SHARETIPSINFO >>Research Reports >>Media and Entertainment Research Report (DATED-21-10-2008)

INTRODUCTION:

Medium of sending information is media. When medium is technology that carries messages to large number of people it is called mass media. Mass media includes radio, television, books, magazine, newspaper, movies and computer network.
Across the globe shape of mass media is changing rapidly. Ways of communication, sharing and sending messages are seeing rapid changes due to the advent of new technology. A convergence is being seen in media, telecom and internet. Player operating in the entire three segments is in better position to cash the opportunity from the rapidly growing mass media market. Strong growth in the mobile music industry is the best example of the convergence trend Indian telecom, media and internet.

SCALE OF MASS MEDIA MARKET:
There are 38-mn internet subscribers in India, which is 32nd, largest in the world.
There are 110-mn FM radio listeners in India.
India has 200-mn readers of newspaper and magazines.
There are 296-mn mobile customers in India.
India has 440-mn television viewers.

SHARE OF ADVERTISEMENT IN DIFFERENT MEDIUM:

FACTS:
Indian TV channel broadcast 15.7-mn advertisement every year, which totals to 362-mn seconds of TV advertisement every year.
India currently has over 400 channels.
TV viewership has declined by 5% since 2001.
TV broadcasters are expected to go hike in advertisement rate this year by 16-18%.
               

NEWS AND REGIONAL CHANNELS:
We are expecting news and regional channel will be the key beneficiary of the advertisement rate hike.

    Advertisement share

SWOT ANALYSIS OF HINDI GEC SPACE:

STRENGHT
Growing number of player.
Supply creates its own demand.
Media conglomerate with deep pocket.
Demand more than the supply for quality product.
WEAKNESS
Viewer migration.
Uncertainty in viewership.
Inventory management.
No network selling.

OPPORTUNITY
Distribution revenue-DTH

THREAT
Increase cost of program distribution.
Economic downturn.
Consumer migration to non TV media.

RADIO SEGMENT:
Indian Radio segment of mass media is going to experience robust growth in coming years. Indian radio industry has grown rapidly from 45 radio station in 2006 to 185 radio station now.TRAI has submitted its recommendation for phase 3  license to the government.

The key recommendations are:
News and current affair on FM radio.
Increase in FDI/FIIlimit to 26% from 20% for news radio channel and 49% to non news radio channel.
Allowing additional channel in same city to existing players.
Change in ownership permitted after three years of operation.
Network of FM radio program across the radio network.
Auto renewal of radio licenses.


We feel radio segment in India is at nascent stage, an exponential growth in the market share as well as revenue could be seen. The market is very huge; with changing demography this area of mass media has immense potential.

Key area to watch:
Govt regulation.
Licensing process.
Innovation.
Talented radio jockey.

FILM SEGMENT:
Indian film industry produces more than 1000 film per year.
More than 3 billion tickets sold in 2005.
Film industry is expected to grow at CAGR of 18% till 2010.
Digitization of theatres and growth of multiplex is fueling the growth.

 Key factors to be watched:

Better quality content from movie factory.
Rising cost
Economic slowdown may impact the growth.
Revenue from other related activity.
Piracy

INDIAN PRINT MEDIA:
More than 220-mn readers of newspaper.
English paper and magazine constitutes 10% of total base.
A newspaper account for 90% and 10% is magazine share.
Leading newspaper in India
                                                                                            Figure is not latest are old.

Key factors to be watched:
Rising news print cost
Advertisement revenue
Circulation revenue

Diversification:
Print media companies are diversifying into allied business in order to de-risk the business.Jagran has ventured into event management business HT media has launched job portal and has entered into high end magazine and catalogue printing.

CONCLUSION:
Due to the economic slowdown, a deceleration in the advertisement revenue cannot be ruled out. Given the fact that we are into the festive season, companies have major portion of their advertisement budget allocated for this period. Print and electronic media is expected to do good business.
Due to depreciation in the rupee the rising newsprint cost for print media would come down. This will increase their profit margin.
Due to the recent meltdown in the market, most of the media company is trading below their book value. It would be our endeavor to highlight the undervalued media companies in our company report.
Happy investing.

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