Media Sector Industry Trends
Media Sector Industry Trends
Media Sector Industry Trends
5 hours
per day watching
online media
2 TV industry landscape
2
M&E sectoral overview
3
M&E sector – An overview
Indian M&E sector to touch INR 2 trillion by 2020
CAGR (2017-20)
Segment wise break up of M&E Sector
INR bn
CAGR 11.3% 2033
9.8%
1658 17%
1473 TV
16% 9%
16%
7%
8% 10%
6.8%
11%
9% 20%
21% Print
23%
45%
44% 7.2%
45%
Films
CY2017 CY2018E CY2020E
KEY HIGHLIGHTS
• By 2020, TV still to be the biggest; digital media to grow the fastest
• Global audience adoption to drive faster growth in films, could see increase in high budget films
• Print media – Subscription revenues led to growth so far, now growth to be seen in advertising segment as well
• VFX, gaming and live events could see traction; India to be an outsourcing hub for VFX segment
4
Source: FICCI Frames, Re-imagining India’s M&E sector, March 2018
Digital media : Setting the context
Globally, consumption is moving to mobiles, India has large mobile-only
users with factors pointing towards increasing consumption
India is leading the way – consumption on mobile over desktop
Markets which have a mobile audience larger than its desktop audience – truly
‘mobile first’ Markets where the mobile audience is equal to or
smaller than the desktop audience
397%
249%
134% 132% 127% 116% 114% 106% 100% 90% 90% 81% 68% 48%
India Indonesia China Mexico Spain Brazil Italy Malaysia UK USA Argentina Canada Germany France
In India, the ecosystem is favorable towards higher video and audio consumption over the 3-5 years
Rise in online video audience (in mn) Rise in online audio audience (in mn) GB consumed/ smartphone/month
500 94.2
87.6
18
250
3.9
5
Source: comScore MMX Multi-Platform, Dec 2017
Digital media consumption by platform
Indians are spending over 150 minutes a day on mobile apps – majorly on
social media and entertainment
Games 20%
Others
FB, Whatsapp, Instagram
Platform
6
Source: comScore MMX Multi-Platform, Dec 2017, Statista, Financial Times, Quartz Media
This Story as being played out in India
Globally and in India, convergence is the new disruptor –Players in
previously “defined silos” are now competing across the value chain
Indian Market
Creation of content (TV Compilation of content Platform/channel to Media used to transmit Devices and screens used
and film production from multiple producers distribute content content (cable, telco, by consumers to consume
houses) (networks, affiliates) satellite) content
Content Producers
Aggregators
“YouTube
Distributors Originals”
Vodafone
Service Providers Play
Wynk TV
iTunes Apple TV
Device Manufacturers Google Play Chromecast
7
Market wise opportunity
With rise in OTT consumption, many players are trying to capture the
market through unique content offering
Other players include Airtel, Vodafone, Eros Now, ALT Balaji, Viu, ZEE5, dittoTV, Sun NXT, TVF Play, hungama
TV shows, movies, news and sports TV shows and movies English Hindi and various regional languages
8
Factors contributing to rise in digital consumption
Reduced data
charges
Growth drivers
Improving digital
literacy
9
TV industry landscape
Overview
10
TV Industry
With 64% TV penetration India still has headroom for growth; hence
expected to grow at 9.3% to be worth INR 862 bn by 2020
Increased TV penetration and digitization to help realize further benefits in the industry
2013 6% 94%
11
Source: FICCI Frames, Re-imagining India’s M&E sector, March 2018; FICCI Frames, India’s M&E sector, 2014, FICCI Frames 2018, BARC Report
TV Industry
The industry is undergoing rapid shifts with every player trying to have a
direct line of sight with the end user
Production houses
DTH Operators
Movie Studios
MSOs and LCOs
875 channels in India,
reaching 183 million
households and 780
million individuals
Sports rights holders HITS
End Users –
Content
consumers
Broadcasters IPTV
12
TV Industry
Top networks dominate eyeballs share; GEC, the most popular; Viewership
highest among the youth
3% 1%
6%
What is watched
on the networks GEC
6%
Top 10 networks contribute to 80% Movies
viewership 7%
News
Music
54%
Kids
Sports
23%
Others
Top 5 networks
Next 5 networks
Others
Viewership across ages (million impressions)
9623
5786
4880 4624
4279
Who is watching
these networks
2-14 years 15-30 years 31-40 years 41-50 years 51+ years
13
Source: FICCI Frames, Re-imagining India’s M&E sector, March 2018
TV Industry
