The global commercial system is a very recent development. Until the 1980s, media systems were generally national in scope. While there have been imports of books, films, music and TV shows for decades, the basic broadcasting systems and newspaper industries were domestically owned and regulated.
Beginning in the 1980s, pressure from the IMF, World Bank and other notable international agencies to deregulate and privatise media and communication systems coincided with new satellite and digital technologies, resulting in the rise of transnational media giants.
How quickly has the global media system emerged? The two largest media firms in the world, Time Warner and Disney, generated around 15 percent of their income outside of the United States in 1990. By 1997, that figure was in the 30 percent-35 percent range. Now, almost the half of their revenues is being generated from countries outside America. Both firms expect to do a majority of their business abroad at some point in the next decade.
As global conglomerates are spreading their wings outside America and Europe, India is an automatic choice for them. If following figures are anything to go by then India is one of the most lucrative market for media conglomerates in the world today.
According to the KPMG-CII survey, the Indian entertainment industry currently estimated at $4.9 billion in 2004, is projected to grow at a spanking 18 per cent compounded on a yearly basis to touch $13 billion by 2010.
Television revenues overtook the more entrenched Indian film industry three years ago, and now constitutes 62 per cent of the entertainment industry’s turnover as compared to the film industry’s share of 27 per cent - the balance being radio, music etc.
The television revenues growing from $3.1 billion in 2004 to a hefty $8.2 billion by 2010, with film revenues growing from $1.3 billion to $3.2 billion in the same period.
Currently, television earns around 53 per cent or around $1.6 billion from subscriptions while advertising revenue is around $1.2 billion. Subscriptions are expected to grow faster than advertising revenue and amount to $5.6 billion while advertising revenue is expected to grow at a more modest rate of 8 per cent to $1.73 billion in 6 years.
However, ad spends in television could be double these estimates to $3.3 billion, depending on the speed and effectiveness of the broadcasting sector reforms, the digitalisation process undertaken by the major players and the entry of telecom companies in distribution.
A more recent J P Morgan report titled ’Indian Media Industry’ predicts that no less than 100 new television channels are likely to be launched over the next three years on the basis of a constantly growing ad-spend pie, suggesting that India is too large a market for anyone to ignore.
India is the place to be these days and the global media giants have realised India’s huge potential that is waiting to be unleashed. That is the only reason why all the major media tycoons are lining up to make a foray in the Indian market.
Walt Disney’s entry in the Indian market last December signifies India’s arrival on the world stage.
India already has a bouquet of various global media conglomerates including AOL- Time Warner’s Cartoon Network and Pogo, Viacom’s two major weapons Nickelodeon and MTV, and more recently Disney’s two new toon channels, all are flavoured with desi spice and are available in regional languages.
And the success of Star bouquet goes without saying. Rupert Murdoch is no stranger to India, and his Hong Kong-based television broadcasting company STAR has grown to become the most successful channel bouquet in the country in less than a decade with an annual turnover close to $500 million.
The surest indication of the importance of any market is the competition, and the invasion of Indian broadcasting space by various international entertainment majors, better known as media conglomerates pronounces how Indian entertainment industry has grown leaps and bounds from good old Doordarshan days.