Media and Entertainment Annual Review September 2009

Published by: CRISIL Ltd.

Published: Sep. 30, 2009 - 124 Pages

Table of Contents

1.0 Industry growth forecast

Overall industry: Structural growth factors intact despite near term dip

Increasing digital penetration, advertising spends to drive television industry growth

Growth to slow down with decreasing share of advertising spends

Theatrical revenues to continue to drive film industry growth

Radio broadcasting revenues to touch Rs 24 billion by 2013

Music industry revenues to grow at 8 per cent CAGR

2.0 Distribution outlook

Digitalisation to transform the television distribution landscape

DTH operators to capture 70 per cent of digital cable subscribers

Payment of carriage and placement fees to be the norm for the time-being

Internet will eat into newspaper advertising revenues

Mushrooming of multiplexes and digital cinemas changing the dynamics of film distribution

Music distribution - digital and mobile the new buzzwords

3.0 Profitability outlook

Television industry profitability: Increased competition, further fragmentation to impact broadcaster profitability

Newspaper profitability: Softening newsprint costs will improve profitability

Film industry profitability: Correction in artist costs and distribution prices

Radio profitability: Reduction in advertising outlay to affect profitability in 2009-10

4.0 Regional markets: Current scenario and prospects

Overview

Television

Newspapers

Film

Box

1.0 Industry growth forecast

01 Advertising spends forecast - approach and methodology

2.0 Distribution outlook

01 Definition of addressable system

02 CAS - Stuttering progress

03 Head-end-in-the-sky - New technology in the offing

3.0 Profitability outlook

01 Newspaper publishing - Revenue and cost heads

02 Operating models for multiplexes

4.0 Regional markets: Current scenario and prospects

01 Classification of cities and towns

02 Interpretation of HHI

Charts

1.0 Industry growth forecast

01 Advertising forecast methodology

2.0 Distribution outlook

01 Television distribution landscape

02 Advantages of digital cinema

Figures

1.0 Industry growth forecast

01 Forecast - Advertising spends

02 Current break-up of advertising spends by media (Rs 233 billion - 2008)

03 Projected break-up of advertising spends by media (Rs 446 billion - 2013)

04 Television and C&S households

05 Average cable ARPU

06 Newspaper circulation and readership (per day)

07 Radio revenues

08 Music revenues

2.0 Distribution outlook

01 Dish TV - Subscriber acquisition costs are moderating

02 Multiplex screens

3.0 Profitability outlook

01 Growth of ad spots on television

02 Increasing viewership of Hindi GEC

03 HHI for Hindi GEC channels

04 Hindi GEC - EBITDA margin (per cent)

05 Subscriber revenues of new DTH operator

06 New DTH operator - EBITDA margins

07 Newsprint prices - Domestic prices and landed cost (Canada)

4.0 Regional markets: Current scenario and prospects

01 Share of tier II and III towns and cities equals that of tier I cities

02 Penetration of television and newspapers

03 Share of C&S subscribers

04 C&S penetration amongst households

05 Ad spends in regional markets in 2008 (Rs billion)

06 Cost to reach thousand people on a prime-time show with high viewership (June 2009)*

07 HHI of GEC channels across languages (June 2009)

08 Market share of top two players (June 2009)

09 Share of different languages in ad spends (by value)

10 Share of different languages in ad spends (by volume)

11 Share of number of film releases

Tables

Executive summary

01 Media and entertainment industry - Revenues

1.0 Industry growth forecast

01 Media and entertainment industry - Revenues

02 Media and entertainment industry - Break-up of advertising and subscription revenues

03 Television industry revenues

04 Newspaper industry revenues

05 Film industry revenues

2.0 Distribution outlook

01 Television distribution platform-wise subscribers

02 STB adoption in CAS notified areas

03 Ticket revenue sharing agreement between multiplexes and distributors

3.0 Profitability outlook

01 New DTH operator profitability - Key assumptions

02 Hindi newspaper - Projected financial performance

03 English newspaper - Projected financial performance

04 Multiplex operator - Projected financial performance

05 Multiplex operator financial performance - Key assumptions

06 Six large cities radio broadcaster - Projected financial performance

07 Ten small cities radio broadcaster - Projected financial performance

4.0 Regional markets: Current scenario and prospects

01 Networks with a large regional presence

02 Relative assessment of television markets

03 Cost per thousand people reached*

Sections

1.0 Industry characteristics

Television

Newspapers

Films

Radio

Music

2.0 Key regulatory issues

Television

Newspapers

Films

Radio broadcasting

Music

3.0 Player Profiles

Television

B.A.G Films and Media Ltd

Balaji Telefilms Ltd (BTL)

