ENTERTAINMENT AND MEDIA INDUSTRY
INTRODUCTION
Entertainment Industry in India comprises of Film Industry and Television Industry. The Indian entertainment industry is among the fastest growing sectors in the country. In the past two decades entertainment industry in India has witnessed explosive growth. In television alone, from a single state owned television network, Doordarshan in 1991, today there are over 300 national, regional and local channels being beamed across the country. Indian film industry is the largest film industry in the world, producing on an average, close to a thousand films a year in all languages. In terms of film production India exceeds Hollywood's production volume by over three times. Some of the fastest growing segments in the Indian entertainment industry include music, cable and satellite television animation and FM.
According to an estimate by FICCI and Ernst and Young Indian entertainment industry would worth more than Rs. 400,000 million in 2008. Several positive developments like the accordance of the 'industry' status to the film industry, satellite channel penetration, the retail boom in the channels for music sales (Music World & Planet M), the use of digital technology in all spheres of entertainment and the growth of multiplexes have contributed to the growth of this sector.
Entertainment industry in India is presently in a consolidation phase as boundary lines between films, music and television are fast disappearing. Skills and resources are being pooled extensively. Besides adaptation to high-end digital technology, the entertainment industry is also witnessing rapid development of state-of-the-art studios and post production facilities.
In terms of employment, an estimated 6 million people earn their livelihood from the entertainment industry and this number is all set to grow. Entertainment industry in India is projected to be one of the major economic driving forces of the country. In India, television is the major segment of entertainment industry. Presently, India has the third largest television market in the world behind only china and the USA. Today, television reaches about hundred million Indian households. India has the world's biggest movie industry in terms of the number of movies produced. Presently, the technology of film-making in India is perhaps the best among all developing countries. Indian film industry is now increasingly getting professional and a lot of production houses such as Yash Raj Productions, Dharma Productions, Mukta Arts etc. are now working on corporate lines.
The popularity of Indian entertainment industry goes well beyond the geographical frontiers of the country. Indian television channels and films are viewed and enjoyed across the entire South Asia. Across the Middle East, parts of South East Asia and Africa, large expatriate populations ensure that Indian TV channels and films are a regular part of their entertainment bouquet. In UK and North America (USA and Canada), Indian TV channels and films are increasingly finding a foothold beyond the expatriate pockets as the audience there has started to enjoy and identify with the contemporary Indian culture. Quite a few of Indian filmstars are also getting good offers from Hollywood.
The future prospects of Indian entertainment industry look to be extremely good. As India's profile rises on the global stage outside interest in India's culture and entertainment industry is also bound to grow.
Entertainment and Media Industry today
As the Entertainment and Media Industry continues to evolve due to shifting consumer preferences, evolving technology and convergence of traditional and new media, finding a concrete definition of the industry is similar to hitting a moving target. The definitions will continue to blur in the coming years. The potential impact of Convergence on the television and advertising industries has long been predicted. The theory is beginning to become a reality in India. In a converged media world consumers increasingly call the shots. No longer is there a captive, mass-media audience. Today’s media consumer is unique, demanding and engaged. The technology enablers have made this new breed of consumer possible. Though this phenomenon brings about several opportunities, it also poses challenges that Convergence is bringing to the content, distribution, and advertising industries.
Emergence of Lifestyle Media
Consumers need a new approach that helps them maximise their limited time and attention to create a rich, personalised, and social media environment- Lifestyle Media: a personalised media experience within a social context. It bridges the world of unlimited content to the world of limited consumer time and attention. It explicitly recognises that consumers increasingly access a two-way communications infrastructure, even if most content is still received in broadcast form today. Realising this vision of Lifestyle Media requires two fundamental components: new content distribution models that put consumers in control, and more accurate and scalable data about what they are watching, doing, and creating. The combination of these two crucial elements will create a media marketplace; a platform that connects media providers and media seekers through an organisational and technical infrastructure. It will enable Lifestyle Media to flourish by allowing content owners, advertisers, and consumers to discover, select, configure, distribute, and exchange both professionally produced and user-generated video content.
