MANAGEMENT DISSCUSSION AND ANALYSIS
The Indian media and entertainment (M&E) industry is full of potential and has atremendous impact on the country's economy. As per a FICCI-KPMG report, India's M&Eindustry reaches 161 million TV households; 94,067 newspapers; about 2000 multiplexes; and214 million internet users, of which 130 million access the Internet on their mobilephones.
The industry grows with each passing day and plays a significant role in creatingawareness on many issues that impact the masses. India's population is over 1.2 billion.These numbers give the M&E industry in India a tremendous opportunity for growth. Afew years ago, the idea of reaching and engaging the county's population seemedimprobable. That scenario has completely changed today and the current industry is armedwith digital technologies, modern mobile devices, penetration of broadband internet anddigital cinema, and considerable backing from the Central Government.
India's M&E industry registered a growth of 12 per cent in 2013 and touched Rs91,800 crore (US$ 15.27 billion). The industry has the potential to grow at 14.2 per centto more than Rs 1.78 trillion (US$ 29.61 billion) in the next four years, as per a reportby FICCI-KPMG.
The television industry in India, which was estimated at Rs 41,720 crore (US$ 6.94billion) in 2013, is projected to increase at a compound annual growth rate (CAGR) of 16.2per cent over 2013-18, to reach Rs 88,500 crore (US$ 14.72 billion) by 2018.
With an estimated market size of US$ 5 billion, India is the 14th biggest advertisingmarket globally, as per the latest edition of the Gunn Report. Digital advertising is alsoexpected to witness a CAGR of 27.7 per cent by 2018.
The foreign direct investment (FDI) inflows in information and broadcasting (I&B)sector (including print media) during April 2000 to March 2014 stood at US$ 3,712.72million, as per the data released by Department of Industrial Policy and Promotion (DIPP).
The Cabinet Committee on Economic Affairs (CCEA) has given the go-ahead for theproposal of the Ministry of I&B with regard to the 12th Five-Year Plan scheme of AllIndia Radio (AIR) and Doordarshan 'Broadcasting Infrastructure and Network Development' ata cost of Rs 3,500 crore (US$ 582.34 million). The two primary components of the proposalare the continuing schemes of the 11th Five-Year Plan and new schemes of the 12thFive-Year Plan. As part of the 11th Plan scheme, the capacity of Doordarshan's Direct toHome (DTH) is being increased to 97 channels from 59 channels. During the 12th Five-YearPlan, the capacity is expected to further increase to 250 channels.
The Indian and Canadian governments signed an audio-visual co-production deal inFebruary 2014. The deal would help producers from both India and Canada to harness theirartistic, technical, creative, financial and marketing resources for co-productions and,subsequently, lead to exchange of culture and art among the two countries.
Further, the Centre has given the nod for licences to 45 new news and entertainmentchannels in the country. Among those who have secured the licenses include establishednames such as Sony, Star, Viacom and Zee. Currently, there are 350 broadcasters whichcater to 780 channels. "We want more competition and we wanted to open it up for thepublic. So far, we have approved the licences of 45 new channels. It's a mix of both newsand non-news channels," as per Mr Bimal Julka, Secretary, Ministry of I&B,Government of India.
India's M&E industry will continue to bank on the digital area in future. With agrowing internet user base of over 200 million, the industry's potential to generaterevenue is vast. In 2013, telecom companies started focusing on data as a way togenerating revenue. Also, advertising agencies competed with each other to acquire in thesocial media and digital domains. These developments suggest a bright future for theM&E industry in the country.
It is also time for the M&E sector to start looking at opportunities outside India.Africa and the Middle East are two of the fastest growing M&E markets, and IndianM&E companies would do well to explore these regions.
