Media is considered to be one of the crucial pillars of democracy. It has the ability and the responsibility to be the moral compass of the country. Asking the right questions as well as shaping and reshaping the narrative in the country to ensure its stability and growth is one of the crucial functions of the media industry. The media industry is not just limited to news in today’s dynamic world. Online media portals, radio, television, newspapers, cinema, etc. are essential parts of the industry that forms its essence. The Indian media industry is touted to be the second largest in the world and growing at a fast pace backed by the increasing demand and foreign investments in the sector over the years.
Given below is a brief overview of the media industry, its highlights, and the government inputs in the industry.
Sector review
The media and Entertainment Industry in India is growing at a fast pace of approximately 8.8% CAGR. As per a report from BCG, the industry will reach the heights of US$55-70 billion by the year 2030.
This industry can be broadly divided into many categories having varied market shares. The split is as below
- Television has the maximum market share of 40% approximately
- Digital advertising section accounting for about 12%,
- Print media which adds up to about 13%,
- Cinema at 9%, and the
- The recent entrant OTT & gaming industries which accounts for approximately 8% of the total market.
The current market conditions have been quite favourable for the OTT segment which is growing at an average CAGR of 29.52% and is expected to reach US$5.12 billion by the year FY26. This growth is attributed to factors like demand for quality content and changing viewership patterns among the masses.
Government Initiatives
The government has recognized the growing importance of the AVGC (Animation, Visual Effects, Gaming, and Comics segment as it is a fast-growing segment (approximately 29%) and signed an MoU with the Canadian Government to explore their cultures through the strength of media.
Seeing the importance of the OTT platforms, the Government has also taken the initiative to auction the archives of Prasar Bharti and monetize the sale of its content on OTT platforms.
The digital segment of media is also included under the purview of the Indian Broadcasting Foundation (IBF) and has been renamed as Indian Broadcasting and Digital Foundation (IBDF).
In February 2021, the Internet and Mobile Association of India (IAMAI) also finalized a structured code of conduct for the OTT platform. Apart from this, the government also announced the auction of the IMT/5G spectrum. Also, the government has also announced a 90% and 75% subsidy for the North-Eastern states and other states respectively for setting up community radio stations.
The Union Cabinet also approved the Production Linked Incentive (PLI) Scheme in the Telecom and Networking Products sector with a view to enhancing the country’s manufacturing capabilities as well as enhancing exports. The financial outlay under this scheme is approximately Rs. 12,195 crores.
Investment in the media sector
There has been a steady inflow of investment in the media sector owing to the rising demand in the sector and the growing importance of Indian media platforms across the world.
- The Union Budget of 2022-23 allocated a whopping amount of Rs.3,980.77 to the Ministry of Information and Broadcasting.
- Also, the overall FDI investment in this sector has increased from 74% to 100%.
- The FDI limit in radio including private FM channels has also been increased from 26% to 49% while in the case of publication of newspapers and periodicals, etc.
- The FDI for scientific publications and technical magazines including specialty periodicals and journals is permissible to the extent of 100%.
There have been significant investments in the media industry by the private sector as well
- In September 2021, a major 10-film deal was signed between Reliance Entertainment and T-series to the tune of Rs. 1,000 crores.
- Netflix India and Excel Entertainment. November 2021 also saw the launch of the Indian music industry’s first-ever NFT series by JetSynthesys partnering with Mr. Sonu Nigam.
- The second quarter of 2021 also saw an increase in the shipment of smart TVs by approximately 65% YoY. This increase was contributed to the rising expansion activities that have been taken up by original equipment manufacturers (OEMs) for their smart TV portfolios.
Top challenges in the media sector
This sector although flourishing at a fast pace still is facing some core challenges that pose a hindrance to the growth path. Some of the key issues faced by this sector are highlighted below.
- Piracy
Piracy is one of the biggest issues faced by this industry across all its segments. There is a visible lack of anti-piracy laws that can prevent this menace. The Copyright Act needs many stringent provisions that can prevent piracy on the digital media platforms that have the maximum cases of piracy issues.
- Transparency issues
Transparency issues have been a constant hassle for the industry, especially the advertising sector. The transparency of the contracts or the funds for a project are often manipulated and therefore there is a general lack of transparency that may also pose taxation issues.
- Threat to media channels and personnel
There has been a growing threat to the freedom of speech in the country and this directly impacts the media and the entertainment industry there have been many cases of threats to the channel as a whole as well as to individual media personnel. Therefore, there need to be stringent laws in place that can safeguard the interests of the media industry and ensure that there is no threat to the sanctity of the sector.
