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Radio & Music sector to reach $844 mn by 2014: E&Y

RnMTeam by RnMTeam
December 8, 2011
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Radio & Music sector to reach $844 mn by 2014: E&Y
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MUMBAI: The radio and music industry combined are projected to grow at a CAGR of 17.3% to reach US$844 million by 2014 from  US$445 million in 2010, according to Ernst & Young’s (E&Y) report – â€?Spotlight on India’s Entertainment Economy’.

The report reveals that both the industries contributes 2.4% of the total Indian M&E industry revenues. FM radio reaches 30% of Indians, while Indian youth are the second-largest audience for paid digital music globally.

Advertising volumes for radio in the top four Indian metros increased 39% year-over-year in 2010, driven by on-ground activation campaigns for advertisers. The increased reach of radio audience measurement will increase advertisers’ willingness to use the medium.

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The third phase of radio license auctions, expected soon, will see radio networks expanding their reach to add around 700 radio stations across the country.

As per the report, film music including Bollywood and regional music, accounts for 67% of music sales in India. Because of the dominance of film music, the Indian music industry is less focused on developing stand-alone artistes than in other countries. Music companies have diversified into film production, edu-tainment content for children and non-film music. They are also entering into  artiste management to increase non-film music revenues and are exploring the concert promotion business to meet a growing demand for live entertainment.

The study also reveals that Indian radio companies derive 30% of their listenership from mobile phone users, and digital mobile music sales dominate Indian music industry revenues contributing to about 50% of total sales. Digital dominates music industry revenues as it  contributes more than half of Indian music industry sales with ringtones and caller ring backtones (CRBT) on mobile phones, garnering about 75% of these revenues.

Radio networks are also using digital to extend reach of mobile devices to target listeners in metros and Tier 2 and Tier 3 towns with live radio feeds from stations across their national networks.

Music companies, however, do not maintain a direct relationship with customers, as telecom operators control the point of sale and dictate pricing and revenue sharing. Revenue sharing norms for mobile VAS in India are typically 30:70 in favor of telecom operators — a strong contrast to global norms, where content providers typically have a majority share.

However, in the current mobile entertainment ecosystem, telecom operators own the relationship with the end customer, leaving radio and music companies with little control over pricing of digital products and services. Increased bandwidth availability and smartphone adoption will allow radio and music companies to establish a direct-to-consumer model for mobile content delivery based on music streaming services over data networks.

Overall the Indian Media and Entertainment (M&E) industry is expected to be in excess of $25 billion in the next four years. As per the report, the industry has registered revenues of $16.3 billion in 2010.

 

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