Introduction

Indian history saw three major events in the year 2011! The iconic moment of our Cricket World Cup triumph being celebrated across households, the spread of Anna Hazares anti-corruption crusade and a song, Kolaveri Di going viral overnight. What was common between these events? It was the power of the reach of Indian media. We have 146 million television households viewing over 623 channels, 82,000 newspapers with a readership of 181.91 million and approximately 132 million Indian internet users. The reach and exposure provided today by the Indian media has opened up tremendous opportunities for both content creators and audiences.

Industry overview
The Indian M&E industry grew by 12 percent from INR 652 billion in 2010 to INR 728 billion. With increasing consumption in Tier 2 and Tier 3 cities, growing influence of regional media and upcoming new unconventional media platforms, M&E industry is expected to achieve a growth rate of 13% in 2013.

M&E industry greatly relies on advertising with revenues amounting to INR 300 billion (in 2011) coming from advertisements, contributing to 41 percent of the overall M&E industry revenues. This share of advertising revenues in overall M&E industry is expected to be maintained at 40% till 2016, largely due to the relatively low ARPUs on account of hyper competition and lower price elasticity of consumers.

Figure 1 : Ad revenue contribution in M&E revenues

Print is the largest contributor having a share of 46 percent of the advertising pie, accounting for INR 139 billion. It is expected to continue being the most dominant medium for next 5 years, despite the threat from new digital platforms. The second most important medium is TV which comes close second. Advertising spends are expected to grow at a CAGR of 14 percent to reach INR 586 billion in 2016.
Indian M&E Industry in 2011: An introduction | 4 Overall industry size (INR Billion) (For Calendar Years) 20

Latest Trends
1) Growth drivers for multiplex exhibitors Digital technology has positively affected media distribution which is evident from a rapid growth of DTH and increased digitization of film exhibition. This has ensured larger and cost effective reach of the media content. Consumption of digital media content has increased in print industry, digital film prints, and entirely new categories such as social media. 2) Online advertising: Online ad spends have seen a spurt in growth vis-a-vis spends on traditional media. Till now, online advertising was majorly limited to search and display, which has become quite outdated now. Social

marketing and video advertisements are going to dominate online advertising in upcoming years. The only limitation is customers are reluctant to pay for online content and advertisements are the major source of revenues. 3) Media on the go: Proliferation of New age user Devices Radio listenership has increased largely due to out of home mobile listenership. The number of internet users is expected to cross 546 million users by 2016, increasingly driven by wireless connections. The increase in tablet penetration in future can have a big impact on internet usage and in particular, video consumption, as its large screen allows a more user friendly experience compared to current mobile phone models. These trends will support the growth in on the go media. 4) Regional markets bucking the recessionary trends and continuing growth momentum With the growth in income and consumption of regional markets, regional advertising grew stronger in TV and Print. National advertisers are customizing their ads as per these markets and even the local advertisers are taking advantage of regional marketing.

TV Advertising
The advertising market grew due to increase in volume, while rates, in general rates stayed flat or declined - Uday Shankar CEO Star India Advertisement inventory are up by 14% in 2011, mainly because of increase in number of channels and increase in commercial time of per hour programming. Majority of the revenues for TV industry come from advertising.
Figure 2: Revenue breakup of TV industry

FMCG (including categories like food & beverage, personal care & hygiene, hair care, personal accessories, personal healthcare, and household products) continued to be the dominant sector in TV advertising forming 43 percent of ad volumes. FMCG companies generally strike bulk deals, putting a downward pressure on the prices availing volume discounts. Services, telecom and auto sectors are other key advertising sectors.

Print
The growth in advertisement revenues has been at a CAGR of 8.7 percent between 2007 and 2011. The advertisement revenues are the main source of revenue for the print industry, contributing almost twothirds to industrys revenues over the years. Circulation revenues grew at a CAGR of 3.7% for the same period having a share of just one-third in the overall revenues.

Figure 3: Revenue breakup of Print Industry

Print industry got affected by the economic slowdown which could be clearly seen when big spending sectors such as education, BFSI and retail tightened budgets. The newspaper advertisement volumes increased from 238 million column centimeter of ad space in 2010 to 280 million column centimeters in 2011. The industry also saw a 22 percent increase in the number of advertisers. Top categories for Print advertising are Education and Auto. FMCG, which is the major advertising sector on TV, comes at the third position in Print.

Table 1 : Top Categories advertising in Print Media

References:
http://www.kpmg.com/IN/en/Press%20Release/KPMG-FICCI-Frames-Press-release-2012.pdf http://www.kpmg.de/docs/FICCI-KPMG_Report_2012.pdf http://www.deloitte.com/assets/Dcom-India/Local%20Assets/Documents/Thoughtware/TMT%20India%20Predictions%202012.pdf