IndIAn economy
Over the past two years, scientists and physicians have amazed the world with their
unflinching efforts and support for humanity in the war against Covid-19. In this fight
against an unseen enemy, humans, backed by the entire medical fraternity, put up a brave
fight.with the relaxation of mobility, travel and social distancing restrictions and the
declining number of new infections, the Indian economy moved into a gradual recovery mode
showing steady and positive signs of revival in 2021-22.
Indias gross domestic product (GDP) reflected at 8.7% in 2021-22. several initiatives
like the adoption of an accommodative stance by the RBI, relief packages by the Government
and the introduction of the PLI (Production Linked Incentive) scheme aided the growth of
the Indian economy, bringing it on its path of revival post lockdown. During the first
quarter of 2021-22, the Indian economy registered a growth of 20.1%, led by a lower base
effect. However,inthefirsthalf of 2021, the second wave of the pandemic proved to be much
more devastating than the first one. But despite the country being in the grips of a more
severe second wave of the pandemic, factors like a faster and wider vaccination drive,
limited lockdowns and robust demand from consumers helped maintain growth. As a result,
the economy registered 8.4% in the second quarter.
During the second half of 2021-22, the Indian economy faced major issues like coal
supply scarcity, energy crisis, and growing inflation. Thereby denting the manufacturing
industry. Alongside, trade, hotels, transport, communication and services related to
broadcasting also remained a bit sluggish.
As we moved ahead, the Russian invasion of ukraine pushed crude oil prices to a 14-year
high. The cascading effect of this conflict is being witnessed in the overall growing
inflation. However, with Russia-ukraine being one of the worlds largest producers of
wheat, agricultural products and sunflower oil, this event boosted the demand for the
Indian agricultural sector as Russia-ukraine stalled their manufacturing activity. Thus,
leading to the circulation of money in the rural economy and increasing disposable income
at the household level. outlook
The Indian economy looks positive and seems promising in terms of its growth prospects.
The overall macroeconomic stability and growing consumer demand indicators suggest that
the economy is well-positioned to take on future challenges. The RBI has projected the
Indian economy to grow by 7.2% in 2022-23. This anticipation can be attributed to the
unique strategies like robust consumption following a burgeoning population, higher income
and employment in both rural and urban segments adopted by the Indian Government. Here
again, rising fuel prices and higher inflation, definitely pose the risk of challenges.
But despite all the difficulties, India continues to be an attractive space for investors
as an alternate manufacturing destination for specific industries: Information Technology,
Broadcasting, Manufacturing Industry and the Agricultural sector. And this is what
provides hope to the Indian growth story.
(Source: RBI https://timesofindia.indiatimes.com/
business/india-business/imf-slashes-indias-gdp-forecast-to-8-2-for-fy23/articleshow/90939753.cms)
Industry overvIew
global media & entertainment (m&e) Industry overview
The M&E industry comprises businesses that produce, distribute and offer ancillary
digital services and products for - Motion Pictures, Video & Audio Recordings,
Television Programmes and Commercials. It also includes streaming Content, Music, esports,
Broadcast, Radio, and Text and Book Publishing Video Games sectors. The industry is backed
by a shift in consumer preferences and change in demand supported by dynamic technology,
innovation, and intense competition. The past few years have seen the industry showcase a
decent performance. It recorded growth of 4.1% between 2016 & 2021 and stood at us$
2.2 Trillion in 2021. This growth trend is estimated to continue, with the industry
touching us$ 2.6 Trillion in 2025, at a growth rate of 4.3%.
when the world was first hit by the Covid-19 pandemic, mediums like TV, movies, web
series, and streaming videos became the major sources of entertainment, information and
window to the outside world. This led to a massive increase in viewership, which, in turn,
played an essential role in increasing the number of players in the M&E industry. The
M&E sector has witnessed a sharp recovery since the easing of Covid-19 restrictions in
2021-22 with the reopening of movie theatres and the resumption of travelling. Thereby
helping add a positive start to the year. further, changing consumer behaviour and
advanced technologies, including broad band providers, network owners, and connected TV
manufacturers, play crucial role in accelerating demand. The broadband will be taking
steps to simplify and integrate tools across the platforms to improve user experience.
further, the global M&E sector ad spending is expected to showcase growth in total
spending of us$ 824 Billion in the period 2021-2024 with a CAGR of 6.5%.