New Delivery Platforms and technological breakthroughs :
Increasing penetration of new delivery platforms is one of the key drivers of the media and entertainment industry today, that has the potential to change the way people receive content. These platforms, resulting from fundamental technological breakthroughs, are likely to see most of the action in next few years. For example, the spread of inexpensive and stable storage media will also enable people to store content and view it at their convenience.
Some Other examples are:
Introduction of DTH and IP-TV
Digital distribution of films
Immersive content media like IMAX theatres
Coming of age of Satellite Radio and FM Radio
Emergence of new technologies like podcasting, etc
Increasing content variety:
New forms of content will emerge to cater to select viewers, as the industry evolves. Content like community radio and local television, that were unviable earlier, will also emerge stronger through new delivery formats. Moreover, content innovation will be necessary to sustain the interest of the increasingly jaded urban population. A few instances of rising content diversity are:
Newer programming categories like reality television,
Crossover content in music and films,
Niche programming on radio like sports and comedy,
Newer genres like lifestyle television, religion channels, etc.
Regulatory initiatives:
The regulatory framework for media is still evolving. Looking at the policies announced by TRAI, it seems that a liberal framework is likely to be developed in order to allow the industry to flourish. Alongside regulating broadcasting and distribution, it will be important to create stronger protection mechanisms for copyrights and royalties. If intellectual property is protected to a fair extent, the industry could capture far greater value, giving its growth rate asignificant boost.
A few examples of such regulatory actions are:
An implementable regulatory framework for introducing addressability of cable television
Policy framework for DTH, satellite radio and community radio
Migration to a revenue sharing regime in FM radio
Superior copyright protection for films, music and home video, etc
THE PAST AND THE FUTURE
The entertainment industry is thriving on the current economic upswing and is currently estimated at INR 222 billion. Due to its sheer size, television has been the main driver for the industry's growth, contributing 62 percent of the overall industry's growth. Films contributed another 27 percent, while other segments like music, radio, live entertainment and interactive gaming constitute the balance11 percent.
The industry growth drivers
Over the past decade, India has been the second fastest growing economy in the world. In 2004, it grew by 8.2 percent, breaching the psychological 8 percent barrier for the first time. In terms of purchasing power parity, it is already the fourth largest economy in the world. Most major global companies are of the opinion that it will become a key market in the years to come. As the Indian economy continues growing, the Indian middle class will also expand significantly. Compared to other nations, the 300 million strong Indian middle class allocates a higher percentage of its monthly expenditure on entertainment. The increasing consumerism of middle-class India is seen from the sharp growth in the sales for various products like automobiles, colour television sets and mobile phones and the burgeoning increase in credit cards and personal loans. There is an increase in the direct consumer spends on entertainment and advertising revenues have also been on the rise.
A PANORAMIC VIEW
The coming of age of the television sector has been the primary driver of the growth that the entertainment industry has seen over the last decade. The private sector enterprise seen across the television value chain in the nineties drove the sector to newer heights. It is now the most important component of the entertainment industry, contributing over 60 percent of its revenues. It is expected to continue powering the industry in the digital era, through various innovations like DTH, interactive television, etc. Though in revenue terms, films contribute just 27 percent of the entertainment industry, its visibility and impact is much more than this figure suggests. It is also a major driver for other sectors like music, live entertainment and television. It was accorded the status of an industry in 2000. Since then, some progress has been made in developing transparency and professionalism in this sector. Music, radio and other emerging segments like animation, interactive gaming and live entertainment together account for remaining 12-13 percent of entertainment revenue.
Piracy and revenue losses at the last-mile are the bane of the entertainment industry. They prevent the rightful owners of the content from realising its full value. All sectors of the industry, except radio, suffer from these twin predicaments in some way or the other. Currently, such losses are estimated at INR 4.3 billion, which amounts to over 40 percent of the industry's total revenues. While such losses are expected to continue for another two to three years, a reversal is expected eventually as a result of a combination of a technology push (with a wide repertoire of film and music becoming available through a variety of legitimate and convenient platforms and options) and a demand pull (with increased internet penetration and the advent of broadband).
