Entertainment Industry in India

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Entertainment Industry in India has registered an explosive growth in last two decades making it one of the fastest emerging industries in India. Television itself witnessed its transformation from a single government owned channels to a medium telecasting more than 300 national and regional channels. At present Indian film industry or Bollywood is a perfect combination of entertainment and commercial sector, producing close to thousand movies in a year in various Indian languages. Indian film industry supersedes Hollywood in terms of movie production quantity by more than three times.

As per the recent report by PricewaterhouseCooopers (PwC), Indians are likely to spend more on entertainment in the coming years with a steady growth in their disposable income. And as per the combined survey report by KMPG and FICCI, the entertainment industry in India is expected to expand by 12.5% every year and is likely to reach US$ 20.09 billion by the year 2013.

Key sectors of Indian Entertainment Industry

Music, radio, digital media are some of the other fastest growing sectors in the Indian entertainment industry.

Indian film Industry

Indian film industry over the past few years has been receptive towards foreign investments. This has paved way for many international production firms to make their debut in Bollywood along with opening their offices in the country. As per FICCI-KPMG report, Indian film industry is worth US$ 2.11 billion and is likely to witness a 9.1% growth till 2013.

World's largest film industry in terms of production volume is undergoing a massive international presence with Reliance ADA Group signing a production pact with DreamWorks Studios, endorsed by Steven Speilberg, a well known Hollywood director, to produce movies with the preliminary investment of US$ 825 million.

Following the lines, Yash Raj Films has signed joint partnerships with Walt Disney, to produce animated films. Other such east meets west stories include, Sippys' film projects being sponsored by Warner Group, Sanjay Leela Bansali Films' collaboration with Sony Pictures Entertainment and TV 18's association with Viacom to form Viacom – 18.

Adlabs has emerged as the only movie chain in India providing 3D and 6D formats and PVR is all set to infuse around US$ 52.2 million to grow its film production and bowling trade in India.

Indian Television Industry

With the introduction of digital distribution platforms like direct-to-home (DTH) and Mobile TV, Indian television industry has undergone a revolutionary change. As per KPMG and FICCI reports, the Indian television industry is worth US$ 4.63 billion and is estimated to grow by 14.5 per cent during 2009-13. Moreover, by 2013 the television advertising industry is likely to own a share of 41% in the Indian advertising sector, which indicates a steady increase of 2% from the current share of 39%.

The DTH industry is likely to touch US$ 620.25 million in 2009-10 as compared to US$ 310.16 million in 2008-09. The growth will be triggered by the increase in the marketing budget of DTH companies like Bharti Airtel DTH, Big TV and Sun Direct by 20-25% in 2010.

Doordarshan, the government owned national television broadcaster of India is expected to become fully digitalized by 2017 and TV channels like MTV, Cartoon Network, Disney, Star Plus and Pogo are all set to grow their service market to cover India's promising licensing and stock market.

India Music Industry

The latest products in Indian music industry which have increased the industry's revenue generation are the non-physical formats like electronic downloads and ringtones. Currently the Indian music industry worth US$ 149 million and is estimated to touch US$ 164.56 million by 2012.

The sales of digital music are likely to contribute 88% in the total music sector's profits in India in 2009. This trend is likely to continue in the year 2008, with digital music accounting for 16% of the total music sales and slowly reaching 60% in 2013.

India Radio Industry

Radio is the medium of masses reaching out to 99% of Indian population. Over the years it has seen vibrant changes and will see some more in the near future.

In the year 2008-09, the government cashed in US$ 11.05 million from private owned radio channels. As per PwC report radio sector is estimated to expand at a CAGR of 19% during 2009-13 from the current US$ 170.87 million.

In context of radio industry's share in advertising, the radio advertising industry is expected to witness an increase a 5.2% growth during 2009-13 from the present 3.8%.

Indian Animation Industry

India is fast emerging as an ideal hub for graphics industries such as graphic designing and animation. With the emergence of hi-tech games incorporating 3D effects, companies like Intel and Advanced Micro Devices (AMD) are revising their marketing strategies in India to expand their operations in computing sector. By 2013, the Indian animation industry is likely to grow from the present US$ 362 million to US$ 811.2 million, as per the combined FICCI-KPMG report.

Digital firms like Reliance MediaWorks have signed joint venture with In-Three for transformation of 2D movies and videos into 3D and Tata Teleservices has launched India's first mobile television - Photon TV with high accessibility broadband services through which users can avail channels on laptops as well as desktops.

Government Reform policies for Indian Entertainment Industry

The Government has introduced some reform policies to trigger the growth of entertainment industry in India. They are:
  • Allowing 100% FDI on advertising and film industry through regular channels
  • Authorizing 49% foreign stake in DTH and cable TV
  • Allowing establishment of uplinking destinations to private TV broadcasters for satellite uplinking from India
  • Certifying the repute of an industry to the movie sector
  • It has given its consent on the guidelines for Headend-in-the-Sky (HITS) operators, an equipment that will offer electronic cable content to Indian viewers
  • Permitting Foreign Direct Investment (FDI) in FM radio industry with a 20% restriction
  • Paving way for FM Radio functioning to the private sector
  • Including development projects of film industry in its five-year plans and allocating US$ 50.13 million to it.