Independent studies have revealed that the growth of India’s Entertainment and Media (E&M) industry will touch a record breaking Rs. 1 trillion mark in the next 4 years (by 2011). The E&M industry is growing at a Compound Annual Growth Rate (CAGR) of 18%. It is currently floating around Rs. 437 billion and is expected to outgrow the country’s economy. This growth is party due to the several positive measures taken by the government. It has also been boosted by technological advancements and entry of large corporate players into all segments of the industry.
In the wake of all these out-growth frenzy in the Entertainment & Media Industry, here we have FUSE+Media, formed by Keyur Patel of Com Ventures as an entity for media investment in India. He is the Managing Director and CEO of FUSE+Media. On one of his quick black-berry-ed email while he rush off to United States, he informed me that FUSE+Media is planning to announce a series of deals in the Entertainment and Media industry. He further told me that it will focus primarily on TV, Film, Print, Radio and of course one of his love - the web. If I can guess it right, there will be announcement on the acquisition and/or stake buy-outs of a radio firm, security company that provides security to media events and perhaps some Production Houses and/or Animation Studios.
More profoundly, Keyur Patel is also looking more closely at the animation, special effects sector of the Media industry too. I’m sure his aim would be the higher profile ones. All this will eventually be a conglomerate but a unified Media Centric network where FUSE+Media will have every arsenal in its disposal that is Media related - TV, Film, Radio, Media Events, Media Security and of course Media on the Internet.
Looking back, it is rather common sense that the E&M industry is growing at a faster rate than the country’s economy because of its income elasticity, wherein when income rises, more resources are spent on leisure and entertainment than on necessities. It is no more uncommon to see just luxury centric shopping malls in India - take Croma for instance. Croma is the place where you go for 90% luxury and 10% necessity.
Television is the largest contributor of revenues to the E&M industry with its size expected to grow from the current Rs. 191 billion to Rs. 519 billion by 2011. TV is followed by Film, out-of-home advertising and live entertainment sharing 16%, 17% and 16% respectively. These days, more than half of the Film are produced by corporate rather than individuals.
Internet Advertising is the fastest growth projectile in the E&M industry with 43% growth but remains just about a humble Rs. 1,600 crore in actual hard cash and is expected to be just about Rs. 9,500 crore by 2011. Over the last three years, the domestic E&M industry has secured over Rs. 4 billion in foreign direct investment (FDI) with 2006 seeing the maximum inflow. Up to 13 proposal for FDI in media were cleared by the Information and Broadcasting ministry last year and it is pondering over another 22. So, there are so much to rejoice in the E&M industry, perhaps lots of good returns if invested wisely and time to reap the big cash if you are looking for investments and acquisitions.