TELEVISION
With total revenues of INR 139 billion, television is the goliath of the entertainment industry. It is now ready to advance to the next stage of its evolution, grasping the opportunities presented by the digital age, which will completely change the home entertainment landscape. In the process, it is expected to continue its rapid growth and reach INR 371 billion by 2010. Some of the transformational changes are:
Additional distribution platforms:
The last-mile of television distribution will see a lot of action in the near future due to entry of new Direct to Home (DTH) broadcasters, Internet Protocol based Television (IP-TV), broadcasting services using Digital Subscriber Line (DSL) technologies, etc. They will also give broadcasters direct access to consumers by enabling them with the ability to provide customised value-added services, such as video on demand. Presently the distribution of subscription revenues is heavily skewed towards the cable operator because of lack of transparency in the declaration of subscribers by the Local Cable Operator to the pay television broadcaster. The introduction of these new platforms and the consequent addressability will facilitate a more equitable distribution of revenues.
More entrants in niche genres offering additional content variety to the viewer:
Niche genres have significantly strengthened their value proposition and more entrants are expected in spaces like animation, business and lifestyle, among others.
Conducive and liberalising regulatory intervention:
A beginning has already been made through an amendment of the Telecom Regulatory Authority of India Act. This is expected to deliver addressability in the currently fragmented distribution market, thereby increasing broadcaster's shares of revenue and encouraging greater participation.
Today and tomorrow
Out of its total current revenues of INR 139 billion, subscription contributed 53 percent, i.e. INR 73 billion. That is one-and-a-half times the advertising revenues, which are at INR 49 billion. Due to the large skew in the 'last mile' the broadcasters' share of pay revenues amount to only around 17 percent, or INR 12.5 billion. Other revenues, which include international distribution right, amount to INR 14 billion.
A combination of purposeful regulatory interventions and technology adoptions can go a long way in correcting such structural imperfections. The initiatives being undertaken and being proposed to be undertaken, to correct these structural imperfections, will drive the second wave of growth of the industry.
Advertising
As per industry estimates, the total advertisement spend in India last year was approximately INR 118 billion. However, at 0.50 percent, India continues to have one of the lowest 'Advertising spend to GDP' ratios amongst peer economies. This underscores the significant potential India has yet to achieve vis-à-vis advertising budgets.
However, this is set to change. A growing middle-class will spur the increasing tide of consumerism and a growing lineup of global brands will continue to be attracted by this expanding market. Consequently it is expected that the 'ad spend to GDP' ratio will increase steadily over the next four years.
FILMS
Though films contribute just 27 percent to the entertainment revenues, they form the heart of this industry. Indian films, especially the mainstream Hindi film industry (Bollywood) dominate segments like music and live entertainment as well as television, where popular films and film-based programmes attract the highest viewership. Compared to television, this sector is rather unorganised and individualistic, with a low level of discipline and process orientation. This, along with the fact that it was not recognised as an industry as late as 2000, restricted its access to institutional funding and forced it to rely on other sources that charged usurious rates of interest. In the recent years, though there has been a distinct shift in the mindset and the willingness to tap institutional debt and equity funds. Some of India's largest corporate houses have entered this sector and large international studios are reportedly evaluating the Indian opportunity. However, the lack of transparency and discipline is preventing them from fully tapping this opportunity. The film industry is at a cusp in its evolutionary path. If conventional players are able to implement the changes needed to unlock its growth potential, the second phase of corporate and institutional growth could see the industry grow at around 16 percent annually to reach INR 143 billion in six years.