Regional genre driving both revenue and viewership
63% English
Kannada
9% Music
Bhojpuri 58%
Kids
Punjabi 38% Others
Tamil 30%
Malayalam 16%
14
Source: BARC data, road show presentation May 2018, Pitch Madison advertising report 2018
Indian Film industry overview
15
Film Industry
The Indian film industry is the world’s largest in terms of both number of
films produced annually, as well as footfalls; However, it lags behind heavily
in terms of box office collections and screen density
Top countries by number of film productions Top countries by Box office revenue
(USD Billion)
India 2263
USA 125
China 1620
UK 60
USA 1181
South Korea 40
Mexico 331
China 16
16
Film Industry
The Indian Film Industry is expected to grow at a CAGR of 11.9% till 2020
driven by broadcast/digital rights and in-cinema advertising
Segment-wise break up of Indian Film Industry Revenues over 2016-20
120
118.0 Domestic theatricals has been the industry’s
INR biggest revenue stream, it contributed over 60% of
103.0 165.7B the total industry revenues in 2017
100 96.3
INR 156B Domestic theatricals along with Overseas
85.6
theatricals have been the key growth drivers,
80 contributing ~78% of the overall industry topline in
INR
122.4B 2017
17
Source: Re-imagining India’s M&E Sector – FICCI Report March 2018
Film Industry
The value chain of the Indian Film Industry comprises of three key
processes - Production, Distribution and Exhibition
3 Production
-Shooting Schedule
4 Post-Production
-Editing & Soundtrack
7 Exhibition
2 Pre-Production -Theatricals
(Cinema)
-Cast & Crew Selection
-DVD/Blu-Ray
-Greenlighting Financing
-TV (free/ pay per
view TV)
-OTT
1 Development
-Rights, Acquisitions
-Script Development 5 Promotion 6 Distribution
-Financing -Trailers -Sales
-Advertising -Agreements & Negotiations
-Publicity
18
Film Industry
While the number of profitable films have stayed more or less constant over the past 5
years, loss making films have been increasing in number, on a YoY basis
Concentration of revenues is increasing at the top, while the long tail is loss-making
2013 26 45
2017 36
2014 27
2015 26 43
2016
27
2016 27 Flop
2017 30 Losing
24
2015 Super-Hit
35
The Hindi Film Industry certifies 200-300 film releases every Hit
year, but almost 98% of the total net box office collection Plus
can be attributed to just the top 50 films 39
2014 34 Average
19
Film Industry
As Hindi Cinema’s share of total industry revenues decline, Hollywood and Regional
Cinema’s revenues have been on the rise for the past few years.
Revenue Split by Language
100% Hindi Cinema’s share of total revenues declined to ~40% in
2017 from 43% in 2015
80% Hollywood and international films steadily increased their
50% 50%
contribution by 3%
60%
Regional cinema maintained its share at ~50%.
7% 10% The continued success of regional films can be attributed to the
40%
increasing appetite of audiences for dubbed cinema - especially
in the south as well as the maturing of Marathi and Punjabi
20% 43% 40%
cinema
There have also been rising investments and interest among
0%
2015 2017 broadcasters as well as digital platforms, to provide regional
cinema to audiences
Hindi Cinema Hollywood and International Films Regional Cinema
20
Source: Re-imagining India’s M&E Sector – FICCI Report March 2018; Deloitte Indywood Report September 2016
Film Industry
Even as income from ticket sales remains the dominant revenue generator, advertising and
F&B are also rising revenue streams for major Multiplex chains
23%
12% revenues for exhibitors
25%
21%
12%
10%
Inox PVR
Contribution of F&B now up to
2016 2017 23-25% for leading exhibitors
Vertical Integration
In order to achieve significant cost advantages,
most film studios have created their own
distribution arms, thus avoiding profit-sharing
Multiplex Entry agreements.
Consolidation OTT
Plat Multiplex Consolidation
The multiplex sector has observed high M&A
activity for the past few years, leading to only few
big players as compared to a highly fragmented
FDI
market 5-6 years ago.
Entry of OTT Platforms
Identifying India as a lucrative market has led to
the entry of many OTT platforms. This has
generated a new revenue stream for film
producers, as well as given a new avenue to
regional/ non-commercial cinema producers for
showcasing their work.
FDI
The Government of India has granted FDI of up to
100 percent, up from the previous limit of 74
percent, through the automatic route.
