New Delhi: The market size of Indian media and entertainment (M&E) industry is expected to touch Rs 1,457 billion by 2016 due to the increasing penetration in smaller cities and continued growth of regional media, a report said on Sunday.
A FICCI-KPMG report said that while television continues to be the dominant medium, sectors such as animation, digital advertising and gaming are fast increasing their share in the overall pie.
Radio is expected to display a healthy growth rate after and will continue to be the second largest medium in the Indian M&E industry, it said.
"The growth trajectory is backed by strong consumption in Tier-II and -III cities, continued growth of regional media and fast increasing new media business. Overall the industry is expected to register a CAGR of 15 percent to touch Rs 1,457 billion by 2016," the report said.
It said that advertising spends across all media accounted for about 41 percent of the overall industry revenues, amounting to Rs 300 billion in 2011.
Digital technology continues to revolutionise media distribution and has enabled wider and cost effective reach across diverse and regional markets, it said.
"2011 was clearly the year where digital technologies began to deliver on their promise. Digital film distribution has helped wider film releases and helped control costs," FICCI Entertainment Committee Chairman Yash Chopra said.
"Cable digitisation, wireless broadband, increasing DTH penetration, growing internet use are all prompting strategic shifts in the way companies work," KPMG Head of Media and Entertainment Jehil Thakkar said.
The report said that there has been increased proliferation and consumption of digital media content – be it newspapers, digital film prints, and online video and music or entirely new categories such as social media.
It also said that smart phones, tablets, gaming devices all form the foundation of a new wave in media usage.
"This is gradually impacting the way content is being created and distributed as well," it added.
Further, the report said that companies are awaiting implementation of policies like copyright for radio and the roll out of 4G for the next growth wave.
"These shifts are expected to be game changers in terms of how business is being done currently and what could be the path going forward," it said.
However, it said that while India is still expected to grow at a healthy pace, growth is projected to be lower than earlier expectations.