Where Newspapers are a good investment
MUMBAI -
Powered by foreign investors who believe Indians need more TV channels, movies and newspapers, India’s media and entertainment industry revenues grew 20% last year, and they’re on track to more than double to $22.5 billion by 2011, according to a new study. Read original article
Rising incomes and consumer spending fueled by the country’s robust economic growth will combine with expanded information delivery options over mobile phones and the Internet to drive a boom that will benefit all segments of the industry, from home video to radio to newspapers, according to a forecast by PricewaterhouseCoopers.
The study, which projects that media industry growth will outperform the general economy each year till 2011, was commissioned by the Federation of Indian Chambers of Commerce and Industry.
In contrast to Western markets, print media is the favorite segment for global investors, according to PricewaterhouseCoopers.
Last year, Vogue announced it would start an Indian edition in 2007, and The Wall Street Journal entered into a partnership with The Hindustan Times to launch a business newspaper, Mint, which debuted in February.
In 2006, the government cleared 13 proposals for foreign direct investment in the print media, and another 22 are being examined.
The Indian print media industry netted $90.80 million in foreign investment in the last three years.
Foreign investors can own only up to 26% in a media company, and foreigners cannot take management control in an Indian media business.
Growing demand coupled with technological advancements like television viewing over the Internet and mobile phones, initiatives by the government to encourage investment and investments by private media firms will be the key drivers for the industry, according to the study.
Due to its low starting point, the Internet advertising industry is expected to post annual growth of 43%, with revenues rising to $216.50 million in 2010.
An estimated 32 million Indians were exposed to the Internet as of 2006, with 21 million regular users. About 59 million are PC literate and potential targets for Internet advertising. The number of regular Internet users is expected to increase to 35 million by 2008.
Through 2011, television industry revenues are expected to grow by 22% a year, from $4.34 billion to $11.78 billion, and print media revenues by 13% a year, from $2.90 billion to $5.27 billion.
The report says 2006 marked a start of convergence for the industry, with big names like Reliance Adlabs, Bennett, Coleman & Co. and the Zee Group diversifying into several arms of the media to maximize growth. Indian firms are now establishing media conglomerates along the lines of Walt Disney (nyse: DIS - news - people ) and Time Warner (nyse: TWX - news - people ).
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