS, EXO and Blackpink are now playing
Digital disruption is all pervasive in media and
a leading role in rebooting K-pop boom in the global
entertainment
market, leading a new chapter in the history of K-pop.
Network, platform and digital technologies are
transforming the traditional media and entertainment
industry. OTT (Over-the-top) service is disrupting the
video industry such as broadcasting and film. Likewise, South Korea has developed sophisticated digital
music streaming service is replacing the traditional infrastructure alongside quality content supply.
music record product. Traditional publishing media The country boasts of one of the highest internet
are being substituted by webtoon (web-based comic penetration rates globally and this along with
subscription) and webnovel (web-based genre novel a strong pop culture makes the media and
service). Rather than reading paper comic books and entertainment industry one of the most vibrant in
novels, Korean consumers now use smartphone to read the ASPAC region.
webtoons and webnovels anytime, anywhere just like a
150 ASPAC markets
C
Guillaume Sachet (Partner)
Singapore Diptendu Mitra (Director)

KPMG Services Pte. Ltd.
Urbanization:
Population: 5,791,90134 PPP (USD): 90,091.4036 Median age: 40.537
100%35
Internet TV HH
Mobile penetration:
penetration: penetration:
147.3%39
84.0%38 98.9%40
34. Singapore population, Worldometers

35. The World Factbook, CIA
36. Tradingeconomics
37. Singapore population, Worldometers
38. 4.83 million Singaporeans are now online,
Singapore Business Review, 30 January 2018
39. Mobile penetration rate, Singapore Government
data, data.gov.sg
40. The future of the Internet combines the power of
liner and OTT, The Drum, 06 February 2018
ASPAC markets 151
The media and entertainment industry in Singapore MediaCorp, which holds the monopoly in Singapore’s
has constantly adapted according to the needs of its FTA TV market, has established its own digital platform
consumers. Over the past few years, it has evolved “Toggle”, offering online access to MediaCorp’s TV
to keep up with providing real-time information and channels, radio stations, catch-up TV. In the case of
new content for users who have grown to be digitally Pay-TV, dominant players such as StarHub launched
attuned. With over 80 per cent41 of Singaporeans online, its online streaming TV product, StarHub Go, to stem
digital technology disruption has clearly been welcomed the decline of their traditional Pay-TV subscription base
by increasingly demanding consumers. Singapore is as well as by rationalizing its product portfolio with
home to some of the world’s most connected, mobile, simplified pricing and contractual terms.
social and digital users boasting a 147.3 per cent mobile
Radio and films remain resilient
penetration rate42 and 98.9 per cent TV penetration
rate.43 Online gaming is clearly a popular pastime, with Markets feeling less of an impact include commercial
local gamers spending 7 hours and 44 minutes per week radio, which continues to be resilient despite the
on video games, which was the third highest globally presence of Internet radio stations. The localized content
after Germany and the US44. on radio, catering to listeners’ preferences, encourages
them to tune in. In addition, commercial radio is also
Digital disruption is affecting traditional media available when driving, when an economical alternative
As Singaporeans shift online, market players have like digital radio is not.
noticed a decline in print media revenue and viewership
In the case of film businesses in Singapore, although
for their Free-to-Air (FTA) and Pay TV services. This is
content production remains small with limited local
largely due to an increase in the number of substitutes
creative content generated, the film distribution
available such as OTT offerings, and pirated content
business is thriving, dominated by four major players.
stemming from both locally and abroad. Due to high
Despite challenges such as online piracy, the cinema
barriers of entry imposed by the Infocomm Media
industry is still projected to grow at a compounded
Development Authority (IMDA) which requires firms to
annual growth rate of 11.8 per cent (from 2019 to 2023)46
obtain a newspaper permit for publishing a newspaper45,
with a large concentration of revenue generated by
news outlets in Singapore have a greater incentive to
international films due to a value proposition offered
shift their investments into digital media and provide
by cinemas in terms of quality of viewing experience
digital versions of print media. Premium subscription
offered.
packages, including digital-only packages, for its flagship
daily – The Straits Times – have also been launched to
cater to the different reading needs of subscribers.
Digitisation has necessitated a realignment and
But business models are evolving to keep pace repositioning of media and entertainment players
Furthermore, with only a handful of local content across the value chain. As digital transformation
providers dominating the market in the space of print, progresses, consumers have become the centre
television (both FTA and Pay-TV), and Radio, such of which offerings have evolved around, providing
market players are turning to streaming content to them with more options and greater flexibility in
stem the decline in content consumption of their their media and entertainment consumption.
traditional consumer models. For example, local provider

42. Mobile penetration rate, Singapore Government data, data.gov.sg
43. The future of the Internet combines the power of liner and OTT, The Drum,
06 February 2018
44. “Singaporeans spend more time playing video games than South Koreans,
Japanese”, Straits Times, March 22, 2019
45. Freedom on the Net 2017
46. Statista
152 ASPAC markets
D
Indonesia Diptendu Mitra (Director)

Urbanization:
55.3%48
Internet TV HH
Mobile penetration:
67.0%52
53.7%51 75.0%53
47. Indonesia population, Worldometer

49. Tradingeconomics
50. Indonesia population, Worldometer
51. Statista
52. We are Social, Digital 2018 Indonesia
53. Indonesia In View, AVIA 2019
ASPAC markets 153
The media and entertainment landscape in Indonesia The recent allowance of foreign investors to hold 100
has changed significantly over the past few years. This per cent stakes in companies involved in production,
is largely attributed to changes in consumer tastes as distribution and exhibition of media has created an
a result of urbanization, the rising purchasing power anticipation of attractive future growth. As such, foreign
of the middle class, and increased mobile penetration. firms such as CJ CGV and Lotte Cinema are expanding
While these changes have invited increased competition in Indonesia.58 This is a sign that the film industry is
across several traditional industries – notably print and expected to reap even more benefits from the rising
television – the other facets are poised for high potential affluence of the Indonesian consumer.
growth in the near future.
Online video is growing in popularity alongside
Media consumption habits are changing in the For OTT and film distribution companies, Indonesia’s
country large population and rising middle class has earned their
The traditional industries have been wary of the effects focus for expansion. These two factors, coupled by the
of shifting consumer taste. The print industry – a country’s growing broadband infrastructure, has created
highly fragmented one with 793 players in the Serikat a large opportunity space for OTT – a space currently
Penerbit Surat Kabar (SPS)54 – has been facing a general dominated by Genflix (serving 6 million subscribers
decline in profits, largely due to the rise of online as of March 2019).59 Unfortunately, the majority of the
media substitutes. In 2017, five print media companies population’s entertainment needs are met through
stopped publishing altogether due to the inability to free online video content60, resulting in a decline in the
maintain profitability.55 In contrast, the Free-to-Air (FTA) average revenue per user (ARPU) as OTT players slash
TV market remains the most popular medium to reach prices to increase their competitiveness. Despite this
the population. With a 75 per cent TV penetration rate56, metric, future prospects are promising. This may be
FTA TV advertising accounts for 51 per cent of the entire attested by the recent investment made by Go-Jek – the
advertising market in Indonesia.57 Despite its dominance, country’s leading mobile application – into this industry,
the industry is set to face looming threats from the Pay with plans to launch a platform in partnership with US
TV segment in the upcoming years as a result of rising player Vice.61
affluence and the expanding middle income class.
Gaming among the fastest growing segments of
While the Pay TV market is expected to grow, providers media and entertainment
do not enjoy high profitability due to intense domestic Online gaming has been the other big beneficiary from
competition and piracy issues. In the last few years, the favourable age demographics and improving internet
many large providers engaged in price wars to maintain access in Indonesia. The mobile gaming market in
market shares which resulted in their detriment. Smaller Indonesia was predicted to grow at a CAGR of 60 per
players were able to stay afloat through collaborations cent during 2015-2019, making it both the largest and
with internet providers, offering cross subsidies and fastest growing country in South East Asia62.
bundling packages that provide cheaper and more
convenient alternatives for consumers. However, the
nation’s weak piracy enforcement has resulted in a sharp
The media and entertainment industry in
rise of illegal Pay TV, which is a key challenge that the
Indonesia is at a crossroads with digitisation
industry will have to overcome in the future.
making its presence felt and challenging traditional
There remains an audience for radio and films business models. New media segments like OTT
Unlike its peers in the traditional segments, radio has and online gaming are witnessing high growth
been on the rise. Despite the industry’s fragmented but it’s still too early to dismiss the incumbent
nature and abundance of small players, the industry is strength of radio, films and FTA TV.
expected to grow at a rate faster than the global growth
rate, given that radio channels are becoming more
accessible due to increased mobile penetration.
54. Indonesia – Media Landscape Eriyanto 2018

55. Indonesia – Media Landscape Eriyanto 2018
56. Indonesia In View AVIA 2019
57. Indonesia In View AVIA 2019
58. Is Indonesia the world’s next big growth story? ScreenDaily, 04 November 2018
59. Indonesia: OTT resurrect, Asia TV Forum, 24 May 2019
60. Indonesia In View, AVIA 2019
61. Go-Jek ventures into video streaming, partners with Vice on original content, TechinAsia, 27 April 2018
62. Mobile gaming sees rapid revenue rise in Southeast Asia”, emarketer.com, January 20, 2017
154 ASPAC markets
E
Thailand Diptendu Mitra (Director)

Urbanization:
49.90%64
Internet TV HH
Mobile penetration:
80.0%68
82.4%67 98.0%69
63. Thailand population 2019, Worldometers

65. Tradingeconomics.com
66. Thailand population 2019, Worldometers
67. Thailand, Globalopolis 2019
68. Thailand has huge mobile potential, The Asean Post, July 19 2019
69. OTT in Thailand: An Analysis of The Opportunities and Constraints,
The IJMAS Journal, May 2019
ASPAC markets 155
Thailand’s media and entertainment industry has seen Regulatory challenges for Pay TV
a transformation of its traditional industries such as Competition in the Pay TV market has also heightened
print and television. As users become increasingly due to the implementation of the “Must-carry”
sophisticated in their use of digital technologies, the regulation. This requires providers to pack all terrestrial
industry has had to make drastic changes to keep pace channels together which smaller players find difficult
with Thailand’s digital appetite. As of 2018, Thailand has to achieve due to higher associated costs.76 Moreover,
achieved an 82.4 per cent internet penetration rate70, an operating costs have been increasing due to the high
80 per cent mobile penetration rate71 and a 98 per cent costs of acquiring exclusive content. This has resulted in
TV penetration rate.72 a decrease in the number of providers in both cable and
Print, TV and radio face tough times satellite TV as smaller players find it difficult to compete
with the larger platforms.
Digitalization has disrupted the media and entertainment
industry through an addition of users onto digital Digital media is highly competitive
platforms and shifting market demand away from Competition in the media and entertainment industry
traditional sources of media and entertainment. In its has intensified due to lower barriers to entry. With
highly competitive print media industry, consumers increasing internet connectivity and a growing middle-
have shifted to online news on social media platforms, income class, the number of subscribers in OTT
causing the advertising revenue from the print industry platforms is projected to grow at a compounded annual
to decrease drastically, with newspaper advertisement growth rate of 20.7 per cent from 2016 to 2020.77
spending taking the largest hit of 21.96 per cent year- However, key players have engaged in price wars in a bid
on-year decline.73 In the television industry, analog TV to increase the number of subscribers in their platforms,
is being replaced by digital TV. In the radio industry, leading to depressed ARPU (Average Revenue Per User).
radio advertising expenditures declined 3.5 per cent
from 2018 as advertising expenditure migrated to more In light of increased competition, firms have had to
popular online channels.74 Due to increasing operating reconsider their value proposition and appeal to new
costs, many radio companies have exited the industry markets. LINE TV, a platform that provides localized
altogether.75 content free of charge to its viewers, has defined a
unique value proposition for itself. By providing exclusive
In response to that, companies have been upgrading content targeted at viewers aged 18 – 22 years old,
their digital capabilities to stay relevant. One example through collaborations with famous local content
is Mitihoon, a stock and investment newspaper startup producers, it is able to differentiate itself from the other
that successfully migrated online to provide news OTT platforms. LINE TV has developed a large customer
services via their website while charging membership base and is currently a popular platform amongst the
fees, experiencing positive growth despite being in a Gen Z population. In the film industry, Major Cineplex
sunset industry. Currently, many newspaper companies Group, which holds 70 per cent of all the cinema
provide real-time news through online channels such revenue in Thailand78, has had plans to expand into the
as Facebook and LINE Today, credibility has become rural areas of Thailand.
the key differentiator instead of speed. To remain
competitive, some TV operators have also opted to go Piracy a serious threat
through major restructuring to reduce operating costs The media and entertainment industry in Thailand has
while others overhauled their content offerings. had to deal with the problem of piracy. This, together
with the economic slowdown and large availability
However, digitalization does not necessarily mean good
of online substitutes, has made the Pay TV market
news for digital service providers. Despite forecasts that
in Thailand remains a tough industry to operate in.
the digital TV market will grow, most of the digital TV
Likewise, the cinema industry faced a 25 per cent
operators are struggling, having to face with challenges
decline in advertising revenue in 2018 and piracy remains
such as the rise of digital media and increasing
a challenging issue left unsolved.79
operational costs. Channel 7HD, Channel 3HD and
WorkPoint TV are the most popular digital TV channels
for the Thais. As a result, most of the TV advertising The digital revolution has drastically transformed
spending has been allocated to these higher-rated the way firms in the media and entertainment
channels in the past few years, making it difficult for industry operate. Moving forward, firms must
other TV operators to stay profitable. consider reevaluating their existing business
models and digital capabilities to stay relevant and
appeal to an increasingly digital population.
70. Globopolis 75. InfoQuest, Thailand Media Landscape 2018

71. Thailand has huge mobile potential, The Asean Post, July 19 2019 76. Thailand in View 2016, CASBAA Ltd.
72. OTT in Thailand: An Analysis of The Opportunities and Constraints 77. Online Video Study in Thailand 2016
73. InfoQuest, Thailand Media Landscape 2018 78. Major Cineplex Group PLC, 2Q18 Analyst Meeting
74. Nielsen, Advertising Information Services Data 2019 79. Thailand’s advertisers power the shift to online media in 2019 as print loses out to the
Internet, February 18 2019
156 ASPAC markets
F
Vietnam Diptendu Mitra (Director)

Urbanization:
35.9%81
Internet TV HH
Mobile penetration:
73.0%65
57.0%64 93.2%86
80. Vietnam population, Worldometers 2019

82. Tradingeconomics.com
83. Vietnam population, Worldometers 2019
84. Statista
85. We are Social, Digital in 2018 in Vietnam
86. Vietnam In View, AVIA 2018
ASPAC markets 157
As one of Asia’s fastest growing economies, Vietnam OTT – a crowded market

has seen its media and entertainment industry change Digitalization has lowered the barrier to entry for players
drastically. This is largely due to the increased mobile to enter the media and entertainment industry. In the
and internet penetration, which reached 97 per cent and over the top (OTT) service industry, the MIC has issued
55 per cent respectively in 2018. With greater digital about 30 OTT licenses to local operators.89 The high
literacy, Vietnamese have become increasingly more degree of competition has left an insignificant market
receptive to digitalization and its idiosyncratic benefits. share for international OTT services such as Netflix,
TV and print – changing tides Amazon Prime Video and HBO. Moving forward, the
MIC is seeking to regulate the OTT industry further by
Pay TV service providers were quick to ride on this rising
drafting new legislation in 2019 to ensure that foreign
trend and as early as 2014, Pay TV players were engaged
Pay OTT services be licensed before they can provide
in a price war to capture greater market share. As the
service in Vietnam. This might further deter other
price of premium content continues to hike upwards,
international players from entering into this market.
industry players have been showing deep concern about
the sustainability of procuring quality content. Movies – still a popular medium
Print media readership has been on a downward trend The driving force behind the digitalization of an
accompanied by falling newspaper sales and advertising economy is increased economic prosperity. This has
revenues. This can be attributed to the shift to digital underpinned the 25 per cent year-on-year growth90 of
media which can provide free and timely news reports the film industry as consumers are more willing to pay
via the web. However, due to large state subsidies for entertainment activities that were once considered
available to companies that fulfill a political function, this luxurious. The film distribution industry in Vietnam is
is not a major concern for industry players. heavily dominated by foreign players such as CJ CGV
(45.3 per cent) and Lotte Cinema (18.2 per cent) which
With TV penetration rates hitting 97 per cent, the together holds about two-thirds of the market.91 CJ CGV
Free-to-Air TV market, which is heavily dominated by is able to maintain its large market share as it holds
state-owned broadcasting companies Vietnam TV exclusive distribution rights to Hollywood’s two biggest
(VTV) and Vietnam Multimedia Corporation (VTC), has film studios – International Pictures and Buena Vista
benefitted. According to the Ministry of Information and International. This is essential as Vietnamese movie-
Communications (MIC), TV advertisement spending is goers prefer Hollywood blockbusters as compared to
set to grow at a modest rate despite competition from local productions and this further fuels growth for CJ
online advertising. It is projected to grow to USD.85 CGV. Although local productions do not fare as well, they
billion in 2018 from USD1.82 billion in 2017.87 are still able to generate respectable revenue. Roughly
Radio – a fringe player 20 per cent of the films screened in Vietnam cinemas
are locally produced. Em Chua 18 – a local comedy film –
Increased TV penetration has, however, impacted the
generated USD7.6 million in revenue in 2017, surpassing
radio industry adversely, as Vietnamese view the TV as a
that the takings of top foreign movie – Kong: Skull Island
preferred substitute over the radio. Like the newspaper
at USD7.5 million.92
industry, the radio industry is heavily controlled by
government regulations and censorship. The market is
dominated by national broadcaster, Voice of Vietnam
(VOV) while other players include local broadcasters in In the turmoil of Vietnam’s digitalization,
the rural regions. Statistics show that the advertising consumers have become the ultimate beneficiary
spending attributed to the radio industry in 2018 is – accruing not just the benefits of convenient
USD2.4 million, which is insignificant when compared digital solutions, but also greater choice and lower
to the total advertisement spending of USD2.9 billion.88 prices as industry players embark on a long and
With a small market share and slow growth rates, the drawn-out war of attrition.
future of broadcast radio is uncertain.
87. Avia, Vietnam In View (2018), pg 1

88. Vietnam to spend USD2.9 billion on advertising
89. Vietnam In View, AVIA 2018
90. Vietnam Entertainment Fund makes a debut, The Voice of Vietnam, July 27 2018
91. Foreign players dominate Vietnam’s blossoming cinema scene, September 28 2018
92. Cinema Industry in Vietnam, B&C Company 2018
158 ASPAC markets
II. Conclusion
As is evident, many trends in the Indian media standing. This realignment and the emergence of
and entertainment industry are mirrored in digital media has however also been the impetus
ASPAC markets. Digital disruption has affected for successful partnerships and alliances among
traditional players in these markets – TV, print and players. The most popular example is the way in
radio – most radically, and businesses have had which telcos have helped grow the OTT viewer
to reassess their value propositions and market base in India as well in other ASPAC countries.
Online gaming is more entrenched Social media is ubiquitous

across ASPAC Social media is being leveraged in
Compared to most ASPAC markets diverse businesses as a tool to improve
that have a mature ecosystem in consumer engagement and loyalty
place to support the growth of online across digital touch points, and this
gaming, India still has some catch- trend is likely to strengthen over the
up to do to realize its full potential. next few years in India. Eastern Asia,
Equally, the emerging concerns in Southern Asia and Southeast Asia
India around the mental health of (in that order) together account for
gamers and addiction to online gaming two billion social media users93 and
are more pressing in more developed encompass a highly lucrative, influential
markets in ASPAC. target market.
Regional content resonates Infrastructure will emerge as the

The popularity of regional/ local differentiator
content within ASPAC markets is South Korea and Japan have paved the
another trend that finds resonance in way for 5G in Asia Pacific but there is
the Indian media and entertainment a wide gap between them and the rest
industry. Stories that have relevance of the region where a lack of demand,
and context for the domestic compelling business use cases and
consumer are attracting a larger monetization possibilities are delaying
audience and global media and deployment94. Among Asian countries,
entertainment players have had to India ranks considerably lower on
invest in creating content tailored to Availability (10 out of 21 countries95)
these markets. compared to its top rank in Affordability
and third in Readiness and underscores
the progress that needs to be made
on this front for continued digital
development.

94. “5G adoption will be slow across Asia Pacific: Moody’s”,
Gadgets360.com, July 01, 2019
95. The Inclusive Internet Index 2019, The Economist Intelligence Unit
ASPAC markets 159
Japan Republic of Korea
Singapore Thailand
Indonesia Vietnam
160
Themes
161
162 The New Tariff Order (NTO)
The New Tariff Order

(NTO)
A paradigm shift
Decoding the new rules 1. New tariff order (NTO): To regulate the maximum
retail price (MRP), excluding taxes,payable by a
The new regulatory framework for broadcasting and subscriber for à la carte pay channels; and
cable services introduced by the Telecom Regulatory
Authority of India (TRAI) came into effect on 29 2. Interconnection order: To provide a framework
December 2018.1 It was devised with a motive of on commercial and technical arrangements among
ushering an era of transparency across the television service providers, i.e., distribution platforms and
distribution value chain, consumer choice and broadcasters for television broadcasting services
systematic growth of the sector leading to an equitable provided through addressable systems; and
environment within the industry. 3. Standards for quality of service and consumer
The new regulation is intended to introduce clarity into protection: To establish customer care services
the pricing structure and revenue sharing between the such as website, and customer care channels and
stakeholders:2 centres.
Nevertheless, proper execution, monitoring and levy
of penalties is crucial in order to achieve the desired
outcome.
Key changes introduced3
Transparency Simplified Non- Democratisation Subscriber

in revenue tariff Discrimination of protection
sharing structure and level content from irrational
playing field selection price hikes
1. Implementation of New Regulatory Framework for Broadcasting and Cable Services, TRAI, 3. The Telecommunication (Broadcasting And Cable) Services (Eighth) Addressable Systems)
February 12, 2019, accessed on 15 April, 2019 Tariff Order, 2017, TRAI, March 03, 2017, accessed on 15 April, 2019
2. FAQs on New Regulatory Framework for Broadcasting and Cable TV services, TRAI,January
08, 2019, accessed on 15 April, 2019
The New Tariff Order (NTO) 163
Implementation timeframe – a long drawn TRAI regulations on 30 October 2018. The distributors
judicial process were required to migrate their subscribers to the new
After a three year long legal battle between TRAI and framework by 29 December 2018. However,the regulator
the TV industry stakeholders which began in January had further extended this deadline a couple of times to
2016 and involved multiple rounds of consultations, finally settle on 31 March 20194 to ensure adequate time
the Supreme Court of India finally upheld the new was available to complete the migration.
Timelines of the implementation and judicial rulings5
January 08, 2016 October 2016 December 2016 December 23, 2016
TRAI publishes a TRAI draft tariff order Two of the leading broadcasters Status quo ordered by the
consultation paper- issued suggesting filed writ petitions in the Madras Madras HC till the next hearing.
‘Tariff issues related changes impacting High Court (HC) against the TRAI Three other broadcasters also
to TV services’ the business and order citing conflict with Copyright filed petitions.
distribution revenue Act or the Tariff Regulatory
of the TV industry Authority of India Act, 1997
April 2017
Madras HC dismisses
broadcaster’s appeal for
an interim stay on the
Tariff order.
May 23, 2018 March 13, 2018 March 03, 2018 May 08, 2017 The broadcaster then
SC refers the issue SC acknowledges goes to the Supreme
Madras HC upholds Madras HC gives
back to Madras HC broadcaster’s plea and Court (SC).
the TRAI order, except split verdict on the
instructing it to deliver grants stay on tariff
the 15 per cent cap broadcaster’s appeal.
a verdict in four weeks order
on discounts TRAI files review
petition in SC.
July 03, 2018 July 20, 2018 October 30, 2018 December 29, 2018 December 29, 2018
TRAI implements The two leading SC upholds the The new regulatory Deadline for migration
the new order broadcasters file a TRAI order framework for to new framework
Special Leave petition broadcasting and cable
against the Madras HC services came into
verdict effect
Withdrawing of the 15 per cent discount comparison to the a-la-carte pricing of pay channels, a
clause – diluting the essence?6 move which is likely to compel subscribers to choose
the channel bundles or bouquets offered by Distribution
In its original manifesto, TRAI recommended a 15 per Platform Operators (DPOs) or broadcasters. The
cent cap on the discounts that a broadcaster can offer bouquet and a-la-carte pricing thus, is being thought of
on its bouquet of channels over the sum of MRP of in a manner, which makes it attractive for the customers
all the pay channels in that bouquet. This essentially to choose bouquets over the a-la-carte channels.
meant that price of bouquet would only become
marginally lower than the sum of à la carte prices of This dilutes the core objective of consumer choice to a
driver channels. This would encourage subscriber choice certain extent– with entities, especially the larger players
through à la carte offering and also prevent skewed a-la- in the value chain continuing to bundle channels as
carte and bouquet pricing.7 they did pre-NTO.8 However,smaller broadcasters find
themselves at a disadvantage with limited portfolios and
Post the removal of the 15 per cent discounting clause need to build strong content for their channels to find
by the Madras HC, broadcasters can continue to placement in DPO packs or get a-la-carte pickup.9
offer significant discounts on pricing of bouquets in
4. Deadline extended: DTH, Cable TV customers can select channels till March 31, Financial 7. The Telecommunication (Broadcasting And Cable) Services (Eighth) Addressable Systems)
Express, February 2019, accessed on 15 April, 2019 Tariff Order, 2017, TRAI, March 03, 2017, accessed on 15 April, 2019
5. The TRAI effect, Impact on net, November 05, 2018, accessed on 15 April, 2019 8. How Trai’s tariff order will affect your cable bill, Livemint, January 19, 2019, accessed on 15
6. DPOs say TRAI tariff order lacks value without 15% bouquet discount cap, Indian Televi- April, 2019
sion, January 03, 2019, accessed on 15 April, 2019 9. KPMG in India Analysis, 2019, based on primary and secondary research
Mixed impact across the value chain: Win advantage of fixed network capacity fees and placement
some, lose some fees that they can negotiate.
Implementation of the new regulatory framework means In the new pricing regime, stakeholders that best cater
that consumers get to choose and select the channels to content needs across demographics and geographies
of their choice, broadcasters stand to benefit from the are likely to emerge as likely winners.
transparency in the value chain and distributors get the
Estimated revenue sharing across the TV value chain pre-NTO10

Cable revenue flow
DTH revenue flow
TV value chain
Content
providers Broadcasters Distributors
t ib t Subscribers
Direct-to- 100%
Cable 30-35%
~26-45% home (DTH)
Multi system Local cable

operators (MSO) ~35-55% operators (LCO) DD Free Dish Paid DTH
Retained 9-10% Retained 45-65%
100%
Although the revenue sharing post-NTO is likely to Consumers – the real decision makers?
evolve over the next 12 months or so, our industry As per the new TRAI regulation, the consumer has been
discussions indicate that the broadcasters stand to gain granted complete freedom to choose what to watch
due to the implementation of the new regime. and pay only for that. Yet, ultimately, subscribers are
The share of broadcasters in the end consumer again being presented with pre-defined channel packs
revenues is likely to increase from about 30-35 per cent or bouquets, choosing which is a significantly more
to approximately 40-45 per cent for DTH operators, economical than the relatively higher priced a-la-carte
while for cable operators, the same is likely to increase channels, which in essence takes away some of the
from approximately 20-25 per cent to about 30-35 per freedom that the NTO was intended to bring in.
cent11.
Consumers getting the short end of the stick?12,13
Pre-tariff order Post-tariff order
Bundle of channels were sold to consumer, no A-la-carte choice,

micro/a-la-carte choice
Higher complexity in terms of choosing individual
Consumers enjoyed low average revenue packs versus bundles,
per user (ARPU), especially in Phase 3 and
Confusion as there are both broadcaster bundles
4, potentially due to non-addressability of the
as well as distributor bundles, and
system.
Higher subscription fees in Phase 3 and 4 due to
the INR130+taxes payout for 100 FTA channels.
Challenges
Blackouts in various pockets across Higher subscription fees for
the country due to migration comparable offerings
10. Beaming change – impact of TRAI’s new tariff and interconnection orders, Crisil Research, 12. Beaming change – impact of TRAI’s new tariff and interconnection orders, Crisil Research,
February 18, 2019, accessed on 15 April, 2019 February 18, 2019, accessed on 15 April, 2019
11. Based on industry discussions 13. Netflix, Hotstar, and Others Released Over 100 Indian Originals in 2018, Gadgets 360,
December 11, 2018, accessed on 15 April, 2019
Also, the subscription fees are declining only for offering some discounts on the same15 ) every month.
consumers willing to cut down the number of channels This cost further makes it difficult for consumers,
or for consumers watching TV only for specific content especially those at the lower end of the spectrum,
like news or sports. In contrast, for families consuming to choose all their pay channels. While the industry
varied type of content depending on the interests of has witnessed ARPUs at the lower end shooting up,
different family members, channels need to be wisely consumers at the higher end have tended to reduce
chosen, only then will the NTO be favourable.14 their monthly outgo by exercising choice.16 However, as
In addition, the imposition of a Network Capacity Fee per our industry discussions; in each of the cases, the
(NCF) has meant that there is a fixed pay-out of INR100- number of channels for a certain outgo are lower than
130 + taxes (while the stipulated NCF is at a maximum the case in the pre-NTO era.
of INR130 + taxes for 100 FTA channels, distributors are
Subscription fees for a consumer (Pre and post NTO)17
Pre-NTO Post-NTO
Number of Subscription fees Number of channels Subscription fees
channels (SD/HD) INR (SD/HD) (SD/HD) INR (SD/HD)
S-1 (As-is) S-2 (Change) S-1 (As-is) S-2 (Change)
(Four metro cities)
Phase I
214/221 106/ 597/802

