Growing at an annual rate of 15.6%, the media and entertainment industry will double its revenues from Rs 36,100 crore in 2005 to Rs 74,400 crore by 2010, according to a Crisil report.
"The media and entertainment sector is expected to be one of the key beneficiaries of the increase in discretionary spending by the Indian consumer. All segments in the industry are projected to grow, but growth in television and radio segments would be particularly impressive. The music industry, however, is expected to continue to show tepid growth," said Mr Nagarajan Narasimhan, Head, Crisil Research.
Presence of multiple players, greater choices to consumers and investor interest are some of the factors spurring growth in this sector.
Convergence
In the future, convergence is expected to influence growth. Convergence is changing the way consumers consume content and the manner content is delivered to consumers.
"In television, we expect the balance of power to shift in favour of broadcasters with the adoption of alternative distribution platforms such as DTH (direct-to-home), CAS (conditional access system), and IPTV (Internet protocol television)," said Mr Narasimhan.
Crisil Research expects the profitability of industry players, especially of the established large players, to remain strong.
According to the report, television broadcasters are likely to benefit from a rise in satellite television subscribers and increasing transparency in the cable distribution system. However, it says the recent fixing of a cap on pay channel prices in CAS notified areas by the government is a negative for broadcasters.
In films, profitability of players in the multiplex cinemas space is expected to improve; but increasing bargaining power of producers, high real estate prices, stiff competition and the eventual loss of entertainment tax benefits are potential downsides, says the report.