MUSIC
The Indian music sector is quite unique compared to other global markets. Songs from new Hindi films comprise 40 percent of the total industry revenue and the box office popularity of the film typically drives sales. In India, growing piracy and free downloads have reduced music buying. Consequently, the industry has shrunk to around INR 10 billion from around INR 13.5 billion, three years ago. The silver lining is that though music buying from legitimate sources might have reduced, the delivery of music through new formats, like FM radio, internet and mobile phones has actually increased interest in music. The future growth is likely to come from non-physical formats like digital
downloads, royalty income, ringtones, etc. The rollout of additional distribution platforms like DTH, digital cable and IP-TV with the growing popularity of large format retail stores will create many more channels selling music. Based on the current trends, the industry is expected to grow only moderately to INR 13 billion in 2010. With the right technology and regulatory push to curb piracy, it has the potential of achieving a double digit growth.
RADIO
Though radio reaches out to 99 percent of India's population and is considered to be the most cost-effective mass medium, it was only recently that private participants were allowed to enter this space with a view to unlocking the latent commercial potential. With private FM radio channels rolling out in several cities, the long stagnant advertisement revenues from radio have doubled in two years. Compared with other nations, radio currently has a very small share of the total advertising pie in India. This is indicative of the promise it holds if the current and proposed licensees are allowed to migrate from the current stifling and unviable licence fee structure to a revenue sharing regime, and if foreign direct investment is allowed.
Emerging opportunities in the entertainment space
Apart from the second wave of growth that various sectors of Indian entertainment industry are set to witness, there are emerging opportunities spanning across genres and markets. Some of the more interesting areas to look out for are:
Animation:
India's large pool of software talent has made it an appropriate resource base to develop animation and graphics-heavy content. Many international organisations outsource their animation requirements to leading Indian software players. As the industry grows and establishes its quality credentials, India will emerge as a serious animation hub.
Outsourced production facilities:
With the relentless rise in Hollywood film budgets, the pressure on cost control is also increasing. India can tap this opportunity by offering Hollywood an overall low cost structure combined with high-quality technical talent and production facilities. However, significant investment in infrastructure and equipment are required to be made before this becomes a reality.
Organised home video:
The Indian market for home video entertainment – VHS tape, VCD or DVD, is largely unorganised with mainly local outlets. A demand for quality and convenience remains to be exploited by large organised retail players, who could leverage economies of scale in content procurement and distribution.
Leisure entertainment like theme parks:
Till date, outdoor entertainment in India has seen limited action with few significant investments. This is changing as leading international players are exploring the Indian opportunity. The challenge here will be providing a cost-effective and profitable value proposition to the Indian consumer.
Live entertainment:
The live entertainment industry in India is largely unorganized with few players having the requisite critical mass. The gradual reduction of entertainment tax across states will make the sector more attractive, drawing in large corporates and multinationals. This is likely to result in increased marketing investments and creation of world-class infrastructure like convention centres. Going forward, there could be collaboration with other constituents of the entertainment industry, like films, television and music.
Industry overview
Consistent commitment to economic reform over the last decade has spurred the steady growth of the Indian economy. The emphasis on creating an enabling environment for investment and the inherent potential of the Indian economy have together pushed India's annual Gross Domestic Product (GDP) growth rate beyond 8 percent.
While India's GDP ranks eleventh in the world in absolute terms, it ranks among the top five economies of the world when assessed in terms of purchasing power parity. It is the growing consuming class with the proclivity to spend that will drive the growth of the Indian entertainment industry. Adding to this positive outlook is the fact that the average Indian is getting younger and is showing a greater propensity to indulge and entertain himself. Moreover, there are over 20 million Indians living abroad who are increasingly opting for India-oriented entertainment, as the availability of such content increases. Globally, a clutch of international films with Indian content, themes and performers are receiving wide visibility and acclaim. This broad acceptance of Indian entertainment is likely to give a further fillip to the expansion of this industry.
KEY DRIVERS OF THE ENTERTAINMENT SECTOR
Consumerism and demographics
The emergence of the Indian middle class with greater earning power and a higher disposable income is one of the key factors that will drive the growth of the Indian entertainment sector. Demographic analysis clearly shows the evidence of this growth. The consumption chart below indicates the continued progression of people into higher income and consumption segments.
A number of economic trends are testimony to this advancement:
Automobile sales are rising across the country. In two wheeler sales, India now ranks second in the world, while car sales are over 1 million per annum, growing at about 25 percent annually.
