Entertainment & Media An Unfolding Opportunity

Entertainment & Media An Unfolding Opportunity

Entertainment & Media • India - An Overview • Market and Growth Potential • Players • Opportunities • Why India? • Contact in India

Entertainment & Media • Population • States/UTs • Geographical Area • Languages recognised • Business language • Per Capita Income** • GDP** Over 1 bn 35 3.3 mn sq kms 22 English US$ 534 US$ 650 bn **(at factor cost & at current prices) 1USD=43.54 INR (as on July 4, 2005)

India - Fast pace Growth • Largest democracy • 4th largest economy by PPP index • 6th largest energy consumer • ForEx reserves skyrocket from US$ 42 bn (2001) to US$ 133 bn (February, 2005) • GDP growth to continue between 6-8% • 3rd largest economy by 2050: Goldman Sachs • Leading in IT & BPO • Oil & Gas and Biotechnology sunrise industries

India - Leading the world • Hero Honda - largest manufacturer of motorcycles • Moser Baer - among the top three media manufacturers in the world • Pharmaceutical Industry - 4th largest in world • Walmart, GAP, Hilfiger sources more than USD 1bn worth apparel from India • 100 Fortune 500 have set R&D facilities in India including GE, Delphi, Eli Lilly, HP, Heinz and Daimler Chrysler

The Entertainment & Media Industry • Size US$6900 mn • Estimated growth rate over next 5 years 14% CAGR One of the fastest growing sectors of the Indian economy

Key Institutional Framework Ministry of Information & Broadcasting Broadcasting Wing Ø Prasar Bharti o AIR o Doordarshan Information Wing Press Council of India Press Information Bureau Films Wing Directorate of Film Festivals Ø National Film Development Corpn Ø Central Board of Film Certification

Constituents

The Changing Face E&M Sector Films Television Radio Media Music Commercial (Hindi & Regional) Cinema Art Movies Cartoon Movies Commissioned Programs News & Current Affairs Commissioned Programs News & Current Affairs News & Current Affairs Fiction/Non Fiction Articles Film Music Private Albums Content  Cinema Halls Home Videos (Video Cassettes, VCDs, DVDs,) Cable Terrestrial DTH Public Broadcaster FM Channels Mobile Phones Internet Newspapers Magazines Books Cassettes CDs Delivery  ---------- Straight line denotes Traditional Delivery Mechanisms - - - - Dotted line denotes Converged Delivery Mechanisms Source:PwC Analysis

Filmed Entertainment Source: Industry estimates & PwC Analysis Current SizeUS$ 1256 mn Estimated growth rate over next 5 years 18% CAGR

Filmed Entertainment-Key Growth Drivers Emergence of crossover films High Return on investment • immense international appeal • low costs of production In 2004 alone, estimated five Bollywood releases generated more than US$ 2 million each in the UK and US.

Filmed Entertainment-Key Growth Drivers • Increasing importance of regional cinema • International cinema dubbed in Indian languages • Growth of multiplexes • Growth in cinema advertising • Merchandising/Promotional Material Revenues

Television • India Third largest television market in the world • Estimated growth rate of 18% CAGR TV industry on an overall basis for next 5 years • Total No. of TV households over 119 mn • Total No. of TV channels over 350

Television Industry- Revenues Source: Industry estimates & PwC Analysis

Television-Key Growth Drivers • Pay Revenues - primary growth driver for subscription revenues • Growth in number of TV households • Low penetration of multi-channel colour TVs in rural areas • Growth in the television software segment

Music Industry F- Forecast;E-Estimate Source: Industry estimates & PwC Analysis

Music Industry- Key Growth Drivers • Growth in non-film albums and music videos • Talent Nurturing • FM radio synergies • Shortening shelf life of music • Organised music retailing • Unbundling of the album concept • Product expansion • Overseas potential

Radio Industry Source: Industry estimates & PwC Analysis F- Forecast;E-Estimate

Radio Industry-Key Growth Drivers • Local Advertising • Lower share of Adspend • Satellite Radio • Community Radio