250/305 413/550 11 387/513
The
subscriber
billing will
(Cities with >
reduce only if
Phase II
population)
number of
1 million
200 354 199 99 552 353 channels

viewed are
cut down by
more than
half
(Urban municipal
Phase III
175 266 156 65 391 253

areas)
Note:
S-1: As-is situation with no change in channel pack, post-NTO implementation (100 FTA channels plus pay channels)
S-2: A scenario where subscribers opt only for channels that they want to view (25 government-mandated channels plus select pay
channels) to reduce or maintain their payout/existing TV bill.
SD: Standard definition; HD: High definition
Large broadcasters to gain the most18 These broadcasters also have the option of safeguarding
Post NTO, viewership is likely to be concentrated across the ad revenues of their less-popular channels by
fewer channels aiding large broadcasters and channels bundling them in bouquets with popular channels.
with appealing content. They stand to benefit from Conversely, smaller broadcasters with less-popular or
higher subscription revenue as well as gain greater niche channels may find it challenging to see uptake,
pricing power. unless there is a clear value for money proposition that
Further, some of the large broadcasters have also they can establish with their content and offerings.
taken a strategic call to move the FTA variants of their Another scenario which may play out could be
popular GECs to the Pay regime, with a view to ensure consolidation in favour of bigger broadcasters absorbing
that subscribers pay for the content they wish to the smaller broadcasters and single channels.
watch. Although these Pay TV channels are priced very
competitively, the initial traction for these channels has
not been very encouraging.
14. Does TRAI’s new tariff order really benefit customers? Stakeholders weigh in, The News 17. Beaming change – impact of TRAI’s new tariff and interconnection orders, Crisil Research,
Minute, February 01, 2019, accessed on 15 April, 2019 February 18, 2019, accessed on 15 April, 2019
15. Based on industry discussions 18. Trai’s tariff order will benefit players across broadcast value chain, says Sudhanshu Vats,
16. Based on industry discussions Exchange 4 Media, December 26, 2018, accessed on 15 April, 2019
Enhanced transparency for the broadcasters19
Fixed fee deals, Broadcasters to have a clear idea of how many

people subscribe to their channels,
No clarity on number of subscribers,
Carriage is also regulated, and
Carriage fee was negotiated and not regulated,
and 65-80% of the content costs to be given to the
broadcaster
Upstreaming of revenue from consumer to
broadcaster was not transparent
Challenges
Future of niche channels in Reallocation of TV ad budgets Many channels may become FTA
jeopardy; channels with unsought from TV to over-the-top (OTT) to keep ad revenues safe as they
content to fade out platforms may not get picked up by the
consumers
Content to rule soveriegn and emerge as the key

differentiator
Content quality will be of utmost importance, especially
for small broadcasters and single channels.
The near future might witness increased traction in
media investment, wherein broadcasters allocate higher
budgets towards refreshing content.
Advertising landscape – clouded in uncertainty
While the distributors have their hands full ensuring a
smooth transition to the new system, advertising on
television saw a hit due to the challenges associated
with the implementation of NTO. The embargo on
ratings by BARC for a brief period, coupled with the
uncertainty regarding the uptake and viewership of
channels; meant that the advertisers pulled out some of
the monies in Q4 FY19, preferring to wait and watch in
terms of how the viewership unfolds.
The NTO in the long run might result in higher ad rates
for popular channels and for channels with wider reach
resulting in reallocation of TV ad budgets.20 There might
also be redirecting of ad budgets from TV to digital
platforms like OTT and social media.
With the new regulations in place, many broadcasters
have decided to convert their popular GEC and movie
FTA channels into pay channels which is likely to result
in the erstwhile FTA channel-linked ad revenues taking a
hit. Whether this move will result in higher subscription
revenues in the long run remains to be seen.
19. Beaming change – impact of TRAI’s new tariff and interconnection orders, Crisil Research, February 18, 2019, accessed on 15 April, 2019
20. Ad agencies expect reallocation of budgets post TRAI tariff order implementation, Indian Television, January 29, 2019, accessed on 15 April, 2019
A mixed bag for distributors LCOs have less of an incentive to go on ground level and
undertake the necessary infrastructural changes as per
The NTO appears to be mildly positive for distributors the new norms.
as content costs become a pass-through expense.
The DPOs may also get the added advantage of higher Rural markets are typically characterised by low-ARPU
carriage fees from smaller broadcasters. subscribers with a monthly bill of less than INR150.
Rural subscribers may opt for a very limited number
However, this is likely to be partially offset by of low-priced channels to maintain or reduce their bill.
rationalisation of channel count by subscribers. Pushing With a base fee of INR 130 + taxes per subscriber, the
for higher number of channels, negotiating for higher subscription fee is likely to increase significantly by more
distribution fee from broadcasters and scaling up of than 30 per cent.
placement fees which has been left to market forces
could be critical growth avenues for the DPOs. Further, the implementation of NTO has also been
facing significant on ground challenges, with customer
In addition, a better balance of power may be possible education and subscriber management systems forming
which was previously skewed in favour of Local Cable a major part of the challenge. As per our industry
Operators (LCOs). In case of disagreement, the share discussions, there have been cable TV blackouts in
of Multiple System Operators (MSOs) and LCOs in some areas, while the overall TV universe has shrunk as
network capacity fee and distribution fee has been outlined earlier. However, despite the same, efforts are
mandated at 55:45. MSOs are expected to leverage this underway from all stakeholders to ensure a complete
to push for higher share from LCOs, resulting in a drop implementation of the regime.
of LCOs’ realisation by as much as 25-30 per cent. Thus,
Mildly positive for distributors21
Fixed fee deals, Clarity on revenues in terms of NCF and sharing

with LCOs,
Issues with LCOs (arbitrary arrangements with
them and no clear idea on revenue sharing), Restricted ability to package channels and upsell,
Low ARPUs in Phase 3 and 4, Rationalisation of channel count by subscribers,
Customer addressability not uniform, and

No specific guidelines on placement fees, and
Carriage an important part of revenues Higher carriage fees from smaller broadcasters
Challenges in implementation of the order

Subscriber management systems not equipped to Could result in subscriber churn in rural areas if
handle load of a-la-carte choice discounts are not given; urban audience may also
shift to OTT
21. Beaming change – impact of TRAI’s new tariff and interconnection orders, Crisil Research, February 18, 2019, accessed on 15 April, 2019
Over-the-top (OTT) to reap benefits and other niche genre content, in the near to medium
term on TV may reduce in the aftermath of the NTO.
The availability of cheap data, library of original, curated
and customised content and convenience of multiscreen As a result, the country may witness cord cutting/
viewing is encouraging viewership on OTT platforms. shaving in the medium to long run for specific genres
In addition, the increase in subscription fees for TV may with content availability and economics favouring OTT
result in some viewers choosing to shift from TV to OTT. consumption over TV subscription for them.
Also the availability of some genres, especially English
Impact of the NTO

In my view, 2019 is likely to be the defining year discounts (as the content costs were fixed), which
for the DTH industry. The New Tariff Order (NTO) may not be the case anymore as the payment to the
mandated by TRAI has been implemented across broadcasters are to be made for every set top box
the Pay TV industry and has created a level playing used by the customer.
field between cable operators and DTH players. The
The other unintended impact of NTO is that the
broadcasters have to now mandatorily communicate
percentage increase in ARPU (for those who do not
their channel and bouquet prices publicly and hence
want to massively optimise on the content) is the
there is likely to be more transparency in the content
highest for those who were in the lower end of the
deals between broadcasters and distributors. Besides
ARPU range – particularly due to how package prices
the content charge, the distributors can separately
have been determined and the NCF component.
charge a Network Carriage Fee (NCF) for being the
While this is somewhat of a dampener from the
transmitter of content and overall service provider
customer point of view, India would still continue to
to the end customer. The NCF would bring some
be amongst the lowest ARPU markets in the world
stability to DTH operators’ revenues as it is entirely
and would still enjoy more content than customers in
for them to keep. In case of cable platforms, this NCF
other markets have access to.
would be shared between the LCOs and MSOs. The
NTO brings in an era of a new business model for the The overall value proposition for the customer
industry, the impact of which will be fully known only continues to be very strong. In addition, this would
over the next few quarters. work out to be positive in the long-term for the
industry as many distributors and broadcasters
How could the industry pan out in the near
who have not been able to fully monetise their
future? investments (because of low subscription ARPUs)
The customers (across distribution platforms) would see some light at the end of the tunnel.
should ideally be able to exercise utmost flexibility Higher ARPUs and higher proportion of subscription
in choosing the channels/bouquets they would want revenues for the broadcasters would help fuel
to watch and for how many days. As per NTO, they investments in creation of improved quality content
are free to change their options almost on a dynamic by the broadcasters.
basis with no incremental cost to them. Having said
In the short-term, there would be some customer
that, it will take some time for all distributors to have
dissonance due to (a) the variety of packs that are
a fully integrated backend system in place to be
created, (b) the multiplicity of choices being offered,
able to provide customers choice and flexibility on a
and (c) increase in monthly pay-out.
dynamic basis.
For distributors to be fully compliant with the NTO,
In the earlier regime, customers had access to a
the entire back end system needs to be altered with
whole host of channels, including those that they
big IT spends. The call centres need to be beefed up
did not need and never watched as distributors
because of increased volumes. This would result in
bundled it in packs for no additional cost as content
a sudden spurt in the operating expenses, for which
costs were not variable. However, under the NTO
there are no immediate visible benefits. Further, the
regime customers may need to optimise their overall
opportunity to increase the margin by upselling new
monthly outgo by subscribing to only those channels/
channels and bouquets has come down drastically
bouquets that they would actually like to watch. If
as more than a lion’s share of the incremental MRP
they will end up subscribing to all channels that they
goes to the broadcaster. Therefore, the distribution
had access to under the old regime, their monthly
platforms would need to start thinking out of the
bill would go up substantially. Also in the case of
box if they would like to improve ARPU in the new
multi TV, the platforms had offered substantial
regime.
In the long run, customer service would be a big The government needs to be cognisant of the deep
differentiator. Operators who provide dynamic disruption this NTO has created and should support
choice and complete flexibility to the customers the industry to survive in the new scenario. Some of
with overall superior service will gain market share. the measures could be:
Cable operators may see the NTO as a big headwind
• Making the Network Carriage Fee linked to annual
as they are required to substantially increase the
inflation rate (currently it is fixed to a certain amount
end price of the customers in order to ensure
and while the operating costs go up every year, the
that the MRP fixed by the broadcaster is actually
revenue of the platform per customer remains fixed)
collected from the end customer. This will reduce the
arbitrage between a cable and DTH connection and • Reduction of the licence fee by 2 to 8 per cent (this
hence facilitate customers churning out from cable has been a request from the DTH industry for a
and moving to DTH platforms (which was earlier while)
perceived to be much more expensive). Then there is
• Consider reduction of GST from the current 18
the FTA market which one hopes would start looking
per cent as it would reduce the burden on the end
for better content and start moving towards either
customer.
cable or DTH.
G. Sambasivan
Chief Financial Officer
Tata Sky Limited
The views and opinions expressed herein are those of the author and do not necessarily
represent the views and opinions of KPMG in India.
Despite initial hiccups, the television industry Sports and General Entertainment channels are
has transitioned into the New Tariff Order the driver channels for subscription in the New
(NTO) regime fairly smoothly. This has brought Tariff Order regime. Rights to sports properties
uniformity in consumer price across platforms and marquee shows will therefore be extremely
(DTH / Cable) and across DPOs, which makes vital for these channels respectively in order to
quality of service the biggest differentiator. have a sustainable strong pull for audiences.
Those DPOs who offer better customer service
would tend to gain market share. We believe
that the power of content would be reflected in
consumer choices and in revenues. Television
channels with engaging content would gain on Nitin Nadkarni
subscription revenues. Going forward, the pay CFO
ecosystem will greatly benefit from ensuring Sony Pictures Networks
complete transparency in subscriber base, which India Pvt. Ltd
is not the case today.
Atul Das
Chief Revenue Officer –
Affiliate Sales
Zee Entertainment
Enterprises Ltd
170 Regional markets
Regional markets
Moving into the limelight
At 97 million1, the number of people speaking Bengali is Increasing ad revenues on regional platforms is also
more than the entire population of Germany1,2. Similar testimonial to the increasing demand for regional
comparisons made for some regional languages reveal content. Using advertisements on television as a
staggering numbers – the number of people speaking reference point, the top advertisement channels are
Marathi (83 million), Telugu (81 million) and Tamil (69 Tamil GECs which contribute about 10 per cent3 followed
million) is higher than the entire population of Turkey by Telugu GECs which contribute to about 6 per cent3
(82 million), France (65 million) and UK (67 million) of the total advertisement revenue. In FY19, the growth
respectively1,2. in advertising revenue for regional channels has been
around 16-17 per cent2.
The large audience size combined with their preference
to consume content in their preferred language has led
to media players/platforms expanding their portfolios to
offer dedicated regional language content.
Segment highlights2
18-25 per cent of the total ad 53 per cent of the 25 per

revenue on TV comes from newspapers are published in cent of the
regional channels local languages total films
produced are
in regional
languages
Regional music Consumers are spending

contributes to 35-43 per cent of time on
35 per cent of regional videos on digital
the total music platforms
streaming
1. ORGI. “Census of India: Comparative speaker’s strength of Scheduled Languages-1971,

1981, 1991 and 2001.
3. CRISIL Research and industry interactions
Regional markets 171
Regional content leading to widening TV viewership films with the remaining being in regional languages
The popularity of regional channels is evidenced by their such as Tamil, Telugu, Malayalam, Kannada, Bengali,
sheer numbers - Out of 595 total channels tracked by Punjabi, Marathi, Malayalam and Gujarati10.
BARC, 332 channels are regional channels across 16 Regional music driving growth in streaming services
languages4. In terms of new launches in 2018, 52 (about
Over the past couple of years, with technology being
70 per cent of total channels launched) were regional
made available to the masses, especially high speed
channels4 .
4G data and digitalisation, music in non-Hindi languages
In 2018, HSM* segment has seen an increase in has gained momentum with streaming platforms
viewership by 20 per cent6. Bhojpuri grew by like JioSaavn, Gaana, Wynk and Hungama, Spotify
38 per cent6, Odia by 36 per cent6, Marathi by witnessing success by building strong regional music
26 per cent6, Assamese by 31 per cent6 and Bengali by libraries, which comprises not only film music but also
13 per cent6. Regional South has held onto its share in music composed by solo/independent artists5. Regional
the overall pie and witnessed a steady growth of With streaming platforms backing folk musicians
7 per cent6 over the same period. creating compositions in languages such Tamil, Hindi,
Punjabi and Telugu competition11 is likely to intensify in
Print industry in India likely to witness positive
the coming years.
growth, backed by increased readership in regional
languages Punjabi contributes 15 per cent12 of the total streaming
Backed by increasing literacy rates and high rural across various platforms followed by Tamil at
population (rural population approximates 72 per cent 5 per cent12 and Telugu at 4 per cent12.
of total population of India), the readership for regional OTT13 platforms investing in non-Hindi video content
newspapers grew from 19 per cent in 2017 to 20 per
It is estimated, that 40-45 per cent14 of consumption
cent in Q1 2019 (an addition of approximately one crore
across OTT platforms is from regional content libraries.
readers)7.
Digital platform players such as Zee5, Voot, Hotstar and
A comparison of IRS 2014 with IRS 2017 saw languages Amazon Prime Video, are investing heavily in original
like Urdu, Kannada, Telugu, Gujarati and Tamil content in regional languages as it not only has a vast
witnessing growth in readership by 53 per cent, audience, but the cost to create content is also ~30-40
37 per cent8, 63 per cent8, 45 per cent8 and 44 per per cent lower than that of Hindi14.
cent8 respectively. Recognising the potential of regional
market, pan-India players such as Dainik Bhaskar Regional impetus driving business
are also looking to expand their reach by launching perspectives and strategies
regional newspapers, in addition to their Hindi language
publications9. Regional entertainment channels backed by large
viewership and rising potential in ad revenues have
The circulation of regional language publications (other lead to broadcasters investing in producing original
than Hindi) is expected to rise by 5 per cent5 and Hindi content which is evidenced by a majority of the new
language publication are expected to rise by channels being launched in the regional space. In 2018,
2 per cent 5year on year. new channels such as Sony Marathi, Star Sports 1
Regional cinema reaching pan-India audience Tamil, Colors Tamil and Colors Kannada Cinema were
through regional content launched15. Over 2019-20, more regional channels are
likely to be launched such as Star Sports1 (Marathi,
The Indian film industry is amongst the biggest in
Bengali, Kannada and Malayalam)16, Sun Bangla, Sun
the world by number9 of films produced and released
Marathi, Zee News Channels (Tamil, Bengali and
annually (2,000+films)9. Out of the total films produced
Marathi)17.
in India annually, Hindi language accounts for 350-500
4. What India watched, 2018, BARC 13. OTT refers to ‘Over-the-top’ providing content over the internet
5. KPMG in India analysis based on primary and secondary research. 14. Amazon Prime, regional OTT players bet big on non-Hindi, non-English content, Financial
6. From content to genre, regional channels reaped benefits of localization, Business Stan- Express, February 11, 2019
dard, December 29, 2018 15. From content to genre, regional channels reaped benefits of localization, Business Stan-
7. Indian Readership Survey Q1 2019, April 26, 2019 dard, December 29, 2018
8. Indian Readership Survey 2017, January 22, 2018 16. Star India to launch Star Sports 1 Marathi channel, Inside Sport, accessed on 4 July
9. CRISIL Research and industry interactions 17. Zee Media gets permission for 4 regional news channels, INDIAN television, accessed on
4 July 2019
10. Media and Entertainment – Film Segment, CRISIL Research, July 19, 2018
* HSM – Hindi speaking markets include Maharashtra, Goa, Uttar Pradesh, Uttarakhand,
11. Spotify’s entry into the Indian music streaming market bodes well for listeners, Money Madhya Pradesh, Chhattisgarh, Punjab, Haryana, Chandigarh, Himachal Pradesh, Jammu &
Control, February 28, 2019 Kashmir, West Bengal, Gujarat, Daman and Diu, Dadra Nagar Haveli, Rajasthan, Delhi,
12. Music Streaming penetrates deeper into the country in 2018, fast becoming a habit for Odisha, Bihar, Jharkhand, Assam.
digital citizen, Daily Hunt, February 27, 2018
Another strategy is that broadcasters have diversified To attract the audience, OTT players are also tying up
their programming portfolio by investing in other media with major production houses in regional languages to
platforms such as radio and OTT18. purchase the rights of films, a trend which was already
predominant in the General Entertainment channels
This space witnessed inorganic growth as a tool to
(GEC) segment where major players compete to
establish presence in the regional markets, for example;
purchase rights of regional language films from major
Star India acquired Asianet19 and Viacom18 acquired
production houses24. For example, In Telugu, most film
channels such as Prism TV - ETV Marathi, ETV Kannada,
rights are purchased by the two big players i.e Zee
ETV Bangla, ETV Oriya and ETV Gujarati20.
Entertainment (Zee Telugu) and Sun Network (Gemini
Regional broadcasters such as Sun TV Network, TV)24.
Asianet and PTC Network expanded their geographical
Players in the Indian music streaming industry like
boundaries to serve larger dispersed audiences18, for
Gaana, Google Play Music, JioSaavn, Hungama, Spotify,
instance Sun TV Network and PTC network broadcast
Airtel Wynk, Apple Music and Amazon Prime Music
channels with regional content to countries like the U.S.,
are gaining a foothold by supporting regional content,
Canada, Australia, New Zealand, the U.K. and Ireland21.
through partnerships with local brands like Saregama,
Major print players like Dainik Bhaskar and Jagran T-Series, Zee Music, YRF, Sony Music as well as
Prakashan have adopted a strategy called ‘Hyper- creating playlists considering Indian audiences and their
localisation’ wherein the focus is on launching and preferences28.
promoting regional newspapers22.
In terms of programming, national broadcasters brought
in a shift in the market in terms of the content, whereby
Regional flavours leading to there has been a gradual move from traditional family
evolution of content dramas to more contemporary content based in urban
Big players realising the diverse nature of Indian and semi-urban settings like fantasy, historical as well as
audience have started to focus on regional content to reality shows and movie premieres .
improve the subscription. Popular sports events like IPL are also dawning regional
Regional languages such as Telugu, Tamil, Kannada and flavours - IPL saw 23 per cent30 of its total viewership
Malayalam have seen growth in video watch time which from six regional languages29 and two language feeds29.
is substantiated with players like ZEE5, Voot, Amazon The content in regional cinema is undergoing a shift
Prime increasing their content in regional languages23 to from folk stories to urban youth-centric stories which is
combat regional OTT players such as Hoichoi (Bengali) in turn translating to better traction for Punjabi, Marathi
and Sun NXT (Tamil, Telugu, Malayalam, and Kannada), and Gujarati films31. This change has also attracted
who are focussed solely on regional audiences23. acceptance amongst mainstream audience, corporate
The Indian players like AltBalaji, Zee5, SunNxt, which studios/production houses which are investing in this
are offshoots of major production companies have a market. For example, Sony Pictures Entertainment
library of regional content which they are leveraging to India entering into the regional space with a Malayalam
their advantage24. OTT players like Netflix and Amazon project, Dharma Productions continuing its foray into
prime have started hiring writers to add contextual regional cinema by distributing Madhuri Dixit’s Marathi
flavour to dialogues in English in addition to launching debut film and Viacom18 Motion Pictures continuing to
regional web series25. For example Amazon Prime invest in regional cinema through another Marathi tale
launched a Telugu comedy series called Gangstars26 in and a Punjabi film32.
June 2018 and ALT Balaji launching its regional stand-up
comedy in Marathi, Punjabi, Gujarati27. Thus in order to
stay relevant, OTT players are bringing fresh content in
regional languages in addition to translating their existing
content.
18. KPMG in India analysis based on primary and secondary research 26. Amazon Prime video launches first Telugu web series ‘GangStars’, The New Indian Ex-
19. STAR India acquires 100% Stake In Asianet Communications, Medianama, March 13,2014 press, accessed on 4 July 2019
20. Viacom Acquires 50% Stake in Indian Regional Networks, Viacom Inc., 2015 27. ALTBalaji offers original stand-up comedy in regional languages, Best Media Info, accessed
on 3 July 2019
21. Sun TV Network, accessed on June 06, 2019
28. With A Million Users Within A Week, Has Spotify Already Hit The Right Chord In India?, Inc
22. CRISIL Research and industry interactions 42, accessed on 3 July 2019
23. Amazon Prime, regional OTT players bet big on non-Hindi, non-English content, Financial 29. Regional languages rule TV!, Rediff, accessed on 3 July 2019
Express, February 11, 2019
30. BARC yearbook, 2018
25. How content streaming platforms like Netflix have created an economy around subtitles in
India, accessed on 3 July 2019 32. Top Bollywood studios are betting on regional cinema this year, live mint, accessed on
26 July 2019
Marketers jumping on the regional brand regional newspapers, even have different websites or
wagon localised apps in different languages to maximise impact
on the target audience which is also a focused group
Considering the number of people speaking regional with carefully selected parameters30.
languages, marketers are tying up with content creators
in regional language using regional media platforms to On the other hand, with the rise of web/voice searches
take into account cultural values and nuances of local in regional languages, search engines are facing a
languages with the intent of building trust with potential shortage of quality websites equipped to cater these
customers. In the past, marketing campaigns were searches. This is giving regional marketers a unique
disjoint for example a Tamil ad on a Tamil GEC leading opportunity to maximise impact by thriving on relatively
to an online website completely in English which greatly low competition for regional language keywords. Brands
limited the consumer appeal and thereby limiting the are leveraging this take by optimising their content for
consumer rates30. these searches. This gives them access to a focused
target audience at rates which are much below the rates
Now focused ad campaigns are not limited to simply for English and Hindi30.
translating the existing content into regional languages.
Intricacies of the culture associated with the regional Website localisation involves rethinking visuals,
language are often woven in to maximise the consumer currencies, units of measurement and of course the
appeal. Such marketing campaigns often employ a language. Localising your website helps your brand
combination of various media such as television ads in reach a larger audience and increase brand awareness.
regional languages combined with announcements in
Challenges hampering the growth of regional content33
Under indexation of the market in terms of monetization

The show and content produced are specific to regional
issues, sensibilities of that region/state, that may be unique.
Thus, the contents may have limited acceptance and reach
and thereby limited in the monetization potential.
Low budget for regional content

The ad revenues of English and Hindi content is
comparatively larger than regional audience. Thus, the
production houses prefer to spend more on sets, pre and
post production of English and Hindi language content.
Local regional channels losing to national broadcasters

Many regional channels used to showcase dubbed version of
popular Hindi shows. With national broadcasters now entering
the market with better budgets to re-create content and larger
network reach, local channels are struggling for survival.
Limited availability of talent

The talent base across various regional media is limited, the
regional players struggle to find quality content creators and
popular local talents.
30. BARC yearbook, 2018

What next? Media companies are increasingly realising the

potential of regional media and most players in this
The variety of languages is one of the main reasons space from broadcasters running TV channels to
that gives regional media its weight. Regional content creators are now not only developing relevant
content by its very nature is focused on a relatively content for the regional market but also focusing
smaller target group with similar social, economic on 24x7 programming to increase their share of the
characteristics. Since the content is customised to regional pie.
the target audience, the impact of regional content is
significant as discussed in the chapter. With increased focus on the part of the media
agencies in terms of supply from creating focused
This combined with the fact that the regional market content for regional market thereby increasing
in terms of advertising revenue currently valued lower monetisation potential and the large demand given
than the Hindi market in India gives advertisers a the population and diversity in India, regional content
unique opportunity to tap into this market at relatively is poised for robust growth.
lower costs.
Redefining Indian viewing patterns – one town at a time!

