Analysis of the Media Industry In India - Essay Example

Introduction Media industry in India is among the fastest growing industries of the present Indian economy. The media industry has benefited a lot from the Indian current economic growth coupled by the rising earnings levels in India. The media industry is presently in a critical stage of revolution. Since 2006, the media industry has enjoyed a good time in terms of growth and development as it has been characterized by realignment, consolidation and expansion in many sectors of the media industry. In addition, the media industry is anticipated to grow up faster than GDP growth of India and subsequently more spending is being expected in the media industry. This report will analyze internal and external environment of the Media Industry in India through applying the SWOT analysis, PEST analysis and the Porter's Five Forces Analysis. In addition the paper will also focus on Future of the Media Industry in India, it will highlight the Different types Of Media in India which includes the Print media, radio, electronic, outdoor and Television. India's foreign direct investment will also be assessed and finally a conclusion will be given inline with the findings. SWOT analysis of the India Media Industry in India Strength The media industry is a strong and well developed industry which is currently growing at high rate; this aspect gives the industry a lot of strength. With the increase in the level of education and media industry has a well educated and skilled workforce with innovative ideas and technology which is an added positive aspect of the industry. The competitiveness of the media industry has enabled the industry to grow technically both vertically and horizontally, which is another positive aspect in the industry. India also offers strategic location and market in terms of its high population which is a boost to the industry. (Bird, 2003) Weakness Among the weakness in the industry, a current weakness may be inability to adhere to ethical standards in the industry which has lead to lawsuits filled against some media industries. The industry also has been slow in its growth only picking up in the recent past, thus its innovation and marketing strategies may be not competitive on the global arena. (Bird, 2003) Opportunities According to the industry experts the industry still has room to expand within India as the market is wide. Media services are being sought with many organizations and thus this offers the industry to increase its market share. The high technological innovation which is happening everyday also presents a good opportunity for the media industry to utilize the latest technology in expanding its product mix or improving existing ones hence reaching or increasing its market. There is exists new business in the global market for the industry. (Bird, 2003) Threats Though India can be said to be stable political, the country his known for frequent changes in government administration and instability in some regions or states, this issue negatively affects the media and it is threat to the media. Also government legislations in India are known to some extend as hindering the growth of industry especially for foreign companies. Also, the current threat poised by piracy, which persists to deter investments in all media sectors has continued to threaten the industry growth. (Bird, 2003) PESTEL analysis of the media Industry in India PESTLE stands for: political, economic, social/cultural, technological, legal, environmental. A description of developments (known) and rising issues (unknown) which may impact on an industry/sector, Political Over the past year the media industry has continued to witness increased political interest increase because of the recognition of the media industry economic importance to the overall economic growth f the country. Policy stage Changes of administration or political principles have changed along the media industry making it to be freer than before. (Johnson, 2001) Economic In the past few years the media industry has witnessed an improved growth in the industry, this is attributed to India positive economic growth in recent years. The growth of the industry is expected to grow by 16% in the current year. Improved competition in other sectors also boots the media industry as these sectors services of the media industry such as promotion. (Johnson, 2001) Social aspect Media plays a big role in form information dissemination to the people of India, which of late due to globalization have developed a high infinite for information. The impact of intense media attention has brought about a more revolution in the social aspect and created a society which is more enlightened and which appreciates the industry. Even though the Indians are known to be conservative and traditional they attitudes towards the media industry are very positive. (Johnson, 2001) Technological advances Modern information technological advancement in media is making the industry players adapt faster to the new environments they are participating. The technological advancement taking place in industry is high and this calls for increased spending and research so as to be innovative in the industry. Legal environment The media industry in India is hot highly regulated as such, but there are laws and regulations which are enforced for the industry to comply. However, in the recent past the government has become to lessen to laws so as not to hinder competition in the face of increasing global challenges from the external markets. Legislations such as anti-piracy laws have been enacted and the government tries to enforce the fully even though it is difficult Porters five forces used for Media Industry in India This part is an outline of positional assessment of the media industry using porter's five forces model Barrier to entry: moderate, legislations and cost of research and development Industry competition: high, advantage gained through technology and marketing strategies Suppliers: supplier power is high Buyers: buyer power is low Substitutes: low Future of the Media Industry in India According to a report done by PricewaterhouseCoopers, and carried in the New Delhi, March 11, 2006, The Indian Media industry is positioned to grow up at 19% compound yearly growth rate. This rate is expected to go on until 2010. (PWC, 2007) Unravelled potential, good Economic growth, increasing earnings levels, consumerism, and technological innovations and policy plans undertaken by the