subscription trend
| segment |
2019 |
2020 |
2021 |
| Television |
468 |
434 |
407 |
| Digital |
29 |
44 |
56 |
| Print |
90 |
68 |
76 |
| film |
183 |
71 |
92 |
| Total |
770 |
617 |
632 |
Rs in Billion (gross of taxes) I EY estimates
The industry is offering a better consumer experience by implementing a bundling
approach where TV and OTT are tying up together. This has led to a marginal increment in
subscription trends, with revenues growing from Rs617 Billion in 2020 to Rs632 Billion in
2021. Digitalisation has further opened doors for a variety of integrated offerings to
various subscribers gaming, shopping, and several other digital services. The M&E
industry has further diversified business and partnerships with third parties, which also
include the next-gen digital assets (nfTs, non-fungible tokens). This aims to create a
gearwheel to subscribers portfolios, drive new customers to sign up, and build the D2C
model to connect directly with the subscribers.
(Source-FICCI Report)
Indias M&E industry recorded a growth rate of 16.4% in 2021-22, backed by
technological progress, evolving generational behaviour, and ongoing impacts of the global
pandemic. Digital engagement in the industry has demonstrated great growth supported by
globalisation, liberalisation, and privatisation, changes in theresultingindustry significant
. Digital media has transformed the M&E industry in recent years to a huge extent. A
majority of these changes have taken place in studios disseminating marketing content,
artists engaging with fans, and consumers interacting with their content.
The industry is witnessing rising consumer spending, a huge scope for media penetration
in both urban and rural areas, and changing aspirations and lifestyles. It is marking new
geographical regions supported by IPs and branded content, driving further growth. The
industry is focusing on targeting new audiences through content, identifying and building
new audiences, and adding a subscriber base to enhance the business model.
outlook
Indian m&e sector grew 16.4% in 2021 to reach Rs1,610 Billion
| segment |
2019 |
2020 |
2021 |
2022e |
2024e |
cAgr 2021-2024 |
| Television |
787 |
685 |
720 |
759 |
826 |
5% |
| Digital media |
221 |
235 |
303 |
385 |
537 |
21% |
| Print |
296 |
190 |
227 |
241 |
251 |
3% |
| Other Gaming |
65 |
79 |
101 |
120 |
153 |
15% |
| filmed Entertainment |
191 |
72 |
93 |
150 |
212 |
32% |
| Animation and VfX |
95 |
53 |
83 |
120 |
180 |
29% |
| Live Events |
83 |
27 |
32 |
49 |
74 |
32% |
| Out of Home Media |
39 |
16 |
20 |
26 |
38 |
25% |
| Music |
15 |
15 |
19 |
21 |
28 |
15% |
| Radio |
31 |
14 |
16 |
18 |
21 |
9% |
| Total |
1,822 |
1,386 |
1,614 |
1,889 |
2,320 |
13% |
All figures are gross of taxes( Rs in Billion) for calendar years I EY estimates
Indias M&E sector is flourishing at a good pace and is anticipated to grow 17% in
2022, to reach Rs1.89 Trillion and the smart connect TV is expected to exceed 40 Million
by 2025. This will be led by lower penetration of TVs as 30% of households in the country
still do not have TV sets and only ~80 Million users are present on OTT platforms. The TV
and OTT have turned a point of connection for interactions and film releases. The TV
segment remains constant in terms of y-o-y growth and the digital media is positioned
second as the growing segment.
(Source-FICCI report) government InItIAtIve
Media and Entertainment is recognised as among the crucial sectors to support the
‘Make in India initiative. Various measures undertaken have been aimed at improving
the overall sectoral growth and performance, bringing in more business opportunities.
Through these initiatives, the Government also focuses on providing rural residents with
similar access to e-services, communication facilities, and digital resources as is
accessible to their urban counterparts.
The federation of Indian Chambers of Commerce and Industry (fICCI) aids the Media and
Entertainment skills Council (MEsC) with financial support through national skill
Development Corporations (nsDC) initiatives to foster a skilled workforce. MEsC serves as
a single source of information in the Media and Entertainment sector, with specific
reference to Indias skill and human resource development.
The Government announced in 2021 that it is working towards creating a national Centre
of Excellence for Animation, Visual Effects, Gaming, and Comics (AVGC). In Budget 2022, it
announced setting up AVGC Task force to promote the sector, facilitate youth employment,
build domestic capacity to serve the Indian markets, and meet global demands.
The Government is setting up the Association of Bangalore Animation Industry (ABAI)
Center of Excellence (CEO) in Karnataka, focusing on lifting the segment and providing
multiple facilities like workshops, incubator centre, green screen room, photogrammetry,
national Center of Additive Manufacturing (nCAM),, and many other latest technologies to
bring the creative community under one roof.