- Lack of adequate representation
Indian as a country lacks equal participation of the female gender in the workforce. This discrimination and lack of adequate representation are also seen in the media industry which often leads to exploitation further driving this divide. Having a structured organizational flow and norms at the grass root level is imperative for better growth potential as well as the safety of both genders in the industry.
- Compliance issues with laws and regulations
The laws and regulations of the media industry including the taxation laws are quite complex and ever-evolving due to the dynamic nature of the industry. Therefore, compliance with such laws from time to time is difficult sometimes and can land the media house or the personnel on the wrong side of the law. It is essential to streamline such laws and have a common code that is acceptable and inclusive for every segment of the industry.
Future prospects in the sector
The Indian media industry is expected to grow at an average more than that across the globe. The driving factors for this sector are the changing consumer patterns, the increase in retail advertising, and e-commerce. The major contributor to the increased demand is also the rural sector which can be a very profitable target for the industry as a whole. Today, India has the second-largest subscriber base of 1.8 billion in the telecommunications sector. With the growing importance of digital media and access to world news at the top of one’s finger, the demand and the customer base are bound to increase. This increase will translate into more investments at the national and global levels at a steady pace.
Top stocks in the media sector based on market capitalization (June 2022)
The top stocks in the media sector are mentioned below based on market capitalization are .
- Zee Entertainment
Zee entertainment is one of the oldest names in the media industry and was launched in 1982. The company today has grown to be a dominant name in this sector and has the highest market share and a customer base of 350 million. The key details of the company are tabled below.
| Category | Details |
| Market Capitalization | Rs. 20,684 crores |
| PE Ratio | 21.43 |
| Return on Equity | 8.16 (March 21) |
| Debt Equity Ratio | 0.04 (March 21) |
| Promotor’s Holdings | 3.99% |
| Share price | Rs. 215.30 |
| Dividend Yield | 1.39% |
- Sun TV Network
Incorporated in 1985, Sun TV was the first privately owned Tamil channel in the country. The company has grown to be Asia’s largest with operations in 32 channels under the flagship of SunTV network and plans to establish its base in North India as well. It is the second-largest company in this sector and the key details of the company are highlighted below.
| Category | Details |
| Market Capitalization | Rs. 16,661.90 crores |
| PE Ratio | 10.20 |
| Return on Equity | 23.97 (March 21) |
| Debt Equity Ratio | 0.00 (March 21) |
| Promotor’s Holdings | 75.00% |
| Share price | Rs. 422.75 |
| Dividend Yield | 3.25% |
- PVR
PVR is the biggest name in the cinema segment of the industry and was the pioneer in the multiplex revolution in the country. The company has the biggest network of 845 cinemas across India and Sri Lanka with over 1.8 Lakh seats. The key details of the company are tabled below.
| Category | Details |
| Market Capitalization | Rs. 11526.61 crores |
| PE Ratio | – |
| Return on Equity | -45.31 (March 21) |
| Debt Equity Ratio | 0.74 (March 21) |
| Promotor’s Holdings | 17.01% |
| Share price | Rs. 1888.50 |
| Dividend Yield | 0.00% |
- Saregama India
Saregama is the oldest music label in the country as was earlier known as the ‘Gramophone Company of India’ & then ‘HMV’. Its dominant business segment is music licensing followed by the Carvaan Product. The key details of the company ate mentioned below.
| Category | Details |
| Market Capitalization | Rs. 6,790.06 crores |
| PE Ratio | 45.52 |
| Return on Equity | 32.88 (March 21) |
| Debt Equity Ratio | 0.00 (March 21) |
| Promotor’s Holdings | 57.65% |
| Share price | Rs. 360.70 |
| Dividend Yield | 0.08% |
- TV18 Broadcast
This is the fifth-largest company in the media sector in terms of market capitalization and was incorporated in 2005. The company has segments like broadcasting, digital content, and other allied businesses. The key highlights of the company are tabled below.
| Category | Details |
| Market Capitalization | Rs. 6,720.29 crores |
| PE Ratio | 11.50 |
| Return on Equity | 17.31 (March 21) |
| Debt Equity Ratio | 0.21 (March 21) |
| Promotor’s Holdings | 60.40% |
| Share price | Rs. 39.20 |
| Dividend Yield | 0.00% |
Conclusion
The media and entertainment industry is one of the strongest pillars of the economy. When the world economies were hit by the pandemic, the media and entertainment industry was badly hit. However, the industry is growing back at a healthy pace and is set to exceed its pre-pandemic progress.