A 50-year old shopkeeper beating the Jodhpur captured eyeballs across a wider set. Screenagers,
afternoon sun while the shop sees a lull, a 35-year stay-at-home women, senior citizens, all of who have
old housewife from Mughalsarai, a 17-year old boy access to data-equipped smartphones today, are also
from Tirunelveli – what do they all have in common? consuming content on OTT platforms in a big way.
In this context, no prizes for guessing – a smartphone Subscribers in regional markets log on to explore
that allows them access to OTT platforms and a wide a movie portfolio that is available digitally as well
range of content to view. as catch-up content from their favourite television
channels. Subscriber behaviour has clearly indicated
While the rest of the world was busy focussed
a gradual co-opting of subscription-driven content by
on India, Bharat has been quietly weaving its own
these audiences.
narrative in terms of the genres they prefer, the
stories they like and the pricing they expect. This has A great deal of exploring has been driven by
been scripted, primarily, on the back of smartphone technology supporting the platforms. Machine
penetration, affordable data, 4G rollout and adoption learning-enabled algorithms that assist with
of digital payments. Industry statistics on language recommendations, software that auto resizes and
content consumption indicated that more than auto compresses the quality so as to suit the network
half of the Indian internet user is non-English with requirements and ensure seamless browsing. Though
languages including Hindi leading the roll followed by the upsurge in the first-time logins indicate growth in
Marathi, Bangla, Telugu, Tamil, Kannada, Gujarati and numbers, there are a few challenges which still need
Malayalam. to be addressed. Low data and bandwidth are still a
major concern both for the players and the audience.
In our experience, digital premieres, regional
language originals, dubbed versions of some of the Price has been the most sensitive point for regional
Hindi/ English web series have been the trendsetters markets. While we have tasted great success with
in these markets – it is about following the 3R our regional subscription packs, we now see the
philosophy of keeping them Real and Relevant such industry singing a different tune with weekly plans.
that they Resonate with the viewer. 2019 has been
While India is busy consuming Original content
the year of regional content, and this has resulted
in English and Hindi, Bharat offers a tremendous
in a slew of announcements of regional language
opportunity to revolutionise and regionalise the way
originals. These original stories from the hinterland
we look at OTT content in the country today. We are
have found an audience in regional-language speaking
at an interesting cross-section where advertisers are
markets across the country. This has resulted in a
looking at the space keenly to understand the ROI
phenomenal increase in opportunities for talent from
they enjoy on the platform.
smaller towns to bring forth their talent, since we
are now unbound from the shackles of waiting for a Voice, Video and Vernacular are pegged as the
70mm release. next growth drivers in advertising. What we have
is the opportunity to curate the platform to offer a
Regional markets have completely overturned the
winning proposition for the entire ecosystem – the
demographic tables that OTT platforms, such as
subscribers, the advertisers, and us – the platforms.
ours, register. While the urban profile is of the
18-34 year old male audience, the rest of India has
Tarun Katial
CEO
ZEE5 India
The views and opinions expressed herein are those of the author and do not necessarily represent the views and opinions of KPMG in India.
176 Skill development
Skil development
The learning imperative
Introduction People and learning trends in the M&E
industry
Owing to the digital disruption, the world of media and
entertainment is changing with a new composition in The M&E industry is on a robust growth path, which
the workforce. As a result, people are at the core of will result in a workforce influx in the next few years.
the business. Their capability to ideate, innovate and The average working age of a media professional is
execute eventually leads to disproportionate value between 24 and 36 years.2 The need for learning agility
creation for the enterprise. This shift requires constant becomes more and more essential in order to keep pace
upscaling and upskilling of the workforce. It starts with advances in the industry. News companies such as
with understanding the need for change and then BuzzFeed and Vox, which are essentially digital in nature,
understanding the areas for change. The traditional job have started incorporating more analytic and data-centric
roles have either completely changed or have totally roles into their newsroom workforces. For instance,
ceased to exist with a decrease of 8 per cent in online specialised data science and data journalism units in
media, 9 per cent in print and 5 per cent in broadcast BuzzFeed or Vox having a team strategically specialising
media.1 However, interestingly the requirement of these on creating content for the social media messaging
new roles are being driven and fulfilled from within the application Snapchat. While such outliers do exist and
industry itself. Given this reality, there now subsists a are growing in numbers, most M&E organisations are
massive mandate within media organisations for talent still trying to align their creative workforces to make the
transformations by way of capability building initiatives in shift to digital.
relevant leadership, behavioral, functional and technical
competencies.
Advantage India
Attractive
Robust Demand Policy Support Higher Investment
Opportunities
Television and AGV From April 2000to

Higher penetration and
segments are expected December 2018, FDI
a rapidly growing young The Government of India
to lead industry growth inflows in Information
population coupled with has increased the FDI
and offer immense and Broadcasting
increased usage of 3G, limit from 74 per cent to
growth opportunities in (including print media)
4G and portable devices 100per cent in cable and
digital technologies as sector reached US$ 7.50
is driving demand. DTH satellite platforms
well. billion.
1. Managing a 21st-century newsroom workforce: A case study of NYC news media By

Source: India Brand Equity Foundation Matthew S. Weber and Allie Kosterich
2. Based on Client Interviews with CHROs and CLOs of M&E Organisations
Skill development 177
M&E industry insights on people and learning3

KPMG in India interviewed renowned CHROs in Organisations are now focusing on developing
the media fraternity, and highlights of the People strong onboarding journeys for their new hires,
and Learning agenda have been identified for the building leadership capabilities of the front-line
upcoming years: managers, defining specialised career journey
for senior leaders, rotating business teams from
1. Learning and development:
traditional business to digital ventures; all this to
Given the rapid and radical changes in the ensure the organisations have an institutionally
sector, CHROs are looking at Learning as the driven, and not individually driven mindset.
key KPI for talent. CHROs are not only focused
on skilling employees on current capabilities, but 5. Multi-generational employees:
also preparing them for upcoming disruption. The media and entertainment industry is
Competencies like agility and tolerance to witnessing a change in the employee approach
ambiguity, design thinking, client focus, data-driven with the emergence of millennial into the
decision making, and creativity and the power of workforce. Managing millennials with divergent
storytelling will become quintessential for every ideologies and immense potential is perceived to
media professional. Given the age-demographic be an area of concern for organisations. People
of the workforce in the M&E industry, it’s also managers across levels need to be equipped with
imperative to provide a learning experience that is effective managerial skillset to be able to harness
highly role relevant, comprising immersive content the potential from their young workforce.
and just-in-time access to learning.
6. Leveraging technology:
2. Aligning HR and Learning and Development While M&E companies have made significant
(L&D) strategy to the overall business strategy: progress in enhancing the digital experiences
The people agenda needs to be aligned to the for their customers, it is now time to focus
overall business strategy. To achieve this, HR and inward and enhance the experience for their
L&D should play a strategic role and should have internal customers. The HR technology and L&D
a collaborative partnership with other business technology landscape is undergoing constant
functions. Unfortunately, however, the HR and improvement, which is changing the perception
L&D departments have historically only played a of organisations towards incorporating these
minimal or administrative role in organisations.4 technologies in achieving business goals.
3. Employee experience and well-being: Automation is a powerful tool that will help
In a disruptive industry like media, retaining complete transactional tasks faster, which will
talent is highly critical for any organisation. For then enable the HR and L&D professionals to play
instance, with heightened pressures on staying a strategic role in the organisation. Leaders feel
ahead of competition, show releases every Friday the immense need to have a significant presence
for example, the workforce is showing signs of on various social media platforms. They have also
burnout. HR teams in media and entertainment are shifted their focus on leveraging data analytics
striving to create experiential employee journeys to provide them with descriptive and prescriptive
by providing the necessary support required for data capabilities.
maintaining a work-life balance. For instance,
necessary counselor or psychological assistance is
provided to employees facing personal struggles.
Such employee centric initiatives transcend into
higher employee productivity and satisfaction.
4. Building internal capability:
Human resource functions in the media and
entertainment sector feel the need to create a
fungible talent pool within the organisation. It is
important to invest in identifying leaders within
and define a career path suited to their aspirations.

The skills for success5

The emphasis today on consumer experience has made To cater to these requirements in the ever-evolving
the M&E industry an extremely demanding arena for business environment, organisations in the M&E sector
the workforce, with consumers expecting content to today are empowering their workforce by committing
be delivered to them on their medium of choice, their more time, money and effort on building relevant
platform of choice and on their own time. This, coupled competencies while attempting to drive a far more
with the speed at which digital adoption has taken place, robust and agile learning culture within the organisation.
brings about its own set of unprecedented requirements
for the workforce in the M&E industry.
Soft skills6 Hard skills6
Artificial Analytical Rea- People

Creativity Cloud Computing
Intelligence soning Management
Mobile
Persuasion Video
UX Design Application Sales Leadership
Production
Development
Collaboration
Natural
Audio Scientific
Translation Language
Adaptability Production Computing
Processing
Social Media
Time Game Development Animation Business Analysis
Marketing
Management
Digital Industrial Competitive
Journalism
Marketing Design Strategies
Customer Service Software Computer
Data Science
Systems Testing Graphics
Corporate
Communications
Impediments to learning in the M&E industry

Impediments to learning in the M&E industry7
For employees For employers
Cost Time Accessibility Engagement Personalisation Effectiveness
5. Based on Client Interviews with CHROs and CLOs of M&E Organisations

6. The most in demand hard and soft skills of 2019, LinkedIn
7. Based on Client Interviews and validated by Future of Skills 2019: Anticipating what’s next
for your business, An Asia-Pacific Edition; LinkedIn
The L&D function as a Centre of Excellence8

The L&D function needs to function as a Centre of
Excellence which brings together M&E industry subject
matter expertise and global best practices with learning
design and technology skills and capabilities so as to
minimise potential impediments to learning for both the
employees as well as the organisation.
From an organisational view point, the L&D function
needs to assist in solving for business needs with
learning solutions that are outcome-focused. Towards
this, the L&D function should provide their organisation
learning solutions across four specialised functions:-
1. Learning advisory services
2. Setting up functional academies
3. Managing learning services
4. Creating bespoke training and workshops
From the employees’ view point, the L&D function
should incorporate adult learning principles such as
immediate relevance, problem-solution centricity and
self-direction with a learning philosophy that keeps the
learner in the centre of the design of the programme.
A holistic learning framework

To operate as a state-of-the-art Centre of Excellence, the
L&D function should look to leverage a holistic learning
framework that enables a multi-dimensional outlook
while creating learning solutions.
Conclusion
LinkedIn, in its Future of Skills 2019 Report, found
that the biggest impediments to learning for
employees is cost, time and accessibility while
for employers it’s engaging learners, adapting
training to the younger generation and improving
learning effectiveness. KPMG in India has ensured
that these do not remain impediments to either
organisations or employees.9 It is therefore that at
the macro level, KPMG in India approaches learning
through the lens of solving business problems
by being a trusted advisor to organisations and
developing effective learning that is impactful in
their context, at the micro level, KPMG in India
enables personal transformation of the individual
to unlock his or her true potential through a
customised learner journey framework.

9. Future of Skills 2019: Anticipating what’s next for your business,
An Asia-Pacific Edition; LinkedIn
KPMG in India’s Learning Maturity Model10

All KPMG’s learning interventions are based on KPMG 7. L&D role and competence: L&D’s role is strategic,
in India’s proprietary Learning Maturity Model. The and they have a say in linking learning to business.
Learning Maturity Model has been adapted to the Indian L&D engages in performance consulting and
industry by KPMG in India. The model has a total of architects solutions that drive behaviour/culture
eight dimensions change. L&D competency framework is in place and
individuals are recruited based on specific skill-sets.
1. Business strategy alignment: Learning strategy
L&D team is also recognised externally for their work.
is an integral part of the business strategy, where
learning is an important input to the business planning 8. L&D operating model: Training budget is part of
process. Learning programmes are planned well the overall HR budget and linked to business plans.
ahead of time and are focused on delivering on A governing body consisting of leaders from HR,
organisation’s larger strategic objectives. business and L&D meet periodically to design, review
and improvise the functioning of L&D team, which
2. L&D metrics and impact: Learning metrics are
works in complete collaboration with business. There
designed to measure learner knowledge gain, change
is a defined process for identifying learning needs.
in learner behaviour and ROTI (Return on Training
Investment) consistently. Extensive use of data
analytics, predictive modelling helps to measure
learning trends and personalise learning. KPMG Learning Maturity Model
3. Learning infrastructure and technology:
Technology is leveraged to get data insights and
create personalised learning paths. Informal learning
through crowd sourcing and social learning platforms
is part of the learning architecture. Learning can be
accessed and tracked from anywhere –‘always on’
and advanced curation platforms exist.
4. Learner experience: Develop and deliver a
curriculum that targets learner experience through a
“consumerised” approach that is hyper-personalised
and multi-modal. Learning is intrinsically valued and
employees can pick the programmes they want to
learn autonomously from a wide range of resources.
5. Learning culture: Leaders and managers play the
role of ‘agents of development’ and it is seen as one
of their primary responsibilities. There is a dynamic
structure in place to support peer-to-peer learning.
The organisation follows a comprehensive rewards
mechanism that incentivises learning.
6. Integrating learning with other HR processes:
Learning linked with Performance Management
System (PMS), career pathing, succession planning,
rewards and manpower planning. Assessment
centres and development centres are leveraged for all
roles across levels.
10. The KPMG in India’s Learning Maturity Model was tested for statistical reliability and it
scored a high of 0.93 on Cronbach’s Alpha test. This shows that the model designed is
accurately measuring the variable of interest (Learning Maturity).
The global war for the right talent will intensify and Managers determine 60% to 70% of your
compel business leaders to reflect and demand employee’s experience. Great managers make
better visibility of a robust “talent pipeline” to great companies. They play an important role in
ensure business continuity. This will also propel talent attraction and retention.
the CHRO to craft the most relevant people
agenda for the enterprise, aligned to the strategic
business goals.
Amit Das
Director – Human Animesh Kumar
Resources & CHRO, Chief People Officer,
Bennett Coleman and Zee Entertainment
Company (Times of Enterprises Limited
India Group)
With the given pace of disruption in M&E industry,

the only way to stay ahead is through continuous
Self Renewal. To manage the changing dynamics
in this new eco system, companies need to
educate and empower their employees, in a way
that they stay updated and help the organization
be future ready.
Vinay Maheshwari
Executive Director & CEO,
Sakshi Media Group
Current L&D landscape and the future proof the organisation. The L&D strategy has to
strategy of L&D in the context of digital necessarily include the following four elements:
transformation in media: 1. Alignment to business needs: The L&D
interventions should help develop the right
The Indian economy is adopting digital at a
capabilities, not only for today, but for future
breakneck pace causing a series of disruptions in all
business needs, which prepares employees to
directions. Most organisations today are compelled
be resilient in the face of rapid changes and also
to adapt to this increasingly digital environment
enhance their productivity. The L&D ecosystem
by leveraging digital technologies to improve
should not only provide continuous learning
operations and drive new customer value in order
opportunities, but also help create a culture that
to enhance their competitive edge. This disruptive
promotes experimentation and learning.
digital ecosystem will transfer many manual tasks
to cost efficient machines and algorithms in every 2. Blended learning: Effectively utilise the mix
sphere of the media industry, be it content creation, of right offline and virtual learning channels to
reader engagement or revenue augmentation. All promote continuous learning for employees,
these trends are changing the face of Learning & which provides enhanced flexibility to learn at their
Development (L&D) in the media industry and this own pace and space.
compels us to choose the right intuitive technology
3. Personalised and engaging learning
for high adoption, identify internal evangelists for
experiences: Hyper-personalised learning
accelerated buy-in, help employees understand what
curriculum with meaningful content delivered
is in it for them, customise the training modules,
in a manner that is entertaining, engaging and
highlight quick wins, and reward the desired
contextual. This would cater to the unique needs
behaviour for adopting the right learning technology.
and preferences of the employees, aligned with
Today’s VUCA environment, which has become the their growth and career aspirations.
new normal, requires significant “right-skilling” to fill
4. Technology enablement: The digital application
the capability gaps. Moreover, hyper customisation
based learning solutions supported by interactive
to cater to a multi-generational workforce with
technologies such as Artificial intelligence,
distinctly different sets of preferences and
Virtual and Augmented Reality, and Bots are
aspirations, becomes a topic of prime importance.
significantly changing the ways employees learn
Every development journey needs to be “Just
today. Machine learning technology will observe
enough, Available on-the-go, Just for me”. Thus,
the learner behaviours to offer sharper learning
The views and opinions expressed herein are those of the quoted person/s and do
developing the right learning environment supported
solutions, and Augmented Reality will offer
by innovative, flexible, on-the-go learning platforms
complex and live simulations to enable real skills.
which can cater to multiple employee segments,
will be instrumental in building an enabling learning However, while organisations will continue to invest
culture. Technology will play a key part in enabling in providing the right learning ecosystem, we need
not necessarily represent the views and opinions of KPMG in India.

the right ecosystem for continuous learning, as well to empower our employees to take ownership of
as enable us to create deeper employee connect their own development, which supports them to
and customised engagement approach to create a fulfil their career aspirations. Thus, the imperative
delightful experience for today’s multigenerational is not only to embed learning in business but more
workforce, at every employee lifecycle touchpoint. importantly, to create an engaging organisational
Additionally, L&D will also play a critical role to culture around learning. In the book titled “The Fifth
reward and motivate top talent, while supporting Discipline”, Peter Senge coined the word “Learning
their constant need to learn through cross functional Organizations”, where employees are continuously
exposure and manage growth opportunities through engaged in enhancing their capabilities to create
non-linear career progression paths. what they want to create. Thus, if the organisations
of today want to be organisations of tomorrow, it is
Today’s fast changing business landscape throws
imperative that they start progressing towards being
several real-time challenges which we, as value
‘Learning Organisations’.
creators, can convert into opportunities. However,
we need to be responsive, adaptable and
continuously assess the capability gaps to meet
the expectation of our customers. We also need to Amit Das,
equip ourselves with competencies like creativity, Director – Human
empathy critical thinking, stakeholder solutioning, Resources & CHRO,
learning agility and design thinking mindset to future Bennett Coleman and
Company (Times of
India Group)
184 Digital privacy
Digital privacy
You are being watched
Data economy • AR devices operate by capturing the real world scene,
An average Indian is now consuming more media analyse it and then overlay extra visual information1
content than ever before. The increase in smartphone • AI helps organisations to exploit the information
users and onset of 4G and impending 5G technologies collected, profile the customers, predict outcomes
have placed a greater emphasis on continuous and provide recommendations
availability of content and data for consumers. The
increasing competition in the Indian telecom sector • Machine Learning algorithms are being developed
has resulted in India having one of the cheapest to design trailers and advertisements. AI software is
data rates across the world. This has created the being used to speed up the production process2
perfect environment for the growth of the media and • Using analytics, organisations have become aware
entertainment industry as consumers have digital and track customer preferences and their choices to
platforms at their fingertips. curate new content
In today’s marketplace, customised environment • Media applications capture background noise to
and recommendations are the norm and it provides profile the consumers to understand the content that
organisations an edge over their competition. They are they stream during their travel
using Content Delivery Networks (CDN) to speed up
• 5G allows consumers to transfer large volumes
content delivery on websites with high traffic based
of data at high speed over a constantly connected
on location. In order to provide such services, media
network
companies are now monetising by collecting huge
amounts of data to create customer profiles in a new • Gaming platforms have been witnessing a surge
and unique way. Such user profiles not only identify in their customer base. Features such as targeted
the person for whom the content is targeted but also advertisements and micro-transactions, which rely
provide insights into their preferences, beliefs and upon user profiles, are central to their business
routines. Data is termed as the new oil for organisations. models.
Due to increase in consumer awareness regarding
collection and processing of data by the organisations, Like any other technology, these are vulnerable to
privacy concern is fast emerging as the next frontier cyber security threats. Organisations leveraging these
where consumer trust and loyalty will be determined. technologies are collecting huge amount of data
to provide a better experience to consumers than
Technology disruption traditional systems. This is considerably impacting
Additionally, evolving technologies such as Augmented consumers’ privacy and raising concerns. Privacy and
Reality (AR), Artificial Intelligence (AI), connected security lapses in the information lifecycle may lead
devices internet of things (IOT), data analytics and 5G to personal data breach. Building, maintaining and
have the potential to make media consumption more developing a dependable relationship keeping in mind
immersive and personalised. the privacy concerns with the empowered audience is
key for media and entertainment organisations today.
1. The Security Risks with Augmented Reality and ways to combat, Sunil Gupta, 14 February
2017
2. AI in Movies, Entertainment, and Visual Media – 5 Current Use-Cases, Analyticsjobs, 11
June 2019
Digital privacy 185
Privacy risks in media and entertainment web pages. This operational and personal data that is
industry collected and analysed is used to curate new content
and provide personalised recommendations. In case
Unlike traditional media and entertainment scenarios,
of a data breach, it could bring down the reputation of
today’s media organisations often have little control
organisations, and also can lead to financial implication
over how and when the content is consumed. People
due to regulatory non-compliance, which in turn
could be using any device to read or view content
can affect their business. Data breaches can cause
with an increasing number of organizations offering
irreparable damage as personal relationships are critical
cross platform integration for seamless customer
in this industry than any other.
experience. Digital marketers collect behavioral data
by monitoring web beacons and cookies deployed on
Cambridge Sony PlayStation & Pictures4 Instagram5 Google6

Analytica3
Cambridge Analytica had 77 million Sony PlayStation 49 million records of Google was fined 50 million
harvested the personal data network accounts were Instagram influencers’ euros for providing data to
of people's Facebook hacked with an estimated details were available in personalise advertising
profiles without their loss of $USD 171million. clear text without a
consent and used it for Further in another incident password.
political campaigning. Sony Picture employees,
Facebook estimated that their families, email between
number of user profiles that employees, executive
were compromised were 87 salaries and unreleased Sony
million movies were leaked
The above figure provides insights on few of the data breaches that have occurred in the media and entertainment
industry.
Regulatory obligations and key privacy • Sectorial regulations such as California Online Privacy
rinciples addressing privacy risks Protection Act (CalOPPA), Privacy and Electronic
Communication Regulation (PECR), Children Online
Due to ever increasing data breaches and privacy
Privacy Protection Act (COPPA) to name a few
concerns, organisations are trying to keep up with
dynamic changes in the risk profiles, fluid geographical EU GDPR has created a shift in the way privacy laws are
boundaries and the constant need to win consumer perceived across the globe. This regulation has created
confidence. Additionally, the regulators and industry the biggest change to rules governing data protection
bodies are developing regulations and frameworks to and was first in its kind to implement administrative
protect personal information of their individuals. fines as high as 4 per cent of annual global turnover.
This was at the forefront in every organisation’s board
Regulators across the globe have adopted two key
room agenda. The wave was not only limited to EU, but
approaches in addressing the growing privacy concerns.
also the rest of the world. GDPR made organisations
to take the pragmatic steps and implement controls to
• Omnibus regulations such as EU General Data
really understand and mitigate the privacy risk exposure
Protection Regulation (GDPR), India Personal Data
that existed across their operations. For example, digital
Protection Bill (PDPB), Malaysian Personal Data
advertising agencies now collect and track personal
Protection Act (PDPA) to name a few
data of consumers with transparency and consumer
oversight by providing a detailed privacy notice and
obtain explicit consent wherever required.
3. Facebook exposed 87 million users to Cambridge Analytica, wired.com, 4 April 2018 5. Instagram breach exposes personal data of 49 million users, cpomagazine.com, 3 June
4. PlayStation Network hackers access data of 77 million users, theguardian.com, 26 April, 2019
2011 6. Google hit with Euro 44m GDPR fine over ads, bbc.com, 21 January, 2019
186 Digital privacy
In India, the current privacy regulatory setup is minimal a copy of personal data to be stored in severs data
and data protection provisions are scattered across centers in India and certain categories of data (notified
several statutes ranging from Information Technology by the Central government/ Data Protection Authority
Act 2011 to the Aadhaar Act 2016. Hence a strong and of India) termed as critical personal data shall only be
robust data protection framework is the need of the processed in server/ data center located in India. In
hour. In 2018, India had taken another step towards addition to the administrative fines, PDPB also considers
realising its dream of becoming a truly digital economy, non-compliance to be a criminal offence. Further,
Justice BN Srikrishna Committee released its first draft establishment of a Data Protection Authority of India and
of the Personal Data Protection Bill (PDPB). Appellate Tribunal by the Central government has been
suggested. After the enactment of PDPB, organizations
Data protection obligations, legal grounds of processing
have been given a 12-months transition period to
personal data, data subject rights and measures such
become compliant. This bill with minor changes will be
as privacy by design, Privacy Impact Assessments
passed in the Indian Parliament and is set to become a
(PIA), notice to name a few, are more or less similar to
law, but operationalisation and adherence to it, once it
the ones drafted in GDPR. However, this bill mandates
becomes a law, will evolve with time.
The key principles of all regulations fundamentally remain more or less the same. Organisations should take
a step back and incorporate the below privacy principles in their day to day operations.
1 2 3 4 5 5 7
Clearly define the Personal data that is Delete personal data Protect personal data
purpose for collecting processed is adequate, when it is no longer against unauthorised
and processing the data relevant and limited to necessary processing and against
in a lawful manner and the relation to organisa- loss or destruction by
communicate to the tion’s processing implementing appropriate
consumer in a transpar- purpose technical or organisation-
ent and simple manner. al measures
Collect data for the Take every reasonable Responsibility to

purpose defined and as step to update or comply and demon-
long as necessary to remove data that is strate compliance to
complete the purpose inaccurate or the regulation
incomplete
Digital privacy 187
Steps for organisations to implement

Due to the tectonic shift in the digital space and more importantly in the media and entertainment industry, it is
more necessary than ever for organisations to adhere to the regulations than before.
STEP 1
Identify individuals across organisations
responsible for driving the privacy initiative
and also define roles and responsibilities for STEP 2
privacy governance
Establish a privacy management framework
keeping in mind the applicable regulatory
STEP 3 requirements and industry best practices
Frame policies and procedure, which would

act as guidelines for operationalising privacy
practices in the organisation STEP 4
Conduct training and awareness
sessions across different levels in the
STEP 5 organisation
Identify processes and applica-

tions dealing with personal data in
the organisation STEP 6
Provide a privacy notice to consumers to
highlight the reason for collecting the
STEP 7 personal data and processing that would be
performed on the data provided
Identify and inventorise the
personal data attributes
STEP 8
Create data flow maps to
establish data lineage
STEP 9
Perform Privacy Impact Assessments
(PIA) for high risk processing activities
to identify and mitigate privacy risks STEP 10
Identify and review the supporting applica-
tions involved in processing personal data
STEP 11 for compliance to privacy requirements
Incorporate the principles of privacy by design

for all new processes and applications
STEP 12
Implement appropriate technical and
organisational controls to protect the
personal data that is collected, processed
and retained.
Privacy challenge in India with evolving planning and execution by asking the vital questions and
digital landscape adapting to the change and move ahead of the curve
by establishing a strong enterprise privacy governance
India’s media and entertainment industry is now
framework. While we can expect India to adopt a
confronted with the task of ensuring an individual’s
privacy regulation, it is important that organisations start
privacy. Organisations should do well to take cognisance
building privacy in their business DNA and give it due
of this and work on strengthening data privacy by putting
consideration in every business decision.
on the end-user lens than a regulatory lens. It should
be approached logically and methodically with utmost
188 Digital content
Digital content
Bridging the monetisation gap
Indians are expected to devote nearly a third of their with consumers towards creating a sustainable business
overall time on media to digital formats in 20191 with model.
more than 30 OTT players and over 10 music streaming
The choice of the “right” monetisation
apps in India catering to their media and entertainment
strategy
demands.With digital consumption gaining momentum,it
is expected that the focus will soon shift to monetisation The most effective monetisation model for a digital
of the content. To this end,digital content platforms are platform depends on factors such as the type of content
now attempting to move beyond advertisements and featured, target audience, scale,competition and service
exploring new avenues to monetise their relationships positioning.2
Digital business characteristics and monetisation models3,4
Content featured and Target audience Scale Model

service positioning
Majorly used by third-party Audience at scale that Requires a bigger target

content aggregators could either be diverse audience, frequent visits
and extensions or niche (e.g. kids) and a large advertiser Advertising
of broadcasting companies base
Suitable for niche or

premium content. Requires Higher income, urban Work with a smaller
continuous updating of new population with a audience with a Subscription
content to ensure customer willingness and ability higher willingness to
stickiness to pay pay
Most appropriate for live

Targeted at one-time
videos and highly desirable
viewers with a low
Large and repeat
Transaction
content with a dynamic audience
attention span
pricing model
Premium content and value Primarily the younger

