This is a brief report Expore the Media & Entertainment Industry.

1. Indian Entertainment Industry 2010 By: Kumar Gaurav
1
INDIAN
ENTERTAINMENT
INDUSTRY 2010
REPORT
.
By: Kumar Gaurav

2. Indian Entertainment Industry 2010 By: Kumar Gaurav
2
TABLE OF CONTENT
Page No.
1. Overview………………………………………………………………………. 3
2. Industry growth over next five years…………………………………….. 4
3. Events of 2009 and their impact going forward………………………... 6
4. Growth rate of the industry (In Billion)…………………………………... 7
5. Share of domestic theatrical revenues……………………………….….. 8
6. Comparison of the revenues………………………………………………. 8
7. Revenue Contribution from Domestic Film Territories………………. 8
8. Revenue Contribution from International Film Territories…………… 9
9. The first day collection of top five Movie………………………………... 9
10. Top first week box office collection……………………………………… 9
11. Distribution of multiplexes and single screens in India……………… 10
12. Certified films by Indian languages……………………………………… 10
13. Certified films by regional languages …………………………………… 11

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1. Overview
Amidst the uncertain economic environment
that was prevalent last year, the Indian M&E
industry has weathered the storm and is
showing signs of accelerating its growth. The
industry performance in 2009 was a
consequence of not only the slowdown, but
also several internal factors that lowered the
pace of growth for the otherwise flourishing
media and entertainment business in India. The multiplex strike, lack of quality
content, delay in auctions for phase 3 FM radio
and 3G mobile telecom licenses were some of
the unexpected events that further impeded the
development of this industry. However, there
were a several positives that brought in some
cheer to the industry. While “3 Idiots” and
“Avatar” created history in India through record
breaking box office collections.
On the whole, the year 2010 has been welcomed with a renewed sense of hope and a
fresh perspective replete with the learnings of 2009. The GDP forecast at is 6.75
percent and 8 percent for the years 2009-10 and 2011-12 respectively looks promising.
On the back of several factors, the overall M&E market in India is expected to grow
at a compounded annual growth rate of 13 percent per annum through 2014 to
reach INR 1.1 trillion. The untapped potential for growth in media reach, impact of
digitisation and convergence, better consumer understanding, sustained efforts in
innovation, and enhanced penetration of regional markets all augur well for the
industry.
“Media spend in India as a percent of GDP is 0.41 percent. This ratio is almost
half of the world’s average of 0.80 percent and is much lower compared to
developed countries like US and Japan. This indicates the potential for growth
in spends as the industry in India matures.”

4. Indian Entertainment Industry 2010 By: Kumar Gaurav
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2. Estimates for the industry indicate robust growth over next
five years
The overall M&E industry size reached INR 587 billion in 2009. The growth rate is
expected to increase to 11.2 percent in 2010, as the industry witnesses a recovery.
The CAGR from 2006 to 2009 has remained at 10 percent and the industry is
expected to grow at a rate of 13 percent in next five years. TV and Print are the
largest sectors of the industry contributing to greater than 70 percent of the
revenues. Their dominance is expected to continue going forward. Sectors like
Gaming and Internet have shown the highest growth rates due to the small base
effect and the trend is expected to continue.
M&E
Industry
(INR
billion)*
2006 2007 2008 2009 CAGR
(2006-
09)
2010P 2011P 2012P 2013P 2014P CAGR
(2009-
14)
Films 78 93 104 89 5% 96 105 115 125 137 9%
Television 183 211 241 257 12% 289 337 382 448 521 15%
Print 139 160 172 175 8% 190 206 225 246 269 9%
Radio 6 7 8 8 9% 9 10 12 14 16 16%
Music 8 7 7 8 2% 9 10 12 14 17 16%
Animation
& VFX
12 14 17 20 18% 23 28 33 39 47 19%
Gaming 3 4 7 8 38% 10 14 20 26 32 32%
Internet 2 4 6 8 56% 11 15 18 23 29 30%
Outdoor 12 14 16 14 5% 15 17 19 21 24 12%
Total Size 443 516 579 587 10% 652 742 835 956 1091 13%
3. Events of 2009 and their impact going forward:
3.1 Poor performance at the box office
There were 242 Hindi films (nearly 140 mainstream Hindi movies) released in 2009
as against 229 released in the previous year. Although the number of films released
in India in 2009 was higher than the previous year, the number of films that were
successful at the box office has been far less. The year 2009 had only four
0.41%
0.78%
1.08%
0.75%
0.90%
0.80%
0.00%
0.20%
0.40%
0.60%
0.80%
1.00%
1.20%
India UK US China Japan World
Media Spend as a percentage of GDP