India is the sixth largest market for mobile handsets (16 million units per annum) and is growing at 50 percent a year.
The country is the fifth largest market for colour televisions and is growing at 25 percent per annum.
A non-homogenous market
As the Indian entertainment market grows, it is essential to recognise the heterogenous nature of the market. All too often, the specific appetite of certainsegments such as the rural population, women and children, is under-estimated and their financial value proposition continues to be under-recognised.
Illustratively, here are some important facts about the rural sector:
There are nearly 42,000 ‘haats’ (rural supermarkets) in India.
In 2002-03, LIC sold 50 percent of its policies in rural India.
Small towns and villages account for over one million cellular telephone
users.
Of the 25 million households that bought television sets over the last three years, 19 million, or 77 percent were rural households.
Of the 20 million who have signed up for a popular horizontal portal, e-commerce
and free mail service, 60 percent are from small towns.
Of the 100,000 persons that have transacted on its shopping site, 50 percent are
from small towns.
Companies and businesses that have managed to differentially cater to the varying segments of Indian population have benefited. As a corollary, the entertainment sector too has begun to witness the advent of a broader set of offerings which are aimed for specific segments: e.g. television channels for children. On the other hand, the ‘children's films’ genre, for instance, has yet to grow and mature in India.
There is a case for a proactive and sustained targeting of specific, niche segments of the market. In fact, given the size and potential of India's niche segments, niche may be a word which is likely to be replaced soon.
ADVERTISING SPEND
As per industry estimates, the total advertising spend in India in 2004 was approximately INR 118 billion, a growth of 13.4 percent over the last year. However, India continues to have a low ‘advertising spend to GDP’ ratio compared to other economies, underscoring the untapped potential.
Given the increasing number of media channels that consumers are exposed to, brands will have to advertise more frequently and across more channels to generate brand recall. As television channels have multiplied and the content available has become more diverse in the last decade, their viewership has increased, niche channels have emerged targeting specific demographic segments and the cost of advertising on television has reduced.
While the broadcasters can dwell on this shared optimism, they must also recognize that advertising budgets are very sensitive to economic downturns. Advertising budgets are not only easily brought down, but the productivity of such expenses is also challenged. Companies are increasingly demanding their advertising agencies to link their fees to performance indicators such as sales increments. With increasing access to state-of-the-art technologies, addressability issues are being put to test, thereby exposing the limitations of current media research findings and measuring the true efficacy of media.
CONTENT
Any new media market attracts an initial swell of content players. Such a scenario invariably leads to a stage where the smaller players find it unviable to continue and are eventually weeded out. After the initial shakeout, the industry consolidates and grows until it reaches a stage of maturity. Thereafter, in a stable environment, it is the quality of content, with an accentuation on innovation and creativity that drives the industry. In the television medium, the different genres are in different stages of their life cycle. Several channels have emerged recently in the space of children's entertainment and education. The news channels are in the next stage of evolution with an influx of players in the last two years, but market limitations and more transparent viewership patterns will lead to an inevitable shakeout. Up the maturity curve is the mass entertainment genre, which has established itself with 3-4 major players and the quality of programming (including innovative formats) determining their fortunes. With the introduction of newer distribution channels, such as DTH and IP-TV, the demand for premium/ alternate content will increase and this is expected to spur the growth of new genres such as education, teenage entertainment, mature content (subject to liberalisation of the programming code), etc.
With a legacy of over 50 years and 1000 films a year, the Indian film industry has reached a phase where the focus is on the quality of content. The increase in the number of films made has not seen a proportionate increase in their commercial success. In fact, there is now a decline in the number of films being produced annually and this trend is expected to continue as production houses now value quality over quantity. To combat the pressures of television programming, the Indian film industry, like its western counterpart, is being forced to attract the audiences through technological advancements like advanced visual effects, special effects, sound sync, animation and sheer star power.