HUGE GROWTH POTENTIAL IN CINEMA ADVERTISING
The Digital era has truly democratised cinema. Prior to the digital era, only about500-600 screens across India got movies on the day of release. Now, with almost 100 percent digitisation, all screens across India qualify as release centres. Prior todigitisation, advertisingwas limited to the 600 release centres across the country. Now,all 8,000-odd digital screens across India are available to advertisers who can use cinemato reach out not only to the audiences in metros and major cities, but further beyond.
Cinema advertisingwas always a part of out of home budgets. This is because theinvestment was made in cinema hallsas properties and limited to 600 properties acrossIndia. Now with nearly 8,000 digital screens screening fresh content, providing over Rs7.7 crore of unduplicated reach every week, the cinema space has become a powerful mediumand is being seen as an important option to support television as a medium.
In the last 20 years, the big brands had moved away from cinema as a medium and hadfocused on TVas an audio-visual medium. This was because of the lack of control ofindependent screen owners and limited reach of the release centres.
Now digital cinema chains have aggregated release centres across the country and theexecution of campaigns has become seamless. This has led agencies and brand managers takea fresh look at the medium. The advertiser needs to now only talk to one media owner toexecute a pan-India campaign.
To summarise, cinema advertising is gaining appeal among advertisers because of twomajor reasons: the structured manner in which ad inventory is sold (versus a largelyfragmented market prior to digitisation) and the fact that it guarantees the undividedattention of captive audiences.
In geographic clusters with limited TV reach, brands struggle to get desired deliveriesthrough television. With disproportionate cinema reach in these markets, cinema naturallybecomes a preferred medium to support TV.
Over the last few years, brands have gone beyond using stars and have invested in filmpartnerships and sponsored film premieres on TV. Most brands have learnt that thisinvestment on films is full of risks and it is better for them to invest in cinema. Smartbrands have also understood that India goes to watch movies every week and that of 52weeks available, 20-25 weeks are really big weeks, including weeks with holidays andfestivals that draw maximum crowd. Brands make it a point to catch up with their audiencesduring these big weeks. More than 1,500 movies are released every year and brands don'twant to limit themselves to the use of four/five movies.
Over the last two years, cinema advertising has grown faster than all other mediums(except online/digital). The next five years will see hectic activity in this space andthe next leg of growth will come from off-screen activation.
MOBILITY (VALUE ADDED SERVICES)
Mobile Value Added Service (MVAS) provider of carrier-grade messaging platforms andgateways, content management systems, WAP, Video and Voice platforms through managedservices. Various services are developed and deployed using these platforms which includesinteractive portals, community and user generated content applications and video streamingapplications. Your Company manages VAS, aggregate content for operator's on-deck andoff-deck portals, manage the delivery of content, manage mobile campaigns for media,advertising and enterprise customers. Your Company has created and aggregated 2G, 2.5G and3G applications and products which can be routed over an Internet Protocol or IP networkand enables mobile operators to deliver multimedia services. Your Company's productsintegrate multiple network functions and services needed for the delivery of advancedmultimedia services, such as video streaming, voice-over-IP, chat and conferencingservices, mobile TV.
Mobile operators are aggressively deploying next-generation wireless networks such asthird generation or 3G networks that are capable of delivering high quality mobilemultimedia services to subscribers. In deploying these new networks, mobile operators areseeking packet core network hardware and software that can deliver multimedia serviceswith high performance, simplicity and reliability.