FAQs
Media is considered to be one of the crucial pillars of democracy. It has the ability and the responsibility to be the moral compass of the country. Asking the right questions as well as shaping and reshaping the narrative in the country to ensure its stability and growth is one of the crucial functions of the media industry. The media industry is not just limited to news in today’s dynamic world. Online media portals, radio, television, newspapers, cinema, etc. are essential parts of the industry that forms its essence. The Indian media industry is touted to be the second largest in the world and growing at a fast pace backed by the increasing demand and foreign investments in the sector over the years.
Given below is a brief overview of the media industry, its highlights, and the government inputs in the industry.
Sector review
The media and Entertainment Industry in India is growing at a fast pace of approximately 8.8% CAGR. As per a report from BCG, the industry will reach the heights of US$55-70 billion by the year 2030.
This industry can be broadly divided into many categories having varied market shares. The split is as below
- Television has the maximum market share of 40% approximately
- Digital advertising section accounting for about 12%,
- Print media which adds up to about 13%,
- Cinema at 9%, and the
- The recent entrant OTT & gaming industries which accounts for approximately 8% of the total market.
The current market conditions have been quite favourable for the OTT segment which is growing at an average CAGR of 29.52% and is expected to reach US$5.12 billion by the year FY26. This growth is attributed to factors like demand for quality content and changing viewership patterns among the masses.
Government Initiatives
The government has recognized the growing importance of the AVGC (Animation, Visual Effects, Gaming, and Comics segment as it is a fast-growing segment (approximately 29%) and signed an MoU with the Canadian Government to explore their cultures through the strength of media.
Seeing the importance of the OTT platforms, the Government has also taken the initiative to auction the archives of Prasar Bharti and monetize the sale of its content on OTT platforms.
The digital segment of media is also included under the purview of the Indian Broadcasting Foundation (IBF) and has been renamed as Indian Broadcasting and Digital Foundation (IBDF).
In February 2021, the Internet and Mobile Association of India (IAMAI) also finalized a structured code of conduct for the OTT platform. Apart from this, the government also announced the auction of the IMT/5G spectrum. Also, the government has also announced a 90% and 75% subsidy for the North-Eastern states and other states respectively for setting up community radio stations.
The Union Cabinet also approved the Production Linked Incentive (PLI) Scheme in the Telecom and Networking Products sector with a view to enhancing the country’s manufacturing capabilities as well as enhancing exports. The financial outlay under this scheme is approximately Rs. 12,195 crores.
Investment in the media sector
There has been a steady inflow of investment in the media sector owing to the rising demand in the sector and the growing importance of Indian media platforms across the world.
- The Union Budget of 2022-23 allocated a whopping amount of Rs.3,980.77 to the Ministry of Information and Broadcasting.
- Also, the overall FDI investment in this sector has increased from 74% to 100%.
- The FDI limit in radio including private FM channels has also been increased from 26% to 49% while in the case of publication of newspapers and periodicals, etc.
- The FDI for scientific publications and technical magazines including specialty periodicals and journals is permissible to the extent of 100%.
There have been significant investments in the media industry by the private sector as well
- In September 2021, a major 10-film deal was signed between Reliance Entertainment and T-series to the tune of Rs. 1,000 crores.
- Netflix India and Excel Entertainment. November 2021 also saw the launch of the Indian music industry’s first-ever NFT series by JetSynthesys partnering with Mr. Sonu Nigam.
- The second quarter of 2021 also saw an increase in the shipment of smart TVs by approximately 65% YoY. This increase was contributed to the rising expansion activities that have been taken up by original equipment manufacturers (OEMs) for their smart TV portfolios.
Top challenges in the media sector
This sector although flourishing at a fast pace still is facing some core challenges that pose a hindrance to the growth path. Some of the key issues faced by this sector are highlighted below.
- Piracy
Piracy is one of the biggest issues faced by this industry across all its segments. There is a visible lack of anti-piracy laws that can prevent this menace. The Copyright Act needs many stringent provisions that can prevent piracy on the digital media platforms that have the maximum cases of piracy issues.
- Transparency issues
Transparency issues have been a constant hassle for the industry, especially the advertising sector. The transparency of the contracts or the funds for a project are often manipulated and therefore there is a general lack of transparency that may also pose taxation issues.
- Threat to media channels and personnel
There has been a growing threat to the freedom of speech in the country and this directly impacts the media and the entertainment industry there have been many cases of threats to the channel as a whole as well as to individual media personnel. Therefore, there need to be stringent laws in place that can safeguard the interests of the media industry and ensure that there is no threat to the sanctity of the sector.
- Lack of adequate representation
Indian as a country lacks equal participation of the female gender in the workforce. This discrimination and lack of adequate representation are also seen in the media industry which often leads to exploitation further driving this divide. Having a structured organizational flow and norms at the grass root level is imperative for better growth potential as well as the safety of both genders in the industry.
