ALWAYS – INVEST IN WHAT YOU KNOW & WHAT YOU CAN UNDERSTAND. DEVELOP CURIOSITY AS A TRAIT
Must know facts:
- Key sectors that come under this category – TV’s, Newspapers, Multiplexes, Internet Users & Radio.India has 168 Million television households, 82,000+ newspapers (registered – 4,500+), close to 2,000 multiplexes and close to 300 Million Internet users – second largest base after China, and is expected to reach out to 640 million by 2019.
- By 2019, digital advertising is projected to have the highest CAGR of 30.2%, while all other sub-sectors are expected to grow at a CAGR between 8% and 18%.
- Television, print and films together accounted for 79.54 per cent of marketshare in 2016, in value terms. TV penetration in India is about 61% and is expected to reach 72% by 2017, the digitisation of cable TV in India is in progress, direct-to-home (DTH) subscriptions are growing rapidly, driven by content innovation and product offerings.
Influencing Factors for price change:
- Stocks in Media sector are best judged when benchmarked against – ‘NIFTY MEDIA’. Sound management principles acts as a differentiator amongst companies in the same sector. Select stocks wisely.
- Any data published by TRAI (Telecom Regulatory Authority of India ) or other reliable sources that indicates Viewership levels is a key. For Example – Viewership in South India is dominant for regional entertainment as Tamil and Telugu channels together account for more than half of total viewership across India.
Understanding the Industry:
The Indian Media and Entertainment (M&E) industry is a sunrise sector for the economy and is making high growth strides. Proving its resilience to the world, the Indian M&E industry is on the cusp of a strong phase of growth, backed by rising consumer demand and improving advertising revenues. The industry has been largely driven by increasing digitisation and higher internet usage over the last decade. Internet has almost become a mainstream media for entertainment for most of the people.
Estimated Market Size:
The Indian media & entertainment sector is expected to grow at a Compound Annual Growth Rate (CAGR) of 13.9 per cent, to reach US$ 37.55 billion by 2021 from US$ 19.59 billion in 2016, outshining the global average of 4.2 per cent. The industry provides employment to 3.5-4 million people, including both direct and indirect employment in CY 2017.
Over FY 2016-21, radio will likely grow at a CAGR of 16.1 per cent, while digital advertising will grow at 30.8 per cent. The largest segment, India’s television industry, is expected to grow at a CAGR of 14.7 per cent, while print media is expected to grow at a CAGR of 7.3 per cent.
India is one of the highest spending and fastest growing advertising market globally. The country’s expenditure on advertising is expected to grow at 12.1 per cent to Rs 68,334 crore (US$ 10.59 billion) by the end of 2018. As per MMA – Mobile advertisement spending in India is estimated to grow to Rs 10,000 crore (US$ 1.55 billion) by the end of 2018.
Apart from the what’s known & seen phenomenon’s in India – I would like to highlight the emerging trend of – ‘Private Radio Stations’. Considering the improvement of road infrastructure in India may take a while to materialise – this clearly translates to increase in number of high spending consumers tuning into radio’s during frequent traffic jams. Also to consider the rural penetration of these radio’s are expected to see a two fold rise.
Top Stocks in the industry:
Sun TV Network, Zee Entertainment, TV18 Broadcast, PVR, Zee Media, Eros International, Balaji Telefilm .. many more.
(Please note above stocks are not recommendations, they are purely for information purpose only)
Information Source / References: MakeinIndia.com, IBEF, The Economic Survey 2016–17 & 17/18, Agricultural and Processed Food Products Export Development Authority (APEDA), Department of Commerce and Industry, Union Budget 2017–18, Press Information Bureau, Ministry of Statistics and Programme Implementation, Press Releases, Media Reports,
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