The media and entertainment industry in India consists of many different segments underits folds such as television, print, and films. It also includes smaller segments likeradio, music, OOH, animation, gaming and visual effects (VFX) and Internet advertising.Entertainment industry in India has registered an explosive growth in last two decadesmaking it one of the fastest growing industries in India. From a single state ownedchannel, Doordarshan in the 1990s there are more than 400 active channels in the country.Worldwide, 2010 saw the global economy begin to recover from a steep decline in 2009.Improved economic conditions in 2010 played a major role in a rebound in customer spend.Since the world economy begin to recover from the global financial crisis of 2008,improved economic conditions played a major role in rebound in consumer spend. While Indiawas not critically impacted by the downturn in 2008 and 2009, it demonstrated one of thehighest growth rates this year and continued to at a healthy pace. The rising rate ofinvestments by the private sector and foreign media and entertainment (M&E) majorshave improved India's entertainment infrastructure to a great extent. As per the recentreport by
PricewaterhouseCoopers (PwC), Indians are likely to spend more on entertainment in thecoming years with a steady growth in their disposable income. And as per the combinedsurvey report by KMPG and FICCI, the entertainment industry in India is expected to expandby 12.5% every year and is likely to reach US$ 20.09 billion by the year 2013. Theindustry pegged at INR 5808 billion in 2009 as compared to INR 3565 billion in 2005. TheIndian Media & Entertainment Industry grew by US$ 12.9 billion in 2009 to US$ 14.4billion in 2010, a growth of 11 percent, according to a report by the Federation of IndianChambers of Commerce and Industry (FICCI) and research firm KPMG. The report also statesthat backed by positive industry sentiment and growing media consumption, the industry isestimated to achieve growth of 13 per cent in 2011 to touch US$ 16.2 billion. As theindustry braces for exciting times ahead, the sector is projected to grow at a CAGR of 14percent to reach US$ 28.1 billion by 2015.
Digi Cine is technological version of conventional cinema. Technology improves thetheatrical entertainment experience from the existing boring to new heights of sensationalexperience. The technology developed and used by Interworld is an state of art for highexperience of Indian audience in all Indian climatic and environmental conditions. Theself-explanatory picture will give you a complete idea of Digital Cinema system.
Your company mainly engaged in the Services segment provides a variety of services tothe corporate and class of person. Services consist of the following:
1. Digital Advertisement
2. Out of Home (OOH)
3. IPO Communication
4. Digital & Social Media
5. 360 Mobile Influence
6. Services with Innovation
7. Mobile communication consist of
SMS Solution for Brokers
SMS Solution for Depository Participant!
SMS Solution for Insurance Agents
Stock Price 8b News Alerts Service
Web based Bulk SMS service
Apart from Digital Cinema, Company has focus on Digital Advertising. DigitalAdvertising is a way of promoting brands and products, using various online features. Withthe growing popularity of the Internet, customers began to form communities and discussabout the brands they are interested in. Today most customers either buy their stuffonline or consult a review website or community before making a purchase.
OUT OF HOME (OOH)
After the inception of Interworld digital limited (IDL) OOH (Out-of-Home) division in2009 many new innovation and ideas successfully conceived and benefited the brands intheir budgets. In a span of just one year, IDL Out-of-Home successfully created a shift inthe perception about the OOH industry in India from conventional Outdoor Media to anall-encompassing 360-degree Out-of-Home communication solution. IDL OOH has developed anational network in partnership with more than 25 vendors providing more than 5000billboards to cover any size of campaign. IDL OOH is offering specialized and most costeffective solutions in combination of Digital and Social media to provide maximum mileagesto brand.
Floating a successful IPO is getting tougher day by day. Every potential investor isgoing to rummage online for information about your company and some time they found thatmany service receivers criticizing your service, complaining about your product, orcreating doubt about company and company upcoming IPO. At this moment, we at Digi Mediaprovide a unique online and offline service called 'Reputation Management'. We harness thepower of the mobile and Internet and help you fight back against malicious attacks. Ourprocess consists of 3 steps. First, We analyze the situation, Second, plan the strategyand Third is, execution of it.
We help to capitalize on cutting edge Web 2.0 and Mobile 2.0 Reputation Managementtechniques such as blogging, podcasts, video, RSS feeds, articles and press releases,social media posting, blog posting, industry relevant forum posting and more. We can evencreate micro websites built around specific keywords that are important to your businessand get them on the first page of Google .In short we can say that, We offer customizeReputation Management system according to businessmen point of view and his business needsand help him to achieve his unique online Reputation Management goals.
