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India has a high-growth media and entertainment (M&E) industry that is constantly buzzing with activity. Every one is bullish about its future growth and this optimism stems from several positive developments that have sprung from across the M&E industry. A steady stream of news about mergers and acquisitions, diversifications, new ventures, and global expansions by several key M&E players point to a strong forward momentum. In fact, the M&E sector is among the fastest-growing verticals in India.

Driven by factors like Indias robust economy, rising middle-class, higher incomes, and increased consumerism, the M&E industrys revenue reached $6.2 bn in FY 07, according to estimates by Springboard Research. Also, recent technological advances and liberal government policies favoring foreign direct investment continue to aid expansion. Attracted by the growth opportunities in India, multinational media conglomerates such as Walt Disney and Viacom have invested or plan to invest in Indian companies, which is sure to propel further growth.

Simultaneously, a key trend in the last couple of years has been the expansion of several Indian players into global markets. Major Indian players such as Zee, NDTV, and Sony India have entered foreign markets primarily in a bid to capture the attention of the Indian populations living abroad. Interestingly, these players are now aiming to generate programs and content suitable for non-Indian audiences and are investing in technologies that will help them reach these audiences.

In addition, media decentralization and audience fragmentation are also changing the dynamics of the M&E industry in India. As the industry moves toward offering niche content for specialized audiences, its vital that M&E companies are able to distribute content across multiple platformsfrom the Internet to portable devices.

Advantage IT
M&E growth has obviously created new business opportunities for IT vendors. Indian M&E companies are on the verge of an IT infrastructure overhaul that is necessitated by new business opportunities and challenges in the sector such as increasing competition and the universal shift to digital content distribution and storage.

Aiming to capture an audience with more disposable income, M&E companies are looking to adopt new delivery platforms and offer content diversity by using technology as a strategic tool. They are looking to utilize these technological innovations to offer cutting-edge services for their customers and greater efficiencies for themselves.

According to Springboard Research estimates, the market size for IT products and services by the M&E industry in India stood at $128 mn in 2007. And it is expected that the market will grow at a CAGR of 32% to reach $300 mn by 2010. Forced by growing competition for customer attention and spending, the industrys urgency to reach new markets faster and efficiently is guiding its investments in IT.

As the current economic boom in India travels to small cities and towns beyond large metropolitan areas, reaching out to prospective customers in these locations is high on the agenda of most media and entertainment companies. The markets in metros have already saturated in many of the sub-verticals (print, films, television, music, radio, online gaming, and Web portals), and it is in these B & C class cities and other smaller locations that companies foresee their future growth.

It therefore comes as no surprise that for most M&E companies, digitization and streamlining content delivery and distribution is the top strategic focus area as far as IT investments are concerned. M&E decision makers in a majority of sub-verticals are digitizing their content as a top business priority, although print media and the music industry are clear leaders in the digitization space. These companies realize that digitization enables reliable content storage and archiving, and also opens new business opportunities. Streamlining content delivery and distribution via broadband, the Internet, and mobile communication devices, for example, is also high on the radar of these companies in India.

Content digitization also leads to improved management of, and access to, digital media assets; enhanced search processes; reduced operational, research and production costs; increased productivity; and optimized ability to leverage valuable content.

To better compete in a market of M&E content providers, companies need to focus on consolidating their infrastructure and production media library via a platform that enables seamless integration with a front-end editorial system. This integration of back-end and front-end would allow easier search and access to archived materials such as photographs, articles, etc. The next big step forward for the M&E industry would be digitally archiving large volumes of media, reusing existing content (content syndication), securely distributing it to global organizations, and exploiting it on newer delivery mechanisms such as mobile TV, broadband access, fiber-to-the-home (FTTH), interactive TV, etc.

Migrating from traditional content distribution to new, networked, online methods of selling content is the future business imperative. The M&E industry, particularly print and music companies, have realized that content digitization will lead to new revenue opportunities such as paid download, subscription, pay-per-view/listen/read, on-demand, and a-la-carte ordering services, as well as limited rights models.

Also, managing and distributing content has become a challenging task for companies as the market demand for content overwhelms content providers who not only have to worry about producing new, high-quality content continuously, but also need to manage their rapidly growing volume of content. For companies with a global footprint, different versions of content must be rendered for different audiences, in different languages, and with local cultural and geographic references.

Content delivery and distribution is significant for the television industry as consumers are becoming increasingly fragmented. Also, TV viewers are now splitting their time among many available media and platforms, and are migrating to more specialized, niche content via cable and multi-channel offerings. With the growing availability of on-demand, self-programing, and search features, a significant cross-section of consumers are even moving beyond niche to individualized viewing.

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