Media, Entertainment industry to grow at 14.2%

“The fact that we have been able to deliver this in light of an overall economic growth of 4 percent and a major resetting of exchange rates is a testament to the tenacity of the industry’s leaders and stakeholders.”

In 2013, M&E industry’s growth rate remained muted, with a slow GDP growth and a weak rupee. The industry grew at 11.8 percent over 2012 and touched Rs 91,800 crore.

“Lower GDP (in 2013) meant lower demand from the consumer and this impacted advertising,” the report said, adding that this added to slower revenue growth.

The report sees digital advertising witnessing the highest compounded average growth rate (CAGR) of 27.7 percent by 2018.

The addition of new media such as social networking services, animation and VFX, online gaming and applications running on mobile devices, has given a new dimension to the world of media that was usually dominated by traditional media, it said.

According to the report, the television industry in the country which is estimated at Rs 41,700 crore in 2013, is expected to grow at 16 percent over 2013-2018, to touch Rs 88,500 crore by 2018.

KPMG Head of M&E Jehil Thakkar said: “Once the television industry completes the entire process of digitisation, including the required back end infrastructure, it will result in increased top and bottom-line across the industry.”

The report said that aided by digitisation and the consequent increase in average revenue per user (ARPU), the share of subscription revenue to the total industry revenue is expected to increase from 67 percent in 2013 to 71 percent in 2018.

It said the print sector continues to remain resilient. In 2014, the growth in print sector is also expected to be promising with the general elections.

“The print industry is estimated to reach Rs 24,300 crore, a growth of 8.5 percent in 2014 and by 2018, it will grow at 9 percent to reach Rs 37,300 crore,” it said.

Thakkar said: “Print had a better year and regional performed well. Elections this year will also provide a boost to the industry.”

The film industry recorded a double-digit growth in 2013, albeit slower than in 2012, with multiple movies scoring big on box office collections.

According to the report, going forward, multiplexes’ growth is expected to slow down, in line with the overall delays and future expectations for retail sector and commercial real estate development, impacting box office growth in the short term.

Highlighting the new media, it said the total Internet user base in the country, which grew 40 percent at 21.4 crore in 2013, is likely to reach 23.9 crore by end 2014.

The FICCI-KPMG report said the advertising industry faced a rough year in 2012, but there are expectations for a better performance in 2013. In 2013, the total advertising spend from various sectors across all media was estimated at Rs 6,250 crore.

Talking about the challenging tax environment in the country, the report said that the myriad of taxes in various forms and multifarious statutory compliance are, to an extent, playing spoilsport.

“Issues such as dual levy of tax, service tax as well as VAT on licensing of copyrights in certain cases, uncertainty regarding withholding tax on various payments made by the broadcasters, withholding tax on discount on sale of set top boxes/recharge coupon vouchers in the case of DTH industry, uncertainty surrounding taxability of foreign sports associations, are being faced by the tax payers in the M&E sector,” it said.

Tax issues have been long outstanding and require utmost attention and address by the Government, the report added.