The Motion Capture and national Center of Additive Manufacturing (nCAM) enables virtual
manufacturing with real-time camera tracking by using disruptive additive manufacturing
technologies. This is helping establish and foster a sustainable environment for product
creation in India. Many studios with limited access to high-end equipment make use of this
feature, enabling even small-scale companies to use high-end technology without having to
invest in expensive setups.
The year 2021 recorded a total of 906 channels wherein 558 were free, and 348 were
paid. The number of free channels saw a drop of 26 as compared to 2020. The growth of the
TV industry can be attributed to a number of reasons increasing creativity of TV
programming, rising demand, a boost in budgets filmsand subsequent for feature quality
improvement, its receptiveness to new talent, geographic targeting, acceptability for
Indian English-writing authors, and expansion of broadband. This goes on to show how the
broadcasters are helping build stronger subscription revenue products through bouquets.
post pandemic and during the year 2021-22, Television Advertising (TV Advertising) grew
24.6%, increasing from Rs250.9 Billion to Rs312.8 Billion, while the Indian TV segment
grew 5% in 2021. The industry is supported by user-friendly access, allowing users to
stream videos and music, browse, and view. Today, the TV industry is adding to the power
and potential of virtual reality and future programming.
TV Viewership by Age Groups watching TV has been a kind of comfort for decades. And
even today, the M&E industry gauges the trend of the highest viewership. The age group
for television demand is bifurcated into 5 age groups [2-14 years, 15-30 years, 31-50
years, 51-60 years, 61+ years]. In 2020-21, the 31-50 age group clocked the highest
viewership while the 15-30 age group scored the second-highest viewership. The 2-14 age
group closely followed this, indicating a decline in kids viewership due to a lack of
fresh content and repeated telecasts.
(Source-FICCI Report)
Outlook
The TV revenue is expected to grow to Rs826 Billion by 2024, and it is forecasted that
TV advertising revenue will reach Rs344 Billion in 2022 and Rs394 Billion by 2024. The
growth will be driven by new advertiser segments, brands exploring TV advertising to build
awareness, and the growth of new channels with original content. The subscription income
is expected to reach Rs415 Billion in 2022 and grow to Rs432 Billion by 2024. However, the
TV connectivity will further grow by 2025 and could crack over 40 Million linked sets. The
growth in this sector can be attributed to rural Indias TV ownership surpassing that of
urban India, with families in the latter market rising. Overall, TV connections will keep
growing at a healthy pace of over 5% per year to cross 67% of Indian households by 2025.
The wired broadband that the consumers have been using for decades is now seeing a
shift to hybrid set-top boxes. The significance of TV connection is that users can watch
content in real-time mode. Currently, the OTT platform is gaining popularity due to the
flexibility to watch online content anywhere, anytime with a cost-effective subscription.
now the hybrid set-top boxes also allow users to access OTT content with the broadband
network. There is no doubt that further bundles of at least one TV and one broadband plus
OTT is a trend that will continue.
(Source-FICCI Report)
IndIAn fIlm Industry
Rs in Billion (gross of taxes) : EY Analysis
| Segment |
2019 |
2020 |
2021 |
2022 |
cy24e |
| Domestic Theatricals |
115 |
25 |
39 |
75 |
105 |
| Overseas Theatricals |
27 |
3 |
6 |
12 |
16 |
| Broadcast Rights |
22 |
7 |
7 |
14 |
19 |
| Digital/OTT |
19 |
35 |
40 |
48 |
69 |
| In-cinema Advertising |
8 |
2 |
1 |
2 |
3 |
| Total |
191 |
72 |
93 |
150 |
212 |
The easing of Covid-19 restrictions and norms in 2021 led to a stark increase in the
Indian film segments revenue by Rs93 Billion. with this, the industry released a total of
878 films in theatres for the year 2021 - 30% were in Hindi and the remaining were in
other regional languages. The box office revenue was dominated by south Indian films, ers
to work faster and a revenue jump of 57% in 2021 to Rs39 Billion. In 2021, the OTT
originals recorded a reach of 2,512 hours and in 2022-23, it is expected to reach 3,140
hours. The Indian film industry is backed by more than a single revenue source, including
an increase in digital focus and a rise in the number of regional language movies.
Thereby, adding value to the industry as it remains poised for further growth.
Virtual Production (VP)
Virtual Production is where the physical and digital worlds meet. It removes the
obligation to travel or/and take control of the set, as it enables more flexibly in
compliance with Covid-19 restrictions. VP seamlessly combines physical and virtual
elements using a suite of software tools and is gaining attention in the present era by
becoming thenewtoolforfilmmaking.VP is divided into three segments: full-computer
generated virtual production; On-set virtual production; and In-Camera VfX.