Requires a large
added feature to encourage generation wanting to
user base with long Freemium
viewers to become paying consume content on
app sessions
subscribers the go
1. Time spent with Media 2019, emarketer, May 30, 2019 4. The key to building a successful OTT business, Magine, February 2018
2. The key to building a successful OTT business, Magine, February 2018
3. Choosing The Right App Monetization Strategy, Medium, November 17, 2015
Digital content 189
Digital business in India devise innovative and perceived as not offering value for money when
pricing strategies there is so much content available for free
Pack durations and sachet pricing • Content fragmentation:There are over 30 OTT video
Flexible subscription packs have been introduced by streaming platforms with a wide array of content on
most digital players to provide users with the option each. Discovery is an issue and many users therefore
of moving away from high-upfront spends on digital cancel subscriptions once they have watched the
content. While Amazon augmented their annual Prime one or two identified shows available on a particular
subscription service with a monthly subscription plan platform. It is only with a steady and reliable stream of
over the course of last year, Zee5 launched a sachet original content will loyalty improve
pack that offers seven days of premium service in • Consumer readiness:While consumers are mobile
association with RailYatri to drive volumes and increase and internet savvy, they are less familiar with payment
user adoption. Sony Liv has also announced a weekly channels: The challenge to monetisation will be in
subscription pack at INR29, while Netflix has announced educating the large digital masses in the use of digital
a weekly, mobile-only pack at INR65. wallets and payment mechanisms.
Content bundling Further, subscription sharing is rampant in India with
In addition to subscription durations, digital businesses almost eight in 10 subscribers of Amazon Prime, Netflix,
have started to customize and categorise their content and Hotstar in India sharing their accounts.5 This trend
to assist discovery and cater to niche target audiences. is hampering subscriber and revenue growth, as users
Star TV-owned Hotstar has launched Hotstar VIP, a are using login details of others to watch content.
subscription service which offers all ‘only Indian’ content Netflix allows up to four people to share one account,
(including early access to TV shows, live TV channels, while Amazon Prime Video allows two users to share
movies, sports and originals). Eros Now offers two its membership programme and add up to four child
different subscription plans – Eros Now Plus and Eros profiles at a higher price, users tend to still subscribe for
Now Premium – with all original content only part of the the basic plan and share their accounts with their friends
Premium plan. and family.
Regional packs Collaboration has assisted content
OTT players have also tried to address the needs of their monetisation
regional audiences by launching customized plans for As was noted in the KPMG Media and Entertainment
language viewers. Zee5, for example, has come up with report 2018, the boundaries defining the Telecom, Media
language based subscription plans in Tamil, Telugu and and Technology (TMT) sector are increasingly blurring.
Kannada to increase its appeal in the Southern markets. The entry of Reliance Jio in 2016 disrupted the telecom
industry in India with the announcement of a steep
Offline payments decline in data tariffs, and voice practically being made
To cater to audiences that are not comfortable free across bundled plans. This lead to a sharp decline in
with digital payments, digital businesses have also telco revenues. To compensate, it has become vital for
implemented innovations that support offline or cash telcos to encourage data consumption on their networks
transactions. While Hoichoi, a regional OTT player, has through content offerings, which has largely been met
adopted the telecom model of top-up cards, Hotstar through strategic partnerships with OTT platforms.
offers Cash on Delivery (COD) to mobile subscribers for
its Hotstar VIP offering. Such collaborations/ partnerships with telcos are also
important for OTT platforms as they get distribution
Several challenges remain however in the access to a wide customer base, with minimal spends
path to profitability on customer acquisition costs. The partnerships ensure
There are multiple factors hindering successful a faster time to market, and potential for subscription
monetisation of digital content: based monetization for OTT platforms as well. As a
result, major telcos like Jio, Airtel and Vodafone Idea
• xisting service:TV remains the most popular
E
have now become content aggregators with a diverse
entertainment medium with a reach into 800 mn
mix of content from numerous OTT platforms available
households in India, and poses a strong challenge to
on their own OTT/VOD apps. The telcos are not explicitly
the growth of OTT video services. Inertia and habit
monetizing this content by charging separately for it,
dissuades many from cancelling their cable and
but implicitly by upselling higher bundled voice and data
satellite connections or minimising spend in favour of
packs to subscribers. While Jio has chosen to offer all
digital subscriptions
of its video content to all categories of its subscribers,
• Price sensitivity:Subscriptions are deemed expensive Airtel and Vodafone Idea have differentiated the video
5. Almost everyone in India is borrowing someone else’s login to stream movies and TV,
Quartz India, September 19, 2018
190 Digital content
content offering based on the categories of pre-paid or

postpaid plans chosen by subscribers. The prize at stake here
The entity in this eco-system with the deepest
In the early days of telco based content aggregation, knowledge of the digital consumer and her
most of the deals between telco players and OTT psychographic and demographic profile will be in the
platforms were on a fixed fee basis for three to five best position to achieve successful monetisation.
years and included a lump-sum payment by for all But in an age of collaborations and partnerships, who
content on the OTT platform. As the OTT landscape owns the coveted relationship with the user?
matures, these deals are evolving towards shorter
duration agreements, with dynamic payout structures In our conversations with industry experts, it became
that typically include a minimum payment guarantee and apparent that the nature of alliances are still evolving
are based on the performance (i.e. active viewership) of although everyone we spoke to concurred that the
the VOD platform on the telco app. Access to customer consumer, and associated insights into her behaviour,
data for the OTT app through the telco platform is an was the prize at stake here. There exists a continuum
important and often negotiated aspect of such deals. in the type of partnerships between distributor and
content creator ranging from insertion – where the
Going ahead, viewership measurement, ownership content is shared entirely with no relay of information
of customer data, access to premium content and on usage or consumer back to the OTT platform – to
deal duration are likely to be the critical aspects when app in app where the user gets redirected to the OTT
partnerships between a distributor and VOD player are where all consumer data will also naturally reside. In
being negotiated. VOD players are likely to seek first- between, lies the API-based format where information
hand access to end-customer data in order to have is shared between the two parties.
complete visibility on consumption habits, windowing
period for premium content and minimum payment For the moment, OTT platforms may be willing to
guarantees in order to protect their economic interests. trade off a direct connect with their consumer for
higher MAUs but there are already instances being
reported of digital platforms pulling out of distribution
partnerships rather than forgo even partial consumer
access and control. In the fight to establish the most
intimate relationship with the user, and in a scenario
not unlike TV some years ago, it will be interesting
to observe how the balance of power shifts between
content developer and distributor.
Emerging distribution models
A C E
B D
Collaboration opportunities
Other digital Hardware

Telcos platforms platforms
Cable / DTH Cab
Strategic
operators YuppTV’s aggregators Amazon Fire
deal between
Jio and collaboration TV stick and
Netflix with ALTBalaji ALTBajaji
Hotstar,
partnership ALTBalaji and YuppTV partnership
ALTBajaji,
with and have tied -up with
SonyLIV,
Videocon SonyLIV’s with Ola Play Micromax
VOOT and
and Tata Sky collaboration
Zee5
with Arré
Digital content 191
192 Cord cutting
Cord cutting
Early adopters embracing change
The global perspective One of the primary factors for this trend is that the
Over-the-top (OTT) video apps are changing the way traditional TV networks are not able to keep up with
video content is consumed globally. In a developed the quality of original content offered by OTT platforms.
market like the US, growing demand for OTT video Also, the rising popularity of linear OTT services, like
content is a major driver for the rise of OTT subscription ‘SlingTV’, could make things more difficult for traditional
and decline in the number of pay TV viewers1,2. As pay TV providers, as these services often offer digital
a result, there is an increase in the number of ‘cord access to their programming at a lower cost. Other
cutters‘- subscribers who have cancelled a pay TV important factors are the significant price differential
service and continue without it. It is estimated that between pay TV and digital subscriptions and the
by the end of 2022, more than one-fifth of the US availabilty of high speed broadband4,5. A decline in the
population will no longer watch traditional pay TV3. number of pay TV subscribers was also observed from
2017 to 2018 in other developed economies like Japan
Smartphone users and penetration and Australia6.
36%
Pay cable TV vs Netflix subscription (U.S.A)
29%
26% 491
23%
381
337
292
USD107 USD11
Pay cable TV Netflix
2017 2018 2019P 2022P
subscription subscription
Smartphone users Smartphone penetration
Source: eMarketer,2018; Leichtman Research Group,2019
Cord cutters (U.S.A)

90 20.8% 21.0%
18.8%
80
16.6%
70 15.2% 14.4%
60 12.9% 1. US Pay-TV providers lost 1,325,000 subscribers in 1Q 2019, Broadband TV News, May
55.1 12.2% 2019; accessed on June 20, 2019
50 9.8% 10.0% 2. Statista
40 39.3 7.8%
33.0 3. Traditional TV Providers Offer OTT Packages to Head Off Subscriber Freeze, eMarketer,
30 24.9 5.6% Aug 2018; accessed on June 20, 2019
20 3.4% 4. Why the Price of Cable TV Stopped Going Up So Fast This Year, Fortune, Nov 2018;
accessed on June 20, 2019
10 1.2%
5. Speed Test Global Index, March 2019
0 -1.0%
6. KPMG in India analysis, 2019 based on secondary analysis
2017 2018 2019P 2022P
cord cutters (mn) % of population
Source: eMarketer,2018; Leichtman Research Group,2019
Cord cutting 193
Indian scenario - Television continues to

remain relevant
OTT video services have gained significant traction in
the past two to three years with 300 mn+ digital video
viewers in India at the end of FY19. This has been
facilitated by an increase in demand for content from
digital subscribers and continued investments by OTT
players. The growth in the supporting infrastructure
with increasing availability of high speed and affordable
internet, growth in smartphone penetration and increase
in the share of smart TVs has also played a crucial role
in the rise of consumption of OTT platforms in India7,8.
Also, the number of broadband subscribers in India has
grown at the rate of ~44 per cent over a period of five
years to reach 525 million by the end of 20189.
OTT vs pay TV subscription (U.S.A)

197.7
181.5
170.1
153
92 89.1 87.8
2017 2018 2019P 2022P

OTT subscribers (mn) Pay TV subscribers (mn)
Source: Quarterly performance indicator report, TRAI
Smart TV market (2018-2024)
~10-12 Mn 30% ~58 Mn

CAGR
2018 2024
Source: “India Smart TV Market”, 6W Research, July 2018
7. Performance Indicator Report, Telecom Regulatory Authority of India (TRAI)

8. Xiaomi’s Mi TV plans to disrupt the TV segment in India, The Economic Time, Feb 2018,
9. India achieves 45% growth in broadband subscribers in 2018, TelecomLead, Dec 2018;
194 Cord cutting
Although OTT services have gained in popularity recently, TV remains a strong and relevant medium in India with
significant reach, especially in rural areas10.
TV penetration in India
2016 2018
All India 66%
Urban 87% 88%
Rural 52% 55%
TV viewership in India
Increase in TV viewership from 2016 to 2018 12%
Avg. time spent per user (minutes)

2017 2019
Television 161 176
Digital 70 90
Source: “The changing face of TV in India”, BARC Report, March 2018; eMarketer, 2019
The current primacy of television is also reiterated by the entertainment medium to television, rather than
fact that there isn’t significant amount of original content threaten the existence of the medium in the short term.
available on OTT platforms currently.
Long term catalysts for cord shaving/
Further, there is an added issue of content fragmentation cutting in India
across OTT platforms from the consumer’s point of
view, given that most OTT players are trying to build Fibre to the Home (FTTH) services and 5G to bolster
their libraries and thus movies and original content internet speeds
are spread across multiple platforms, leaving the user FTTH and 5G services are anticipated to be highly
with a choice of choosing what they want to view, as beneficial for the OTT ecosystem. FTTH would provide
compared to the ‘all you can have buffet’ approach that high speed fixed broadband enabling better quality
TV has traditionally had. While the likes of Jio are trying of online viewing experience on a large screen,
to aggregate content from multiple content providers, which could help substitution of traditional forms of
fragmentation of content availability on OTT platforms TV distribution, even though the eventual device of
means that TV is likely to retain its relevance in the near consumption may remain the smart TV.
future.
5G services, which are likely to see mass consumer
In fact, with a majority (~98 per cent) of homes in adoption only in the long run in India, are expected to
India having a single TV and with 82 per cent of people usher in an ecosystem of high speeds at mobility, and
watching TV together11, the flexibility and individualistic could act as the catalyst for cord shaving/cord cutting in
viewing nature of OTT platforms means that digital India.
video has currently positioned itself as a complimentary
10. The changing face of TV in India, BARC Report, March 2018

11. The changing face of TV in India, BARC Report, March 2018
Cord cutting 195
Fibre to Home (FTTH) services 5G services
Key features • The gaming market, with in-app advertising • Fifth gen. mobile telecoms technology which
and large investments into content, provides exponentially faster download
• Fibre access solution where each subscriber speeds and better efficiency
is connected to an optical fibre
• Provides bundled services like broadband
speed of at least 100 Mbps, Cable TV,
On-Demand IPTV, Telephony etc.
Key • Government aims to increase fibre footprint • Government to allocate airwaves to offer 5G
developments to fivefold by 202212 services by the end of 201914
• Jio Giga Fiber is expected to be rolled out in • Jio envisages launching 5G services in 202015
1100 cities13, with trials currently on
Source: KPMG in India analysis, 2019 based on secondary research (till June 14, 2019)
Increasing availability of content on telco platforms and technology over a course of three years16. For
A majority of the telecom operators in India have signed example, Netflix has planned to invest INR6 billion per
content partnership deals with prominent OTT players year in originals, whereas Amazon Prime has committed
(Netflix, Amazon Prime Video, ALTBalaji, etc.) and major INR22.3 billion (in 2017) over a period of 2-3 years17.18.
broadcast networks to enhance the use of data traffic These increasing investments by OTT players on original
on their networks, improve ARPUs and reduce customer content could result in the entertainment needs of the
churn. This has enabled telco platforms to become users being fully met online in the long run. Although
content aggregators and offer a wide variety of content, the current volume of original content is not at par with
including catchup TV, shows, movies and originals to television, however, with the increasing demand of
its users. These content offerings of telcos, which are content and resultant supply, the OTT ecosystem could
extremely affordable and in some cases, even free become self-sustaining, with a real possibility of some
currently; when coupled with high speed internet, could early adopters starting to cut/shave the television cord.
threaten the traditional television distribution in the long
run.
OTT platforms bulking up content libraries
Number of Live TV
The growth in the number of OTT viewers has
movies (approx.) channels
encouraged segment players for continuous investment
in creating original programming and beefing up content Netflix 3800 NA
libraries in Hindi and regional languages. Platforms have
doubled-down on regional content in recent times and Amazon Prime 4700 NA
have started to bulk up their regional libraries by using
a mix of dubbed and original content across different Hotstar 2800 32
formats to fill the supply gap and cater to regional
Sony Liv 1600 26
audiences across the country. For original programming,
major OTT players are estimated to spend INR2.5 billion Zee5 2600 100
in building original content on the platforms, distribution
Source: KPMG in India analysis, 2019 based on secondary research
12. Telecom operators, fibre companies eye fund for infrastructure expansion, The Economic 16. As viewership spikes, OTT players to invest INR2,500 crore in content in next three years,
Times, Mar 2019, accessed on June 29, 2019 Best Media Info, Sep 2018; accessed on June 30, 2019
13. Reliance Jio GigaFiber’s 50mbps, 100 mbps connection may come in these prices, Business 17. OTT apps step up content war, eye paid subscribers, Livemint, Mar 2019, accessed on June
Today, June 2019, accessed on June 29, 2019 30, 2019
14. Government-backed 5G trials by 2019 end, deployments by mid-2020,ET Telecom.com, Mar 18. 2018 a turning point for original content on OTT,exchange4media,Oct 2018, accessed on
2019, accessed on June 29, 2019 June 30, 2019
15. After 4G wave, Reliance Jio may launch its own 5G handsets with 5G services, India Today,
Feb 2019; accessed on June 29, 2019
196 Cord cutting
DTH operators and ISPs trying to enter digital

distribution Monthly TV Basic HD OTT
subscription pack(INR) subscription(INR)
With the growing popularity of over-the-top platforms
and video on demand content, DTH platforms in the Star TV vs
country have also started to enter this segment with 85 30
Hotstar
bundled offerings. For example, Tata Sky has introduced
the Tata Sky Binge Service, which seeks to combine Zee TV vs Zee5 60 83
the DTH channels, and other streaming services like
Hotstar, EROS Now, Hungama Play and SUN NXT. Sony TV vs Sony
70 40
Similarly, Dish TV has launched its platform called Liv
‘Watcho’ for its users. The platform offers content
Viacom TV vs
including movies, short films, live and catch up TV 32 0
VOOT
channels and user generated content19. Another major
DTH player, Airtel has launched ‘Airtel Internet TV’ which Total 247 153
allows users to access apps like Netflix, YouTube and
Source: KPMG in India analysis, 2019 based on secondary analysis
more on their TV screens alongside their TV channels20. Note- Avg. monthly subscription of OTT players is calculated from yearly plans, wherever
available
Along with DTH players, internet service providers
(ISPs) have also entered this segment to leverage the entertainment content is likely to be consumed on OTT
opportunity. For example, ACT Fibernet has launched platforms with TV likely to witness cord shaving for the
Android-powered OTT streaming device21, whereas genre.
Hathway introduced a hybrid set-top-box (STB) which Overall, with increasing internet speeds, the upheaval
combines linear TV with Play services22. around the implementation of the NTO, and the price
These initiatives by traditional TV distributors point parity as outlined above, the OTT players stand to
to the perceived threat of digital distribution that the benefit immensely in the coming future.
segment faces, and the launch of the above services
are strategic moves by the distributors to protect their Conclusion
turf in the long run. The reach and consumption of television continues
to grow in India currently, and given the relatively
The NTO - increasing cost of TV subscription non-existent arbitrage between cable TV and OTT
The New Tariff Order (NTO) has brought in an element pricing, television is likely to remain relevant in the
of choice to the traditional TV subscription with MRPs short to medium term in the country. With the single
for each channel, and added the Network Capacity Fee TV household dominance in India, OTT apps have
(NCF) as a new component to the subscription bills. currently taken position as complimentary mediums
Industry discussions have revealed that implementation of entertainment to television, rather than threaten
of the NTO has largely led to increasing the cost of TV the very existence of it.
subscription across most of the subscribers in the TV
However, with the rapidly growing digital
universe.
infrastructure, proliferation of OTT platforms
On the other hand, OTT players have been reducing the and continued investments in original content
cost of their subscription through introduction of basic, by these platforms, the seeds for cord cutting/
affordable packs. For example, Hotstar launched its shaving are quietly being sown. With the relative
low cost subscription pack in the form of ‘Hotstar VIP’, increase in cable subscription costs post the NTO
whereas Netflix introduced ‘mobile only’ plans which and the imminent launch of FTTH services, digital
are 50 per cent cheaper than its basic plan. distribution could see increasing traction, with cord
cutting/shaving potentially being exercised by the
These cost reduction initiatives by the OTT players has
early adopters.
resulted in somewhat of a parity being achieved when it
comes to TV pack vs. OTT pricing. The long term launch of 5G services is likely to give
further fillip to this trend, wherein the entertainment
The English genre on TV could be one of the most
needs of the household may be fully met by online
adversely affected genres in the new tariff regime, with
video services.
increased price parity between television and digital
offerings, and the supply of English entertainment on
digital platforms reaching a critical mass. English pay TV 19. Dish TV forays into OTT segment with Watcho, Livemint, April 2019, accessed on June 30,
2019
channels, as a result, are already expecting a drop of 20. Airtel Internet TV Allows Users to Watch Content from OTT Apps and Television Channels,
25-30 per cent in the revenues in the near term in Telecom Talk, July 2019, accessed on July 20, 2019
this new era of a-la-carte pricing for TV channels. 21. ACT Fibernet launches Android-powered OTT streaming device priced at Rs 4499, Televi-
sion Post, April 2019, accessed on June 30, 2019
In the medium to long run, majority of the English 22. Hathway introduces android OTT box, The Economic Times, Oct 2018, accessed on June
30, 2019
Cord cutting 197
198 Original content on OTT platforms
Original content on
OTT platforms
Capturing mindshare
Online video platforms have displayed strong growth

in terms of viewership and subscription globally.
This has resulted in consumers increasingly turning
towards online video platforms to meet their
entertainment needs, leading to cord cutting/shaving
in some countries. In early 2019, the number of global
subscribers for video streaming services were more
than cable connections1. The rapid growth of original
content available on these online platforms is one of
the key reasons for the above trends. For example, in
CY2018, the original digital series launched worldwide
were more than double over the previous year2.
Number of subscribers - Global (Mn)
Cable
connections 556
Video streaming
613
services
Number of online originals launched - Global
319
139
1. Global video streaming market is largely controlled by the usual suspects, Venture Beat,
March 2019, accessed on July 1, 2019
2. Original Digital TV Series Grow, Netflix Commands Dominant Share, MediaPost, April
2017 2018 2019,accessed on July 1, 2019
Original content on OTT platforms 199
Further, with global networks moving towards launching been experimenting with Youtube Originals, which
their own digital platforms, original content is becoming are commissioned original shows, with the launch or
increasingly critical for independent platforms to survive ‘ARRived’ in India in 2018.
and for network-based platforms to differentiate.
Original programming on OTT platforms in India
Originals not only help fill out a platform’s content
has started gaining prominence since early 2018.
library, but also helps differentiate them from the
Prior to this, platforms were focusing on building a
competition. The presence of originals across genres
robust content library through live/catch up television
like web series, films, comedy, and documentaries helps
offerings and movie acquisitions. However, in order
platforms entice users to subscribe, with the depth and
to differentiate among peers and engage the growing
quality of the library helping retain users as well.
digital audience, OTT providers started focusing on
In this escalating war for original content, global offering new, innovative content with stories that cut
platforms are beefing up their content budgets to stay across target markets.
relevant. Some of the content budgets for originals on
Major global players like Netflix and Amazon have
select platforms is outlined below:
launched significant hours of original content after a
Investments in original content couple of years of their launch. Amongst the Indian OTT
(USD billion) – Global players3 players, Hotstar started experimenting with a greater
amount of original programming in 2018-19, while the
Amazon HBO likes of ALT Balaji, Zee5 and Eros Now have also been
Netflix Hulu
Prime Video Now building robust libraries of original content.
2019E 15.0 6.0 2.5
Hours of India-focused original content
2018 12.0 6.0 2.5 2.5
launched (Original series and films)
2017 9.0 90
80 2017 2018 2019*
Source: KPMG in India analysis based on secondary research 70
60
50
Original content – the Indian OTT context 40
Original programming on digital platforms in India 30
20
was pioneered in a way by Youtube, where small, 10
independent creators have been engaged in creating 0
user generated content (UGC) since years. With a wide Netflix Amazon Hotstar Eros Alt Balaji
Prime Now
access to digital consumers that Youtube provides, Launch year 2016 2016 2014 2012 2015
many organised and large content creators like TVF, Dice * Till 14 June 2019
Media, etc. also started out putting their original content
on to the platform. Source: KPMG in India analysis based on secondary research
While some of the larger content creators have

moved on to independent platforms, i.e. TVF moving
to an own app called TVF Play and the likes of Dice
Media producing content for majors like Netflix,
Youtube still holds great prominence in India for user 3. The New Entertainment Giants: Welcome to the Streaming-Industrial Complex, PCMag,
generated original content. The platform has also April 2019, accessed on July 2, 2019
© 2019©KPMG,
2019 KPMG,
an Indian
an Indian
Registered
Registered
Partnership
Partnership
andand
a member
a member
firm
firm
of of
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KPMG
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(“KPMG
(“KPMG
International”),
International”),
a Swiss
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entity.entity.
All rights
All reserved.
rights reserved.
Some of the key launches around original content by major OTT players in FY19 are listed below:-
Key originals launched on major OTT platforms in India (FY19)
Amazon
Netflix Prime Video Hotstar ALTBalaji Zee5 Eros Now MX Player
India
• Delhi Crime • Made in •R oar of The •K ehne Ko • Karenjit •F lip • ImMature
• Sacred Heaven Lion Humsafar Kaur • Metro Park • Hey
Games • Four More • On Air with Hain • Life Sahi Prabhu!
• Operation
• Lust stories Shots AIB • Zaban Hai 2 Cobra • Aafat
• Mirzapur Sambhal Ke • Abhay
• Ghoul • Enaaya • Love Ok
• Comicstaan •T he Great • The Final Please
• Selection • Smoke
Indian Call
Day • Laakhon
Mein Ek • Dysfunctional • Rangbaaz
Family
Source: KPMG in India analysis based on secondary research
With the growing demand from the expanding

Investments and planned launches of
digital audience, OTT players have committed large
original content4,5,6,7,8
investments in creating and distributing original
programming in Hindi and regional languages. OTT Investments in Planned launch of
This increase in investments on original content, Platform originals original content
has resulted in the content ecosystem undergoing a At least nine
seismic change in terms of significant rise in the scale INR6 billion per original series and
and quality of content production. Most of the players Netflix
year eight original
have released long-form content reflecting the global movies in 2019
standards. Such long-format content includes franchises
with multiple seasons with per episode duration of at Committed
least 20 minutes. INR22.3 billion in
Amazon 2017, expected to 10 original series in
Prime be allocated over 2019
the course of
two-three years
Tied up with 15 film-
INR1.2 billion on
Hotstar makers for original
‘Hotstar Specials’
content
In FY20, INR1.50-
1.75 billion, with
Alt Balaji at least 75% of 24-30 shows in 2019
going into content
creation
72 originals (12 mov-
ies & 60 series) over
a period of one year
Zee5
(till Mar’20) across
genres and
languages
4. OTT apps step up content war, eye paid subscribers, Livemint, March 2019, accessed on 7. Hotstar to invest INR120 crore in generating original content, Economic Times, January
July 2, 2019 2019, accessed on July 2, 2019
5. 2018 a turning point for original content on OTT, exchange4media, October 2018, accessed 8. Netflix to release 9 original series in India this year, Livemint, March 2019, accessed on July
on July 2, 2019 2, 2019
6. We would rather create IPs than acquire titles, Financial Express, April 2019, accessed on
July 2, 2019
Even though long form content has seen increasing

traction as against the early-day trend of short form/ Genres of original content on major OTT platforms
snacky/UGC content, players have continued to release
short form originals to cater to the ‘snackable’ content 31%
27%
audience. For example, ‘Eros Now’ launched a series of
short-form originals (Quickies) in December 2018, with
plans to roll out more than 50 series in 20199. In fact, 13%11%
54 per cent of all the original series released in India
(FY19) were short form (less than 20 minutes)10. Thus, 3% 3% 3% 3% 2% 1%
1% 1%
the trend signifies that there is scope for both long form
Action
Drama
Documentary
Talk shows
Comedy
Docudrama
Crime
Thriller
Horror
Sports
Reality shows
Romance
and short form content to co-exist in the Indian OTT
landscape.
Original content duration on OTT (FY19)
Analysed for original content released on Netflix, Amazon Prime, Hotstar, Alt Balaji,
Zee5, Sony Liv, Viu Eros Now in Hindi and regional languages from 2017-14th June’19
>35 min. Source: KPMG in India analysis based on secondary research
19%
Cost of creating original OTT content –
10-20 min. Players spending big
54%
20-35 min. On an average, the cost of content production on OTT
27% platforms is significantly higher as compared to TV.
This can be attributed to economies of scale as cost of
sets and other fixed costs are apportioned over 300+
episodes in case of TV as against to 8-10-episode series
on OTT platforms12.
Source: KPMG in India analysis based on secondary research Based on secondary research, we have analyzed the
In terms of content type, initially players were focused cost of content creation on some major OTT platforms.
on developing original content dealing with niche, For some original series, global platforms like Amazon
edgy and new age concepts targeting elite audiences. and Netflix are spending in the range of INR10-20 million
However, as the online video viewership expanded per episod13. For example, per episode cost of original
beyond metros into tier II/III cities and rural areas, series including ‘Made in Heaven’ and ‘Mirzapur’ on
players have started to create original content for Amazon Prime was INR10-20 million14. On the other
masses that they can relate to. Also, many players have hand, the content cost of digital originals for Indian OTT
collaborated with content companies that have been player, Zee5 is three times as compared to TV15.
creating content for this audience, and understand the However, regional content production cost is almost 30
tone and grammar of content creation on digital. For per cent lower to that of Hindi original content and per
example, original web series ‘Gullak’ on Sony Liv has episode costs are approximately in the INR5-6 million
been created by TVF, whereas Netflix originals ‘Little range. A small budget web series in the regional genre
Things-2’ was created by Dice Media. could cost INR2.5-3 million per episode16.
When the genres of original content released were With such high investments in content creation, it
analysed for major platforms, it was observed that becomes imperative for OTT players to look beyond
comedy, drama, romance and thriller were the most traditional advertising models as advertising revenues
prominent genres since 2017. The top four genres are not sufficient to recover the cost of content,
constitute more the 80 per cent of the originals released marketing and distribution. Thus, a healthy revenue
in India11. stream from subscription becomes important in the long
run for recovering production cost and further investing
in content creation.
9. Eros Now Launches Quickie, a New Short Form Content Platform, Business Wire, Decem- 14. OTT players aim to carve a niche with originals, Indian Television, March 2018, accessed on
ber 2018, accessed on July 3, 2019 July 3, 2019
10. KPMG in India analysis based on secondary research 15. ZEE5 Originals’ content cost to be 3x more than TV, Indian Television, Oct 2018, accessed
11. KPMG in India analysis based on secondary research on July 3, 2019
12. The Rise of The OTTs, Business Outlook, April 2019, accessed on July 3, 2019 16. Amazon Prime, regional OTT players bet big on non-Hindi, non-English content, Financial
Express, Feb 2019, accessed on July 3, 2019
13. Boom time for original digital content creators, Business Today, Feb 2018, accessed on July
3, 2019
Originals released in regional languages (FY19)

