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Friday, August 15, 2008

Indian media and entertainment sector to grow to US$200bn


The Indian media and entertainment sector is likely to grow to US$200bn industry by 2015 from US$12bn currently. Attracted by such growth, global media and entertainment companies such as The Walt Disney Company, The Warner Group, Viacom, Inc., Sony Pictures Entertainment, Inc., The Financial Times and the Dow Jones & Co. have entered the market by either acquiring a stake or partnering with an Indian counterparts.

Last month, News Corporation, the world's largest media conglomerate by market capitalization, announced it would invest more than US$100mn to launch six new television channels in India over the next year. The potential for growth in India’s print media is underscored by its low penetration rate of 38%. The market grew by 15% in 2007 to US$3.7bn from US$3.2bn the previous year.

The sector is expected to grow at compound annual growth rate (CAGR) for 2008 through 2012 at 13% for newspapers and 15% for magazines. The comparative estimated CAGR internationally (for 2007 through 2011) is 2.1% for newspapers and 3.1% for magazines. The slower pace of growth in the mature markets is expected to attract other global media companies to the fast growing Indian market by acquiring stakes of as much as 26%, the maximum foreign ownership permitted in an Indian entity.

Mecom Group Plc, one of the leading media groups of Europe that has 300 titles publishing 30 million copies a week with presence in five countries of Europe - Netherlands, Denmark, Norway, Germany and Poland is wilting under the prevailing downward pressure on advertising volumes and price – could see a brighter side by making an India entry.