Boom Time for media and entertainment industry

India has a high-growth media and entertainment (M&E) industry that is
constantly buzzing with activity. Every one is bullish about its future growth
and this optimism stems from several positive developments that have sprung from
across the M&E industry. A steady stream of news about mergers and acquisitions,
diversifications, new ventures, and global expansions by several key M&E players
point to a strong forward momentum. In fact, the M&E sector is among the
fastest-growing verticals in India.

Driven by factors like India's robust economy, rising middle-class, higher
incomes, and increased consumerism, the M&E industry's revenue reached $6.2 bn
in FY '07, according to estimates by Springboard Research. Also, recent
technological advances and liberal government policies favoring foreign direct
investment continue to aid expansion. Attracted by the growth opportunities in
India, multinational media conglomerates such as Walt Disney and Viacom have
invested or plan to invest in Indian companies, which is sure to propel further
growth.

Simultaneously, a key trend in the last couple of years has been the
expansion of several Indian players into global markets. Major Indian players
such as Zee, NDTV, and Sony India have entered foreign markets primarily in a
bid to capture the attention of the Indian populations living abroad.
Interestingly, these players are now aiming to generate programs and content
suitable for non-Indian audiences and are investing in technologies that will
help them reach these audiences.

In addition, media decentralization and audience fragmentation are also
changing the dynamics of the M&E industry in India. As the industry moves toward
offering niche content for specialized audiences, it's vital that M&E companies
are able to distribute content across multiple platforms-from the Internet to
portable devices.

Advantage IT

M&E growth has obviously created new business opportunities for IT vendors.
Indian M&E companies are on the verge of an IT infrastructure overhaul that is
necessitated by new business opportunities and challenges in the sector such as
increasing competition and the universal shift to digital content distribution
and storage.

Aiming to capture an audience with more disposable income, M&E companies are
looking to adopt new delivery platforms and offer content diversity by using
technology as a strategic tool. They are looking to utilize these technological
innovations to offer cutting-edge services for their customers and greater
efficiencies for themselves.

Time Spent on Various Media Daily

According to Springboard Research estimates, the market size for IT products
and services by the M&E industry in India stood at $128 mn in 2007. And it is
expected that the market will grow at a CAGR of 32% to reach $300 mn by 2010.
Forced by growing competition for customer attention and spending, the
industry's urgency to reach new markets faster and efficiently is guiding its
investments in IT.

As the current economic boom in India travels to small cities and towns
beyond large metropolitan areas, reaching out to prospective customers in these
locations is high on the agenda of most media and entertainment companies. The
markets in metros have already saturated in many of the sub-verticals (print,
films, television, music, radio, online gaming, and Web portals), and it is in
these B & C class cities and other smaller locations that companies foresee
their future growth.

It therefore comes as no surprise that for most M&E companies, digitization
and streamlining content delivery and distribution is the top strategic focus
area as far as IT investments are concerned. M&E decision makers in a majority
of sub-verticals are digitizing their content as a top business priority,
although print media and the music industry are clear leaders in the
digitization space. These companies realize that digitization enables reliable
content storage and archiving, and also opens new business opportunities.
Streamlining content delivery and distribution via broadband, the Internet, and
mobile communication devices, for example, is also high on the radar of these
companies in India.

Content digitization also leads to improved management of, and access to,
digital media assets; enhanced search processes; reduced operational, research
and production costs; increased productivity; and optimized ability to leverage
valuable content.

To better compete in a market of M&E content providers, companies need to
focus on consolidating their infrastructure and production media library via a
platform that enables seamless integration with a front-end editorial system.
This integration of back-end and front-end would allow easier search and access
to archived materials such as photographs, articles, etc. The next big step
forward for the M&E industry would be digitally archiving large volumes of
media, reusing existing content (content syndication), securely distributing it
to global organizations, and exploiting it on newer delivery mechanisms.

Nilotpal Chakravarti

(The author is Senior Analyst, Springboard Research)