MUMBAI: Both the radio and music industries in India are expected to grow at a healthy pace of 16 per cent over the next five years.
The KPMG Ficci Media and Entertainment Report released at the Ficci Frames convention in Mumbai on Tuesday has noted that while the radio industry suffered a setback of 0.3 per cent over the previous year, the music industry recorded a healthy 14 per cent growth during the same year.
The KPMG report last year had portrayed the exact reverse picture a year ago, when radio had done well as compared to the music industry.
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This year, the radio industry is estimated to have grown at a CAGR of nine per cent over 2006-09. It is estimated to have reached a size of Rs 7.8 billion by end of 2009, a decline of 0.3 per cent over the previous year. Radio like other sectors, says the report, was affected by the recession, showing an almost flat trend during the year. However, the situation improved during the course of the year, with the industry returning to modest growth during the last quarter. “The impact was felt both in terms of ad volumes and ad rates. Ad rates stabilized in the second half of 2009 and volumes started picking up after the first quarter, aided partly by the elections in April and May,” the report notes.
The report says that the radio industry it is expected to grow at a CAGR of 16 per cent over 2010-14 and reach a size of Rs 16.4 billion by 2014. Increase in the number of radio stations in Phase III, expected regulatory reforms that are likely to improve profitability and stimulate foreign investments, enhancement of current measurement systems and growth in locally targeted advertising are some of the growth drivers for the sector.
The size of the Indian music industry was estimated at around Rs 8.3 billion in 2009, up from Rs 7.3 billion in 2008, implying a growth of 14 per cent during the period. One of the primary reasons for this growth was the increased acceptability of different digital distribution models, acceptability of music genres other than the Indian film industry, and broadcast and public performance licensing revenues, all of which compensated for declining physical sales and are expected to drive growth going forward. Overall the music industry is expected to grow at a CAGR of 16 per cent over 2010-14 to reach Rs 17.2 billion, the report says.