5. Indian Entertainment Industry 2010 By: Kumar Gaurav
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blockbusters as compared to the seven blockbusters in 2008 and six in 2007.
Industry sources estimate that the percentage of successful films that were profitable
to many of the stakeholders in 2009 was nearly half of that in 2008.
3.2 Multiplex strike and its after effects
The strike launched by Hindi film producers and backed by United Producers Forum
lasted for two months and stalled several movie releases in multiplexes. As
collections from multiplexes contribute a considerable percentage of a film’s gross
domestic theatrical collections, the lack of major films released during this period
resulted in significant losses for the industry. After the strike a number of films were
released together, leading to the cannibalisation of revenues. The other significant
fallout of this strike was the subsequent paucity of funds available to producers for
their in-production films. A majority of the film producers were banking on post
release revenues to fund their under-production projects, or market completed films.
However this cash flow was delayed on account of the strike, forcing producers to
postpone their planned releases.
3.3 New piracy laws in Maharashtra & Karnataka
The Maharashtra Prevention of Dangerous Activities (MPDA) act was amended and
enforced from in 2009. Similarly in Karnataka, the Karnataka Prevention of
Dangerous Activities of Bootleggers, Drug- Offenders, Gamblers, Goondas, Immoral
Traffic Offenders and Slum-Grabbers (Amendment) Bill, popularly known as the
Goonda act bought film and video piracy under its purview in July 2009. The industry
expects the legislations to help curb revenue losses due to audio and video piracy in
the two states. Maharashtra and Karnataka are not the first states to pass such an
act to tackle piracy; a similar law termed as the ‘Goonda’ act, was passed in Tamil
Nadu in 2005, which has met with some success in
curbing piracy in the state
3.4 Expected fall in the number of Hindi film productions
While the overall number of Hindi films released did not fall, the number of new
movie productions has been impacted. Since an average Bollywood movie typically
takes between 10-16 months to produce, the number of movies released in 2010
end and early 2011 is likely to be impacted.
3.5 Cable and satellite rights - Closely linked to performance of television
channels
Television broadcasters saw a revival in their advertisement revenues and utilisation
levels leading to higher realisations for Cable and Satellite (C&S) rights in the later
part of 2009. Many producers are finding it difficult to pre-sell the rights of their film,
as broadcasters are increasingly acquiring the rights of a film post its theatrical
release. As a result, the value of a film’s C&S rights is now even more closely linked
to its domestic box office performance. Many of these rights are not sold outright to a
single broadcaster, but are syndicated to a number of TV channels. An example is of
‘Ajab Prem Ki Ghazab Kahani’ getting INR 4.5 crores for its premier sale to Colors
and then being syndicated at an additional value to NDTV Imagine for second airing
rights. A number of film producers are also doing bulk deals where a film portfolio
rather than a single movie is sold to the broadcasters. For instance, in December
2009 UTV entered into a deal based on which Colors would air the first show of a
selective library of their films after which NDTV Imagine would air the second
showing.

