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Indian media revenues to soar to $25bn by 2015

India's media and entertainment (M&E) industry registered revenues of US$163 billion in 2010; a figure which is forecast to leap to over $25 billion in the coming four years, according to a new report from Ernst & Young.

The study, 'Spotlight on India's Entertainment Economy', looks at the surge in investment by global media companies and the significant opportunities presented by digital media for the South Asian nation.

'A surge in mass broadband adoption is expected, led by the launch of 3G and 4G [mobile] services. By 2015, 90% of India's projected 187 million broadband subscribers will access the net through wireless devices,' says Ernst & Young.

Alongside this, economic liberalisation, near double-digit annual growth, and a fast growing middle class are major factors in India's M&E sector surge.

"The M&E industry in India has been, and will continue to be, one of the biggest beneficiaries of India's favourable demographics," said Farokh Balsara, media and entertainment leader for Europe, Middle East, India and Africa, Ernst & Young.

"Having one of the world's youngest populations, high volumes of content consumption, a favourable regulatory framework and growing digital adoption, makes India an attractive investment destination for global media and entertainment companies."

The study shows that India's increasing per capita income, growing middle class and working population are generating huge domestic demand for leisure and entertainment. India has over 600 TV channels; 100 million pay-TV households; 70,000 newspapers; and produces over 1,000 films a year.

Furthermore, the country's distinct regions and multiple languages offer global entertainment companies a variety of opportunities to deliver localised content. Also, the mandatory drive to digitisation of India's cable TV network provides further opportunity for the broadcast industry.

However, the Indian average revenue per user (ARPU) remains among the lowest in the world, while signal piracy is rampant in India and accounts for in excess of $4 billion per year.

"The growth strategies in most companies in the US and Western Europe are linked to India and other emerging markets," said John Nendick, global media and entertainment leader, Ernst & Young. "However, to succeed in India, global media and entertainment companies need to navigate unique challenges in the areas of content localisation, distribution and pricing, regulations and piracy."

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