Introduction to Media

& Entertainment
 What is entertainment?

• An activity that allows one to amuse oneself

and relax
• May be active or passive
• May involve an individual or a group or engage
public at large
 What is entertainment?
• Serves the purpose of
− Social Interaction
− Education
− Mass communication, marketing and
advertising
• Plays an important role in shaping of culture
Evolution of Entertainment
• Media and Entertainment has evolved
immensely over the years
– Theatre and arts, gambling, books, village
fairs, gladiator matches - earliest forms of
mass entertainment
– Now the age of Hi definition TV and Smart
phones and the digital era
• Emphasis on enhancing the ‘experience’ of
entertainment has led to
– Enormous technological advancements over
the years, especially in the last 2 decades
– Platforms of media have evolved
• Newer Platforms to transmit content
• Newer Platforms to consume content
– Has led to the advent of the ‘digital era’
• Platforms now allow and enable interactivity
—Consumption of content has evolved immensely
• Consumer has a lot more choice
• Same Content reaches out through various
platforms, involves the consumer a lot more
• More targeted reach
• Age of superior quality, high definition
content through evolution of production &
distribution methods – Films are digitally
transmitted, Hi FI DTH transmission
– Has aided and evolved modern marketing
• Accessibility and availability of content has
evolved immensely
• Lot more choice on the go
• Facebook and Twitter aid almost
instantaneous interactivity between peers,
content providers, marketers
• What America watches, we in Shela watch
almost at the same time!
Broadcast media over the years
Broadcast media over the years
Social Media over the years
Social Media over the years
Communication over the years
Communication over the years
The Media Industry:
Some geeky facts
 The Media Industry- As a %age of GDP

Source: Worldwide Media & marketing forecasts, Group M, Summer 2009

 Per Capita Media Spends in $

Source: Worldwide Media & marketing forecasts, Group M, Summer 2009

 M&E markets across key countries
(in Mn $)

2005 2006 2007 2008 2009

India 8,746 10,503 12,401 13,616 14,052

China 41,297 47,245 57,496 69,166 75,815

Japan 150,975 160,716 166,999 169,298 164,337

US 433,842 454,572 469,096 460,997 428,140

Source: PwC Analysis and Industry Estimates

 Media Industry Size
M&E Industry (INR billion) 2006 2007 2008 2009 CAGR (06-09) 2010 (P) 2011(P)

Television 183 211 241 257 12% 289 337

Print 139 160 172 175 8% 190 206

Films 78 93 104 89 5% 96 105

Radio 6 7 8 8 9% 9 10

Music 8 7 7 8 2% 9 10

Animation & VFX 12 14 17 20 18% 23 28

Gaming 3 4 7 8 38% 10 14

Internet 2 4 6 8 56% 11 15

Outdoor 12 14 16 14 5% 15 17

Total Size 443 516 579 587 10% 652 742

Source: KPMG Analysis, Industry Discussions

*Taken for Calendar Years
 Indian Advertising Industry
(In INR Bn)

2005 2006 2007 2008 2009 CAGR

Television 54.5 66.2 78 84.2 89 13.0%
Print 62.7 78 94 103.5 100 12.4%
Radio 3.2 5 6.9 8.3 9 29.5%
Internet 1 1.6 2.7 5 6 56.5%
Outdoor 9 10 12.5 15 12.5 8.6%
Total 130.4 160.8 194.1 216 216.5 13.5%
Source: PwC Analysis and Industry Estimates
Key
Industries
Within
Media
TELEVISION
 Some Key Facts/Developments
• Largest Segment of the Media Industry in the
world and in India
• Major Indian Players – Network18, Star, Zee,
Sony, NDTV, BCCL
• 500 million+ viewers, 129 million+ HH in 2009
• 60% penetration of households
• 460+ channels
• Digitalization and DTH (16 mill subscribers)
• Key currency: Viewership and Reach
 COSTS

Content Costs of casting, shooting, equipment,

Creation/Production packaging, post production

Content Acquisition Payment to agencies, production houses,

royalty charges

Content Distribution Carriage costs, DTH costs of transmission

Payment to creative and media agencies, media

Content Marketing houses

People cost, technology cost, overheads, asset

Infrastructure
management
 REVENUES

Revenues from Pay per View, DTH subscription,

Subscription
MSO subscription

Revenues from Royalty, agreement with other

Content Syndication media houses/companies

Advertising , innovation, alternate revenue

Ad Revenues generation, sponsored marketing events, media
partnerships
PRINT- Newspapers
 Some Key Facts/Developments
• Second largest print market
• High amount of regional diversity
– 62,000 papers
• 92% of the print industry 500+ viewers in 2009
• 2009 Challenging year, volatility in newsprint
• Major Indian Players: BCCI, IE
• Online availability a threat but not a grave one
yet
• Key Currency- IRS and NRS no.s
 COST

Content Editorial Costs, Wiring costs, Research costs, Cost of

Creation/Production material (newsprint)

