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TV ad revenues to propel India to Asia’s 3rd largest market

India will become the third largest television advertising market in the Asia-Pacific region by 2016, after Japan and China, according to a new report from Media Partners Asia.

The south Asian nation is set to overtake the TV industry sectors of Australia and Korea, attracting US$5.4 billion (INR 264 billion) in advertising revenues and registering a compound annual growth rate (CAGR) of 15% over the next five years.

Combined, advertising and subscription revenues to pay-TV in India will grow at an average 12% per annum to 2016 to hit $15 billion (INR 733 billion), according to the new study unveiled at Mumbai's TV.NXT event.

Affiliate fees and other non-advertising revenues will rise at a slower pace of 11% to reach $10 billion (INR 489.1 billion) in the next five years.

"India's TV sector continues to give strategic global groups unrivalled access and exposure to growth in Asia-Pacific," said Vivek Couto, executive director, Media Partners Asia.

"How successful India is in emerging as a profit engine in the future and as a driver of talent and capital across global franchises, will depend on the pace of consolidation and M&A; the growth of new markets and demographics; the monetization of digital and broadband infrastructure; and progressive change to an outdated regulatory regime."

A ratings system was employed for the report, titled The India TV Industry, Act Two, which considered flagship channels, bouquet strengths, scale, content sourcing, intellectual property rights and syndication, distribution leverage, financial strength and future readiness.

"Each of these parameters was assigned weight to the degree of its relevance over the next five years," said Couto.

With all these factors considered, Star India sits at the top of Media Partners' TV network league, followed by Sun TV Network, Zee Entertainment Enterprises, and Multi Screen Media (which operates the Sony channels in India).

Sanjay Gupta, chief operating officer of Star India told Live Mint: "Investment in building of brands and advertising will continue unabated (in India). The rate of growth is projected in the region of 12-16% a year. This is one of the fastest growing media vehicles."

Growing subscriber numbers will continue to be the focus of India's TV networks in order to boost revenues, according to Media Partners Asia.

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