Compare this with the state of the U.S. media industry. According to a report released today by Kantor Media, the total advertising expenditure in the U.S. fell by 12.3% in 2009. The decline was across every single media sector except Internet display advertising, which grew by 7.3% (table below shows the breakdown).
This comparison is not exactly apples-to-apples because advertising represents only a part of the U.S. media industry, but it still highlights the broader trend I had discussed earlier, that India and other BRIC countries will be the main future growth drivers of the global media industry.
The FICCI FRAMES conference, held in Mumbai every year by FICCI, is the biggest conference for the media & entertainment industry in Asia. I spoke at FICCI FRAMES last year, but was unable to travel this year due to the recent birth of our daughter.
The KPMG-FICCI report, released during this conference every year, provides a comprehensive annual assessment of the Indian M&E industry, covering all of its segments and verticals. The report is widely considered as the most authentic referral document on the industry in India.
Here is a quick summary of the KPMG-FICCI report from the portal businessofcinema.com:
The M&E industry stood at Rs 587 billion in 2009, a growth of 1.4 percent over the previous year. In 2010, a growth of 11.2 per cent is expected.Below is the ad spending in the U.S. in 2009 broken down by each media type/channel, as released by Kantar Media today. The total annual advertising spend last year reduced by 12.3% as all channels except Internet display advertising registered a decline, mainly due to the recession caused by the financial crisis in the country. This situation should improve as the U.S. economy comes out of recession in 2010 and beyond, however the macro trend of redistribution of ad dollars from old media to digital channels shall continue.
The estimated 13 per cent growth rate per annum for the sector for next five years will be driven on the back of factors like favorable demographics, expected recovery in the GDP growth rate, strong long term fundamentals of the Indian economy, expected rise in advertising to GDP ratio compared to developed economies and increasing media penetration.
Factors like Digitisation, Regionalisation, Convergence of new media etc are some of the trends in the industry and are expected to drive growth going forward.
The industry is estimated to have reached a size of Rs 257 billion, a growth of 6.8 percent over 2008. The television industry is projected to grow at the rate of 15 per cent over 2010-14 to touch Rs 521 billion in 2014.
The filmed entertainment sector saw a de-growth of 14 per cent to stand at Rs 89 billion in 2009. This was primarily due the three month impasse between the multiplexes and the producers last year coupled with poor content being churned out. The industry is expected to grow at a rate of nine per cent over the next five years, to stand at Rs 137 billion by 2014.
The Indian Print Media industry is estimated to have shown a very moderate growth of 2 percent in 2009 and reached around Rs 175 billion. Ad revenues saw a decline. The industry is projected to grow at a CAGR of 9 percent over the next five years and reach around Rs 269 billion in size by 2014.
Radio industry is estimated to have grown at a CAGR of 9 percent over 2006-09. It is estimated to have reached a size of Rs 7.8 billion by end of 2009, a decline of 0.3 percent over the previous year. It is expected to grow at a CAGR of 16 percent over 2010-14 and reach a size of Rs 16.4 billion by 2014.
The size of the Indian music industry was estimated at around Rs 8.3 billion in 2009, up from Rs 7.3 billion in 2008, implying a growth of 14 percent during the period. Overall the music industry is expected to grow at a CAGR of 16% over 2010-14 to reach Rs 17.2 billion.
Out of Home (OOH):
OOH media has grown at a CAGR of 5 percent over the past 3 years, and is estimated to have reached Rs 13.7 billion in size in 2009, a de-growth of 15 percent over 2008. It is projected to grow at a compounded rate of 12 percent over the next 5 years and reach a size of around Rs 24.1 billion by 2014.
The Animation & VFX segment in 2009 registered a growth of 13.6 percent over 2008. The industry is expected to grow at a CAGR of 18.7 percent in the coming years to reach Rs 46.6 billion by 2014. This growth will be triggered by the increased consumption of animated content, focus on IP creation and growth of 3D formats.
Gaming is expected to be the fastest growing sector in the M&E industry. While the sector has shown a 22 percent growth in 2009, it is expected to grow at a CAGR of 32 percent in the next 5 years to reach Rs 32 billion by 2014.
U.S. Ad Spending by Media
Percent Change in Measured Ad Spending1
| || |
| || |
|TELEVISION MEDIA|| ||-9.5%|| ||-2.4%|
|-- Network TV|| ||-7.6%|| ||4.1%|
|-- Cable TV2|| ||-1.4%|| ||2.7%|
|-- Spot TV3|| ||-23.7%|| ||-13.9%|
|-- Spanish Language TV4|| ||-8.9%|| ||-4.7%|
|-- Syndication - National|| ||-4.9%|| ||-10.7%|
|MAGAZINE MEDIA5|| ||-17.4%|| ||-11.5%|
|-- Consumer Magazines|| ||-16.6%|| ||-11.1%|
|-- B-to-B Magazines|| ||-26.2%|| ||-22.7%|
|-- Sunday Magazines|| ||-11.0%|| ||3.6%|
|-- Local Magazines|| ||-27.7%|| ||-18.2%|
|-- Spanish Language Magazines|| ||-21.6%|| ||-12.8%|
|NEWSPAPER MEDIA6|| ||-19.7%|| ||-8.9%|
|-- Newspapers (Local)|| ||-20.0%|| ||-10.3%|
|-- National Newspapers|| ||-17.8%|| ||0.4%|
|-- Spanish Language Newspapers|| ||-16.4%|| ||-10.7%|
|INTERNET (display ads only)|| ||7.3%|| ||-2.1%|
|RADIO MEDIA|| ||-20.3%|| ||-12.5%|
|-- Local Radio7|| ||-20.6%|| ||-11.7%|
|-- National Spot Radio|| ||-24.6%|| ||-16.9%|
|-- Network Radio|| ||-8.7%|| ||-7.9%|
|OUTDOOR|| ||-13.2%|| ||-5.4%|
|FSIs8|| ||3.0%|| ||0.0%|
|TOTAL9|| ||-12.3%|| ||-6.0%|
Source: Kantar Media
1. Figures are based on the Kantar Media Stradegy™ multimedia ad expenditure database across all measured media, including: Network TV (6 networks); Spot TV (123 DMAs); Cable TV (71 networks); Syndication TV; Hispanic Network TV (4 networks); Consumer Magazines (231 publications);,Sunday Magazines (7 publications); Local Magazines (19 publications); Hispanic Magazines (14 publications); Business-to-Business Magazines (260 publications); Local Newspapers (147 publications); National Newspapers (3 publications); Hispanic Newspapers (47 publications); Network Radio (5 networks); Spot Radio; Local Radio (32 markets); Internet; and Outdoor. Figures do not include public service announcement (PSA) data.
2. Cable TV figures do not include Hispanic cable networks.
3. Spot TV figures do not include Hispanic stations.
4. Spanish Language TV includes 4 Hispanic broadcast networks, 4 Hispanic cable network and 70 local Hispanic TV stations.
5. Magazine media includes Publishers Information Bureau (PIB) data and reflect print editions of publications.
6. Newspaper media figures reflect print editions of publications.
7. Local Radio includes expenditures for 32 markets in the U.S.
8. FSI data represents distribution costs only.