DIGITAL SOCIAL MEDIA
We at Interworld digital having expertise in marketing, advertising and operation offersocial media strategy to corporate. Under this we work with client company managementteam, we help him to quickly come, and to grips with the impact of social media, creatingwithin organization the necessary change that positions company brand, product, or servicefor success on the Social Web.
With IDL plan and strategy companies can easily build & launch social mediamarketing campaigns within shortest time. Campaign formats include quizzes, contests,coupons, virtual gifts and more.
We enables him to simultaneously publish in social media marketing campaign on Facebook Fan Pages, Twitter and company Website.
360 MOBILE INFLUENCE
Under 360 degree mobile service, we are providing various type of services to ourclient company like give Answer on behalf of him as comments left by users on multipleblogs. Read what they say about brand and accordingly inform to the company.
We also offer tools to customers to share about company products (blogs, forums,surveys) with company .We also try to Connect with customers and also present on socialnetworks and create a profile for brand. Apart of these, we are also replying offline Postby customer and announce coming event on Twitter, Post feeds on Face book, Blog aboutbrand.
We believe, Success can only be achieved through anticipating, understanding andexecuting the trends in this arena, service innovation, service differentiation and valuecreation.
SERVICES WITH INNOVATION
Today online environment is the perfect approach for a number of reasons, we know thatmany of the potential buyers are regularly visiting the major portal sites, online channelfacilitates unprecedented user control. If a viewer wants to re-watch details about aspecific product feature, they can do so easily. Finally, long-form online infomercialsare designed to help prospects decide to buy, often leading them directly to the brandsite.
IDL Digi Media help businesses increase their visibility online by creating, producingand optimising video content for their websites, blogs and social media streams.
Mobile communication has groomed a lot in past few years, major reasons for rapidadvancements in mobile network technology and its popularity among public so that companyalso able to take commercial advantages.
Interworld provides the ability for corporate and brands to communicate with largegroups of people instantaneously anytime and anywhere via their mobile phone. Servicesinclude content delivery to mobile devices, mobile advertising, premium SMS, mobilesweepstakes, TXT2 Screen, Txt N' Win and wireless consulting. Our team is dedicated to thesolutions, we provide to each one of our clients. Our Skill sets are complimentary inmanagement, marketing /advertising and software development with significant internationalmobile marketing experience.
Interworld maintains a professional approach and will do everything to manageexpectations and achieve the expected results. We are dedicated to deliver the rightmobile experience for both company and its valuable customers, and linking them to yourbrand, products and services.
OPPORTUNITY & CHALLENGES Growth in digital content consumption across media
Digital technology continues to revolutionize media distribution - be it the rapidgrowth of DTH and the promise of digital cable, or increased digitization of filmexhibition - and has enabled wider and cost effective reach across diverse and regionalmarkets, and the development of targeted media content.
There has been increased proliferation and consumption of digital media content - be itnewspapers and magazines, digital film prints, and online video and music or entirely newcategories such as social media. Accordingly, online advertising spends have seen a spurtin growth viz a viz spends on traditional media.
Rise of new age user devices
Smart phones, tablets, PCs, gaming devices, etc. all form the foundation of a new wavein media usage. This is gradually impacting the way content is being created anddistributed as well. Multiple media including TV, films, news, radio, music etc are beingimpacted with this change.
New age consumers adapting themselves to the newer technologies
As Indian consumers evolve, there is a heightened need to engage them across platformsand experiences. There is a greater need for integration and innovation across traditionaland new media, with changing media consumption habits and preferences for niche content.Media companies today have no choice but to provide more touch points to engage withaudiences.
Regional television and print continued its strong growth trajectory owing to growth inincomes and consumption in the regional markets. National advertisers are looking at thesemarkets as the next consumption hubs and the local advertisers are learning the benefitsof marketing their products aggressively.
