TV industry growth to slow down, Online ads click, music gets softer

Mumbai: The television industry may slow down over the next five years, mainly on account of increased competition between cable and direct-to-home (DTH) service providers, regulations pertaining to price, and an increase in content and distribution costs.

According to a report by media research company Media Partners Asia (MPA), the television sector will witness growth of around 16 per cent between 2008 – 2012. However, a FICCI – Pricewaterhouse Coopers (PWC) report pegs this growth at around 22 per cent. The FICCI – PWC report  predicted by the FICCI-PricewaterhouseCoopers (PwC) report is scheduled to be released on 25 March, Mumbai, while MPA's report on Asia's cable and broadband market will be released in April 2008.
 
Of all the media segments, the Indian music industry is at the very bottom of the list in terms of revenue growth projections for the next five years.   The FICCI-PWC report on the Indian entertainment and media industry says that the music segment would grow by a just about 2 per cent from 2008 - 2012, against online advertising at 32 per cent, animation/gaming at 25 per cent, radio at 24 per cent, television at 22 per cent, print media at 14 per cent and filmed entertainment at 13 per cent. Incidentally, globally the music industry growth is projected between 2 and 3 per cent.

PWC executive director Timmy Kandhari said although physical sales of music have suffered, there's an upswing in digital media, though it has not been able to make up for the loss in physical sales. Besides piracy, the availability of free access to non-stop music across numerous FM radio stations could another reason for the decline in music sales.

The FICCI-PWC report says that the television industry will see a compounded annual growth rate (CAGR) of 22 per cent during 2008-12, reaching  Rs60,000 crore from the present size of Rs22,300 crore, Overall, the FICCI-PWC report suggests that the media and entertainment industry will touch Rs1,15,700 crore by 2012, from Rs51,300 crore in 2007. 

MPA's report on India predicts the average revenue per user (ARPU) for both cable and DTH services at around Rs200 and Rs180 respectively, between 2008 – 2012. The report predicts that collection of subscription revenue for the television industry could a decline by around 12.5 per cent, settling around Rs32,000 crore by 2012, against an earlier estimate of Rs36,000 crore. The report also predicts that there will be consolidation in the DTH market, which will see three survivors of the six DTH players, once the DTH subscriber base touches 25 million as opposed to 3.2 million in 2007. 

Both the MPA FICCI-PwC reports are unanimous in their suggestion that the television industry will witness growth in the next five years, despite key issues affecting the sector. The MPA report on India's television sector suggests the pay television market will grow from 82 million homes at the end of 2007, to 137 million by 2012. 

Online advertising took the top slot in 2007, showing a growth of 69 per cent over 2006. It was followed by outdoor advertising at 25 per cent, with animation/gaming and radio sharing the third slot at 24 per cent. TV was next at 18 per cent, followed by print at 16 per cent. Filmed entertainment showed 14 per cent growth, and music only 1 per cent.

Frames 2008 is expected witness participation from over 2,500 delegates from nearly 20 countries, across seminars and networking business sessions.  Delegates from Australia, France Germany, Greece, Italy, Malaysia, Pakistan, the UK, and the US have registered for the event.