Dish TV India Ltd

New Delhi Television Ltd

Network 18 Group

Sahara One Media and Entertainment Ltd

SUN Network Ltd

TV Today Networks Ltd

UTV Software Communications Ltd

Wire and Wireless India Ltd

Zee Entertainment Enterprises Ltd

Zee News Ltd

Print

Bennett, Coleman & Company Ltd (BCCL)

Deccan Chronicle Holdings Ltd

Jagran Prakashan Ltd

Mid-day Multimedia Ltd

HT Media Ltd

Film

Adlabs Films Ltd

Inox Leisure Ltd

Mukta Arts Ltd

Pritish Nandy Communications Ltd

PVR Ltd

Sections

Pyramid Saimira Theatre Ltd

Fame India Ltd

Shree Ashtavinayak Cine Vision Ltd

Radio

Entertainment Network (India) Ltd

Music: Player profiles

Saregama India Ltd

Tips Industries Ltd

Boxes

1.0 Industry characteristics

01 SEC classification

02 Revised box office revenue sharing model

2.0 Key regulatory issues

01 Regulation in respect of cable television pricing and distribution

Charts

1.0 Industry characteristics

01 Television subscription value chain

02 Television delivery mechanism

03 CAS - The modalities

04 Film industry value chain (illustrative)

05 Film production process

06 Film distribution process

07 Multiplex business model

3.0 Player Profiles

01 NDTV (post demerger)

02 Network 18 Group - Business overview

03 Sun Network

04 UTV Software Communications

05 Zee Entertainment Enterprises Ltd

06 Zee News

07 Bennett, Coleman & Co

Figures

1.0 Industry characteristics

01 Share of languages by value of advertisements 2008

02 Share of different states in fixed screens

03 India - Music sales genre wise

04 Digital music revenues

Tables

1.0 Industry characteristics

01 Television broadcasting - Different genres and key players

02 Television - Cable network capacity

03 Television Comparison of various delivery media from subscriber point of view

04 Newspaper - Publication and region of dominance

05 Banks taking an active role in financing

06 Film distribution - Territories and major areas covered under each territory

07 Comparison of multiplexes and single/double screens

08 Ticket revenue sharing agreement

09 Radio broadcasting - Brief history

10 FM radio broadcasting - Operational players after phase II

11 Traditional physical format versus digital and mobile music

2.0 Key regulatory issues

01 TRAI recommendations on foreign investment limits

02 Entertainment tax in various states

03 FM radio broadcasting - Phase I versus phase II

3.0 Player Profiles

01 BAG Films - Financial snapshot

02 Balaji Telefilms Ltd - Financial snapshot

03 DISH T V India Ltd - Financial snapshot

04 NDTV Ltd - Financial snapshot

05 Television Eighteen India Ltd - Financial snapshot

06 IBN18 Broadcast Ltd - Financial snapshot

07 Sahara One Media and Entertainment Ltd - Financial snapshot

08 Sun TV Network Ltd - Financial snapshot

09 TV Today Networks Ltd - Financial snapshot

10 UTV Software Communications Ltd - Financial snapshot

11 Wire & Wireless India Ltd - Financial snapshot

12 Zee Entertainment Enterprises Ltd - Financial snapshot

13 Zee News Ltd - Financial snapshot

14 Deccan Chronicle Holdings Ltd - Financial snapshot

15 Jagran Prakashan Ltd - Financial snapshot

16 Mid-Day Multimedia Ltd - Financial snapshot

17 HT Media Ltd - Financial snapshot

18 Adlabs Films Ltd - Financial snapshot

19 Inox Leisure Ltd - Financial snapshot

20 Mukta Arts Ltd - Financial snapshot

21 Pritish Nandy Communications Ltd - Financial snapshot

22 PVR Ltd - Financial snapshot

23 Pyramid Saimira Theatre Ltd - Financial snapshot

24 Fame India Ltd - Financial snapshot

25 Shree Ashtavinayak Cine Vision Ltd - Financial snapshot

26 Entertainment Network (India) Ltd - Financial snapshot

27 Saregama India Ltd - Financial snapshot

28 Tips Industries Ltd - Financial snapshot

Abstract

The media and entertainment (M&E) industry will be adversely affected due to the slowdown in the growth of advertising spends. However, on the positive side, the cost of content creation is moderating, the price of raw materials like newsprint is declining from the highs reached in 2008, and the economy is looking at a recovery in 2010.Ad spends to grow at 7-8 per cent in 2009

Revenues from advertising account for about 40 per cent of the total M&E sector’s revenues. Advertising spends, which had risen by 17-18 per cent in the first half of 2008, contracted in the second half of the year due to the economic slowdown, thereby averaging a 15 per cent growth in 2008. This scenario continued in the first half of 2009, with advertising spends estimated to have risen by 5-6 per cent. For the full year, CRISIL Research expects advertising spends to grow by 7-8 per cent to Rs 231 billion.

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