Subscription to agencies, freelance editorial costs

Content Acquisition

Editorial Costs, Wire costs, Subscription to agencies,

Content Distribution Cost of material (newsprint), agent commissions

Subscription Drives, Agency costs, Cost of marketing

Content Marketing collateral

Infrastructure Press Cost, Overheads

 REVENUE

Subscription Subscription Revenues, Newsstand sales,

Modern Retail sales, Bulk Sales

Content Syndication Royalties, Content fees

Advertising , innovation, alternative revenue

Ad Revenues generation, sponsored marketing events, media
partnerships
PRINT- Magazines
 Some Key Facts/Developments
• Forms 8% of print industry
• Worst affected by recession after OOH
• Still saw new launches- Forbes, Entrepreneur,
Sports Illustrated
• Niche products doing well: Growth in
readership no.
• Key challenge to grow ad yields
 COSTS

Content Editorial Costs, Wiring costs, Research costs,

Creation/Production Cost of material (newsprint)

Subscription to agencies, freelance editorial

Content Acquisition costs

Editorial Costs, Wire costs,, Cost of material

Content Distribution (newsprint), agent commissions

Subscription Drives, Agency costs, Cost of

Content Marketing marketing collateral, Event costs, Brand
Extension cost

Infrastructure Press Cost, Overheads

 REVENUES

Subscription Subscription Revenues, Newsstand sales,

Modern Retail sales, Bulk Sales

Content Syndication Royalties, Content fees

Advertising , innovation, alternate revenue

Ad Revenues generation, sponsored marketing events, media
partnerships
FILMS
 Some Key Facts/Developments
• Outdoes Hollywood by ticket admissions (3 bn vs 1.5
bn and no. of films, revenues lag still
• Poor year faced in 2009 – poor films +multiplex strike
• New phenomenon –DTH release – Slumdog, Ajab Prem
• Organized players getting into the film value chain
• Global investments by Indians: Reliance + Speilberg
collaboration, funding of $ 825 mill
• Digital production and distribution a big plus, saves
costs, curbs piracy, wider release, durability of media
 COSTS

Content Costs of casting, shooting, equipment, location,

Creation/Production sets, film costs

Post Production VFX-CGI, Processing, Dubbing costs

Payment to creative and media agencies, media

Marketing
houses, PR, Launch Event etc.
 REVENUES

Distribution/ Revenues from selling distribution and

Exhibition exhibition rights

Revenues from Royalty, agreement with other

Telecast Rights media houses/companies for future airing of
movies on TV

Merchandise Revenues from merchandise, brand

endorsements by stars

Ad Revenues In movie marketing and product placements

RADIO
 Some Key Facts/Developments
• Regional Media, thrives on local content
– Media ‘on the go’
• Shown growth due to FM enabled handsets
• Has been affected by recession and regulatory issues
• Challenge of being a ‘blind’ medium
– Ad rates remain low
• Cost Structures due to regulatory fee pose a
challenge
• Things to look up post phase3 with allowance for
multiple frequency for same player in same city
• Currency/Measurement: RAM and IRS
 COST

Content Editorial Costs, Research costs, Cost of

Creation/Production equipment, production cost

Content Acquisition Subscription to agencies, freelance editorial

costs

Content Distribution Transmission cost

Agency costs, Cost of marketing collateral, Event

Content Marketing
costs, Brand Extension cost

Infrastructure People, Overheads, Capital Assets

 REVENUES

Advertising , innovation, alternate revenue

Ad Revenues generation, sponsored marketing events, media
partnerships

Content Syndication Royalties, Content fees

OUTDOORS
 Some Key Facts/Developments
• Only pure advertising media
• Worst affected by recession
• Largely dependant on municipal and
government regulations
– Industry thrives on creative innovations to bypass
regulations!
• Largely unorganized, not too much scope for
reliable measurability
 Cost

Content Vinyl and printing costs

Creation/Production

Rentals/Licenses Government charges

Infrastructure Owning and maintenance of sites

Revenue
Ad Revenues/
Ad revenues and recycling of used material
recycle costs
INTERNET
 Some Key Facts/Developments
• Most rapidly growing media
• Most interactive and trackable media
• Cheap to advertise and develop content over this
media
• Metric and measurability: CPC, CPM, CPA
• Tremendous scope for targeted innovative advertising
• Social Media takes off in a big way
– Facebook, Twitter, Foursquare, Digg, Stumble all make
interaction and sharing simpler
– Foursquare goes ahead to involve and opens up avenues of
location based marketing to social groups
• Key challenge: Internet penetration still very low
 Cost
Content Technology costs, production costs, resource costs,
Creation/Production storage costs, product development costs

Content Acquisition Digital rights transfer costs, royalty cost, cataloguing

costs, storage costs

Content Distribution Technology costs- primarily bandwidth

Content Marketing Advertising costs, Analytics

Infrastructure cost, people cost, monitoring

Infrastructure/ technology costs, security management costs
Rights Management
Security, Retrieval, storage, cataloguing, archiving
Digital Asset costs, meta-tagging and enterprise management
Management costs
 Revenue