Regional languages of
OTT platform No. of regional language originals Examples
originals
Netflix 2 Tamil, Marathi Sometimes, Firebrand
Amazon Prime 2 Tamil, Telugu Vella Raja, GangStars
Alt Balaji 1 Bhojpuri Hero Varrdiwala
Tamil, Telugu, Malayalam, Sigai, Kaali, Liftman, Kalavu,
Zee5 24
Marathi, Bangla, Punjabi Chitra Vichitram, Khoj
Sony LIV 2 Marathi Founders, Full Tight
Increasing focus on regional Also, OTT players are increasingly focusing on Indian
content creation regional language users with new offerings as they
are expected to bring the next big inflection point in
With an increasing number of internet and online terms of growth and monetization. Players are creating
video viewers coming from the non-Hindi and English assorted content libraries including various genres
markets, most of the OTT platforms have started to and formats to target different segments of audience.
focus on content creation in regional languages. For However, due to a limited number of quality content-
example, Zee5 has released nearly 25 original web makers, the content cost is expected to rise as players
series/films in six regional languages in FY19, whereas continue investing in this space.
the exclusive Bengali regional OTT player, Hoichoi
has further strengthened its original content library.
Though the regional language originals released by Conclusion
other platforms in FY19 were limited in number, these Original content on online digital platforms is likely
numbers are expected to increase in future. to see growing impetus in the coming years as a
One of the strategies adopted by these OTT platforms tool for pull-based customer acquisition for such
to reach a wider audience base is ‘content dubbing’ platforms. While original content is critical to
in different regional languages. For example, Hoichoi help drive acquisition and initial sampling of the
has dubbed its Bengali content in Hindi and Tamil. platform in terms of viewership, the depth of the
Similarly, platforms like Amazon, Netflix and Alt Balaji content library, including that of original content
have dubbed their Hindi content in regional languages will determine who can retain customers over
(esp. South Indian languages) to target these emerging a longer period of time. Further, since original
language markets. content creation comes at a cost, higher than that
of traditional television, platforms would need to
With the expanding landscape of the OTT market in
judiciously balance out the economics in terms of
India, original and exclusive content has fast become
spends on content creation vs. subscription-based
one of the critical pillars to succeed in this highly
monetization.
competitive ecosystem. From global platforms,
broadcast backed Indian players to other Indian Given the rapid pace of growth of the online video
independent OTT platforms, all of them are expected market in India, original content is likely to continue
to continue investing significant monies in delivering being the differentiator for attracting users on to OTT
exclusive, high-quality content. platforms, resulting in exciting times for consumers
and the OTT ecosystem as a whole.
204 E-sports
E-sports
One for the team
Electronic sports, also referred to as e-sports, is a Key entities in the e-sports ecosystem are media,
competitive video gaming tournament1 that is played publishers, league organisers and teams. E-sports is
online or offline. While e-sports tournaments have a relatively new concept in India, and unlike traditional
been around for the last two decades in India, it is only sports, entities contribute by playing multiple roles.
recently that they have caught the attention of both
mainstream investors and professional players.
Stakeholders in the e-sports ecosystem2
Donations
Merchandise
Fans
Ticketing, merchandise, Transfer fees
in - game sales
Revenue share and

Streaming rights in game sales Salaries
Media League Teams
Players
Sponsorships
Sponsorships
Brands
Sponsorships
Streaming ad revenue
Publishers – Game developers

League organiser – Organises leagues/tournaments
Platforms – Video livestreaming and broadcaster of e-sports events
1. The evolving landscape of sports gaming in India, KPMG, March 2019
Note: The entities are not mutually exclusive, e.g. a league organiser may organise and
sponsor its own events 2. The Future of E-sports, The Nexus, August 16, 2015
E-sports 205
Publishers: Develop games for mobiles, consoles Growth in audience for Indian e-sports4
or PlayStations. Globally, they host events and
competitions to promote their games. Their key source E-sports audience in India (in million)
of revenue in the e-sports ecosystem is the licencing
fees that event organisers/ streaming platforms pay Both occasional players
to use their games for organised events. In India, and enthusiasts are
expected to increase by
since e-sports is at a nascent stage, game developers 400% between 2017
and 2021
themselves are organising many tournaments and
sponsoring the prize money. Example: Tencent 10
10
(publisher of popular game PUBG) announced

2 10
PUBG Mobile Club Open 2019 with a price pool of 2
approximately INR136 million (USD2 million)3.
2017 2021P
League organisers: Arrange e-sports leagues and
tournaments. Over the last four to five years, India Occasional viewers E-sports enthusiasts
witnessed a rise in the number of gaming and digital
entertainment companies that organise leagues and To address concerns such as players’ exploitation,
tournaments around the country. The number of delayed payments and breach of contracts and issues
international league organisers has also grown; ESL is relating to the broader ecosystem, India has established
one such organiser. These companies are investing in the E-sports Federation of India (ESFI). It is also a full
players by grooming them, collaborating with brands, member of the International E-sports Federation (IESF)
TV channels and streaming platforms to reach a larger and the Asian E-sports Federation (AESF).
audience. Example: NODWIN Gaming has entered into
a strategic partnership with global e-sports giant ESL to Rise of investments
collaboratively organise and promote e-sports in India.
E-sports has seen a rise in investments and partnerships
Players and teams: Globally, players and teams have since 2016. Investments are mainly used for organising
owners, who sponsor and groom them, provide them national level events and for generating the prize pool.
with infrastructure and salaries, and charge them The total prize pool surged from INR13.7 million in 2016
transfer fees on switching to other owners. Currently, to INR38.4 million in 2018. Cobx Gaming contributed
this practice is not prominent in India. Most players INR14 million to the prize pool, followed by Nodwin
and teams still rely on the prize pool. However, they Gaming with INR10 million in 20185. For ESL India
are being backed by brand sponsorships for logistic Premiership in 2019, Nodwin has announced a prize
and merchandise requirements (jerseys, in-stream pool of INR11 million6. Nodwin has partnered with
promotional content, etc.). Example: Kingston’s gaming international company ESL to organise international
vertical, HyperX, is the official sponsor of the Entity gaming tournaments in India, bringing global e-sports
Gaming, India’s leading e-sports team with rosters in enthusiasm and events to a local setting. With more
CSGO, PUBG and Dota 2. domestic and international companies forming such
partnerships, the total prize pool may reach INR3 billion
Brands: Globally, e-sports is attracting large FMCG
in the next three to six years7.
companies as well as sportswear manufacturing
companies, as it has high engagement levels with Interest in sponsoring e-sports events has visibly
younger audiences. India has a comparatively much increased. In 2019, brands such as Mercedes-Benz8 ,
lower brand engagement level than western countries. HyperX9 and OPPO10 were seen to be sponsoring events
However, with the growing popularity of games such as and teams in India.
PUBG, brands see the potential to reach more Indian
youths. Brands are likely to play a key role in the growth
of e-sports in India. Example: Vivo will be the official
sponsor of PUBG Mobile Club Open 2019.
3. PUBG Mobile Club Open 2019: The Biggest Global Mobile Gaming Tournament is Official, 8. Mercedes-Benz partners the first-ever international esport competition ‘ESL One’ in India,
13 March 2019 Economic Times, April 22, 2019
4. The evolving landscape of sports gaming in India, KPMG, March 2019 9. HyperX becomes primary sponsor of Entity Gaming; its first e-sports team in India, BGR,
5. E-sports in India 2018, AFK Gaming, January 05, 2019 March 28, 2019
6. ESL India premiership announced for 2019 with INR 1.1 crore in prize pool, Talkesport, April 10. OPPO Sponsors Tencent Games and PUBG Corp’s ‘OPPO PUBG MOBILE Series 2019’,
10, 2019 Business Standard, January 10, 2019
7. Prize pool for may reach Rs 300 crore in India in next 6 years, Economic Times, March 17,
2017
206 E-sports
The global experience and learnings for When gaming enthusiasts are attracted to a franchise
India and choose to spend their own time and money backing
their teams, there can be a subsequent follow on of
According to reports, e-sports is set to cross USD1
large investments from sponsors with brands that can
billion in 201911 with sponsorship revenue accounting for
become endemic to the sport. The institutionalisation of
the majority at USD456.7 million. Media rights is one of
e-sports is in its nascent phase in India and early signs
the fastest growing revenue streams and is an indicator
of the creation of an ecosystem around the game is a
of the immense opportunity in broadcasting and
critical step in this direction.
streaming e-sports content. Together with advertising
and sponsorships, these three revenue streams are
expected to account for 82 per cent of the total market The popularity of Players Unknown
revenues in 2019. Battleground (PUBG) is redefining the
Globally, e-sports franchises are finding new ways to
Indian gaming industry
differentiate themselves, build a brand and develop PUBG was launched on PC and gaming consoles in
a loyal following of gaming enthusiasts. This requires December 2017, and the mobile version was released in
time and investment in creating a unique and clearly March 2018 in India. The game is estimated to have a
distinguishable identity in the market. From an internal user base of around 120 million players in India12, making
team perspective, in order to develop a strong franchise, it the largest market for PUBG mobile outside of China.
longer multi-year player contracts have to become
PUBG’s popularity in India can be attributed to its users’
the norm for team members, who can then naturally
perception of it being better than other similar
develop their personalities and play styles within their
multi-player battle games13. To further expand its user
respective teams.
base and reach, the company is expected to launch the
PUBG Mobile Lite version, which is designed to work on
low-end devices.
What PUBG got right
01
Easy to play Free game
02 03
Cheap and fast
04
First-mover
05
Visuals and Trending
06
download internet advantage graphics content
As compared to
PUBG on PC, PUBG mobile India has the Fortnite is PUBG has Popular
PUBG Mobile is free to cheapest mobile PUBG’s biggest more realistic YouTubers
is easy to play download on data tariff in competitor. graphics, and streamers
due to effective mobile operating the world. The However, PUBG characters, started live
features and platforms. The average price of mobile was weapons streaming
options to edit game also 1GB mobile data launched in and shooting PUBG, thus
controls. works well on is INR18.5. March 2018, mechanisms, introducing a
The ability to smart phones Cheaper data whereas Fortnite adding to larger audience
have real-time across all price and affordable was launched realism in to the game.
conversation ranges, without smart phones on Android only visuals and best multiplayer
with teammates compromising have led to in August 2018. enhancing the online game
while playing on the quality or more game Thus, PUBG overall gaming on mobile
creates further graphics. downloads. has established experience. platforms.
interest. itself as the
best multiplayer
online game
on mobile
platforms.
11. Global e-sports market 2019, Newzoo 13. Charted: India’s obsession with Chinese online game PUBG, Quartz India, December 10,
12. Why we cannot stop playing PUBG: Gaming addiction health problems and why no one 2018
talked about a Candy Crush ban, India Today, April 22, 2019
E-sports 207
Resistance from some quarters

Despite its growing popularity, PUBG mobile has faced
some criticism as well.
• Ban on PUBG by educational institutions and
states – Primary state schools in cities such as
Ahmedabad (ban lifted in April 2019), Surat and Rajkot
have already imposed a ban on PUBG, citing students’
poor academic performance and growing gaming
addiction. Premier institutes such as Vellore Institute
of Technology (VIT) have followed suit. Officials from
Goa and Kashmir have also appealed to parents and
teachers to keep children away from PUBG, citing
their poor performance in exams. The National
Commission for Protection of Child Rights (NCPCR)
has recommended that state governments should ban
PUBG, claiming that the game encourages violence
among children14.
• Ambiguity in video gaming regulatory framework
– Except for gambling and betting, regulations for
gaming are not well defined in India. Laws that deal
with content regulation include the Protection of
Children from Sexual Offences Act 2012, the Indecent
Representation of Women (Prohibition) Act 1986 and
the Information Technology Act, 2000. PUBG mobile
does not violate any of the above regulations, but the
game may be banned after amending existing laws15.
• Conventional mind set – Globally, video games are
increasingly accepted as sports. However, playing
video games is perceived as a recreational activity and
not as a career in India and some parents discourage
their children from spending time in mastering games.
Conclusion
India is a fast growing market for e-sports and
gaming in general, and hence a potential ban
on any popular format is a grave concern for all
stakeholders. Game developers are working towards
promoting a responsible gaming experience, which
will be a welcome move for the entire ecosystem.
For example, some e-sports games plan to introduce
a digital locking system for underage users (below
the age of thirteen) and parental permission would
be mandatory to access the game. India is also
witnessing the creating of industry bodies within
online gaming and e-sports to promote balanced
and responsible gaming as well as represent the
opportunities and challenges faced by stakeholders.
This and other such measures to build an ecosystem
around gaming is likely to go a long way in ensuring
a more sustainable and credible growth story.
14. The National Commission for Protection of Child Rights (NCPCR), March 14, 2019
15. PUBG Mobile Ban: Regulating Gaming and Digital Addiction in India, First Post, March 20,
2019
208 E-sports
Building ecosystems in gaming – The e-sports way

In November 2018, when Danish Prime Minister As JetSynthesys, we are catering to this entire
Lars Løkke Rasmussen inaugurated the Counter- community of gamers. The huge mobile penetration
Strike e-sports tournament, broadcasted live in and now specialised gaming smartphones combined
17 languages via Twitch, and on TV to over 120 with the already existing high end gaming PCs and
countries across five continents, the message was consoles provide a variety of platforms for gamers to
simple, “You are truly sportsmen following your easily access gaming content everywhere. Further,
dreams.” With e-sports likely to become an Olympic unlike China, all successful global gaming titles are
sport by 2024, several national governments are easily available at affordable rates in India, enhancing
now seeing e-sports as a catalyst to not only create the gaming experience for the community and
world class tournaments and players but to also attracting an entire new generation of gamers. VR,
drive economic growth and tourism in an area that AR and mixed reality gaming experiences are gaining
extensively engages the Gen Z and millennials. For traction.
this generation, selfies with e-sports stars is more
A mobile first gaming culture as well as macro
common than tennis or baseball stars. This of course
drivers such as government investment, broadband
leads to massive endorsement amounts that top
growth, subsidies, recognition of digital gaming by
e-sports stars command especially in countries like
the government and industry bodies can amplify this
Korea. Investments for e-sports hence have seen a
early success at home. Development of infrastructure
surge internationally with fund raising in this space
for pro-tournaments like the ESL One India 2019 with
led by game developers and player organisations like
a USD300,000 prize pool, player training organisations
Cloud9, TSM and franchise based e-sports leagues
supporting top teams, as well as industry bodies
such as that for Overwatch seeing rise in valuations
like the CII India Digital Gaming Society (IDGS) are
over the past couple of years.
making the ecosystem impact meaningful. IDGS has
But this is no ordinary play. Players participating in a clearly stated goal of sustained engagement with
tournaments are not conventional athletes. Strategic the government, innovators, manufacturers, and other
thinking, quick action and optimal use of resources stakeholders to maximise potential with National and
are skills that set top players apart. Player training state governments in policy formulation and enable
organisations have built 20,000 to 30,000 square the growth of the industry. It can create over five
feet training facilities for pro-e-sports athletes. In the lakh jobs each year. And if Indian game development
2018 Asian Games, 23 year old Tirth Mehta from companies can effectively integrate into global supply
India playing in the Hearthstone tournament won the chains in the digital gaming industry, the impact can
country’s first ever e-sports medal demonstrating that be significantly greater.
even India has talented pro-athletes who can earn
In India, the ecosystem for digital gaming and gamers
global recognition. With a career as a pro-e-sports
is expanding rapidly, the investments are growing
athlete becoming more popular in the coming years,
and the need of the hour is to nurture our players, to
digital gaming as an industry is exploding.
support and create brands out of them. The sponsors
At the top of the funnel there are a few million casual will then follow - making it a sustainable career option
gamers in India, who, as they improve their skills, will for players. The next five years, could well be the
rise to become mid-core and eventually pro-gamers. defining moment for digital gaming in our country.
Rajan Navani
Vice Chairman and Managing Director
JetSynthesys
The views and opinions expressed herein are those of the author and do not necessarily represent the views and opinions of KPMG in India.
E-sports 209
210 Monetisation of sports leagues
Monetisation of
sports leagues
Show me the money
With the growing sports culture in the country, the The growth of the sports industry is supported by the
sports industry has undergone a series of fundamental emergence and acceptance of new private leagues.
changes in the last decade. Key factors leading to a rise The IPL offers a glimpse of the potential of sports in
in sporting culture are increasing government and private India. Into its twelfth season in 2019, the cricket league
sector participation, proliferation of sports leagues, wide- attracted 700 million viewers in 2018, growing by almost
ranging and inescapable digitalisation, growing popularity 40 per cent over the last year. Online viewership also
of sports other than cricket, and rising female and rural doubled in 2018 reaching 200 million2. Independent and
audiences. The launch of the Indian Premier League dedicated channels in regional languages - Telugu, Tamil,
(IPL) in 2008 has had a domino effect, leading to the Bangla and Kannada, along with expert shows such
evolution of sports leagues over the last decade. as “Select Dugout” and “Super Funday” have greatly
contributed to the increased reach of IPL3.
Sports has received attention from private and non-profit
organisations, which are now seeing merit in organising Non-cricket properties account for nearly 20 per cent of
sports leagues and tournaments, funding talented the live match viewership4. As a sign of India’s evolution
sportspersons and developing sports at the grass-roots as a multi-sports viewing nation, the Pro-Kabaddi League
level. (PKL) and Premier Badminton League (PBL) had 300
million and 200 million viewers, respectively, in the
Evolution of sports leagues in India 2018-19 season5. In addition, there have been new
entrants such as the Premier Volleyball League (PVL)
With the quantum of sports advertising increasing from and Ultimate Karate League (UKL). PVL, which follows
INR24,230 million in 2008 to INR77,630 million in 2018, a model similar to that of IPL, generated good traction
sports industry in India has shown double digit growth in its first year – a total viewership of 14.3 million6,
over the last decade. Media spends, on ground and including 1.3 million online streaming7. The Ultimate Kho
team sponsorship and endorsements have also shown League and X1 Racing League, both conceptualised in
significant growth, which highlights the developing India, are expected to be launched by the end of 2019.
sports culture in India1.
1. India In The Big League, Impact, 8 April 2019 5. Thanks To Live Sports, India’s Hotstar Is Going Where No Other Streaming Service Has
2. Star India celebrates as IPL 2018 draws 700MN viewers, Rapid TV News, May 29, 2018 Gone Before, Forbes, 26 April 2018
3. Star India viewership hits new record, touches 462 million mark during IPL 2019, BrandE- 6. Pro Volleyball off to flying start, The Economic Times, 15 February 2019
quity.com, May 23, 2019 7. Volleyball League owners aim to make event second biggest in India, Economic Times,
4. How the game around sports is changing, Business Standard, May 15, 2017 April 10, 2019
Monetisation of sports leagues 211
Beyond big sports leagues, India’s sporting culture is The already successful IPL model is being replicated,
getting an impetus from the coverage received by school to a lesser extent, in leagues for football, badminton,
events as well as regional leagues such as the Mumbai kabaddi and volleyball. Though a number of multi-
Premier League. sports leagues in India are following an IPL-like revenue
model, monetisation cannot be simply assumed.
However, not all leagues have been successful. For
Sports viewership in India is skewed in favour of cricket
instance, Hockey India League (HIL) franchisees suffered
and attracting the same for any other sport (even for
financial losses during the last five seasons. At least
domestic cricket leagues other than IPL) remains a
three franchises are not happy with the league and
challenge.
have expressed their inability to participate in future
editions due to financial constraints. However, to revive
its popularity, HIL is launching a revamped version by Monetisation of sports leagues
end of 20198. Even Pro Kabaddi League’s viewership has From a business perspective, the key stakeholders
fallen by 25 per cent in Season 6. Reasons highlighted involved in leagues are federations, broadcasters,
could be related to viewer fatigue due to an elongated franchise owners and sponsors. A basic revenue model
season and a change in the normal season window from structure is depicted below:
June-July to October in order to accommodate The Asian
Games9.
Revenue model of sports leagues10,11
Media / broadcasting Sponsorship /

Associate and partners
rights advertisement rights
Federationpool
Federation poolrevenue
revenue
Franchise
Federation (investors) League organisers Prize money
(team owners)*
Team sponsorships
Some share of franchise earnings
goes to the federation as franchise fee
Gate receipts
Franchise earnings
* Franchise’s share varies in proportion to the license fee each team owner had paid for franchisee rights
The revenue models may differ slightly from league-to- The success of any league depends on its ability to
league, with some leagues having possibility for newer monetise its business model. Some factors that may
revenue sources depending on stage of development of help leagues monetise more effectively are described
the sport, level of innovation and popularity of the sport/ below:
players. For instance, in PBL, franchise team contracts
give rights to hold city badminton leagues and run an
academy in their respective cities12.
8. Hockey India League’s 2018 edition cancelled, future uncertain, The Economic Times, July 11. IPL Guide 2019: All You Need To Know About The Indian Premier League, Kreedon, 21
27, 2017 March 2019
9. We have to look for heroes in sports, make them icons: PKL’s Anupam Goswami, Livemint. 12. Premier Badminton League expects to break even in FY20, The Economic Times, Novem-
com, April 20, 2019 ber 30, 2018
10. For once, each IPL franchisee poised for 150+ crore profit, Insidesport, 2 May 2018
Rise of digitalisation Globally, content consumption is evolving across digital

formats, especially with increasing mobile and internet
Digital is pushing the envelope for stakeholders in the
penetration. Sports content is now the second-most
entire sports value chain from content producers and
popular digital content in India13,14. Digitalisation is
viewing platforms to advertisers and consumers.
leading to wider reach, increased viewership, higher
Viewers increasingly prefer to watch sports events advertisement revenue, along with a rise in participation,
online instead of TV, given the flexibility of watching sponsorships and investments in sports.
them online, anytime on-the-go. Given the convenience
it offers, digital content platforms, in turn, are trying to
convert users into paying customers.
Mode of sports viewership among internet users15
Desktop / laptop
Online
36%
Offline Mobile
33% 67% 45%
Tablet
Other devices
8%
11%
Note: Based on survey of internet users aged 16 to 64
Although the online streaming of live sports started with Tapping into a new segment of sports viewers
the IPL in 2009, the inflection point was the launch of Sports viewership, which was traditionally urban male-
Star India’s over-the-top platform “Hotstar” during dominated, is gaining traction with women, kids as well
2013-1416,17.18.6 million concurrent viewers tuned into as rural audiences.
Hotstar for the final match of IPL 201918.
Women and rural Indians have emerged as key
Following Hotstar’s footsteps, Sony’s over-the-top consumers of sports content. Women account for 35-38
platform “SonyLIV” streams live sports for some per cent and rural Indian constitute 40-47 per cent of
marquee sports tournaments such as the La Liga sports-related content. Women also accounted for 40
football league, UEFA Champions League and the FIFA per cent of IPL’s total viewership in 2018. Furthermore,
World Cup19. the average time spent on watching IPL also grew from
The ease of watching sports events online has led to a 31 minutes in 2017 to 33 minutes in 201820,21.
rise in viewership. Going by the trend, sports viewership
in India is likely to surge over digital platforms.
13. The Growth Of Mobile Content Consumption In India Is Primary Driven By Entertainment & 18. IPL 2019: Hotstar registers 18.6 million concurrent viewers for finale, Business Standard,
Sports, Dazeinfo, 24 October 2018 14 May 2019
14. Thanks To Live Sports, India’s Hotstar Is Going Where No Other Streaming Service Has 19. Thanks To Live Sports, India’s Hotstar Is Going Where No Other Streaming Service Has
Gone Before, Forbes, 26 April 2018 Gone Before, Forbes, 26 April 2018
15. Sports OTT Landscape in India, eMarketer, January 24, 2019 20. The 18 realities of Indian sport, Sportskeeda, 15 May 2018
16. The Growth Of Mobile Content Consumption In India Is Primary Driven By Entertainment & 21. Female contribute 40% to total IPL viewership, Insidesport, 16 May 2018
Sports, Dazeinfo, 24 October 2018
17. IPL 2019 Final: Hotstar Breaks Record With 18.6 Million Concurrent Viewers, Economic
Times, 14 May 2019
Brand monetisation opportunities through fan engagements