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3.6 Release on DTH – A new revenue stream
Bollywood has so far followed a very traditional distribution model, with limited focus
on alternative platforms. The DTH platform offers a new revenue stream for
producers to monetise their filmed content. Progressive producers view the direct-to-
home (DTH) platform as a means of supplementing their overall revenues, rather
than as a threat to theatrical revenues, as the perception is that the big screen
viewing experience cannot be compared with that of the small screen9.
A number of films such as Slumdog Millionaire, Aa Dekhen Zara, Main Aur
Mrs.Khanna and Ajab Prem Ki Ghazab Kahani were released on DTH this year
within weeks of their domestic theatrical release.
Although revenues from DTH releases currently comprise a small portion of overall
revenues, the industry is optimistic about its futurepotential.
3.7 Rationalising of talent costs and emerging business model
In 2009, producers reported a 20-40 percent reduction in talent costs as compared to
2007-2008. A new trend that has emerged is that of a profit-sharing model between
actors and production companies, wherein top actors take a small upfront fee and a
share of profits in lieu of the larger portion of their fee. This model allows the
economics of a film to work better by improving the risk bearing capacity of
producers13 and linking actors’ remuneration to a films commercial success.
3.8 Efficiency in production
The high cost base without a corresponding increase in revenue for films green lit in
2007/08 forced producers to look for innovative ways to cut costs and improve
production efficiency. For example, producers chose to shoot in outdoor locations
closer to home rather than in far off exotic locations and initiated active budget
monitoring and cost control processes. Producers also made use of subsidies and
co-production treaties in place to arrive at a cost effective and quality conscious
model. These lessons learnt are likely to hold the industry in good stead in the future.
3.9 Innovative marketing and promotions
With decreasing theatrical windows, the importance of progressive marketing and
promotions is growing. An integrated marketing campaign by the producers,
distributors and exhibitors to attract audiences and drive better monetisation within
the limited theatrical windows available today is critical for the industry.

7. Indian Entertainment Industry 2010 By: Kumar Gaurav
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4. Growth rate of the industry (In Billion)
Indian Film Industry
Film
industry
(INR bn)
2006 2007 2008 2009
CAGR
(2006-
09)
2010P 2011P 2012P 2013P 2014P
CAGR
(2009-
14)
Domestic
Theatrical
62.1 71.5 80.2 68.5 3.3% 73.3 79.3 85.8 93 100.8 8.0%
Overseas
Theatrical
5.7 8.7 9.8 6.8 6.2% 7.3 7.9 8.6 9.3 10.1 8.0%
Home
Video*
2.9 3.3 3.8 4.3 13.1% 4.7 5.2 5.9 6.6 7.4 11.8%
Cable &
Satellite
Rights
5 6.2 7.1 6.3 7.9% 7 7.9 9 10.1 11.4 12.8%
Ancillary
Revenue
Streams
2.5 2.9 3.5 3.5 12.9% 4.1 4.7 5.4 6.2 7.1 15.0%
Total
Industry Size
78.2 92.7 104 89.3 4.6% 96.5 105.1 114.6 125.2 136.7 8.9%
0
20
40
60
80
100
120
140
2006
2007
2008
2009
2010P
2011P
2012P
2013P
2014P
62.1 71.5 80.2
68.5 73.3 79.3 85.8 93 100.8
5.7
8.7
9.8
6.8
7.3
7.9
8.6
9.3
10.1
2.9
3.3
3.8
4.3
4.7
5.2
5.9
6.6
7.4
5
6.2
7.1
6.6
7
7.9
9
10.1
11.4
2.5
2.9
3.5
3.5
4.1
4.7
5.4
6.2
7.1
Domestic Theatrical Overseas Theatrical Home Video Cable & Satellite Rights Ancillary Revenue Streams