Print Media F- Forecast;E-Estimate Source: Industry Estimates & PwC Analysis

Newspaper Industry F- Forecast;E-Estimate Source: Industry Estimates & PwC Analysis

Magazine Industry F- Forecast;E-Estimate Source: Industry Estimates & PwC Analysis

Newspaper and Magazine Publishing Industry Key Growth Drivers • Booming Indian economy • Content • Government initiatives • Emerging Digital Technologies

Indian Film Industry Players Production Distribution Exhibition Zee Telefilms a a Adlabs Films a a a AVM Productions a a a Mukta Arts a a X Rajshri Productions a a X Shringar Group X a a PVR Cinemas X a a Pritish Nandy Communications a a X a a Present X Not present

Indian Television Industry Key Players • CNBC-TV 18 • Discovery • ESPN Star Sports • Hathway Cable • MTV India • STAR India • TEN Sports India • Walt Disney • Turner International

Indian Television Industry Key Players • Doordarshan • Balaji Telefilms • Eenadu TV • NDTV • Nimbus • Padmalaya • Sahara India • Sony Entertainment • Sun Television • UTV Software • Zee Telefilms Limited

Indian Music Industry Key Players • Universal Music India • Saregama India (HMV) • Venus Records • Sony Music Entertainment • BMG Crescendo • Virgin Records • Magnasound

Radio • All India Radio (AIR) • Planned, developed & operated by Ministry of I & B. • Network of 214 broadcasting centres • covering 24 languages • covering 91.37% of the area • serving 99.13% of the Indian populace • Private FM Broadcasters • Entertainment Network India • Radio Today • Radio City • Radio Mid – Day West • India FM Radio

Print Media Key Players Newspapers Magazines • India Today • Readers Digest • Outlook • Femina • Filmfare • Stardust • Times of India • Hindustan Times • The Hindu • The Telegraph • Indian Express • Mid-Day

Cable TV Households- untapped potential Low Cable penetration levels indicate huge untapped potential Rural areas to spur growth Total No. of Households 200 Million TV Households 119 Million Cable TV Households 50 Million Source: Industry Estimates & PwC Research

Television • Television Subscription Current size US$ 1667 mn • Television Advertising Current size US$ 1067 mn Source: Industry Estimates & PwC Research

Growth of multiplexes • Platform to screen movies appealing to niche audience • Have brought back Indian film viewers to movie halls • Smaller screening options

The India Advantage • Expanding Indian Economy • Strong job creation in new economy sectors • Demographic Advantage – 30 to 40 million people joining middle class every year • Change in consumer mindset due to global exposure • Untapped rural potential

The Policy Advantage Key Government Initiatives • 2001 Industry status to Films • 2001 Announcement of DTH guidelines • 2004 Announcement of Broadband Policy • Reduction in import duties • Move towards Co - production treaties

Enforcement efforts against music pirates Number of raids conducted Source: Indian Music Industry

FDI Policy • Advertising & Film Sector Upto 100% on automatic route • Print Media - Upto 74% in Indian entities publishing scientific/ technical & specialitymagazines/periodicals/journals - Upto 26% in Indian entities publishing news & current affairs newspapers & periodicals • Broadcasting Sector No restriction on foreign equity in proposals related to software production, marketing of TV rights, air times, advertisements etc.

Contact in India Office of the Minister for Information & Broadcasting Shastri Bhawan New Delhi 110 001 Tel 0091 11 2338 4782/2338 4340 Fax 0091 11 2378 2118

Contact in India Secretary, Ministry for Information & Broadcasting R.No. 655, A Wing, Shastri Bhawan New Delhi 110 001 Tel 0091 11 2338 2639 Fax 0091 11 2338 3513

Contact in India Confederation of Indian Industry (CII) The Mantosh Sondhi Centre 23, Institutional Area Lodi Road New Delhi 110003 India Tel: + 91 11 2462 9994-97 Fax:+ 91 112461 5693 Email: c.banerjee@ciionline.org

Entertainment & Media An Unfolding Opportunity