In the late 80s, the Indian music industry saw an end of the existing duopoly with several new players emerging. A spurt in content availability and new genres such as Indi-pop drove the rise in music consumption. However, technology has facilitated easy access to music through illegal downloads, pirated CDs and tapes, music television channels and radio FM channels. With little value realisation by music companies and minimal regulatory support, music companies are struggling for survival, as a result of which there has been very little experimentation in content. This situation could change with the increasing popularity of non-film music in India and globally, signs of which are being observed.
PRICING
India has the potential of becoming an attractive destination for international broadcasters and production houses, despite its low per capita income, as the larger population base makes a viable case for high volume consumption. However, while prices are significantly lower in India than in other parts of the world, access to volumes is restricted by fragmentation in the distribution chain. Subscriber declaration by cable distributors to broadcasters in India is extremely low resulting in very inequitable distribution of subscription revenues. According to an independent research, the operator-broadcaster split of subscriber revenue in India has possibly the worst skew in the world.
Such low levels of declarations have been attributed to the lack of transparency in the last mile distribution end of the business, which is controlled by the 30,000 odd local cable operators and independent cable operators across India.
Similarly, in films, there is low transparency of actual gate receipts, outside of multiplexes and few organised theatre halls. This is particularly true in smaller towns where receipts are not accounted for. According to industry experts, the total revenues lost to the film industry due to unaccounted receipts coupled with video piracy range between INR 15 - 20 billion annually. Film piracy through illegal DVD and VCD releases and the open screening of new releases by cable channels, is forcing film producers to pre-sell the television and video rights, before the release of the film even if it means an erosion of theatrical ticket sales.
Piracy of music through illegal downloads, unauthorised CDs and remixed versions of popular music is taking its toll on music recording companies. The paltry royalty sums, if any, paid by music television channels and FM radio only adds to the difficulties faced by these companies.
Differential pricing
India has seen improved income levels across a large section of its populace, with a significant number of people willing to spend on entertainment. However, a substantial difference in the affordability levels between various sections of society continues to exist. As a result, a price differentiation strategy needs to be adopted for media products, with a view to maximise revenues.
In the film sector, price differentials already exist both at the point of distribution territories for distribution) as well at the point of exhibition (theatre hall tickets).
The differential pricing mechanism can be examined more closely and transparently to determine price levels that will draw larger audiences to films. In the music sector, pricing CDs at a premium end and cassettes at the low end may help music companies compete with the prices of pirated cassettes. A marginal drop in CD sales may be offset by increased cassette sales. At an overall level, difference pricing should be driven by the objective of revenue optimization.
REGULATION
Regulations give form and direction to the free play of market forces, according to the social and economic objectives of the nation. Therefore, regulatory interventions are typically driven by a vision for the future, which can be shared by all stakeholders. The need to have such a vision is very important now in India, as the entertainment industry prepares for the introduction of several new technologies and business models that have the potential to revolutionise the dynamics of value creation in this space.
The guiding principles of such a vision should include:
Ensuring consumer choice and protection
Achieving sustainable growth
Ensuring a level playing field
Providing equitable distribution of value
Adoption of new technology
In most media markets, the consultative process leading to formulating regulations, has served as defining steps for charting the growth path. In India, most segments of the industry have grown to their present structure and size in a largely unregulated Environment. Such growth has resulted in the creation of last mile monopolies in cable television, established through informal agreement among the unorganised last-mile operators. However, further growth will be extremely difficult without facilitative regulation to ensure structural and behaviourial changes amongst the industry players.
Technology
Technology has played a key role in influencing the entertainment industry, by redefining its products, cost structure and distribution. Empirical evidence suggests that technological innovations create discontinuities in the industry, with the initial dissonance evolving into eventual realignment to effectively create and realise value from it. Content creation has benefitted significantly from technological breakthroughs,
especially in the areas of sound, visual effects and animation. This has benefitted audiences by providing them with a high-tech content viewing/ listening experience. The growing adoption of digital television around the world has forced leading global broadcasting companies to put development and use of new technologies at the centre of their core strategies. For a content distributor, future will come by specialised offerings, such as high-resolution pictures, high-speed Internet access, online games and information, pay-per-view electronic commerce services and voice telephony. New technologies, such as satellite radio, are characterised by their ability to reach out to larger audiences than ever before, reducing the cost per contact. While these technologies typically require high initial capital expenditure, the same may be set off by incremental volume gains through increased reach. It is this trade off that needs to be evaluated before an investment is made in any new technology.