Franchise teams are exploring multiple opportunities and accountable system, driving innovation, increasing
to increase revenue contribution from other sources attractiveness of sports as a career opportunity and
in order to reduce their dependency on their share of making it business and investor-friendly.
revenue from the central pool.
However, except for the BCCI, Amateur Kabaddi
Typical brand monetisation approaches aim at generating Federation of India (AKFI) and All India Football
higher ticketing and merchandising revenue. However, Federation (AIFF), few sports governing bodies or
this is not possible without higher fan engagement. federations have taken steps towards becoming
Besides performance, fan following is generated in a privatised, mainly due to their overdependence on
number of ways such as having celebrities associated government funding and lack of interest in the sport26.
with the team and sports celebrities such as Virat
While companies seem more than willing to sign
Kohli and MS Dhoni. However, fan engagement can be
on athletes as their brand ambassadors and spend
generated in a number of innovative ways.
on sports advertising and sponsorship, they seem
Sunil Chhetri, captain of the Indian football team, was reluctant to spend on sports infrastructure and training.
successful in gathering fans for a football match after Additionally, only 2 per cent (INR1,910 million) of
having defeated Taiwan in front of a paltry audience their corporate social responsibility (CSR) budget was
of just over 2000 people in a stadium with a capacity allocated to promotion of sports in 201827.
of 10,000 plus seats. Chhetri made an emotional
Most of the spending is limited to leagues of key sports
plea through a video on Twitter, post which all tickets
such as cricket, kabaddi, football and badminton rather
available for the next match against Kenya were sold
than sports development at the grass-roots level28.
out22. The viral video connected with football fans in
India.
Another example is of Royal Challengers Bangalore
(RCB) wherein the franchise is partnering with
Interacting Technology Sport, an Israel based company,
to enhance fan engagement. The mobile app will allow
fans and communities to interact and support the
team throughout the year. Fans will also get access to
exclusive content such as behind the scene videos and
experiencing a day in the life of team players23.
Given India’s multilingual culture, connecting with fans
outside the traditional English and Hindi speaking target
market is crucial to increase fan engagement. Matches
streamed in regional languages have seen a tremendous
response, with IPL in Tamil Nadu generating over 90
per cent consumption in Tamil along with an increase in
viewership versus a 96 per cent viewership in English
just two years ago24.
Corporate backing and privatisation of sports
governing bodies
Sports is largely seen as a state subject with state
governments owning and managing most initiatives
and infrastructure. The role of the private sector in
infrastructure development has been limited so far25.
Privatisation of sports helps build a more transparent
22. India football match ‘sold out’ after emotional plea by captain Sunil Chhetri, Scroll.in, 04 25. CSR projects in sports: Few companies willing to play along, Livemint, October 17, 2017
June 2018, accessed on 6 August 2019 26. What makes Indian sports so attractive to marketers?, AFAQS, September 18, 2017
23. IPL 2019: RCB partners Israeli sports tech firm to enhance fan engagement, Inside sport, 27. The CRISIL CSR Yearbook 2019, Crisil Foundation, February 2019
18 March 2019, accessed on 5 August 2019
28. Funding India’s sport transformation, Sportskeeda, 2017
24. Cricket commentary in regional languages is bowling over more Indians, BloombergQuint,
accessed on 5 August 2019
Creation and monetisation of new through Swiggy by Hotstar. The interface is designed to
sports icons provide a user with an integrated food ordering menu
As the viewership and sponsorship expands beyond while ensuring an uninterrupted match stream.
cricket, it is creating space for recognition of new Further, the growth of sports culture has led to
sports icons beyond cricket such as runner Hima Das, the merging of interests in sports and style, with
javelin thrower Neeraj Chopra and badminton players major leagues making strides towards transforming
Saina Nehwal, PV Sindhu and Srikanth Kidambi. Sports themselves into major lifestyle brands. Licencing
persons across wrestling, gymnastics and shooting alliances with apparel, accessories and sports
are also creating a name for themselves, especially equipment manufacturers for league logos, uniforms and
during the Olympics, Commonwealth Games and Asian other merchandise have emerged as a major revenue
Games. source.
Given the rise of new sporting icons, sports talent Sportswear retail, an ancillary industry, is booming.
management firms are the entities behind the scenes Customers have access to performance enhancing
that make it happen. Scouting for players begins at state as well as casual wear products based on their need.
and national level competitions such that players are German sportswear lifestyle brand Puma has performed
signed before they make it big. Traits such as consistent better than competitors such as Nike and Adidas in
performance and the right attitude are essential in India. Success factors for Puma include focusing on the
picking the right players. Virat Kohli was signed during fast growing women’s sportswear segment, along with
the 2008 Under 19 World Cup, way before he started the signing of Mary Kom as their brand ambassador
playing mainstream international cricket29,30. and co creating the brand One8 with Virat Kohli32,33.
With the rise of non-cricket sports leagues, talent Increasing appetite for multi-sport leagues can be seen
management firms have a wider market. Franchise through the sale of sports gear. Decathlon, a sporting
teams like Delhi Waveriders (a Hockey India League goods retailer, has done well in India due to its product
franchise), Hyderabad Hunters (a Premier Badminton line, with commodities catering to more than 70 sporting
League franchise) and Delhi Dynamos (an Indian Super disciplines, whereas other retailers’ product line is
League football franchise) along with individual sports limited to traditional sports such as cricket and football34.
icons like boxing professionals Vijender Singh and MC
Mary Kom and table tennis player Manika Batra are all
being represented by talent management firms31.
Conclusion
Other avenues for monetisation Sports media looks promising as the consumer
Traditionally, revenue was generated primarily through base expands with popularity of sports leagues,
sponsorship fees, gate or ticket fees and sale of rising digital consumption, new brand monetisation
broadcasting and media rights. These limited avenues strategies increasing female and rural viewership.
have resulted in poor profit margins for key stakeholders. Especially, the impressive upswing in viewership
of sports other than cricket showcases India’s
Digitalisation has played a key role in opening up novel
capability to become a multi-sport nation.
revenue models, including the formation of fantasy
sports leagues, live streaming of sporting events on Live sports, including franchise-based leagues,
over-the-top (OTT) apps and advertising on digital have emerged as the primary vehicle of investment
platforms. for the corporates. This increase in private sector
participation has the potential to ignite growth of
Sports related digital mediums such as websites and
young talent as well as infrastructure in India.
mobile applications are drawing an increasing number of
subscribers. Broadcasters and advertisers are targeting
this new customer base in order to increase viewership
and generate more revenue. An example of innovative
revenue generation is providing in-app food delivery
29. Cornerstone Sports website, accessed on 23 June 2019 33. “Inside the Indian sportswear industry”, India Retailing, 5 March 2019, accessed on 29
30. “Bunty Sajdeh: The super-agent” livemint.com dated 1 October 2016, accessed on 23 June June 2019
2019 34. “Decathlon overtakes Adidas, Nike in sports gear retailing”, Economic Times, 10 April 2019,
31. IOS Sports website, accessed on 23 June 2019 accessed on 29 June
32. “Puma edges past rivals in India sales to emerge as top sportswear brand”, Times of India,
1 March 2019, accessed on 29 June 2019
216 Centralised marketing system
Centralised marketing
system
Connecting the dots
Introduction divisions – finance, operations, sales and marketing,

and thus have consciously realised the importance
In this age of burgeoning technological advancement, of convergence and integration of marketing-related
massive volumes of data are generated every moment. activities. They are increasingly exploring opportunities
Organisations are emphasising the need to translate to adopt a centralised marketing system (CMS) coupled
unstructured data into critical insights, enabling a with competent analytics capabilities, some of which
swift decision making process in real time. Many will enable marketing course corrections in real time.
organisations are prudently leveraging on emerging Investments are being made to set up a platform, which
technologies – Artificial Intelligence (AI) and Machine will automate the marketing efforts through the stages
Learning (ML) in order to optimise their ROI. of forecasting, budgeting, implementation, settlement
Advertising spends grew by 14 per cent annually and analytics, and thereby convert static data inputs into
resulting in INR694 billion expenditure across industries. interactive exchanges.
FMCG, auto, telecom and education contribute to 57
per cent of the total traditional advertising expenditure.1
Depending upon the spend pattern, marketers partner
with agencies and third party vendors to handle their
different activities in events, creative artwork, traditional
media, digital media, market research, etc. There could
be one or numerous agencies and vendors handling
the different verticals for each marketer. 20 per cent of
the marketing activities happen at the marketers’ end
(involving critical decision making process) whereas
the balance 80 per cent (execution) is handled by
their deputed agencies and vendors.This complex
environment created between marketers, agencies and
multiple vendors makes it imperative for the companies
to enhance their control on the activities and their
respective spends.
Companies face headwinds due to information gaps
and data silos between their primary functional
1. Pitch Madison Advertising Report, February 2019
Centralised marketing system 217
KPIs are set by internal marketing teams and their

The need for a centralised marketing marketing/media partners.
system These plans undergo numerous modifications during the
Some of the critical questions that marketers are course owing to market dynamics. Real-time tracking
encouraged to ask prior to setting up of a CMS are of KPIs is paramount since they are in conjunction with
as follows: the end marketing objective. Since KPIs differ as per
activities, markets, etc., a robust centralised system
• Does the team have its data at a granular level in ensures that the organisation is cognisant of the
one place? deliverables at every stage of the marketing process,
• Is the team spending more time on putting data leading to an efficient due diligence and compliance
together than gaining quick insights? procedure.
• How can the team connect multiple data silos Authorisation and approvals
that the business has created or bought into? Several times, organisations run the risk of marketing
• Can the team get adequate essential data without activities being implemented without authorised
spending any more? approvals in place. Marketing activities undergo
several changes on comparison with the approved plan
• Is there a possibility of integrating multiple owing to numerous factors, resulting in spontaneous
partners, technologies and tools that the team implementation of activities without appropriate
works with? How can companies ensure approvals. Authorised approvers, due to lack of time or
transparency from them? inaccessibility to the system etc., may miss providing
• Is the company allocating budget correctly? their approvals. Given the hyper-activeness of the
Which marketing activities are providing the best marketing environment and to seize the opportunities
returns? Where can the budget be capped? in hand, marketers are forced to provide a go-ahead
on activities to their marketing/media partners without
appropriate approvals, running a high risk of budget over-
shoot, potential reputational damage to the company,
Expected benefits etc. CMS linked to web portals, mobile apps, etc. assist
Through highly customised CMS platforms (depending authorised personnel to provide requisite approvals
upon organisations’ needs), marketers are expected to despite them being present in remote locations,
benefit in the following ways: minimising the aforementioned risks.
Budget optimisation Real-time reporting and monitoring
Marketing activities are calendarised provisionally, Marketing activities are executed by the internal
based on the projected spends, at the start of the marketing team in conjunction with their marketing/
year with the available budget spread across different media partners. The partners share monitoring reports
months. Marketing budgets are susceptible to changes as per the reporting mechanism set mutually. Internal
since utilisation varies depending upon competition, marketing teams receive activity reports from their
individual market performance, individual marketing multiple partners via e-mails/share drives. This becomes
activities, media vehicles, etc. A primary challenge a challenging task for the internal marketing team since
faced by companies during budget tracking is the most of their time gets spent in collating the data in one
presence of discrepancies in the investment figures place, analysing them, gaining insights and subsequently
reported by different functions for the same activities, taking the necessary course corrections.
thereby adversely impacting the time taken to arrive at To minimise the time and efforts spent in arriving at
decisions. corrective actions, CMS platforms have in-built features
With a robust CMS in place, organisations can track to provide accessibility to multiple stakeholders/partners
budget utilisation accurately and in real time on a involved to enable them to upload the requisite data.
central database. Budgets can be revised by authorised The ML algorithms in the tools can analyse the data on
personnel enhancing stricter control. Additionally, the a single click, providing meaningful insights in real time.
algorithms set in the CMS tool assist in understanding With prudent human intervention, these insights can be
the spend behaviour by different regions on a monthly, turned into meaningful decisions, thereby impacting the
quarterly or annual level, which further assists the ROI positively.
organisations in making discreet budget allocation Settlement
decisions in the subsequent financial year.
Life can be made simpler for the finance team with the
Planning of KPIs and subsequent tracking availability of pre and post activity reports and deviation
Efficient marketers plan their marketing investments, reports on a centralised platform. These reports can be
which are reflected in their marketing budget. mutually discussed between the different functional
218 Centralised marketing system
teams, thereby enabling quicker decision making • Qualitative information on market-wise investments
process with respect to payment settlement. A CMS deployed in real time through
Hikaru sales
Okadaforecasts,
integrated with SAP and other accounting modules, investment to revenueMedia
ratios,and
investment correlations,
Telecommunications
establishing a single user-interface will lead to a swifter etc. Lead Partner
settlement process with minimum effort.
• 360 degree repository KPMG
of retailinaudit
Japandata, competition
Persistent analytics data, market research data, share of voice data, etc.
Persistent marketing analytics rather than prescriptive CMS platforms juxtaposed with reliable predictive
analytics is the key to long term sustenance in the foundation (system-wide ML/AI) can help organisations
marketing sphere. penetrate into their data repository, derive insights
on their strategy, draw correlations and associations,
• Gaining a deep domain view of the marketing spends
make inferences and attributions and predict course
through marketing budget forecasts, marketing
corrections, the value proposition being the ability to
investment analysis, marketing media mix
perform continuous marketing analytics.
“Tracking the marketing ecosystem by means of “With year-on-year growth in marketing

stitching marketing data with sales, competition investments and continuous increase in available
and third party data through high-end process marketing platforms, tracking marketing
automation resulting in bridging the “data chasm” investments real time and taking necessary steps
between the CFO, CMO and CEO, thus enabling for course-corrections is critical. We must seek
a platform for continuous analytics is the pressing to explore opportunities to set up centralized
need of the hour.” technology platforms that converges sales &
marketing data, enabling real-time analytics
resulting in optimization of marketing return on
investments”
Biswajit Das
Founder & Promoter,
Brandintelle
Atit Mehta
R Sridhar CMO,
Partner and Advisor, Think & Learn Pvt. Ltd.
Brandintelle (BYJU’s)
The views and opinions expressed herein are those of the quoted person/s and do not necessarily represent the views and opinions of KPMG in India.
Centralised marketing system 219
220 M&A deal trends
M&A deal trends

Mergers and Acquisitions (M&A) deal trends continue to Creation of a TMT hybrid
mirror the convergence wave within technology, media Since 2016, Jio has been building a direct to customer
and telecom (TMT) sector in FY19. The deal activity business model by creating a complete ecosystem of
by TMT players, led by Reliance Jio Infocomm Limited digital products and services around its core telecom
(Jio), showcases intent to create an integrated direct to service offering. Initially, it was through investments in
customer business with diverse business segments. content companies like Saavn, Eros, Balaji Telefilms,
This is leading to deal activity not only in segments like Viacom18 and Whistling Woods,1 Jio has also invested in
content, digital, but also in traditional segments like TV innovative technology start-ups.
distribution. Some of the key deal themes observed are
set out herein.
Investments by Jio and Reliance Industries Limited (RIL) in Tech based start-ups1
Embibe Apr-18 Education tech
Radisys Jun-18 Telecom
VAKT Dec-18 Blockchain
EasyGov Feb-19 E-governance
Reverie Feb-19 Voice tech
Sankhya Sutra Labs Feb-19 Software
C-Square Mar-19 Software
Grab Mar-19 Logistics
Haptik Apr-19 Artificial Intelligence
Fynd2 Aug-19 E-commerce
1. “In Reliance’s quest to build India’s digital ecosystem, startups take centre stage”,
yourstory.com dated 13 May 2019, accessed d on 5 June 2019.
2. “Ambani’s Reliance to buy majority stake in Google-backed Fynd”, economictimes.com
dated 5 Aug 2019, accessed d on 5 Aug 2019.
M&A deal trends 221
We may well see further disruption in TMT as Jio tries The DTH space too is likely to see activity. The space
to cement its direct to consumer business centered on is dominated by players like Dish TV, Tata Sky, Sun
media and technology while there could be strategic Direct and Airtel. Airtel has approximately 22 per cent
responses from other Telcos and also existing media market share (~16 million users)7 in India and is exploring
companies as they look to protect and consolidate their expansion opportunities.8 The theme of consolidation
businesses. demonstrated with Dish TV and Videocon d2h merger
in 2017 could continue as TMT players like Jio and Airtel
Digital content and platforms: Fuelling the TMT
battle it out for domination in this space.
ambition
India has the second highest number of internet The recent introduction of the New Tariff Order (NTO)
users after China.3 Until recently, much of the content by TRAI can further act as a catalyst for consolidation
produced has targeted audiences in metropolitan cities. not only in TV distribution but also in the broadcasting
With an increasing number of people coming online space.
from different demographics, there is a growing need Television Broadcasting: Emergence of a global
for regional-focused content instead of mass produced giant
content. This has led to the creation of many such
The Walt Disney Company (‘Disney’), completed the
platforms that cater to a specific audience:
acquisition of Twenty-First Century Fox (‘Fox’), for a
• In May 2018, the Beijing based content sharing transaction valued at USD71 billion, in March 2019.9
platform SHAREit (Shareit) acquired Fastfilmz Media With this transaction, Fox owned Star India, which has
India Private Limited, a south Indian movie viewing a commanding presence in the broadcasting and OTT
app for approximately INR860 million.4 space, has also come under the Disney umbrella.
• Roposo, a social media app, raised funding of This deal, has created a bouquet of offerings that
USD10 million in October 2018 from Tiger Global and are diversified, compelling and far reaching. It will be
Bertelsmann India Investments. Roposo is available interesting to see how Disney monetizes this acquisition
in regional languages like Punjabi, Gujarati, Tamil and in India and how would the industry react to it. It may
Bengali among others.5 trigger further competition for quality content in the
television broadcasting and OTT space, much to the
Recent years have seen the emergence and growth of
delight of Indian consumers.
a number of OTT players in India. From the subscription
only Netflix and Amazon Prime Video to hybrid models Film exhibition: Battle to get screens
of Hotstar and Zee, to new multi-format models like Film exhibition is seeing a continued trend of
MX Player, OTT players are striving to differentiate consolidation. The top four players namely PVR, INOX,
themselves. While some OTT platforms are developing Carnival Cinemas and Cinepolis dominate the multiplex
their own content, others are buying out or investing in screens in India.
content producers. As all these OTT platforms fight for
the consumer’s eye – and wallet – it is likely to evolve In August 2018, PVR acquired SPI Cinemas, a south
into a survival of the fittest with potential consolidation India-based multiplex chain, which has presence in
opportunities playing out. Tamil Nadu, Telangana, Andhra Pradesh, for INR6,330
million. SPI Cinemas has a network of 76 screens (68
TV distribution — a new battlefield operational and eight expected to commence operations
Given Jio’s strategic plan to launch its own giga fiber soon) across 17 properties and 10 cities. With this
service in 2020, RIL invested in: acquisition, PVR’s total screen count increased to 706
• Approximately 51 per cent stake in Hathway Cable and screens across 152 properties and 60 cities.10
Datacom Limited (Hathway) for INR29,400 million,6 With the movie screens per viewer in India still low as
and compared to global standards, the question is whether
• Approximately 66 per cent stake in DEN Networks film exhibitors will look for more organic growth by
Limited (DEN) for INR22,900 million6 targeting newer cities/demographics or continue with
inorganic expansion by acquiring smaller screens and
The acquisition of digital cable giants, Hathway and DEN, multiplexes. Consolidation has been the preferred
gives Jio a head start with instant access to 24 million mode of expansion for multiplex players as purchasing
users of Hathway and Den6 and the ability to leverage existing screens is considered easier and faster than
their last mile connectivity. constructing new screens due to various regulatory
3. “Internet users in India to rise by 40%, smartphones to double by 2023 economictimes. 7. “Next wave of DTH consolidation imminent as Jio GigaFiber readies for launch”, business-
indiatimes.com ” dated 25 April 2019, accessed on 21 June 2019 standard.com dated 7 April 2019, accessed d on 5 June 2019.
4. “Content sharing platform SHAREit acquires movie app Fastfilmz”, vcccircle.com, dated 8 8. “Airtel looking at Dish TV for merger to take on Reliance Jio”, business-standard.com dated
May 2018, accessed on 21 June 2019 18 March 2019, , accessed on 5 June 2019.
5. “Social media app Roposo raises fresh funding from Tiger Global, Bertelsmann” livemint. 9. “Disney completes its USD 71 billion buy of Fox entertainment assets”, cbsnews.com,
com, dated 12 December 2018, accessed on 21 June 2019 dated 20 March 2019, accessed on 19 July 2019.
6. “Reliance to buy majority stakes in Den Networks, Hathway Cable for INR5,230 crore”, 10. “PVR widens its reach, buys SPI Cinemas for INR633 crore”, livemint.com dated 13 August
economictimes.indiatimes.com dated 18 October 2018, accessed on 5 June 2019. 2018, accessed d on 5 June 2019.
222 M&A deal trends
and practical hurdles. The trend of consolidation in film Gaming: Emergence of e-sports and fantasy sports
exhibition is expected to continue, albeit at a slower rate games
as the number of screens available for consolidation has Mobile-based games like PUBG have demonstrated
reduced significantly. that there is a huge potential for mobile gaming in
As the number of screens available for consolidation India. With the free flow of data and better hardware
reduces significantly, overseas expansion is also being acting as a catalyst for growth, last few years have seen
evaluated. The Carnival group acquired a 100 per cent tremendous investor enthusiasm in this space. This
stake in Novo Cinemas in July 2018.Novo Cinemas year saw funding rounds in GamingMonk Entertainment
operates movie theatres in United Arab Emirates, Qatar Private Limited - an offline e-sports organiser, AGTech -
and Bahrain. Carnival Group already has presence in an online gaming platform for social and casual games,
Singapore.11 and Mech Mocha - a mobile gaming start-up.15,16
Radio: consolidation gaining traction Another upcoming sub-segment seeing activity is

online fantasy sports gaming. Tencent Holdings Limited,
Consolidation has been gaining traction in the radio
world’s leading gaming company, invested USD100
segment as existing players try and increase synergies
million in Dream 11 Fantasy Pvt. Ltd., a fantasy sports
across brands, frequencies and geographies.
platform, in September 2018.17
• HT Media Limited, which operates FM radio stations
The emergence of sports leagues, digital infrastructure,
under the brand names of ‘Fever’ and ‘Nasha’,
reaffirmation around the legality of fantasy sports and
acquired a 51 per cent stake in Next Mediaworks
key partnerships of fantasy sports platforms with sports
Limited, which operates radio stations across major
leagues may lead to increased investor interest in
metros under the ‘Radio One’ brand.12
fantasy sports gaming. This space may see more action
• In May 2019, Music Broadcast Ltd (‘MBL’), which as online fantasy sports gaming goes beyond cricket, to
operates the FM channel under the brand name kabaddi, badminton, football and other sports in India.
of ‘Radio City, announced acquisition of Reliance
Broadcast Network(‘RBN’) that houses private FM
brand ‘Big FM’, for INR1050 Crores. MBL will acquire 11. “Carnival Group to acquire Qatar’s multiplex chain from Elan Group”, economictimes.com
dated 19 July 2018, accessed on 5 June 2019.
40 Big FM stations out of the total 58 stations held by 12. “HT Media acquires 51% stake in Radio One parent Next Mediaworks”, livemint.com
RBN.13 dated 24 April 2019, accessed on 5 June 2019.
13. “Radio City to acquire 40 Big FM stations for Rs 1,050 crore”, economictimes.com dated
• In April 2018, MBL had acquired 100 per cent stake in 27 May 2019, accessed on 5 July 2019.
14. “Music Broadcast to acquire Ananda Offset’s Friends 91.9 FM radio”, livemint.com dated
Ananda Offset Limited, which runs Friends 91.9 FM in 24 April 2018, accessed on 5 June 2019.
Kolkata.14 15. “Paytm having another go at gaming, revives Gamepind with Alibaba-owned AGTech”
Vccircle.com dated 30 January 2018, accessed on 21 June 2019
Radio may see further consolidation going forward. 16. “From rummy to e-sports, it’s boom time for digital gaming in India” Techcircle.in dated
12 November 2018 accessed on 21 June 2019
17. “Tencent leads $100 mn investment in fantasy sport platform Dream11”,
Vcccircle.com, dated 6 September 2018, accessed on 21 June 2019
Outlook
The deal activity in the Media and Entertainment We may continue to see investor interest in this
space is likely to be buzzing going forward. space, with more focus on targeted original, regional
and local content.
Convergence of TMT is expected to continue, and
may see more investment activity as telecom players With the entry of telecom giants, television distribu-
look to build a well-rounded consumption ecosystem tion space has seen some deal activity and is expect-
backed by building technological capabilities. ed to see more movement as the telecom players
look for dominance in this space.
Digital content and advertising are the means to sus-
tain the new digital media and entertainment industry. Increased investor interest in newer segments like
gaming are only expected to grow from here on.
M&A deal trends 223
224 Tax landscape
Tax landscape
India has been at the forefront in adopting changes in Film industry
its tax laws as we witness a paradigm shift from the
traditional accepted principles of taxation. Equalisation 1. Deduction of expenses relating to production/
levy, significant economic presence are some of the distribution of films
new concepts embraced by India into its tax regime. While Rule 9A/9B provides for deduction of
Even the recent draft report on Attribution of Profits to expenditure incurred on production of films/
Permanent Establishment (PE), released by the Central acquisition of distribution rights therein, there are
Board of Direct Taxes (CBDT) on 18 April 2019 for public a few ambiguities related to its application due to
comments, recommends a Fractional Apportionment evolving business dynamics. Recently, the Bombay
Approach as against the traditionally accepted arm’s High Court in the case of Dharma Productions1,
length approach. On the indirect tax front, the M&E following the decision of Madras High Court2,
industry has had its share of positive and negative has held that expenditure incurred on print and
impact arising from GST implementation. Further, advertisement in connection with the films produced
with an aim to settle pre-GST litigations, it has been (after the production and certification of the film by
proposed in the recently presented Union Budget 2019 the Censor Board) which is specifically excluded from
to introduce a dispute resolution cum amnesty scheme the term ‘cost of production’ of the feature film as
called ’The Sabka Vishwas (Legacy Dispute Resolution) per Rule 9A of the Income tax Rules, 1962, should
Scheme, 2019’ for resolution and settlement of legacy be allowed as a business expenditure under section
cases of Central Excise, Service Tax and certain cesses. 37 of the IT Act. While the said decision may help
the taxpayer, a government circular clarifying various
This chapter provides a bird’s eye view of the key direct
ambiguities surrounding applicability of Rule 9A/9B
and indirect tax issues typical to the M&E industry,
could help dispel the uncertainties.
including some key/recent judgements dealing with
such tax issues. 2. Withholding tax (WHT) on production of films
In certain cases3, the Mumbai Tribunal has held
that production of motion films or cinematographic
films would be covered within the meaning of the
expression ‘work’ as contemplated under section
194C4 and not ‘fee for professional/technical services’
1. CIT v. Dharma Productions (P.) Ltd [2019] 104 taxmann.com 211 (Bombay)
2. CIT v. Prasad Productions (P.) Ltd [1989] 179 ITR 147 (Madras)
envisaged under section 194J of the IT Act. However,
3. Alliance Media & Entertainment Ltd. v. ITO [2017] 79 taxmann.com 114 (Mumbai - Trib.), the issue remains contentious as tax authorities
Nitin M. Panchamiya v. ACIT [2012]
continue to allege that the same should be liable for
4. WHT rate under Section 194C is 1-2 per cent
5. WHT rate under Section 194J is 10 per cent
WHT under section 194J5.
Tax landscape 225
3. WHT on payment for acquiring right to exhibit 7. Input tax credit blockage due to place of supply of
cinematographic films services
The Chennai Tribunal, in case of Indo Overseas The place of supply of services by way of hotel
Films6, has held that irrespective of the medium accommodation (in case of outdoor shoots) is the
in which the cinematographic films have been place at which such immovable property is located.
exhibited, the same constitutes ‘exhibition of The input tax credit of state levies charged by the
cinematographic films’, which has been clearly service provider cannot be availed in another state.
excluded from the ambit of the definition of ‘royalty’
Since, it is practically impossible for production
under the IT Act7. Consequently, it was held that no
houses to obtain registrations in all the states where
WHT is required under Section 195 of the IT Act on
the shooting is carried out, there is a significant
payments to non-residents for purchase of rights to
tax cost on account of non-availment of input tax
exhibit cinematographic films. However, the issue
credit on such services received in states where the
relating to consideration for non-theatrical rights
production houses are unregistered.
still remains debatable as the definition of royalty
specifically includes consideration for films/video 8. States not entitled to grant tax exemption status
tapes for use in connection with television. If any state declares a film as tax free, it has the
4. Multiple registrations and increased compliances authority to only waive off the state GST, which is
half of the total GST charged i.e. 6 per cent or 9 per
Under the GST regime, state-wise registrations
cent, as the case may be (based on ticket prices).
basis the threshold limit of the ‘aggregate turnover’,
multiple return filings and inter branch billing has led The government should consider to grant overall tax
to huge unwarranted compliance costs as well as exemption to films spreading social messages to
time and effort for media companies. the society i.e. both central and state taxes (CGST
and SGST) must be waived off. Also, tax exemption
5. Rate on copyright transfer
should be provided for the corresponding input and
By virtue of a notification, permanent transfer input services.
of intellectual property right (which includes
copyright) has been incorporated in the goods 9. Input tax credit on advances paid for production
schedule, attracting GST at the rate of 12 per Companies paying huge advances to the copyright
cent. However, entry under service schedule also owners against receipt vouchers are unable to
includes ‘permanent transfer of intellectual property avail input tax credit on the amount paid as GST
right’, which has not yet been amended/deleted law requires possession of invoices and receipt of
thus creating unwarranted ambiguity. Further, services for input tax credit availment. Since the
intellectual property right being intangible in nature, movie in respect of which share in copyright is to
determination of place of supply (i.e. location of be received is under production, receipt of services
termination of delivery), in case of permanent is difficult to justify. Accordingly, since the input
transfer is still a challenge. tax credit paid in advance cannot be availed it gets
deferred, causing huge impact on the cash flow.
6. Specific restriction to avail Input Tax Credit (ITC)
on certain inward supplies 10. Challenges in determining value of supply in case
While expenses incurred towards beauty treatment, of barter transactions
serving food and beverages and hiring conveyance Promotional activities undertaken by production
including vanity vans for actors and technicians houses and artists such as providing free movie
directly relate to core business activity of a tickets, tie-in promotions, distributing free
production house, such expenses will not qualify for merchandise, making appearances for events, etc.
credit under the GST regime. are in the nature of barter transactions which fall
under the definition of supply as per the GST law,
Also, there is no clarity as to whether the services
even though there is practically no flow of monetary
of a make-up artist will fall under beauty treatment
consideration. Such transactions will now have to
services. The restriction of these services shall
be valued and GST will have to be paid by both the
further add on to the tax burden of production
parties.
houses and adversely impact their working capital
cycle and profitability.
6. Indo Overseas Films vs ITO [2017] 81 taxmann.com 378 (Chennai Tribunal)