Pay per view, pay per download, time bound

Subscription subscriptions

Content Syndication/ Royalties, application development,

Aggregation transmission of data

Advertising, innovations, events

Ad Revenues
MOBILE
 Some Key Facts/Developments
• A communication tool that has today evolved
into a popular multimedia platforms in India
• Mobile apps, games, VAS content large
contributors to revenues
• No. of downloads and growing VAS revenues
clear indicators of it being a popular medium
• Very cost effective marketing tool
 Cost

Content Technology costs, production costs, resource

Creation/Production costs, storage costs, product development costs

Content Acquisition Technology costs, cataloguing and storage costs

Content Distribution Technology costs

Content Marketing Media buying/planning, advertising

Security, Retrieval, storage, cataloguing,

Infrastructure archiving costs, meta-tagging and enterprise
management costs
 Revenue

Subscription VAS and Application/Widget subscription

revenue

Content Syndication Application/Widget subscription revenue

Ad Revenues Advertisements, innovation

SPORTS ENTERTAINMENT
 Some Key Facts/Developments
• IPL and FIFA World Cup - key examples of
Sports as an genre/media sub industry
• Huge revenue opportunities
• Most marketable media with several easily
monetize-able extensions
– 3D relay
– Screening in halls etc
 Cost

Player costs Acquiring, building and training of teams

Celebrity
Managing teams, team health and performance
Management

Marketing Huge investment in innovative marketing, media

buying and planning
 Revenue

Huge opportunities in various kinds of

Merchandise merchandising and brand extensions

Telecast and Telecast and public viewing , Internet telecast

Theatrical Rights

Ground Revenue for on ground advertising, TV shows

Sponsorship/ and content generation around Sports
TV show deals Entertainment
The Media Value Chain
 KEY STAKEHOLDERS OF THE VALUE CHAIN

Content
Content Content
Provider/ Consumer
Creator Distributor
Aggregator

•Produces •Aggregates or •Distributes the •Receives and

content collects content content consumes the
•May or may not •Packages the •Directly linked content
be directly product to end user •Chooses to
interacting with •Markets the •Also markets consume
the consumer product the product •Reacts to the
content
received

AGE OF CONVERGENCE & PRESENCE ACROSS THE VALUE CHAIN

 The Age of Platform Diversification
• Convergence of Media Houses
– 360 degree presence – eg. Overdrive magazine
• Age of convergence across the value chain
– Media Owners and distributors converging- eg SunTV, UTV
• Rise of User Generated Content
• Distribution has revolutionized- IPTV, DTH
• Age of Youtube, Smartfones and Iphone Applications
– Availability of content in small packets
• Scope for Innovation at each level
– Marketing innovations
– Distribution innovations- banking through DTH
– Content Innovation- NDTVLive Widgets, EPG
A HUNDRED LOVERS- DIESEL
• Diesel launched its Spring Summer collection
through a unique viral campaign
– Flash file in the form of a music video on the lines
of dance sequence in Godard’s A Band Apart
– Used a lesser known, amateur artiste’s music,
found through Myspace
– Plugged it across Facebook and other social media
• Instantly became a rage!
 OLD
SPICE
• Brilliant example of sustaining a buzz post a good
campaign
• Created personalized ads for prolific twitter users
• Produced it cheaply and posted it on Youtube
channel
• For eg On Twitter, @aplusk wrote "If you don't
feel better after this @kevinrose I don't know
what will help http://bit.ly/bZn4hu“
• And the ad was…
• Instantly it became a rage across social media
• One of the best example of Advertiser Funded
Programming
– 2 lakh plus followers, rapidly built within few months
of launch in 2008
– Already in 3rd season
• Brilliant quality of content
• Simple yet effective marketing, helped by good content
• Push over interactive media of Youtube, Facebook,
Twitter
• Made it easily available and accessible to all
• Immense extension possibilities/ repackaging and
sustenance of content through TV, Internet, Radio, DVD,
Itunes, Live shows, Podcasts-Mobile devices
 Advantages of Digital Era
• Availability of content and ‘content about
content’
• Possibility to track your consumer
– Better Targeting
– Effective Marketing
– Niche formats can thrive
– Opportunities for remarketing, Location based
marketing
• MORE FUN FOR CONSUMER!
– Uninterrupted Content Availability
– At one’s own convenience, even on the go
 Key challenges in the Digital Era
• Enormity of content availability
• Digital Rights Management
• Digital Asset Management
• Distribution challenges – reaching increase in
competition
• Absence of robust policies and clear
regulations
 Key challenges in the Digital Era
• Understanding the limitations of each medium
– Misunderstanding purpose being served by each
media
– Expecting same treatment of content across all media
• Privacy issues and management of privacy- eg of
facebook and the huge debate on violation of
privacy
• Pushes content providers to innovate Eg I tunes, I
pod Applications
• Pushes Advertisers to think new, innovate
Thank You