Some such technology trends are:
Digital distribution
Digital distribution of content in television and film will help plug the leakage of last-mile revenues due to the under-declaration among cable operators and film theatre owners.
The Personal Video Recorder
The Personal Video Recorder (PVR) expands users' ability to decide when and how they will watch programmes. It allows the viewer to pause a television programme when required, and provides the luxury of skipping commercials entirely. The PVR allows viewers to create their own programming schedule to fit their time requirements. Technologies such as this will lead to more audience 'fragmentation'. In such a scenario, it is the programming content that will ultimately drive the industry.
High Definition Television
As digital video signals begin to appear, High-Definition Television (HDTV) sets are getting the most attention. Digitalisation allows HDTV broadcast and transmission with incredibly sharp and detailed pictures.
However, at present, current-generation television sales have not demonstrated a downwards trend. In fact, consumers continue to pay more for large screen models with present-day technology. Even in the US, viewers are not expected to switch to HDTV soon, due to the very high price differential.
Interactive services
Digital broadcasters are working on ways to include interactive services into their over-the-air digital video transmissions, primarily as video signal enhancements. Cable and satellite television companies are also moving towards interactive services that vary from simple video-on-demand to more complex internet access products. Such interactive technologies are expected to be platform-neutral, providing service providers with new products and services to offer.
Fixed broadband wireless systems
Fixed broadband wireless systems are another way to bring interactive digital services to consumers. The wireless debate currently centres on the use of point to-point or point-to-multipoint technology. Point-to-point, a technology already entrenched in some regions of Asia, beams data over the air from a transmitter to one receiver. It is widely used for business-to-business communication. Point-to multipoint, still an embryonic technology, operates like satellite distribution, beaming data to as many reception antennae as the signal can reach.
Internet radio stations
As internet connections have become faster and software for cyberspace has become more sophisticated, audio aficionados have benefitted significantly. Free, downloadable audio players for computers have made listening to audio via the computer commonplace. Traditional over-the-air radio stations have begun to take advantage of the new software, as well as the internet's ability to deliver graphics, data and video at the same time, to enhance their audiences' listening experience. The internet has also extended the reach of radio stations beyond their own markets, which was determined by the strength of their broadcast signals, to the entire world.
Downloadable digital audio
As technology has enabled internet users to download digital audio tracks, online music download sites have rapidly sprung up, presenting a challenge to existing radio stations. Marquee artists are opting more often to debut new albums or tracks online rather than through traditional radio stations or video music channels. Recording artists and record labels are also moving toward offering their music online. For both artists and producers, digital distribution is a way to bypass radio stations and, more recently, video music channels.
Satellite radio
Satellite radio is a digital radio broadcast system that uses direct-to-home satellite technology to offer listeners up to 100 channels of commercial-free audio music, news and entertainment.
THE FUTURE
The future of the entertainment industry will be a function of the interplay of each of the above factors, namely consumerism, advertising spend, content, pricing, technology and regulation. Estimating the industry size over the next 5-10 years, would require a crystal ball, given the number of variables involved. However based on current trends, the industry is expected to breach the INR 500 billion barrier in five years. For the Indian entertainment industry, this is the moment of truth. Beyond the linear growth projections, there is a bigger story waiting to happen if a concerted and accelerated effort is made now. The industry is entering a second phase of growth, which will have technology as one of the key drivers. This growth phase will be the consequence of a combination of quality infrastructure and the gradual penetration of digital connectivity, which will redefine the way entertainment content is delivered and consumed. This phase of growth needs to be supported by an enabling tax and regulatory infrastructure, as the government begins to understand the long term potential of this sector, and starts according it the priority status it deserves.
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