22
Print Media landscape in India
Overview
23
Print Media
Unlike the global trend, Indian print media continues to grow, largely on
back of the vernacular markets
6.8 %
2.6 % 369.3
• The Indian Print industry grew by 2.6% in 2017 to reach
331.4
303.4 INR 303 mn with Hindi and Vernacular languages
296
growing marginally while English de-growing
• Advertising revenues grew by just 1% in 2017 on
account of macro-economic factors such as demonetization,
RERA & GST implementation
• Ad Revenues grew in second half on account of increased
spending by political parties/government for elections,
festival season, focus in yield management, greater customer
engagement
24
Source: FICCI Frames Reimagining India ME sector March 2018
Print Media | Subscription Overview
Hindi has the largest claimed news circulation at 49% of the total pie
12%
41% 49%
47%
12%
H indi E ng lish Other lang ua ges H indi E ng lish Other lang ua ges
• As on March 31, 2017 there were 114,820 registered publications • Hindi newspaper claim nearly half of the circulations in India
in India of which 16,993 were newspapers. • Launch of several circulation generating schemes (apart from
• 4,007 new publications were registered during 2016-17, while 38 bundling and discounting) were undertaken in 2017 as the
ceased, which was a 3.6% growth. industry focused more on subscription, which increased its share
• The maximum publications across any language were in Hindi of revenues from 27% to 29% of total revenues.
(46,587), followed by English (14,365). • Magazine subscriptions on average held their own and did not
significantly change.
25
Print Media | Advertisement Overview
Hindi and English dailies dominate the advertisement pie; with major
demand drivers being FMCG and Auto sectors
13%
Media
E-Commerce 11%
Corporate 9%
BFSI
T ravel & T ourism 8%
Clothing,
14% Fashion C lothing , F ashion J ewellery 7%
34% Jewellery
39% R etail 7%
R eal estate
E duc ation 5%
& allied
R etail BFS I 4%
A uto 4%
Education
F MCG 2%
Auto
27% 1%
F MCG Others
Telecom 1%
Others
Hindi English -1% HH Durables
2017 saw 61% of total advertising volumes FMCG and Auto were the largest advertising Alcoholic Beverages, Real Estate, Durables
being commanded by Hindi and English categories in 2017 on print, followed by reduced their ad spends on print while the
publications followed by Marathi, Telugu and Education, Retail and Real estate. largest increase were seen in Media and E-
Tamil. commerce categories
26
Print Media Industry
Indian Print Media industry is very different from print media industry in
developed markets owing to the following reasons
1} Cost Advantage • Cost is not more than INR 200/month (3 USD), which is close to the cost
of a single newspaper per day in the US
2} Home Delivery
• In comparison, in the West, people buy newspapers from stands or from
metro stations
• People have developed a deeply entrenched habit to start their day with
reading newspaper
3} Credibility &
Habit
•
•
Members of family with age >35 years still prefer a physical copy
Credibility of news from newspaper higher than other news sources
4
neighborhood/city news
Localization
• Localization along with credibility helps them to cater to a loyal and diverse
set of readers
27
Increasing Competition
Traditional newspapers have faced increased competition lately from other
firms, primarily because of consumption of news digitally
• Almost all print companies are foraying into digital by establishing their own
news websites/apps
Digital moves from
incumbents • There is competition among incumbents to increase digital footprint, however
digital content monetization is significantly low
• There has been a rapid rise in domestic digital-born startups such as Scroll,
Rise of Start ups & Quartz India & Quint that is eating the share of physical news players
aggregators
• There is also rise of news aggregators such as Inshorts, Firstpost & Daily-
Hunt that feed digital readers with short & crisp content
• There is rapid growth in social media content consumption over the last few
Emergence of years, spurn by large global social media players such as Yahoo, Facebook &
social media Google
players
• These players enjoy wide user-base and hence tap into the needs of Indian
readers & even personalize the content through use of analytics
28
Digital Trends shaping the print industry
Leading Print companies are increasingly making use of technology to better
manage employee utilization and to provide superior customer experience
Robotics Process
Automation
prevent duplication of
newsgathering efforts, improved scheduling, prioritization of news
Integrated Newsroom better utilization of stories
self-care portals
Self Care
29
Music industry in India
Overview
30
Digital Music – Setting the context
Indian Digital music industry to touch INR 3100 Crores by 2020
Digital music revenue (INR Cr) Revenue streams in 2017 for digital music
CAGR 34.3%
20%
Ad Supported streams
2%
3100 Mobile customization
53% Downloads
Others
1280 25%
2017 2020
31
Source: FICCI Frames Reimagining India ME sector March 2018; Digital Media: Rise of On-demand Content, Deloitte report, 2015
Emerging themes in digital music industry
Exciting avenues ahead
Growing Competitive
Market
The market is becoming increasingly Increase in AVOD spends
competitive with multiple players Music and video streaming platforms are
offering music streaming and other expected to further witness a boost in