7. Explanation 2 to Section 9(1)(vi) of the IT Act
226 Tax landscape
The challenge here is determining the value of such payments are not in the nature of royalty/fees for
services. There is no readily available market value of technical services under the tax treaty and hence, not
such supply nor are there any comparable supplies liable to taxes in India. The issue is pending before
to arrive at value of services of like kind and quality, the Supreme Court.
since the value is dependent on success of the film.
3. Taxation of a Foreign Telecasting Company (FTC)
Further, the parameters of success may vary for each
on account of advertisement revenues
movie.
Taxation of advertisement revenues
11. Municipality empowered to levy tax on
entertainment and amusement FTCs are taxable in India only if they constitute a
PE in India. The Mumbai Tribunal in certain cases11
In certain states, municipal authorities have started
has held that the Indian agent of the FTC, being an
levying and collecting taxes on entertainment and
independent agent to whom payments are made at
amusement. Consequently, the likely benefit being
arm’s length, does not constitute a PE of the FTC in
received by the industry on account of subsumed
India.
entertainment tax may fade and they may suffer
multiple tax levies and cascading tax effect similar to After the implementation of the Multilateral
what was prevalent in the erstwhile tax regime. Instrument pursuant to OECD’s BEPS Action Plan 7,
one will have to keep in mind the expanded scope of
Broadcasting industry agency PE as it will cover within its ambit situations
where a dependent agent ‘habitually plays the
1. WHT on certain payments by TV channel principal role leading to the conclusion of contracts
companies that are routinely concluded without material
Discount given to advertising agencies modification by the enterprise’.
While a CBDT circular8 settled the argument that the Taxation of subscription revenues
discount given by television channel companies to
FTCs are of the view that payment of subscription
advertising agencies for acquiring advertising slots
revenue is in the nature of business income, not
will not attract WHT, the Supreme Court in the case
taxable in the absence of a PE. Recently, the
of Prasar Bharti9 held that the payments made to the
Bombay High Court in the case of M/s MSM Satellite
advertising agencies for securing advertisements are
Singapore Pte. Ltd.12 has held that subscription
‘commission’ liable for WHT under section 194H of
charges received by FTC from Indian distributors
the IT Act. The facts of this case are different from
cannot be construed as royalty under the IT Act as
those envisaged in the circular, and one will have
well as India-Singapore Tax Treaty as it does not
to evaluate the facts of each case before deciding
involve parting with any of the copyright.
whether the circular would apply or not.
4. Taxation of agency commission for advertising
Payment of channel placement fee
air-time/distribution of channels outside India
Recently, the Supreme Court in the case of Times
Recently the Mumbai Tribunal in the case of Fox
Global Broadcasting Co. Ltd10 has dismissed
International Channel Asia Pacific Ltd.13 held that
Revenue’s Special Leave Petition challenging the
no tax is payable on agency/marketing commission
favourable Bombay High Court order holding that
to non-resident agents outside India for services
placement fees/ carriage fees paid to cable operators/
rendered outside India as there is no territorial nexus
MSO/DTH Operators are payments for work contract
of such services with India.
covered u/s 194C and not ‘fee for technical services’
u/s 194J. This order of the Apex Court is a welcome 5. Deduction of cost of production of programmes
order on the issue which has been a subject matter Given the short lifespan and nil or negligible revenue
of litigation since many years and hopefully should earning potential after the first telecast, several
put the pending litigations to rest. industry players generally claim deduction of the
2. Taxation of transponder charges production cost when the programme is telecasted
and do not capitalise such cost. While the said
While transponder payments are taxable under the
position is upheld by the Delhi High Court14, it still
IT Act after the retrospective amendment, non-
remains a subject matter of dispute with the tax
resident taxpayers can continue to benefit from tax
authorities.
treaties entered into with India to contend that such
8. CBDT Circular No. 05/2016, dated 29 February 2016 12. CIT v. MSM Satellite (Singapore) Pte. Ltd (ITA No. 103 of 2017 and ITA No. 207 of 2017)
9. Director, Prasar Bharati vs CIT [2018] 403 ITR 161 (Supreme Court) 13. Fox International Channel Asia Pacific Ltd. v. DCIT [2019] 103 taxmann.com 1 (Mumbai
10. CIT v. Times Global Broadcasting (2019) TS-115-SC-2019 Tribunal)
11. SPE Networks Inc vs DCIT (2017) 87 taxmann.com 345 (Mumbai Tribunal); International 14. CIT vs. Television Eighteen India Ltd. [2014] 364 ITR 597 (Delhi High Court)
Global Networks BV vs ADIT (2017) 84 taxmann.com 188 (Mumbai Tribunal)
Tax landscape 227
6. Clarification with respect to broadcasting services Out of Home (OOH) industry

The ambiguity with regards to the place of supply WHT on payment made for putting up a hoarding
for broadcasting services was resolved by the
government by clarifying that the same would be the CBDT circular18 has clarified that the payment for putting
location of recipient of services as per the records up hoardings is in the nature of advertising contract
of the supplier. This has provided a great relief to the and provisions of section 194C of the IT Act will be
broadcasters as tracking of head-ends/IRD boxes applicable. It is further clarified that if a person has taken
provided to the cable operations might have been a a particular space on rent and thereafter sub-lets the
herculean task. same fully or in part for putting up a hoarding, he would
be liable to TDS under section 194-I and not under
7. Advertisement services provided to the section 194C of the IT Act. This legal position is recently
government affirmed by the Mumbai Tribunal in the case of Accord
In case of supply of advertisement services on Advertising19.
television channels to the Central Government,
a State Government, a statutory body or a local Sports
authority, the place of supply of such service shall
Taxation of sports associations, sportspersons and
be amount attributable to services provided in each
foreign teams participating in sporting events is a
respective state. In the absence of any contract with
complex issue.
the recipient of services, there was no mechanism
to arrive at such amount. It has now been prescribed The Supreme Court in the case of Formula One World
vide IGST Rules that, such amount attributable to Championship Limited20 has held that the racing circuit
each state shall be determined basis the viewership constitutes a fixed place of business/PE of the foreign
in each such state. company in India under the India-U.K. tax treaty, even
though the duration of the event was only for three days,
DTH industry since the foreign company had full right of access to the
circuit during the entire period of the event.
1. WHT on discount on sale of Set Top Boxes
(STBs)/Recharge Coupon Vouchers (RCVs) Further, the Authority for Advance Rulings (AAR) in
the case of Production Resource Group21 held that
The Mumbai Tribunal in the case of Bharat Business the space provided to the foreign service provider for
Channels Limited15 has held that trade discounts rendering services i.e. lighting, sound, video, etc. during
provided to distributors/dealers on sale of set up the Commonwealth Games in India constitutes a PE of
boxes and recharge vouchers shall not be considered the foreign company in India under India-Belgium tax
as ‘commission’ subject to WHT under section 194H treaty, since it had an identifiable place of business at its
of the IT Act since the relationship between the disposal, and the duration and degree of permanence
taxpayer and the distributors/dealers is on a principal was for as much time as its business required.
to principal basis. The aforesaid decision has been
recently followed by the Mumbai Tribunal in the case
of Tata Sky Ltd16. A suitable clarification from CBDT
Transfer Pricing (TP)
(similar to the one issued in the case of TV channel The sections below provide an overview of TP related
companies17) that such discount is not in the nature issues faced by the M&E industry.
of commission/brokerage could benefit the industry.
1. Compliance vis-à-vis peculiar transactions
2. Clarification in connection to Customers Premise Given the distinct and peculiar nature of international
Equipment (CPE) supplied by DTH operators transactions entered into between parties in the
Under the GST regime, the government has clarified M&E industry coupled with varying prices and
that CPEs are not sold by the DTH service providers/ returns, the benchmarking analysis may not always
cable operators to the end customers, and they are be possible within the purview of the five out of
merely placed at the customers’ location for supply the six methods prescribed under the law as it is
of digital cable services. Such clarification has helped difficult to gather information on similar independent
in resolving the long standing dispute under the transactions from public domain.
erstwhile tax regime where the state government However, taxpayers may have a little more flexibility
had raised huge VAT demands contending that grant to use the sixth method viz. the ‘Other Method’
of CPE constitutes a deemed sale as per VAT laws. wherein tender documents, proposals, valuation
15. JCIT vs Bharat Business Channels Limited [2018] 92 taxmann.com 216 (Mumbai Tribunal) 19. Accord Advertising (P.) Ltd. v. ITO [2018] 93 taxmann.com 398
16. Tata Sky Ltd. v. ACIT [2018] 99 taxmann.com 272 20. Formula One World Championship Limited vs CIT [2017] 394 ITR 80 (Supreme Court)
17. CBDT Circular No. 5/2016 dated 29 February 2016 21. Production Resource Group [2018] 401 ITR 256 (AAR – New Delhi)
18. CBDT Circular No. 715/1995 dated 8 August 1995
228 Tax landscape
reports, standard rate cards, price quotations and The M&E players in India have significant
commercial and economic business models, etc., intercompany transactions in the nature of royalty
could be used to demonstrate an arm’s length intent. given their tie-ups with international M&E entities
and nature of their operations. Payment of brand
2. Increased compliance burden on foreign M&E
royalty being a contentious TP issue in Indian TP
entities undertaking TP compliances in India
audits, no APA and MAP were signed for an entity in
In a recent landmark decision of a foreign taxpayer22, the M&E industry so far. However, conclusion of an
the Special Bench of Kolkata Tribunal has held that APA/MAP on payment of brand royalty is a welcome
whether there is an erosion of the overall Indian tax move and M&E players could benefit from the
base is not a relevant factor in determining whether precedent set by the said APA.
TP provisions apply to a transaction.
4. Other notable developments
This ruling, if implemented by the tax authorities,
• The CBDT released a notification in the month
can have wide spread ramifications for any foreign
of December 2018 specifying the due dates for
M&E entities complying with TP compliances in
furnishing of CbyC report by a constituent entity
India. In the immediate short-term, the ruling may
of an international group which was followed by
increase the compliance and litigation burden for
signing of an agreement between India and the
taxpayers and the overall impact could be adverse.
U.S. for exchange of CbyC information
Consequently, the foreign M&E entities who may
be undertaking TP compliances in India, taking • The CBDT has published a draft report
support of the base erosion argument, would need to recommending a three factor approach for
reassess the arm’s length justification reasons in light attribution of profits to Permanent Establishments
of this decision. in place of the current FAR analysis approach.
3. Update on Advance Pricing Agreements (APAs)
The APA Scheme endeavours to provide certainty to
taxpayers by specifying the method and determining
the prices of international transactions in advance,
thus avoiding future transfer pricing disputes.
Conclusion
The trend in recent years portrays that the Indian
government is focused on proactively introducing
leading global tax practices in the Indian tax
ecosystem. It will be helpful if the government
provides clarity on pending tax issues, which can
provide impetus to the Media and Entertainment
sector.
22. Instrumentarium Corporation Limited v. ACIT [2016] 71 taxman.com193 (Kolkata Tribunal)

(Special Bench)
Tax landscape 229
230
Technology
trends
231
232 5G
5G
What can M&E sector expect?
5G - go full throttle
We use the term 5G to describe the 5th generation of wireless network, which is more superior when compared
to the current 4G LTE network. Starting from 2G onwards, every radio access technology1 has strived to improve
speed and efficiency of the wireless network.
5G- Data & More upto
4G- Data 1 Gbps- 20 Gbps-(IMT 2020)
(IMT advanced) latency <1 ms
3G- Voice & Data 2
latency 60-98 ms
4
Mbps- (IMT 2000)
latency 212 ms 3
2G-Voice 64 Kbps-
Latency 629 ms 2
1
New technologies in 5G
With the rise of mobile users and their demand for high data, 5G will be equipped to handle far more traffic at much
higher speeds. This would mean catering to new technologies2 which will deliver data with sub -10 Ms latency with
speeds of 20 Gbps.
Massive MIMO
Millimeter
Small Cells (Multiple input and Beamforming Full Duplex
Waves
Multiple output)
• Frequencies • They are portable • 5G base stations • It is a system • With 5G a
between 30 Ghz- base stations can support about that indentifies transceiver will be
300 Ghz which require a hundred ports the most efficiant able to transmit
mininal power to which means data delivery and receive data
• Major drawbacks
operate more antennas route through at the same time
is that the waves
can fit on a single signal processing on the same
cannot permeate • It relays signals
array algorithms frequency
through buildings from other base
or obstacles stations and • This increases the • It can help by • One drawback of
sends data to capaciy of mobile focusing a signal this technology
users at any networks by a in a concentrated is that this too
location factor of 22 or beam that points creates signal
greater in the direction of interference
• The sheer
the user instead through a pesky
quantity of small • However
of broadcasting it echo, this can
cells required installing so many
in many directions be overcome
to build a 5G more antennas
only with special
network makes it to handle cellular • This helps in
echo canceling
difficult to set it traffic also improving signal
technology
up in rural areas causes more efficiencies
interferences and reducing
if thos signals interference
cross hence one
must incorporate
beamforming
1. Setting the Scene for 5G: Opportunities & Challenges- International Telecommunication 2. Study on implications of 5G deployment on future business models-
Union 2018 report report by DotEcon Ltd and Axon partners group 14th March 2018
5G 233
5G use cases
The high speeds and low latency will usher existing societies into new age smart cities and Internet of things (IOT).
Though the industry has identified several potential use cases3 the ITU-R (International Telecommunication Union-
Radio communicator sector) has identified three important categories.
Enhanced Mobile Massive Machine type Ultra reliable low latency

Broadband (eMBB) communications communications
(mMTC) (URLLC)
• Helps in enchanced indoor • Helps in supporting large • Autonomous vehicles, smart

and outdoor broadband to number of devices in a small grids, tele health, industrial
crowded areas, enterprise area automation, remote patient
collaboration, augmented and monitoring
• IOT, asset tracking, smart
Virtual reality agriculture, smart cities, • These applications require
• Favoured option as the last energy monitoring, smart sub millisecond latency
mile solution for areas home, remote monitoring
lacking in copper or fibre
connections to homes
The race to 5G
The countries which are most ready for 5G are China, US, South Korea and Japan4. Within this cluster it is China,
South Korea, the U.S. and Japan leading as a result of strong commitment to early 5G launch combined with
government commitment in achieving 5G success. The second group of countries are made up of three Western
European countries: the U.K., Germany and France. In China there is a strong government backing for 5G research
and development combined with strong industry backing. Their MNOs (mobile network operators) have announced
extensive trials and have committed the launching of 5G services by 2020. The 2018 Winter Olympics held in
South Korea gave visitors an opportunity to witness the capabilities of 5G through autonomous cars, immersive
technologies in augmented reality (AR) and fast checkout through wearable payment devices. The United States is
at par with China in the 5G race with all major carriers having conducted extensive trials, and is set for a commercial
launch by the second half of 2019. The hosting of the 2020 Olympic and Paralympic Games in Tokyo is helping
Japan galvanise the 5G progress.
01
02
03
04
05
06
07
08
09
10
Singapore Russia Canada France Germany UK Japan US South Korea China

Tier 3 Tier 2 Tier 1
3. Setting the Scene for 5G: Opportunities & Challenges- International Telecommunication 4. Global race to 5G-Spectrum and infrastructure plans and priorities- Analysys Mason April
Union 2018 report 2018 report
234 5G
Impact of 5G in media and entertainment promises latency of <1Ms live streaming and large
downloads will happen at supersonic speeds. 5G will
The revenue forecast over the next decade (2019-2028) increase media usage immensely. The average data
is pegged at ~USD3 trillion5 which the ME companies speed is likely to move from 12.1 Mbps to 20.3 Mbps
will be vying for and the revenue opportunity enabled by 20216 coupled with voluminous data traffic. 5G data
by 5G networks will be ~USD1.3 trillion. The year 2025 traffic is likely to hit 533 Exabyte/year in 20257 with
is expected to be the year when the industry will reach lower dependency on 2G, 3G and 4G traffic. The above
critical mass wherein 57 per cent of global wireless shifts resulting a revenue contribution of ~80 per cent
media revenues will be generated on the back of super- by 5G technologies in the USD420 billion dollar media
fast 5G networks and devices. One of the key metrics and entertainment pie in 20288.
of 5G performance is latency and since the technology
Global data traffic in Exabytes/year
600
533
500
414 426 421
400
322
425
415
2022 2025 2028
300
278
255
200 150
91 92 91 91 91
70 nearly 20% of almost 53% of ~80% of total
100
total revenues- total revenues- revenues USD325
7 12 14 44 13 11 10 9 USD45 billion of USD165 billion of billion of USD420
0 USD250 billion USD310 billion billion
2020 2021 2022 2023 2024 2025
5G 4G 3G 2G
Source: Global 5G market Netscribes
Total global media revenues delivered over wireless

networks, 3G/4G VS 5G, 2016-28 (USD billion) Speeds in MBPS
450 3G/4G 5G
400
350 22
300
In Billion
20 20.3
5 45
250 220 255
325
18 18.1
80
130 165
200 16 16.2
14.9
150 14 13.5
240
100 194 206 205 190 12
145 170 150 145 130 125 12.1
50 110 95 10
0 8
2016 2017 2018 2019 2020 2021
2023
2024
2020
2026
2021
2022
2027
2028
2017
2018
2019
2025
2016
Source: Ovum 2018 Media and entertainment report Source: Global 5G market Netscribes
5. How 5G will transform the business of media and entertainment- Ovum Oct-2018 report
6. Global 5G market Netscribes
7. Global 5G market Netscribes
5G 235
5G levers in media and entertainment9
Cloud based Over the Top TV Virtual Reality Augmented Reality Driving synergies
gaming
• A move away from • Although over-the- • VR is one medium • AR, like VR, is • The advent of 5G is
purchasing top television in which 5G’s heavily dependent certain to advance
expensive (OTT TV) has been latency on 5G technology the already
consoles from gaining improvements will to reach its full developing
Sony, Microsoft momentum in be most obvious. potential. One entanglement
etc. recent years, they With latency of minute of AR can between
are still dependent less than 1ms, 5G consume 33 times technology and
• With 5G, complex entertainment
on a hard-wired will allow more data than a
processing can be companies. Disney,
Internet streaming VR to minute of standard
done at a for example,
connection. cross the key definition video.
centralised server announced a
implementation AR gaming
and transmitted • Wireless 5G’s collaboration that
threshold. application will be
seamlessly, speeds will, on would see 5G
able to use 5G to
directly to the other hand, • 5G will increase technology applied
communicate with
consumers. allow anyone with the possibility of to improving the
all these
a data plan to “responsive haptic studio’s production
• Telecom information
stream OTT TV clothing”— workflows, likely
companies like sources and
without any clothing or allowing greater
AT&T are overlay real-time
involvement of the accessories that integration and
themselves information and
cable companies. add a realistic efficiency across
investing in cloud- content into a
touch component production facilities.
based gaming player’s set of
to the VR
services, joining smart glasses or
experience
game industry other AR-enabled
stalwarts Microsoft devices.
and Sony, and
technology players
like Amazon and
Google.
236 5G
5G media and entertainment revenue streams9

The biggest opportunity lies in the mobile media and mobile display advertising space with a likely combined
contribution of ~USD300 billion10 which is almost 90 per cent of the projected revenue from 5G technologies in
2028. The potential of 5G will be revolutionary in nature helping to create new consumer and business segments.
The potential of 5G will also be felt in the network capabilities primarily with multi access edge computing (MEC),
which uses the EDGE of the network by bringing computing closer to the data centre helping in reducing latency,
improving connection speeds. Emerging technologies like AI (Artificial Intelligence), IOT (Internet of things) and VR
(Virtual Reality) are powered by MEC and 5G synergies. Network Slicing allows MNO (mobile network operators) to
offer different services across a common infrastructure.
Enhanced Enhanced mobile Home broadband Immersive New media

mobile media advertising & TV media
• Video, music and • Video banners • 5G as primary • AR & VR content • Self driving car
gaming on 5G home entertainment
• In game placement • Cloud gaming
networks entertainment
over 5G delivered over 5G • 3D holographic
clubbed with a TV
displays
• Visual ad formats package
in VR & AR • Connected haptic
• Also referred to as
suits
fixed wireless
access (FWA)
Global 5G revenue (USD billion)
200 180
150
150 120
110
100 75 74
45
50
5 18 18 20 20 0
20
5
0
Mobile Mobile Immersive Home and New
Media Display Media Internet TV Media
(Video,Music advertising (AR, VR and
and cloud gaming)
Games)
2018 2023 2028

Source: OVUM report 2018 5G impact on Media & Entertainment
9. KPMG in India analysis 2019 primary and secondary research

5G 237
5G in India
India has predominantly been a 2G market. But since 2017 there has been a surge in sale of smartphone devices
owing to a combination of factors like falling data prices, better network coverage, low cost 4G handsets and the
development of locally relevant content. Currently, India has ~400 million11 smartphone users which is likely to
increase to ~900 million devices by 2022. The data consumption has increased exponentially, and it is likely move
from 3.5 GB per user to 17.5 GB per user in the period 2017-2212 . The surge in data consumption has been on
account of Jio’s entry in the market, which led to the plummeting of data prices which in turn led to decreasing
ARPU13 albeit we have seen a slight increase from Dec-18 onwards. The data rates in India are perhaps the lowest
in the world right now.
Devices & data landscape ARPU trends in Rs
250 140
220
200 120 121

160
104
100
150
80 83 84
89 80 79
100 76
69 67 70
60
50 40
17.5 40
3.5
0
20
Smartphone users Connected devices Data
in Cr in Cr consumptions (Gb)
-
Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18
2017 2022
Source: CISCO VNI report Source: CARE rating limited Dec 2018 report
5G: Key lever for cord cutting the 4G space. Initial deployment of 5G is expected in
2020 while the government has targeted 2022 for the
5G network will not only allow the telcos to meet the
completion of 5G rollout. The silver lining is that total
requirement of high speed data services, it will also
revenues are likely to grow from USD25 billion in 2017
support rich content-specific OTT services. OTT has
to USD30 billion by 2025 and increase of CAGR 1.9 per
shifted from merely being a communication service to
cent16.
content delivery platform. With the content shifting from
SD to HD and soon to 4K/8K videos, the requirement
of high speed, ultra-low latency data services is a
Telcos need government support
prerequisite for these kind of services. 5G in a way is Some of the key interventions where the telcos will
likely to become a catalyst for OTT players to provide seek government support will be to rationalise the
rich content to their end users. A recent survey14 regulatory levies such as license fee (LF), spectrum
showed that the share of millennials watching online usage charge (SUC), universal service obligation (USO)
entertainment at 48 per cent exceeds the share of those levy and costs to promote network investments and
watching cable TV at 43 per cent. With the increase affordable telecom services, roll out a uniform Right of
in smartphone users to ~800+ million by 2022, an Way (ROW) policy across all states to facilitate rollout
increasing number of Indians are likely to utilise digital of 5G cell towers and fibre, and adoption of ‘light touch’
distribution as the primary outlet for video consumption, regulatory policies as an enabler of future technologies.
thus emerging as a real threat to traditional, linear
television in India. Opportunity size
5G has the potential of unlocking opportunities to
5G: Dream or reality? an extent of USD1 trillion17 by 2025. India needs to
To be 5G ready, India would require a total investment overcome certain anomalies related to high cost of
of USD100 billion over the next 5 to 7 years, but the spectrum and the quantum of spectrum. Commercial
slow growth of 5G network remains a concern. The launch of 5G is likely to happen by late 2020 or early
investment in capex will be USD5.7 billion in 2020 2021. The trillion dollar dream will be achieved through
compared to USD8.1 billion in 2017 which is CAGR of spectrum policy, regulatory policy and implementation
-11%15. 5G will account for just 4.6 per cent of total of 5G use cases. Guidelines on regulatory matters might
connections in 2025 but there will be greater growth in be promulgated by Oct-19.
11. Cisco VNI report, 2018 15. Global mobile trends – What’s driving the mobile industry- A view to 2025, GSMA, Sept
12. Cisco VNI report, 2018 2018
13. CARE rating limited (formerly known as Credit analysis and research limited- Dec 2018 16. Global mobile trends – What’s driving the mobile industry- A view to 2025, GSMA, Sept
report 2018
14. YouGov-Mint Millennial Survey (July-2018) 17. KPMG in India analysis 2019 primary and secondary research
238 5G
Conclusion
Features like Ultra high fidelity media, On-site
live event experience, User generated content
and machine generated content, immersive and
integrated data, cooperative media production and
collaborative gaming will drive the 5G innovation
space in media and entertainment. Download
speeds are bound to increase manifold compared
to 4G, also in the era of user generated content,
photo and video upload speeds will improve
fueling social media content. 5G is expected to be
implemented in specific geographies, spaces and
applications that make use case of 5G viable. It is
not expected to be a ‘wall to wall’ service that will
replace 4G services for well over 15-20 years.
To be really 5G ready, India would require a total

investment of USD100 billion over the next 5 to
7 years. The 5G High Level Forum has also been
established to provide the much needed boost
for implementation of 5G in India.
5G will revolutionise business ecosystems
and open up several new ones. Analysts have
found that by 2026, there will be an estimated
USD619 billion dollar revenue potential for
operators addressing 10 specific industries with
5G — manufacturing, energy and utilities, public
safety, healthcare, public transport, automotive,
media and entertainment, financial services,
retail and agriculture.
The Honourable Prime Minister has set a target
of USD5 trillion for the Indian economy by 2024
of which telecom is expected to provide 25 per
cent’
Rajan S Mathews
Director General
COAI (Cellular Operators
Association of India)
5G 239
240 Future disruptors
Future disruptors
Key technological innovations have transformed the way robust infrastructure layer for the ecosystem, driving
content is created, captured and distributed. Innovations faster adoption of these technological innovations.
have largely focused on enhancing customer experience
In this chapter, we cover four key technological
by offering improved performance, better quality and
trends: 8K – the ultra-high definition display standard,
newer avenues for content consumption channels.
content delivery networks (CDN), digital labour and its
Further, evolving technologies also present opportunities
implications in the M&E space and Augmented/Virtual
for organisations in the media and entertainment
Reality.
industry to achieve greater operational efficiencies.
The upcoming 5G rollout is also expected to provide a
8K content and hardware Content delivery networks

• Leading TV manufacturers have started releasing 8K • Content delivery networks (CDN) significantly reduce
TVs in mature markets like the U.S., China, Japan the site latency, boost webpage load time, reduce
and Europe bandwidth usage cost and ensure global availability
of content
• With the advent of 5G, streaming of HD content is
expected to become more mainstream, which will • AI-based predictive acceleration and use of hyper
benefit the sales of 8K TVs local CDNs are a couple of key trends in this space
• In India, we are yet to see a strong traction in the • India is experiencing significant growth in data con-
development of 8K content, but is expected to get sumption – specifically with respect to video; hence
better in the coming years. the importance of CDN is bigger than ever before.
Short to medium term impact – Short to medium term impact -
Minimal Adoption rate is high
Digital labour Augmented and Virtual Reality

• Digital labour can be broadly classified into basic • AR and VR continues to disrupt the way media is
robotic process automation, enhanced process auto- created and consumed
mation and cognitive automation based on maturity
• Big players like Facebook, Google, Microsoft and
levels
Magic Leap are coming up with their innovative prod-
• In M&E space, digital labour has found use cases in ucts and solutions to the market
content generation, discovery and regulation, and
• In India, VR content production is gaining traction in
also in support function automation
areas like gaming, tourism, sports, advertising etc.
• Several start-ups have come up in India focusing on
• While usage of AR/VR is on the rise, widespread
intelligent automation, artificial intelligence, machine
adoption is still in its early stages.
learning and big data.
Rapid adoption expected Gaining mainstream traction
8K content and hardware: A medium term Coming to the digital camera space, NHK was one of
reality the first companies to introduce a small broadcasting
camera with an 8K image sensor in 2018. Also, Red
Ever since 4G started gaining global acceptance, 8K Digital Cinema camera company launched three 8K
coming to the fore is becoming a talking point in the cameras.
industry circles. 8K refers to any display resolution
with around 8000 pixels width1. The highest ultra-high According to an HDMI press conference at CES 2018,
definition television (UHDTV) resolution currently in the the expectation was to ship around 4 lakh TVs in 20183,
digital television space is the 8K UHD resolution, which almost entirely in China. In the initial years, demand is
has a horizontal width of 7680 pixels and a vertical almost entirely expected from China followed by the
resolution of 4320 pixels, which gives it the popular U.S., Europe and other emerging countries.
name 4320p. The market of 4K TVs is reaching maturity stage. It is
With high level of image sharpness and smooth expected to exceed 50 per cent of the total TV market in
gradients, 8K resolution offers better perception of 2019. Overall UHD TV shipment (4K+8K) is expected to
depth for the viewers. However, the wide scale adoption grow by 50 per cent by 2023. For 8K specifically, market
of 8K will have a lot of roadblocks in its way. The traction is expected from 2019. The sales are expected
availability of 8K content, the bandwidth to stream high to grow from 0.2 million to 1.5 million by 2022.
definition content, improved HDMI standards and the
affordable means to store content can all be challenges
US 8K UHD TV shipments4
in the near future. But the industry is expected to catch
up in the coming years.
Trends in 8K hardware – currently in its .7% 1500