- Compliance issues with laws and regulations
The laws and regulations of the media industry including the taxation laws are quite complex and ever-evolving due to the dynamic nature of the industry. Therefore, compliance with such laws from time to time is difficult sometimes and can land the media house or the personnel on the wrong side of the law. It is essential to streamline such laws and have a common code that is acceptable and inclusive for every segment of the industry.
Future prospects in the sector
The Indian media industry is expected to grow at an average more than that across the globe. The driving factors for this sector are the changing consumer patterns, the increase in retail advertising, and e-commerce. The major contributor to the increased demand is also the rural sector which can be a very profitable target for the industry as a whole. Today, India has the second-largest subscriber base of 1.8 billion in the telecommunications sector. With the growing importance of digital media and access to world news at the top of one’s finger, the demand and the customer base are bound to increase. This increase will translate into more investments at the national and global levels at a steady pace.
Top stocks in the media sector based on market capitalization (June 2022)
The top stocks in the media sector are mentioned below based on market capitalization are .
- Zee Entertainment
Zee entertainment is one of the oldest names in the media industry and was launched in 1982. The company today has grown to be a dominant name in this sector and has the highest market share and a customer base of 350 million. The key details of the company are tabled below.
| Category | Details |
| Market Capitalization | Rs. 20,684 crores |
| PE Ratio | 21.43 |
| Return on Equity | 8.16 (March 21) |
| Debt Equity Ratio | 0.04 (March 21) |
| Promotor’s Holdings | 3.99% |
| Share price | Rs. 215.30 |
| Dividend Yield | 1.39% |
- Sun TV Network
Incorporated in 1985, Sun TV was the first privately owned Tamil channel in the country. The company has grown to be Asia’s largest with operations in 32 channels under the flagship of SunTV network and plans to establish its base in North India as well. It is the second-largest company in this sector and the key details of the company are highlighted below.
| Category | Details |
| Market Capitalization | Rs. 16,661.90 crores |
| PE Ratio | 10.20 |
| Return on Equity | 23.97 (March 21) |
| Debt Equity Ratio | 0.00 (March 21) |
| Promotor’s Holdings | 75.00% |
| Share price | Rs. 422.75 |
| Dividend Yield | 3.25% |
- PVR
PVR is the biggest name in the cinema segment of the industry and was the pioneer in the multiplex revolution in the country. The company has the biggest network of 845 cinemas across India and Sri Lanka with over 1.8 Lakh seats. The key details of the company are tabled below.
| Category | Details |
| Market Capitalization | Rs. 11526.61 crores |
| PE Ratio | – |
| Return on Equity | -45.31 (March 21) |
| Debt Equity Ratio | 0.74 (March 21) |
| Promotor’s Holdings | 17.01% |
| Share price | Rs. 1888.50 |
| Dividend Yield | 0.00% |
- Saregama India
Saregama is the oldest music label in the country as was earlier known as the ‘Gramophone Company of India’ & then ‘HMV’. Its dominant business segment is music licensing followed by the Carvaan Product. The key details of the company ate mentioned below.
| Category | Details |
| Market Capitalization | Rs. 6,790.06 crores |
| PE Ratio | 45.52 |
| Return on Equity | 32.88 (March 21) |
| Debt Equity Ratio | 0.00 (March 21) |
| Promotor’s Holdings | 57.65% |
| Share price | Rs. 360.70 |
| Dividend Yield | 0.08% |
- TV18 Broadcast
This is the fifth-largest company in the media sector in terms of market capitalization and was incorporated in 2005. The company has segments like broadcasting, digital content, and other allied businesses. The key highlights of the company are tabled below.
| Category | Details |
| Market Capitalization | Rs. 6,720.29 crores |
| PE Ratio | 11.50 |
| Return on Equity | 17.31 (March 21) |
| Debt Equity Ratio | 0.21 (March 21) |
| Promotor’s Holdings | 60.40% |
| Share price | Rs. 39.20 |
| Dividend Yield | 0.00% |
Conclusion
The media and entertainment industry is one of the strongest pillars of the economy. When the world economies were hit by the pandemic, the media and entertainment industry was badly hit. However, the industry is growing back at a healthy pace and is set to exceed its pre-pandemic progress.
FAQs
The current growth rate of the media and entertainment sector in the country is approximately 8.8% YoY.
The broadcasting and distribution network in India includes 800 satellites, 6000 multi-system operators, approximately 60,000 local cable operators, 7 DTH operators, and many IPTV service providers.
The permissible FDI investment in the media and entertainment industry is up to 100%.
The dominant sector in the media and entertainment industry is the television sector.