services. Moreover, content their revenues on account of increase in
partnerships in the digital / OTT spends in advertisements on digital
space such as Jio and Saavn are platforms. This would lead to further
poised to put additional pressure on monetization for both streaming
the existing players such as Wynk, companies as well as record labels
Apple Music
32
Sports industry overview
Overview
33
Indian Sports Industry
The professional sports industry mainly derives its value from sponsorships (both
central and team), media rights for broadcast across various channels, league and
ticketing revenue
Sale of media rights typically contributes 55-70% of total revenues for any sports organization while
sponsorships account for ~20% of the overall topline
34
Indian Sports Industry | Media rights
The sale of media and broadcasting rights is usually for the biggest source
of revenue for teams and other sporting organizations, accounting for more
than 50% of topline
% of broadcasting revenues
Sale of Media rights by BCCI Earnings per match for BCCI
in India (2016)
(INR crore) excl. IPL –(INR crore)
60.18
16,348
8,200
43.2
Indian 6,138
Cricket 3,851
Cricket (including International, Domestic
matches and IPL)
Other Sports (Hockey, Football,
Basketball, Kabaddi) 2018-23 2012-18 2012-18 2018-23
With increasing TV and mobile phone penetration across the rural as well as Urban parts of the country, broadcasting firms
in the country have increasingly been focusing on developing not only their traditional TV portfolio but also their digital
internet and mobile channels, luring customers with continuous content innovation, live feeds and other product offerings
35
Source :EY – Sports in India, FICCI : Re-imagining India’s M&E sector 2018, Economic Times
Indian Sports Industry | Media rights
Cricket is the most popular sport on TV; Soccer, Kabaddi and Wrestling are
emerging categories
Unique viewers of Sports leagues in 2016 (mn) Popular Sports properties in India on TV-2017
(% of impressions)
Others
362 60% of the overall viewership Soccer
5%
came from Cricket in 2016 5%
Wrestling
224 220 5%
109 Kabaddi
16%
Cricket
69%
Indian Premier Indian Super Pro Kabaddi Pro Wrestling
League League League League
Viewership for major leagues such as IPL, ISL • Data suggests that Cricket continues to be the most popular
and PKL sport in the country with 69% of the overall number of TV
impressions in the country coming from domestic and
International Cricketing events
• Kabaddi and Soccer are the second and third most watched
sports in the country respectively, owing to successful closure
of Pro-Kabaddi and Indian Super League seasons and
aggressive promotional campaigns
Male Female Rural Urban
36
Source: Internet and Mobile Association of India, BARC India, FICCI : Re-imagining India’s M&E sector 2018
Gaming industry landscape
Overview
37
India’s online gaming opportunity
This mobile-first behavior is translating into a huge market opportunity for
online-gaming industry in India
Online Gaming Revenues (in INR billion)
Indians are spending over 150 minutes a day on mobile apps –
31%
with 72% on social media, entertainment and gaming
68.3
17.6%
Entertainment 28%
Games
48% Gamers in India (in millions)
4%
24
Others
20% 25
25
25
312
37 253
40 200
158
88 108
38
Source: comScore MMX Multi-Platform, Dec 2017
India’s online gaming opportunity
Spends per gamer are gradually increasing although still lower than global
benchmarks; real money and social gamers driving the spends
Revenue Streams
• Online gaming industry divided into three main genres:
• Casual Games
• Social Games In-app/
• Real Money Games Advertising Commissions
subscription
• Currently the size of the Real Money games is estimated to be
55% of the total gaming industry, growing at a robust 25% per Casual games 70% 30%
annum
• Online card games have been the fastest growing segment:
Includes both real money & social games Social games 10% 90%
• In India, spend per mobile gamer reached 2.6 USD in 2017 and
envisaged to grow further in near future in form of real money and
Spend per mobile gamer (in USD) social games purchases
32 • Other consumer companies will also realize gaming as an
important platform for advertising their products resulting in
increased revenue
23
• Indian media houses are using gaming as an interactive form of
entertainment to engage consumers
15
12 • More Partnerships with Bollywood studios in game development
10 for movies that have been widely accepted by Indian masses is a
7.5 7.5
5.1 revenue-making opportunity for gaming companies
4.5
2 2.6
1.2 • Baahubali: The Game and Sultan: The Game are some of the top
most downloaded games in India
2015 2016 2017
39
Indian Online Gaming
Key trends that will shape the Indian industry
1
Freemium gam es to create Convergence of st akeholders to
better econom ics for gam ing drive adoption and usage of
co m pan ies mobile internet
2
8
Content custo m ization for Emerging technologies to
the ‘Indian’ taste: Local becom e a
brand com m ercial reality in India
2021
Indian online gaming industry
poised to grow to 1 billion USD
and 310 million online gamers
Enhanced customer lifecycle at by 2021 e-Sport s to au g m ent
every stage: Pow er of data engagem ent levels in online
gam ing
7
4
FUTURE
Revenue from purchases & advertisements to be equally balanced
41
Jehil Thakkar
Thank you!
Head, Media & Entertainment
Partner, Deloitte Touche Tohmatsu India LLP