Entertainment Media An Unfolding Opportunity July 2005 Entertainment

Entertainment & Media An Unfolding Opportunity July 2005

Entertainment & Media ØIndia - An Overview ØMarket and Growth Potential ØPlayers ØOpportunities ØWhy India? ØContact in India July 2005

Entertainment & Media ØPopulation Over 1 bn ØStates/UTs 35 ØGeographical Area 3. 3 mn sq kms ØLanguages recognised 22 ØBusiness language English ØPer Capita Income** US$ 534 ØGDP** US$ 650 bn **(at factor cost & at current prices) 1 USD=43. 54 INR (as on July 4, 2005) July 2005

India - Fast pace Growth Ø Largest democracy Ø 4 th largest economy by PPP index Ø 6 th largest energy consumer Ø For. Ex reserves skyrocket from US$ 42 bn (2001) to US$ 133 bn (February, 2005) Ø GDP growth to continue between 6 -8% Ø 3 rd largest economy by 2050: Goldman Sachs Ø Leading in IT & BPO Ø Oil & Gas and Biotechnology sunrise industries July 2005

India - Leading the world Ø Hero Honda - largest manufacturer of motorcycles Ø Moser Baer - among the top three media manufacturers in the world Ø Pharmaceutical Industry - 4 th largest in world Ø Walmart, GAP, Hilfiger sources more than USD 1 bn worth apparel from India Ø 100 Fortune 500 have set R&D facilities in India including GE, Delphi, Eli Lilly, HP, Heinz and Daimler Chrysler July 2005

Entertainment & Media ØIndia - An Overview ØMarket and Growth Potential ØPlayers ØOpportunities ØWhy India? ØContact in India July 2005

The Entertainment & Media Industry One of the fastest growing sectors of the Indian economy ØSize ØEstimated growth rate over next 5 years July 2005 US$6900 mn 14% CAGR

Key Institutional Framework Ministry of Information & Broadcasting Wing Films Wing Directorate of Film Festivals Ø National Film Development Corpn Ø Central Board of Film Certification Press Ø Prasar Bharti o AIR o Doordarshan July 2005 Information Wing Council of India Press Information Bureau

Constituents July 2005

The Changing Face E&M Sector Content Delivery Films Television Commercial (Hindi & Regional) Cinema Art Movies Cartoon Movies Commissioned Programs News & Current Affairs Cinema Halls Home Videos (Video Cassettes, VCDs, DVDs, ) Source: Pw. C Analysis July 2005 Mobile Phones Cable Terrestrial DTH Radio Commissioned Programs News & Current Affairs Public Broadcaster FM Channels Media News & Current Affairs Fiction/Non Fiction Articles Internet Music Film Music Private Albums Newspapers Magazines Books ----- Straight line denotes Traditional Delivery Mechanisms - - Dotted line denotes Converged Delivery Mechanisms Cassettes CDs

Filmed Entertainment Source: Industry estimates & Pw. C Analysis Current Size US$ 1256 mn Estimated growth rate over next 5 years 18% CAGR July 2005

Filmed Entertainment-Key Growth Drivers Emergence of crossover films High Return on investment Þ immense international appeal Þ low costs of production In 2004 alone, estimated five Bollywood releases generated more than US$ 2 million each in the UK and US. July 2005

Filmed Entertainment-Key Growth Drivers Þ Increasing importance of regional cinema ÞInternational cinema dubbed in Indian languages ÞGrowth of multiplexes ÞGrowth in cinema advertising ÞMerchandising/Promotional Material Revenues July 2005

Television ã India Third largest television market in the world Ø Estimated growth rate of TV industry on an overall basis for next 5 years 18% CAGR ã Total No. of TV households over 119 mn ã Total No. of TV channels over 350 July 2005

Television Industry- Revenues Source: Industry estimates & Pw. C Analysis July 2005

Television-Key Growth Drivers Þ Pay Revenues - primary growth driver for subscription revenues ÞGrowth in number of TV households ÞLow penetration of multi-channel colour TVs in rural areas ÞGrowth in the television software segment July 2005

Music Industry Source: Industry estimates & Pw. C Analysis July 2005 F- Forecast; E-Estimate

Music Industry- Key Growth Drivers Þ Growth in non-film albums and music videos ÞTalent Nurturing ÞFM radio synergies ÞShortening shelf life of music ÞOrganised music retailing ÞUnbundling of the album concept ÞProduct expansion ÞOverseas potential July 2005

Radio Industry Source: Industry estimates & Pw. C Analysis July 2005 F- Forecast; E-Estimate

Radio Industry-Key Growth Drivers Þ Local Advertising ÞLower share of Adspend ÞSatellite Radio ÞCommunity Radio July 2005

Print Media Source: Industry Estimates & Pw. C Analysis July 2005 F- Forecast; E-Estimate

