TV to drive India's showbiz: CII-KPMG study

By agencies   |   Tuesday, 22 March 2005, 08:00 Hrs
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MUMBAI: The Indian television industry is all set to grow to $4.2 billion ( 18,900 crore) by 2006, a study sponsored by CII-KPMG said.

Television, which accounts for 70 percent of showbiz industry's revenues, is set to grow to $4.2 billion in 2006, from $3.08 billion (Rs 13,900 crore). Overall industry size will be worth $7.2 billion (Rs 30,900 crore) by 2006, against the current $5.04 billion (Rs 22,200 crore), says the report. The sector is getting active, and PricewaterhouseCoopers is slated to release a showbiz report card in April.

"The impact of professionalism and organized financing is starkly evident in TV. It's the only major sector working in an organized manner and with access to institutional funds," says the CII-KPMG report. In sharp contrast, film and music have not progressed as far as institutional funding goes.

Digital connectivity, direct-to-home TV, favorable regulatory environment, animation, organized home videos and live entertainment will drive industry growth by average 18 per cent in next few years.

Films, which contribute just 22 percent to the industry's revenues, will be driven by mainstream Bollywood, and grow to $1.88 billion (Rs 8,300 crore) in 2006, from $1.34 billion (Rs 5,900 crore). But lack of transparency and minimal discipline are bottlenecks that will continue to prevent the industry from realizing its potential.

An emerging opportunity is the relentless rise in Hollywood movie budgets, which has led to pressure for cost controls. "Indian studios can tap this opportunity by offering Hollywood overall low-cost structure, combined with high-quality technical and production facilities," says the report.

Income from royalties and ring tones will rescue the $220 million (Rs 1,000-crore) music industry, which is struggling with piracy and Net downloads.

The growth of the $45.4 million (Rs 200-crore) radio industry will depend on policy initiatives like introduction of satellite radio. Despite privatization of FM channels, radio ads account for just 2 percent of India's overall ad pie.

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