95
infancy G R: 1200
CA
The consumer-available digital television and cameras
that can handle 8K started getting launched in early
2018. Samsung launched the Q900FN TV at Europe’s 500
biggest tech show Internationale Funkausstellung (IFA)
early 2018, and it was the first consumer-available 8K 200
TV to be launched by a major manufacturer in US and
the sales started later in the year2. In February 2019,
Samsung announced they will be entering 60 other
countries with their 8K televisions. Sony is also planning 2019 2020 2021 2022
Units in 000s
to enter European market with their 8K TV in June 2019.
Source: Consumer Technology Association
1. 8K Resolution, Wikipedia
2. Samsung Q900 85-inch 8K QLED TV hands-on review, Digital Trends, October 10, 2018
3. What Is 8K? Should You Buy a New TV or Wait?, PC Mag India, September 4, 2018
4. CES 2019: CTA Sees Major U.S. 8K TV Push. MES Alliance, January 07, 2019
Global UHD TV shipment forecast5 Japanese and Chinese markets are leading the sales
of 8K TVs. All brands have launched or planning to
launch their products in the Chinese market in 2019.
The behavioral preference of the people to try out new
R: 8.4% technology coupled with the strong advancement in 5G
CAG 148 and the LCD display industry drive the sales of 8K TVs in
139 145 this geography.
132
118 Compared to the matured markets like the U.S., China
and Japan, India is a step behind in the focus areas for
99 hardware manufacturers. Samsung launched their 8K
TV in India in June 201910. Targeting the ultra-premium
segment customers, Samsung introduced their 8K TV
2018 2019 2020 2021 2022 2023 in four sizes – 98-inch, 82-inch, 75-inch and 65-inch. TVs
Units in 000s with display size of 40-inch and above are experiencing
the fastest growth in India11. The increasing appetite of
Source: IHS Markit
Indian consumers for bigger screen size means that the
shift to 8K large screens is expected to gain traction in
the coming years.
Major 8K hardware players
The global 8K hardware market comprises several large Growth catalysts
companies. Some of the major players and their work in
the 8K space is described below: • With the advent of 5G, streaming of HD content is
going to be more mainstream which will benefit the
Organisation Content delivery networks sales of 8K TVs
Samsung • First mover, Samsung, launched • The average screen size for TVs is seeing rapid
the first 8K consumer TV in growth. Average LCD TV screen size increased by
2018 nearly five inches between 2015 and 201812
• A new ‘Making History’ com- • The 8K Association (8KA)13, a coalition of TV and

mercial was created by Sam- display companies, is working to both develop 8K
sung6 with CNN Films tied to industry standards and promote 8K to consumers
“APOLLO 11” documentary • With advanced technologies, glass panel makers are
celebrating the power of 8K able to produce large TV panels with less wastage
technology and human explo- and lower cost.
ration
Sony • Slated to hit European market
in June 2019 with their 8K TV
• PS5 is expected to offer 8K
resolution7, rumored to launch
in 2020
BOE (Display • During Society for Information
manufacturer) Display (SID) display week
2019, BOE presented a host
of 8K products8, including 75-
inch 8K 120Hz display, 3.5-inch
8K display, and 0.39-inch 8K
spliced VR display
Canon9 • Planning to launch a 8K-capable 5. UHD: 4K is here and now, but what about 8K?, IBC, Chris Forrester, May 10, 2019
EOS R mirror-less full-frame 6. New Samsung Ad Campaign For QLED 8K TV, TVTechnology, May 24, 2019
camera 7. Sony Unveils More Details of the PS5, ExtremeTech, May 21, 2019
8. SID Display Week 2019: a showcase for BOE’s leading-edge display technologies, PRNews-
wire, May 15 2019
9. Canon 8K Cinema Camera – First Official Footage, Cinema5d, March 14, 2019
10. Samsung targets early adopters with pricey QLED 8K TVs, Indian Express, June 5, 2019
11. Smarter TV, Telegraph India, April 16, 2019
12. Average size of LCD TV screens worldwide from 2015 to 2021, Statista, May 17, 2019
13. TV Manufacturers Get Serious About 8K, PC Mag India, January 9, 2019
Development in content creation in 8K 8K content development in other parts of

The access to high quality 8K content is limited to the world15
experimental broadcaster streams and in gaming sector. • In association with Orange, French PSB France
Mostly what happens is the processing of 4K or lower Télévisions is testing live stream of French Open,
resolution video and upconverting it to 8K. 2019
Japan based broadcaster NHK has launched a channel • A recent event at Cannes showcased 8K videos from
to broadcast 8K content14. It showcases specific 8K Japan, South Korea, the U.S., France and Italy for the
content videos daily. selected delegates
However, there is significant investment needed from • K2 Studios is producing content extensively in 8K.
the viewer’s side, since 8K viewing would need 8K They currently have a portfolio of more than 70
compatible TVs, dedicated satellite dish, boosters and movies
distributor boxes.
• San Francisco based Golden Gate 3D is producing 8K
With the Tokyo Olympics in 2020, there is a big push content associating with leading broadcasters
from NHK to boost consumer adoption of 8K technology
and to create 8K content suitable for their viewing. In • Italy’s Magnitudo Films have filmed multiple
other parts of the world, we are yet to see a strong documentary movies in 8K
traction in the development of 8K content but is • In 2018, NASA beamed a 8K UHD video, first 8K video
expected to get better in the coming years. to be filmed in space, from the International Space
Station to Earth.
14. What Is 8K? Should You Buy a New TV or Wait?, PC Mag India, September 4, 2018
15. UHD: 4K is here and now, but what about 8K?, IBC, Chris Forrester, May 10, 2019
Content delivery networks: Streaming performance enhancer

Content delivery network (CDN) is an internet layer, transparent to the end user, which consists of distributed
network of proxy servers and data centres. Based on the geographical location of the user, the webpage hosted
location and the applicable content delivery centres, CDN delivers pages and other web-based content to the end
user.
Most of the time when a user tries to access a webpage, it won’t be the first time the user is accessing it.
Identifying web content based on popular requests from users and storing it in the nearest server improves
the latency multifold. Overall, a CDN significantly reduces the site latency, boosts webpage load time, reduces
bandwidth usage cost and ensures global availability of content. This technology is critical for improving user
experience on OTT apps.
CDN Layer
Introduce CDN
Web Cache reduces bandwidth to origin server
Source: NTT Communications
Global content delivery network market size As per Future Market Insights (FMI) report16, the Indian
(In USD bn) CDN market size is expected to reach USD2.3 bn by
2026.
How CDN impacts the media and
% 22.1
2.3 entertainment industry17
R :1
C AG Most of the data requests today are for video content,
which adds a lot of traffic to the network. CDNs placed
across the globe reduces the time it takes to deliver
12.4 video streams from origin to end user.
Video streaming with a CDN entails a lot of specific
benefits, such as:
Scalability CDN helps to accommodate high

2019 2024 viewership and unexpectedly high
Units in 000s number of live audiences
Source: MarketsandMarkets, May 17, 2019 Low latency Since the nearest server is ac-
cessed, content delivery through
CDN has low latency compared to
other methods
Quality When CDN is used, there are
minimum hops and thus buffering
and delays are minimal
16. Content Delivery Network Market: Increasing Consumption of Online Video Content to
Trigger Market Growth: India Industry Analysis and Opportunity Assessment, 2016-2026, Security CDN also provides an extra layer
FMI, September, 2016 of security enabling failovers
17. What Is a CDN and Why Is It Critical to Live Streaming?, Wowza Media Systems, January
11, 2019
Key market players Data tariff per GB of data in India (In INR) -
(normalised to the Oct-Dec quarter in the respective
Some of the major players and their work in the CDN years)
space is described below:
Company Key Developments

Akamai • Partnered with SonyLiv and 164 CA
Technologies introduced dynamic ad insertion GR
: -7
capabilities during India-South 5%
Africa cricket series18 in 2018
• Introduced media acceleration
solution18 in 2017 to improve 19
media performance over inter- 11
net.
Limelight • In 2018, Limelight partnered 2016 2017 2018
Networks with Ericsson to collaborate on
content delivery and edge cloud
services19 Source: Trai
• In 2017, MultiTV, a video stream-

ing solution provider, chose Major trends in the market
Limelight’s Orchestrate Plat-
form18 to offer online video to Multi-CDN Strategy: In geographical coverage, multi-
viewers across India. CDN approach ensures better coverage than relying on
one single provider. Also, there are clear differentiating
factors between CDNs – some specialise in streaming
Other major players:
services and some other focus on static optimisation
• Amazon Web Services • Tata Communications and security. In these cases, it is preferable to use
• Verizon • Alibaba different CDNs for different purposes on the same
website.
• CD Networks • Level 3
Communications Hyper-local CDNs: Rise of edge security CDNs or hyper
• Alcatel-Lucent local CDNs leads to the deployment of edge nodes
• CloudFlare (servers) closer to the end users - in malls, stadiums,
• Tencent
apartments, hotels etc. Keeping the servers as close
• Google to the user ensures faster response time and better
customer retention.
Industry growth drivers
Predictive acceleration20: Leveraging analysis of similar
Average data consumption per user per month in page requests from the user, predictive acceleration
India (In MB) - (normalised to the Oct-Dec quarter in the helps to identify which pages need to be pre-fetched
respective years) next. Thus keeping it ready and available using server-
push capabilities even before the user raises the request
for that content. This is found to improve the site
8950
9 % response time, ensuring better customer experience,
21
G R: particularly over slower connections.
CA
API and mobile app acceleration20: APIs can
selectively be cached based on certain aspects using
advanced coding mechanisms. By authenticating
requests at the edge and prioritising API requests during
1945 peak load time, CDNs can largely improve mobile app
879 performance just like they do for websites.
2016 2017 2018 18. Global Online Video Platform In Media & Entertainment Market Opportunity Analysis and
Industry Forecast, 2018-2025, Allied Market Research, August, 2018
Source: Trai 19. Limelight and Ericsson: New Content Delivery and Edge Cloud Partners, LimeLight Net-
works, October 24, 2018
20. Content Delivery for an Evolving Internet, Akamai Technologies, March, 2016
Digital labour: RPA and automation in the M&E space

Digital labour is a broad term, which is defined as the automation of labour, by making use of digital technologies,
to automate redundant/high volume processes, which are carried out by knowledge workers in the business. It’s
a continuum of technologies that firms can use to automate business processes and operations. On one end of
the spectrum, it can be the automation of transactional aspects of a business and at the other end, it can be the
automation of sophisticated business processes making use of advanced technologies involving cognitive machine
processing and artificial intelligence.
Classes of digital labour

Class 3
Class 2
3 Cognitive Automation
Class 1
2 Enhanced process automation Adaptive Natural

alteration language
processing
Processing of
1 Robotic process automation unstructured data Large-scale Big data
and base processing analytics
knowledge
Machine Artificial
Learning intelligence
Rules Screen Work
engine scraping flow
Source: Demystifying Digital Labor, KPMG, 2016
Class 1: Basic robotic process automation A media company can utilise AI and advanced semantic
reasoning to rapidly understand customer queries,
Simple unsophisticated swivel-chair processes that
provide them with answers, and escalate to human
exist in all organisations today can be automated using
support if needed.
several basic tried and tested technologies.
Class 3: Cognitive automation
In the M&E space, customer relations is an area where
basic robotic process automation can have an impact. Any process which has similarity to human activities like
When the customer submits a change of personal perceiving, inferring, gathering evidence, hypothesising,
information, intelligent systems can automatically reasoning and interacting with human counterparts will
update all related agency systems with the new and require state-of-the-art advanced technologies.
updated values, thus reducing manual interventions.
Cognitive automation is gaining widespread attention
Class 2: Enhanced process automation in the media and entertainment space, especially in
content generation, network optimisation and big data
When business processes are less structured and often
analytics.
more specialised, automation of said activities will need
additional capabilities.
Key features
Class
Unstructured
Macro based
Large Scale
Knowledge
Processing
Processing
Reasoning
Predictive
Language
Alteration
Analytics
Analytics
Adaptive
Machine
Learning
Big Data
Natural
Base
Data
Class 1 x
Class 2 x x x x x
Class 3 x x x x x x x x x
Market overview and its trends 2025. This is clearly influencing the decisions of top
CXOs across the globe.
As per a study by Bank of America21, the global market
for robots and artificial intelligence is expected to In India, several startups have come up focusing on
reach USD152.7 billion by 2020. The adoption of these intelligent automation, artificial intelligence, machine
technologies could improve productivity by 30 per cent. learning and big data. In 2018, startups operating in India
McKinsey research suggests that smart robots will in this space raised around USD529.52 million22. In 2017,
replace more than 120 million knowledge workers by the aggregate investment was only around USD113
million.
Key market players

Class 1 Class 2 Class 3
• Automation Anywhere • IP Soft • IBM Watson
• BluePrism • Arago • WIPRO Holmes
• Ui Path • Automation Anywhere • Google (Deep Mind)
• TCS • X.Ai
• Wipro • IP Soft
• Next IT (Alme)
21. Robots/AI Is Going to Be a $152.7B Market by 2020, Says BofA, Medici, December 1,
2015
22. Indian AI Startup Funding 2018: Total Global Investment In India Touched USD$ 529.52
Million – Analytics India Magazine, January 15, 2019
Degree of investment in selected technologies23 Figure 3: Specific functions in which digital labour is
implemented23
Legal 5%
Blockchain 9% 3%
6%
Finance 18%
21% 10%
IoT
9% 16%
HR
14%
RPA 18%
10% Sales 14%
17%
AR / VR 10% 14%
18% Marketing
20%
Within IT 28%
AI / Machine Learning 24% 23%
25%
Supply Chain 14%
On-demand 23% 25%
marketplace platforms 37%
Customer Support
26%
All Industries Broadcast/Media All Industries Broadcast/Media
Automation in media & entertainment industry as well. Content development companies

space have to produce content more quickly and efficiently
than ever. There is an emerging second economy24
We belong to a generation, where responsiveness is of positions that were traditionally handled by skilled
of prime importance. Companies focus on reaching workers getting replaced by automation engines. Few
their customers at a faster pace than their competitors. use cases where automation is implemented in M&E
Automation thus gains a strong priority item for CXOs space is listed below:
in today’s organisations. There is a similar trend in M&E
23. The Harvey Nash/KPMG CIO Survey 2018, KPMG, 2018

24. Automation: Fuelling the ‘Second Economy’ of Media & Entertainment, Prime Focus
Technologies, September 01, 2017
Insight generation With the help of AI, content producers can get deeper insights from sports
footage and use that for better story telling. Player actions, scores, etc. are
measured and analysed by AI in real time. In 2011, IBM partnered with Wim-
bledon to introduce an AI powered scoreboard26 that identifies the play-pat-
tern of a player to predict the winning chances of a player.
Content localisation The ever improving support to regional languages and advanced language
processing capabilities makes translating and make the subtitling process
more effective. Skilled workers can now just review the outputs from
automation engines rather than manually performing the content localization
processes, and thus reduce the quantum of manual labour.
Content generation Auto generation of highlights/key events of a sports programme or gener-
ating a movie trailer video out of actual lengthy video files are all examples
of similar work. Computer vision, using neural networks, has been exten-
sively used in 2018 FIFA World Cup Football25 to generate automated video
highlights. American newspaper print and online media company, Tribune
Publishing, uses artificial intelligence to monitor trending news and use that
information to automatically generate multimedia digital content without any
human intervention26
Content discovery Traditional media companies used to rely on basic metadata like title, cast,
synopsis, genre or other keywords to search and find content. With the help
of natural language processing, image processing and machine learning
algorithms, bots can be tasked with generating detailed insights like specific
actors, theme/emotion of the scene, props used in a scene. Using this ad-
vanced metadata, enhanced search can be done on content libraries uncov-
ering new links between files.
Content regulation To manually regulate the content being posted in social media is an impos-
sible task. So, social media platforms are now leveraging their expertise
in cognitive automation to tackle this situation. Facebook uses advanced
machine learning and predictive algorithm tools to detect sensitive content,
identify hate speech, fake news and take action27.
Support function automation Just like any other industry, RPA is being used by M&E companies as well to
automate processes across enterprise business functions like Finance & Ac-
counting, Human Resources, Sales & Marketing, Customer Support, Supply
Chain etc.
25. Artificial Intelligence in FIFA World Cup Football 2018, By- Utpal Chakraborty, Medium, July
09, 2018
26. Three Reasons Why the Media & Entertainment Industry Should Embrace Machine Learning,
Epam, Robert Koch, August 01, 2018
27. 7Facebook using machine learning to fight fake news, Internet of Business, June 25, 2018
NetFlix: A case study genre liking, etc. Based on these details, personalised
thumbnails are auto-generated and displayed to the
Netflix is a pioneer in adopting digital labour to enhance user28.
customer service. Movie recommendation feature of
Netflix, very popular amongst its users, makes use of Key drivers of adoption29
intelligent automation to identify patterns from viewing
• Improved productivity
history of users with similar taste. This data is used to
make recommendations to the user on what to watch • Scalability
and keep them engaged with the platform28.
• Consistent performance
Another interesting use case of automation in Netflix
• Cost efficiency
is the auto generation and personalisation of movie
thumbnails. Based on the viewing pattern of users, • Ease of deployment
intelligent system creates a profile of the user with their
preference, which includes actors who they like, movie
28. How Netflix Uses AI, Data Science, and Machine Learning — From A Product Perspective,
Becoming Human, February 27, 2019
29. Demystifying Digital Labor, KPMG, 2016
Augmented and Virtual Reality: Gaining mainstream traction

Some of the latest developments in the area of augmented and virtual reality vis-à-vis media and entertainment
industry are as follows:
Market landscape
Some of the major players and their work in AR/VR space is described below:
Company Recent developments

Facebook30 • Launched two VR headsets in 2019, Oculus Rift S and Oculus Quest
• Facebook announced its new Oculus for business enterprise solution in 2019 and new
methods of bringing immersive web content into VR
• Partnered with RED and launched a high-end, professional VR camera
Google 31
• Google launched Chrome on DayDream View enabling users to interact with any webpage
while in VR
• Company launched VR180 creator allowing users to create 3D, immersive photos and vid-
eos using affordable cameras.
Magic Leap32 • Launched Magic Leap One, company’s first AR headset in 2018
• Bought Belgian startup Mimesys which builds hologram teleconferencing software.
Microsoft • Launched second version of HoloLens, HoloLens 2 in 2019
• Introduced MineCraft Earth33, an AR game at its developers’ conference.
Examples of some VR content production companies in India

Company Business description Recent developments
Grey Kernel34 • One of India’s leading virtual reality • Creates gamified VR content for a host
and advance visualisation company. of platforms, including iOS, Android,
Oculus, Windows, etc.
• Creates in-house content and also cu-
rates experiences from specialised VR
studios.
Meraki Studio35 • Creates 360-degree VR films for • Collaborating with Star Sports India,
sports, live events, tourism pro- Meraki covered 2016 Asia Cup cricket in
motion, real estate, adventure and virtual reality
wedding videos.
• In collaboration with students of IIT
Bombay, created a virtual reality film
‘Strangers Again’.
Elysian Studios36 • Creates 360-degree 3D virtual tours • Created a VR experience of Rishikesh, a
of tourist destinations. popular pilgrimage town in India
• Covered Bodhgaya, a Buddhist temple
in Bihar, and Kashi in VR, soon to be
launched.
HereAfter Studios37 • Creates 360-degree VR content for • Created deep water VR experience for
TV, live events, corporate, etc. ONGC detailing working of oil rigs.
30. Everything Facebook announced at F8 2019, Venture Beat, Paul Sawers, May 02, 2019 34. 5 cutting-edge virtual reality startups in India to watch out for – Sohini Mitter, YourStory,
31. Google product blogs Sohini Mitter, June 20, 2018
32. Magic Leap, Wikipedia 35. Meraki – Company Website
33. Microsoft Brings Augmented Reality to “Minecraft“, The Motley Fool, Daniel Kline, May 36. Elysian Studios – Company Website
20, 2019 37. HereAfter Studios – Company Website
Category-wise applications and examples of AR/VR in M&E
Videos
Programming including TV shows, • National Geographic and Oculus have partnered on a virtual reality experi-
documentaries and news is cap- ence covering trek across Antartica38
turing the imagination of AR/VR
• BBC is releasing Doctor Who’s first adventure39 in virtual reality
content. The consumption of video
content in VR through OTT plat- • Daler Mehndi, Indian pop icon, produced a virtual reality music video and
forms could prove to be a major launched it in 2017.
use case.
Films
With the potential to transform • INOX unveiled Asia’s first augmented reality (AR) experience40 in multi-
movie theatre experience, VR the- plex in Mumbai
atres have started surfacing.
• AR Rahman directed ‘Le Musk’, a virtual reality film entirely shot in Rome
• Arka MediaWorks tied up with AMD Radeon to create a promotional VR
experience41 for their film, Baahubali.
Live events
Attempts are in full swing in India • Hotstar broadcasted IPL season 2018 and 2019 in VR42, which could be
to capture live sports, concerts, experienced using VR headsets
product launches and so on in VR,
• BT Sport offered 360 degree virtual reality feed43 for the Champions
and showcase the novelty of these
League final in 2017 and 2018
technologies at meetings/confer-
ences. • MelodyVR hosted its first-ever livestream event featuring One Direction’s
Liam Payne in 201844
Advertising
Marketing and advertising is • National Geographic used VR technology for marketing with an immer-
expected to become increasingly sive video of Victoria Falls45
immersive through VR and AR,
• Coca-Cola is one other prominent player who uses VR experience for
potentially generating a higher
their commercials. The Christmas season ad in Poland is one example46
level of engagement with viewers.
• Pepsi collaborated with Google to come up with a Super Bowl ad cam-
paign that covers multiple generations47
38. NATGEO, OCULUS PARTNER ON ANTARCTIC VR, License Global, April 30, 2019 44. Are VR And AR The Future Of Live Events?, Forbes, November 26, 2018
39. BBC launches Doctor Who’s first-ever virtual reality episode, The Guardian, May 16, 2019 45. VR Concert Platform MelodyVR Posts $14.7 Million Loss, Turning Focus To Mobile, Upload-
40. INOX Unveils Asia’s First Augmented Reality Experience, Business World, November 15, VR, Jamie Feltham, May 10, 2019
2017 46. 3 Unmissable Virtual Reality Marketing Trends to Win in 2019, MarTech Advisor, May 10,
41. Virtual Reality Films in India, Media India Group, May, 2018 2019
42. 202 million viewers watched IPL 11 on Hotstar, LiveMint, May 29, 2018 47. Google collaborates with Pepsi’s Super Bowl campaign to provide VR experience, The
Drum, February 03, 2018
43. BT Sport To Stream UEFA Champions League Final On YouTube As Digital Importance
Grows, Forbes, May 15, 2018
Acknowledgements
Content team KPMG ASPAC team
• Adit Singh • Maulik Shah • Darren Yong
• Amit Balachandra • Maya Nair • Hikaru Okada
• Ankit Setia • Mayuran Palanisamy • Diptendu Mitra
• Anupriya Thakur • Mihir Kulkarni • Guillaume Sachet
• Archana Das • Neha Pevekar • Sang-Hyun Han
• Atul Kumar • Nikhil Hemrajani • Seung-Yeoul Yang
• Aurko Ray • Radhika Goel • Steve (Seung-Hun) Yeom
• Bharat Rajamani • Rajat Lal • Sung-Bae Park
• Bodhijit Ray • Ravin Nandle

• Chaitanya Gogineni • Rohit Kanodia Brand and design team
• Gopalakrishna Anantha • Sangeetha Ramachander • Anupriya Rajput
• Himanshu Parekh • Santosh Dalvi • Darshini Shah
• Jignesh Oza • Shivani Sanwal • Raahul Gautam
• Jinesh Shah • Shweta Srivastava • Rasesh Gajjar
• Jitesh Gera • Sushma Kumar • Sameer Hattangadi
• Karan Dasaor • Tushar Gaurkhede • Sharon D’silva
• Karandeep Singh • Vibhor Gauba • Shilpa Bhoir
• Karthik JCS • Viraj Nair • Shruti Iyer
• Keshav Saboo • Vivek Nair • Venkatesh R
• Kushagra Ladha • Vivek Malekar
IN OUR ABILITY TO TRIUMPH OVER ANYTHING

IN OUR SPIRIT OF UNDYING ENTHUSIASM
OUR DRIVE TO ACHIEVE THE EXTRAORDINARY
UNMOVED BY FEAR OR CONSTRAINT
WE’RE DRIVEN BY JOSH AND IT SHOWS
© 2019 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent
member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. THIS ADVERTISEMENT FEATURES KPMG INDIA EMPLOYEES
KPMG in India contacts:
Nilaya Varma
Partner and Leader
Markets Enablement
T: +91 124 669 1000
E: [email protected]
Satya Easwaran
Partner and Head
Technology, Media and Telecom
T: +91 22 6134 9200
Girish Menon
Partner and Head
Media and Entertainment
T: +91 22 6134 9200
K.G Purushothaman
Partner and Head
Telecom
T: +91 22 6134 9200
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India’s digital

KPMG in India’s Media and

India’s digital future

We would like to thank all those who have contributed

TV - Waking to a new reality 54

Print - The oldest pillar still standing 66

Films - Content triumphs 76

Animation, VFX and post production - Turning imagination into reality 88

Gaming - Well played 102

Out of home - Embracing digital 112

Radio - Waiting to be heard 120

Music - In tune with the masses 130

5. The media and entertainment industry in ASPAC markets - 142

NTO - A paradigm shift 162

Regional markets - Moving into the limelight 170

Skill development - The learning imperative 176

Digital privacy - You are being watched 184

Digital content - Bridging the monetisation gap 188

Cord cutting - Early adopters embracing change 192

Original content on OTT platforms - Capturing mindshare 198

E-sports - One for the team 204

Monetisation of sports leagues - Show me the money 210

Centralised marketing system - Connecting the dots 216

M&A deal trends 220

Tax landscape 224

7. Technology trends in M&E sector 230

Future disruptors 240

Introduction film segments contributed to the performance of the

Type User base ( millions) Proﬁle parameters

HH Income proﬁle Language Primary mode

Global content and

Free content available

Sporadic digital access on account of either poor connectivity or irregular income.

Source: KPMG in India analysis, 2019

8. TRAI performance indicator reports, March 2019

There is likely to be significant progression in Implications for digital businesses

Size of Indian media and entertainment industry

Industry performance - Historical

Gaming 24 28 32 44 62 41.6% 26.4%

OOH 22 26 29 32 34 5.0% 11.2%

Radio 20 23 24 26 28 6.2% 8.6%

Music 10 11 13 14 17 15.3% 13.0%

Total 1,055 1,183 1,295 1,440 1,631 13.2% 11.5%

Radio 20 23 24 26 28 6.2% 8.6%

Total 428 490 547 609 693 13.9% 12.8%

9. KPMG in India analysis, 2019

Industry performance - Projected

Digital 173 234 303 386 492 621 29.1%

TV 714 824 935 1,025 1,121 1,215 11.2%

Gaming 62 88 119 154 200 250 32.2%

Animation and VFX 88 103 121 140 161 184 16.0%

Total 1,631 1,880 2,148 2,415 2,725 3,070 13.5%

Source: KPMG in India analysis, 2019

Total 693 786 895 1,021 1,176 1,367 14.5%

Source: KPMG in India analysis, 2019

• Television continues to be a critical mass monetisation as compared to casual games, is also

Technology trends of broadband infrastructure, coupled with the ease

8K content and hardware Content Delivery Networks

Digital labour Augmented and Virtual Reality

Short to medium term impact – Short to medium term impact –