Indian administration which are currently encouraging inflow of investments in the country, will attest to be significant drivers for the media industry in India. The media industry has been predicted to surpass the overall economic growth in every year, till the year 2010. (PWC, 2007) Two main factors which will contribute to the industry growth are, low media access or penetration in lesser socio-economic groups and low advert expends; At present media penetration is slow in lower socio-economic groups, however efforts to raise it even just slightly are possible to bring much high results, merely owing to the total numbers being great. India bully economic growth, increasing consumer spending couple with regulatory rectifications are pulling foreign investment in many sectors of the media industry, particularly the print segment. "The sector needs a consistent and uniform media policy for increase in investments" (PWC, 2007). Different types of Media-Print media, radio, electronic, outdoor, Television all in India Media in India aims at reaching an extensive audience. Apart form the news media segment, which include radio, print and television, the internet also plays an increasing function, alongside with the increasing o Indian 'blogging' community. Television Television presently is the key driving strength of media industry in India. Television is predicted to be a main source to India's GDP in the recent future. As at present, television is accessible by roughly hundred million households in India. Out of these, roughly half are satellite and cable. India is the third biggest television market, in the whole world coming after china and USA. India also is amongst the cheapest subscription of cable market, where in numerous places a monthly cable cost is merely averagely US $ 4 and hardly ever surpasses US $ 10. Print media: A roaring Indian economy leading to increasing necessitates for contents and regime initiatives which have opened up the segment to foreign investments are pushing growth in print media. Also, with increasing literate population, more folks in rural and urban regions are reading the newspapers and the magazines nowadays. The internet at present offers a fresh avenue to create more advertising income. (PWC, 2007) Radio: The most cheap and oldest model of media in the India that is dominated by AIR, the sector is witnessing a myriad-change very. In 2005, the India announced three main policy proposals which have driven growth in the sector. These policies were migrating to a returns share administration, permitting foreign investments into the sector and opening up licenses to the private players of the sector. This surge of radio stations have resulted in increasing requirement for content and experts. Latest concepts such as satellite, community radio and internet have also started to punch the market more and more, and radio is gradually making a return in the lifestyles of the people. (PWC, 2007) Out-of-home advertising: Outdoor media locations in India are mainly owned or run by small, local players and are usually, who directly markets them to the advertisers and also advertising agencies. Nonetheless, this sector also is witnessing a myriad-change through technological innovations. (PWC, 2007) Internet advertising: Roughly 28 million Indians are presently connected on the internet. And this increasing number is resulting to the increase of internet advertisement, which at present stands at around Rs 100 crore. Internet is used for a various reasons, in addition to work, for instance chatting, doing transactions, leisure and writing blogs. Internet provides a vast opportunity to marketers selling their products. With broadband increasingly becoming popular, this sector is projected to grow by leaps and jumps. (PWC, 2007) Table 1: summary of media segments and their share (PWC, 2007) Media penetration and its size and projected growth All India urban Current size Size 2010 Print 25% 46% Rs 10,900 crore Rs 19,500 crore Terrestrial television 53% 80% 14,800 crore Rs 42,700 crore Cable and satellite television 20% 46% radio 22% 25% Rs 300 crore Rs 1,200 crore cinema 7% 11% Rs 800 crore Rs 1800 crore internet 1% 3% Rs 100 crore 1750 crore Foreign Direct Investment in India The liberalized investment administration, rapidly growing economy, good and strong macro economic policies, continuous de-licensing of industry sectors and the easing in business transactions has attracted multinational corporations to put investment in India. And subsequent to policy amendments and bureaucratic simplifications, the FDI capital inflows have witnessed an exceptional upswing. The FDI inflows in India have recorded more than five-fold increment in the previous three years, rising from US$ 2.2 billion in 2003-04 financial years, to US$ 15.7 billion in 2006-07. Concurrently, FDI amount in GDP of India has gone up from 0.77%to 2.31% (in that period). Considerably, FDI currently plays an increasing position in India's economic growth of The FDI share in overall investments is more than twofold from 2.55 % in 2003-04 to 6.42 % in 2006-07. Evidently, India is presently doing well, and the figures seem to be getting better each day. (IBEF, 2008): Conclusion Media industry in India remains among the fastest growing industries of the present Indian economy, industry has benefited a lot from the Indian rapid economic growth coupled by the rising earnings levels in India. Good laws and liberations of the market are other factors which have enhanced the media industry, though there is high competition in the industry there is room for new players and expansion of the current players. The television and the print media are the biggest segments of the industry. Of late FDI in India is a rise and the country is positioned has a major market global for the media industry. Reference: Bird, S. E. (2003): The audience in everyday life: Living in a media world. New York: Routledge. Jeffery, R. (2000): India's Newspaper Revolution: Capitalism, Politics and the Indian-Language Press 1977-99. New Delhi: Oxford University Press. Johnson, K. (2001): Television and the Social Change in Rural India. New Delhi: Sage Publication. IBEF (2008): Indian Economy Overview; Foreign Direct Investment, available online on; www.ibef.org/economy/fdi.aspx ; accessed on 3/3/08 PWC (2007): FICCI - PricewaterhouseCoopers forecast Indian Entertainment and Media industry to grow 19% CAGR through 2010. Available online on; www.pwc.com/extweb/home.nsf ; accessed on 3/3/08 Read More