An advertising revenue dependant industry
The ARPU (Average Revenue Per User) for television, average newspaper cost for printand average ticket price for films continue to be low on account of hyper competition inthese industries. Segments like radio and a significant portion of online content areavailable free of cost to consumers. Owing to this, the Indian consumer is still not usedto paying for content and hence the industry players are sensitive to the impact of theslowdown, which affects the budgets of advertisers.
Awaited regulatory shifts
Lastly, apart from the shifts in consumer preferences, company strategies and businessmodels, one big change awaited for the next growth wave is the implementation of recentlyenacted and regulations on digitisation for cable, implementation of Phase 3 and copyrightfor Radio and the roll out of 4G. These shifts are expected to be game changers in termsof how business is being done currently and what could be the path going forward.
The performance of Media - Entertainment sector in correlation with the economicgrowth, Film industry Growth and media Sector of the country. The Digital Industryinvolves inbuilt risk and uncertainty, which carries various opportunities and threats tothe film industry.
Our risk management approach comprises of three key elements, which are as follows:
Risk identification: External and internal risk events, that must be managed andidentified in the context of nature and its impact on business. These risk events areassessed by management and prioritized for development of risk mitigation.
Risk mitigation: This step comprises developing of a mitigation plan for the risksidentified and to be treated on priority.
Risk monitoring and assurance: Key risks are managed through a structure thatcascades across the corporate and business. At the corporate level, management isresponsible for the risk management process and reviewing the implementation andeffectiveness of mitigation plans.
INTERNAL CONTROL SYSTEM
Your Company's internal audit team comprises professionals, supported by regional teamsat our registered office and our corporate offices. In our company, regular audits ofoperational functions are conducted and quality team has been created for reviewing on aregular basis. This is supported by a team of external auditors whose reports are reviewedby the top management at regular intervals. Your Company has invested in adequate internalaudit and control systems. Operationally speaking, all key functions have an in-builtmaker checker concept.
Our internal control systems are adequate and provide, among other things, reasonableassurance of recording transactions of operations in all material respects and ofproviding protection against significant misuse or loss of company assets.
Your Board believes that to build a sound and growing business in a difficult andcomplex industry, Employees are vital to the Company. The talent base of your Company hassteadily increased and your Company has created a favorable work environment whichencourages innovation and meritocracy.
The Company's Human Resource processes ensure building a competent team of motivatedemployees. It is the Company's first priority to enrich its employees by promotinglearning and enhancing their knowledge with special emphasis on internal and externaltraining. The proper synchronization between the goals of the individual and that of theorganization is a critical aspect and is delicately managed by the HR department.
The Company has stressed strongly on performance management linked to compensation. Torecognize and reward good performance, the Company has been successfully practicing theconcept of performance-based variable compensation. The reward and recognition system isduly followed through a performance appraisal system on an annual basis.
The Company is into single reportable segment only.
Statement in this Management Discussion and Analysis describing the Company'sobjectives, projections, estimates, expectations or predictions may be "ForwardLooking Statements" within the meaning of applicable securities, laws andregulations. Actual results could differ materially from those expressed or implied.Important factors that could make the difference to the Company's operations includecyclical demand and pricing in the Company's principal markets, changes in GovernmentRegulations, tax regimes, economic developments within India and other incidental factors.
On Behalf of the Board of Directors
|Man Mohan Gupta||Kamal Kishore Sharma|
|Chairman & Managing Director||Director|
|Place : New Delhi|
|Date : 02.09.2014|
Ajay Sharma , Director
Kamal Kishore Sharma , Director
Peeyush Kumar Aggarwal , Additional Director
Company Head Office / Quarters:
701 Arunachal Building,
19 Barakhamba Rd Connaught Pla,
Phone : New Delhi-011-43574044/45 / New Delhi-
Fax : New Delhi-011-43571047 / New Delhi-
E-mail : firstname.lastname@example.org
Web : http://www.interworld.co.in
Skyline Financial Services Pvt
D-153/A 1st Flr ,Okhla Industrial Are,Phase-I ,New Delhi-110020