Advantages
Meets the necessary requirements similar to traditional production tools comprising
physical set, props, cameras, light, virtual, and motion
Budget-friendly in nature
Removes creative boundaries, allows to make fully customised sets, and even creates
environments from ones imagination
Outlook
The film segment revenue is expected to reach Rs150 Billion in 2022-23 and Rs212
Billion by 2024. The industrial growth is mainly supported by increased per capita income,
growing middle-class section, demand from Tier 1 and Tier 2 cities, and penetration into
international markets for revenue streams. Movies like shershaah and Jai Bhim achieved
viewership across 210 nations and 4,100 cities, demonstrating the growing popularity of
digital movies. In 2021, 40 Million Indian households paid for 80 Million OTT video
subscriptions, according
Subscription based video-on-demand (SVOD) to the above graph. It is estimated that
a subscription was used between 3 people and so, an estimate of 40 Million OTT households
could have a potential reach of up to 120-140 Million people, or even more. Hence, the
number of OTT consumers is probably much higher than the number of subscriptions; this is
just like how the internet is consumed by several people in a family or around a tea stall
in smaller towns.
COMPANY OVERVIEW
The Indian Television and Movie industry is a hub for several production houses working
in the entertainment business. Balaji Telefilms Limited (‘Balaji or ‘we or
‘The Company) was one of the first and foremost companies to enter the Hindi and
regional general entertainment channel industry. The Company was founded under the able
guidance of Mr. Jeetendra Kapoor and established under the hands-on leadership of Mrs.
shobha Kapoor and Ms. Ekta Kapoor. Over the years, Balaji has set an impeccable industry
benchmark for producing differentiated and popular content across various entertainment
segments. from reality shows, family drama, and daily soaps to comedy and entertainment to
now OTT, Balaji is synonymous with popular entertainment. Balaji has always focused on
curating content for various age groups, formats, media and platforms. The Company aims to
increase viewership by creating fresh content and focusing on the programming mix based on
consumer demand.
The Company has also introduced ALTBalaji, a subscription based video-on-demand
platform, to enter the OTT space and directly connect with the audience. It offers
high-quality and premium shows involving renowned authors, celebrities, and award-winning
directors. Balaji intends to build a better digital space and elevate ALTBalaji to the
forefront of OTT entertainment.
Segment-wise Key Performance Highlights For The Year 2021-22
The relaxation of Covid-19 restrictions allowed the business to operate at its optimum
capacity. As a result, ALTBalaji continued increasing its popularity in the OTT space
taking its overall library to 90+ shows which also included its super-hit and massively
popular show ‘Lock upp which became the highest watched reality show in the OTT
space within a very short span, crossing 500 Million views, thereby signalling the reach
of the business. The TV business continued at its normal pace reflecting our strong and
innovative content as ever across channels which continued to garner good and stable TRPs
and viewership. As regards the movie segment, the Company has multiple exciting projects
with some of the top leading actors and directors of the country that will surely attract
audiences to the cinema theatres, as well as an exciting pipeline across genres to attract
eyeballs on OTT platforms in 2022-23. However, considering that the reopening of cinema
theatres transpired only towards the end of this financial year, the Company was unable to
have a theatrical release in 2021-22, but continued to make a mark in the TV and digital
space in order to provide wholesome entertainment to audiences across all age groups.
OPPORTUNITIES AND THREATS
Opportunities
According to a report published in Livemint, the Indian OTT video streaming market may
record a CAGR of more than 20% to touch us$ 13 Billion-us$ 15 Billion over the next
decade. Balaji Telefilms being an OTT player provides immense opportunity for the Company
to cater the growing demand with its fresh content offered to our viewers
Revenue from TV advertisement is showcasing a stable growth which widens the Companys
revenue generation sources and provides ample opportunity for the Company
Balaji Telefilms diversified presence in Media and Entertainment industry provides
opportunity to generate revenue from various sources
Demand for regional content has shown a robust growth in the past few years and Balaji
Telefims being a producer of content across numerous languages will help generate higher
revenue threats
The increasing adoption of pirated content negative influence canhaveasignificant on
the business, and is a major threat
Demand for our entertainment services may be affected by changes in technology and
consumer consumption trends
The entertainment industry is very competitive and constantly changing. Consumers now
have more alternatives for accessing various forms of entertainment through new and
existing distribution methods
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