Sector growth expectations
• Indian media and entertainment industry expected to grow at a CAGR of 12.5% over 2008-13E.
• Ad spends expected to grow at a CAGR of 12.4% over 2008-13E.
• TV ads growth likely at 7.0% in 2009E.
• Radio also likely grow as it is still seen as a cost effective medium.
• Print, cinema, and outdoor, however, will be hit harder due to higher exposure to real estate, financial, and auto sectors.
Conclusions
• Media players need to fight the slowdown by reducing costs and freeing capital to run the business. This means, rethinking on compensation, carriage fee, and programming costs.
• The slowdown will help in 'cost rationalisation' of the industry as it will move from a seller's to a buyer's market.
• In the current scenario, the focus of industry players will be on profitable growth.
Government initiatives
• Government is supporting the industry and has increased the rate for DAVP to 10%. Earlier the government had abolished the discount of 15%. FDI relaxation has also been on the cards for quite some time.
• Government is considering formulating a policy framework for Headend-In-The-
Regards,
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