Newspaper Industry Source: Industry Estimates & Pw. C Analysis July 2005 F- Forecast; E-Estimate

Magazine Industry Source: Industry Estimates & Pw. C Analysis July 2005 F- Forecast; E-Estimate

Newspaper and Magazine Publishing Industry Key Growth Drivers Þ Booming Indian economy ÞContent ÞGovernment initiatives ÞEmerging Digital Technologies July 2005

Entertainment & Media ØIndia - An Overview ØMarket and Growth Potential ØPlayers ØOpportunities ØWhy India? ØContact in India July 2005

Indian Film Industry Players Production Distribution Zee Telefilms a a a Adlabs Films a a a AVM Productions a a a Mukta Arts a a X Rajshri Productions a a X Shringar Group X a a PVR Cinemas X a a Pritish Nandy Communications a a X July 2005 a Present X Not present Exhibition

Indian Television Industry Key Players ØCNBC-TV 18 ØDiscovery ØESPN Star Sports ØHathway Cable ØMTV India July 2005 ØSTAR India ØTEN Sports India ØWalt Disney ØTurner International

Indian Television Industry Key Players ØDoordarshan ØBalaji Telefilms ØEenadu TV ØNDTV ØNimbus ØPadmalaya July 2005 ØSahara India ØSony Entertainment ØSun Television ØUTV Software ØZee Telefilms Limited

Indian Music Industry Key Players Ø Universal Music India Ø Saregama India (HMV) Ø Venus Records Ø Sony Music Entertainment Ø BMG Crescendo Ø Virgin Records ØMagnasound July 2005

Radio All India Radio (AIR) • Planned, developed & operated by Ministry of I & B. • Network of 214 broadcasting centres • covering 24 languages • covering 91. 37% of the area • serving 99. 13% of the Indian populace Private FM Broadcasters • Entertainment Network India • Radio Today • Radio City • Radio Mid – Day West • India FM Radio July 2005

Print Media Key Players Newspapers ØTimes of India Magazines ØIndia Today ØHindustan Times ØReaders Digest ØThe Hindu ØOutlook ØThe Telegraph ØFemina ØIndian Express ØFilmfare ØMid-Day ØStardust July 2005

Entertainment & Media ØIndia - An Overview ØMarket and Growth Potential ØPlayers ØOpportunities ØWhy India? ØContact in India July 2005

Cable TV Households- untapped potential Low Cable penetration levels indicate huge untapped potential Rural areas to spur growth Total No. of Households 200 Million TV Households 119 Million Cable TV Households 50 Million Source: Industry Estimates & Pw. C Research July 2005

Television ® Television Subscription Current size ® US$ 1667 mn Television Advertising Current size Source: Industry Estimates & Pw. C Research July 2005 US$ 1067 mn

Growth of multiplexes Þ Platform to screen movies appealing to niche audience Þ Have brought back Indian film viewers to movie halls Þ Smaller screening options July 2005

Entertainment & Media ØIndia - An Overview ØMarket and Growth Potential ØPlayers ØOpportunities ØWhy India? ØContact in India July 2005

The India Advantage Ø Expanding Indian Economy Ø Strong job creation in new economy sectors Ø Demographic Advantage – 30 to 40 million people joining middle class every year Ø Change in consumer mindset due to global exposure Ø Untapped rural potential July 2005

The Policy Advantage Key Government Initiatives Ø 2001 Industry status to Films Ø 2001 Announcement of DTH guidelines Ø 2004 Announcement of Broadband Policy Ø Reduction in import duties Ø Move towards Co - production treaties July 2005

Enforcement efforts against music pirates Number of raids conducted Source: Indian Music Industry July 2005

FDI Policy Ø Advertising & Film Sector Upto 100% on automatic route Ø Print Media - Upto 74% in Indian entities publishing scientific/ technical & speciality magazines/periodicals/journals - Upto 26% in Indian entities publishing news & current affairs newspapers & periodicals Ø Broadcasting Sector No restriction on foreign equity in proposals related to software production, marketing of TV rights, air times, advertisements etc. July 2005

Entertainment & Media ØIndia - An Overview ØMarket and Growth Potential ØPlayers ØOpportunities ØWhy India? ØContact in India July 2005

Contact in India Office of the Minister for Information & Broadcasting Shastri Bhawan New Delhi 110 001 Tel Fax 0091 11 2338 4782/2338 4340 0091 11 2378 2118 July 2005

Contact in India Secretary, Ministry for Information & Broadcasting R. No. 655, A Wing, Shastri Bhawan New Delhi 110 001 Tel Fax 0091 11 2338 2639 0091 11 2338 3513 July 2005

Contact in India Confederation of Indian Industry (CII) The Mantosh Sondhi Centre 23, Institutional Area Lodi Road New Delhi 110003 India Tel: + 91 11 2462 9994 -97 Fax: + 91 112461 5693 Email: c. banerjee@ciionline. org July 2005