• Investment World
• eWorld
• Brand Line
• Mentor
• Life
• Brand Quest
• The New Manager
• BL Club
• Smartbuy
• Books

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Cross Currency

• Rates
  
  

Shipping

• Ports
  
  

Archives

• Yesterday
• Datewise
• Resources
• In Focus
• In Depth
• Events 2007

Group Sites

• The Hindu
• The Hindu ePaper
• Business Line
• Business Line ePaper
• Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

Our Bureau

Mumbai, Feb. 19 The hum of recession could be heard over the din of optimism on the first day of the three-day annual event of FICCI Frames 2009 in Mumbai on Tuesday, as the Rs 58,400 crore Indian media and entertainment industry took stock of the challenges that lay ahead.

Striking a note of caution, the FICCI-KPMG annual report on the industry has however projected a 12.5 per cent growth for the media and entertainment industry to reach the size of Rs 1,05,200 crore by 2013. Low media penetration and advertisement to GDP ratio were cited as the cardinal factors that are expected to spur growth in this segment. “At the same time, 2009-10 spells caution for industry players,” the report said.

Advertisement revenues have been one of the main drivers behind the growth of the M&E industry, reflecting a CAGR of 17.1 per cent over the last three years. “Going forward, the advertising industry is expected to exhibit a lower growth rate owing to the turbulent economic environment,” the report said, projecting a lower CAGR of 12.4 per cent over the next five years.

The television industry is estimated to have reached Rs 24,100 crore , a growth of 14.2 per cent in 2008. The report estimates a growth of 14.5 per cent over the next four years.

The funding pattern in the industry is also undergoing a significant trend. Earlier, the industry was largely reliant on private or individual funding. But in the last few years, the industry has been witnessing increased investments in the form of public issues and PE funding.

Major deals in recent times have been NBC Universal picking up 26 per cent stake in NDTV Networks, Walt Disney increasing its stake in UTV Software Communications and ICCI Ventures, Lehman and Goldman Sachs picking up about 15 per cent stake in a Bangalore-based outdoor advertising firm.

“Now, with the economic downturn and liquidity crunch, the overall availability of funding may take a hit in the short term, but the long-term prospects continue to be positive,” the report said.

It, however, pointed out that overall deal volumes registered a 25 per cent slide in 2008. The sector witnessed 36 private equity deals in 2008, compared with 27 in 2007, with the total deal values amounting to $496 million.

Mr Rajesh Jain of KPMG India summed up saying that media companies are under pressure to change, innovate, and re-examine their existing business models.

“In the immediate future, media corporates are likely to focus more on operating margins and opportunities for consolidation,” he added.

More Stories on : Marketing Research | Newspapers & Publishing | Entertainment & Leisure | Other States

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Copyright © 2009, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line