8. Indian Entertainment Industry 2010 By: Kumar Gaurav
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5. Share of domestic theatrical revenues
2009 2014E
6. Comparison of the revenues
7. Revenue Contribution from Domestic Film Territories evenue
contribution from domestic film territories for Hindi films
Territory Percent
Indicative revenue contribution from domestic film territories for Hindi films
Territory Percent
Bombay (Mumbai, Thane, Western Maharashtra, Gujarat) 40%
Delhi and UP (Delhi City and UP) 20 - 22%
Punjab (Punjab, Haryana, J&K, Himmachal) 7.5 - 9%
Rajasthan 5 - 5.5%
C.I. (parts of Madhya Pardesh) 3.50%
CP Berar (majority of MP, all Chittisgarh, East Maharahstra) 5 - 5.5%
Bihar and Jharkhand 1 - 2%
Bengal 4.5 - 5%
Assam 0.50%
Orissa 0.50%
Nizam and Andhra (South East Maharahstra and all AP) 5 - 5.5%
Mysore (all Karnataka) 3.5 - 4.5%
Tamil Nadu and Kerala 1 - 1.5%
Nepal 0.25%
Estimated Net Collections for 1st
Week in Mumbai circuit: INR 27.25 Cr.
Number of Cinema in Mumbai Circut:
70
Dabangg
(2010)

9. Indian Entertainment Industry 2010 By: Kumar Gaurav
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8. Revenue Contribution from International Film Territories ev
enue
Indicative revenue contribution from international film territories for Hindi
films
Territory Percent
USA and Canada 30 - 33%
UK and Europe 30 - 33%
UAE 15 - 20%
Australia and New Zealand
20 - 25%
Pakistan
South East Asia (Fiji, Singapore, Malaysia, Indonesia)
Africa (South Africa, Kenya)
10. Top first week box office collection
Top First Week Earners
Film Date Cinemas Nett Gross Cinema
Average
Ghajini (8 Days) 25 Dec 2008 1125 64,41,00,000 5,72,533
Rab Ne Bana Di Jodi 12 Dec 2008 956 42,19,00,000 4,41,318
Singh Is Kinng 8 Aug 2008 969 39,72,00,000 4,09,907
Golmaal Returns (9 Days) 29 Oct 2008 847 38,69,00,000 4,56,789
Om Shanti Om 9 Nov 2007 896 36,97,00,000 4,12,612
Welcome 21 Dec 2007 873 33,46,00,000 3,83,276
Race 21 Mar 2008 908 33,37,00,000 3,67,511
Dhoom 2 24 Nov 2006 744 32,36,00,000 4,34,946
Krrish 23 Jun 2006 705 29,87,00,000 4,23,688
Kabhi Alvida Na Kehna 11 Aug 2006 665 28,49,00,000 4,27,970
Partner 20 Jul 2007 736 28,31,00,000 3,84,647
13
8.1
10.1
9.3
10.25
0
2
4
6
8
10
12
14
Three Idiots My Name Is
Khan
Kites Housefull Raajneeti
RupeesinCrore
9.The first day collection of top five Movie

10. Indian Entertainment Industry 2010 By: Kumar Gaurav
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New York 26 Jun 2009 741 27,47,00,000 3,70,715
Dostana 14 Nov 2008 686 26,90,00,000 3,92,128
Don 20 Oct 2006 677 26,05,00,000 3,82,422
Chandni Chowk To China 16 Jan 2009 1032 25,88,00,000 2,50,775
Heyy Babyy 31 Aug 2007 681 24,60,00,000 3,61,233
Bhool Bhulaiyaa 12 Oct 2007 699 23,59,00,000 3,37,482
Sarkar Raj 06 Jun 2008 792 23,54,00,000 2,97,222
Delhi 6 20 Feb 2009 843 22,58,00,000 2,67,853
Jodhaa Akbar 15 Feb 2008 767 22,34,00,000 2,91,265
Fanaa 20 Oct 2006 563 22,27,00,000 3,95,560
Chak De India 10 Aug 2007 422 22,01,00,000 5,21,564
11. Distribution of multiplexes and single screens in India
Multiplexes Single Screens
12. Certified films by Indian languages
20 22 19 19
80 78 81 81
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2006 2007 2008 2009
Others
Hindi

11. Indian Entertainment Industry 2010 By: Kumar Gaurav
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Bengali
7%
Malayalam
8%
Kannada
17%
Tamil
17%
Telugu
24%
Others
6%
Bhojpuri
6%
Marathi
10%
Gujarat
5%
13. Certified films by regional languages