Asia Press Agency

Tag: EY

  • Indian Media Sector to Reach ₹3.08 Trillion by 2026

    Indian Media Sector to Reach ₹3.08 Trillion by 2026

    The Indian media and entertainment (M&E) sector has been on a remarkable growth trajectory, with the latest Ficci-EY report projecting a continued expansion in the coming years. In 2023, the sector reached a significant milestone, touching ₹2.3 trillion in revenue. However, while this growth is impressive, it represents a slight slowdown compared to the previous year, mainly attributed to challenges faced in advertising during the first half of the year.

     

    Despite the overall slowdown, there were notable areas of growth within the sector. Except for television, all segments of the M&E industry experienced positive growth in 2023. Notably, the contribution of new media, including digital and online gaming, increased substantially. Digital media emerged as a key driver of growth, contributing ₹12,200 crore to the total revenue and accounting for 38% of the sector’s revenue in 2023.

     

    Looking ahead, the Ficci-EY report forecasts a compound annual growth rate (CAGR) of 10% for the M&E sector, reaching ₹3.08 trillion by 2026. This projection underscores the resilience and potential of the industry despite temporary setbacks. Television, digital media, filmed entertainment, and animation and VFX are expected to be the key contributors to this growth, with estimated revenues touching ₹71,800 crore, ₹75,100 crore, ₹20,700 crore, and ₹13,200 crore, respectively, by 2024.

     

    The report highlights the shifting dynamics within the M&E sector, with traditional media witnessing a decline in its share of revenue. While television remains a dominant player, its advertising revenues experienced a decline of 6.5% in 2023, primarily due to reduced spending by gaming and direct-to-consumer (D2C) brands. However, subscription revenues saw growth following price increases, indicating resilience in consumer demand.

     

    On the other hand, digital media continued its upward trajectory, with advertising revenues growing by 15% to reach ₹57,600 crore in 2023. Digital subscription revenues also saw growth, albeit at a slower pace compared to previous years. However, challenges such as piracy and saturation among urban elite audiences have impacted the growth potential of digital platforms.

     

    Another area of growth within the M&E sector is online gaming, which saw a 22% increase in revenue to reach ₹22,000 crore in 2023. The popularity of online gaming has surged, with over 450 million gamers in India, of which approximately 100 million play daily. Real money gaming comprises a significant portion of segment revenues, although regulatory challenges and higher GST levies have impacted margins.

     

    The film industry also experienced growth, with revenues reaching ₹19,700 crore in 2023. Theatrical revenues reached an all-time high of ₹12,000 crore, driven primarily by increasing ticket prices. However, theatrical footfalls are still below pre-pandemic levels, indicating a need for further recovery.

     

    Despite these positive trends, the animation and VFX segment faced challenges in 2023, growing just 6% due to global supply chain disruptions and declining ad revenues. Potential mergers and reduced investment in animated content production further impacted the segment’s growth.

     

    The Ficci-EY report paints a promising picture for the Indian M&E sector, with digital media emerging as a key growth driver. While traditional media continues to play a significant role, the industry is witnessing a shift towards digital consumption patterns. With continued innovation and adaptation to changing consumer preferences, the M&E sector is poised for sustained growth in the years to come.

  • Karma Group to Invest $100 Million in Resorts

    Karma Group to Invest $100 Million in Resorts

    Karma Group, a distinguished members-only hotel enterprise overseeing 45 resorts worldwide, including 15 in India, is poised to make a significant investment of $100 million over the next three to four years, according to company CEO John Spence.

     

    The company is collaborating with Ernst & Young (EY) to evaluate financing possibilities, encompassing debt, private equity, and even the potential of an initial public offering (IPO). This substantial investment is earmarked for the development and acquisition of new resorts to sustain the company’s current annual revenue growth rate of 10-15%. Karma Group already generates $45 million annually from membership fees.

     

    In the present fiscal year, the company aspires to attain a turnover of $150 million and expects an Ebitda (earnings before interest, tax, depreciation, and amortization) of approximately $30 million. Notably, around half of this revenue is anticipated to originate from India.

     

    With around 85,000 members, a substantial portion of whom are Indian (approximately 25,000), Karma Group’s approach is often likened to the membership club model of establishments like Soho House, distinct from traditional hotel companies. Membership is accompanied by a points system that members can utilize for perks like seven free nights each year.

     

    Reflecting on their origins in India in the 1990s, Spence noted that they recognized the changing desires of Indian consumers. He explained that these travelers sought quality package holidays and entertainment experiences, prompting Karma Group to position themselves more as an entertainment business rather than a conventional lodging or room-selling enterprise.

     

    Karma Group made its initial foray into India with a modest resort in South Goa in the 1990s, later expanding to Bali (Indonesia) and Australia. Approximately nine years ago, they re-entered the European market. In India, the company owns most of its assets or enters long-term leases, demonstrating their low debt strategy.

     

    Looking ahead, Karma Group is intensifying its efforts to cultivate more business within India, targeting the local market’s preferences for domestic and international travel. Their strategy includes expanding the range of properties both in India and worldwide to cater to the desires of Indian travelers. They are also exploring membership models better suited for millennials, recognizing their preference for shorter, less restrictive commitments compared to traditional 20-year memberships.

     

    Spence elaborated, stating that millennials tend to favor annual membership offerings that cost around $990 per year, encompassing networking events and providing similar privileges as long-term members. By adapting to evolving consumer preferences and focusing on experiential travel, Karma Group is poised for growth and expansion in the hospitality industry.

  • Three Bidders Compete for O2 Power’s 350 MW Solar Projects

    Three Bidders Compete for O2 Power’s 350 MW Solar Projects

    Three major bidders have entered the final stage of competition to acquire O2 Power’s 350 megawatts (MW) of solar projects in India. These bidders, actively seeking opportunities in India’s green economy, are Gentari Sdn Bhd, a unit of Malaysia’s state-run oil and gas company Petroliam Nasional Bhd; Edelweiss Infrastructure Yield Plus Fund’s Sekura Energy Ltd; and private equity firm Actis Llp. The transaction, with an equity and enterprise value of $50 million and $200 million, respectively, is being managed by EY, with these three bidders selected from a pool of approximately a dozen non-binding offers (NBOs).

     

    These bidders are also actively exploring opportunities in India’s renewable energy sector and are in contention to purchase 185MW solar projects from Finnish state-run power utility Fortum Oyj. Actis, known for its investments in emerging markets, has already committed $2.1 billion to India. Additionally, Actis is competing for Macquarie Asset Management’s Green Investment Group (MAM-GIG) platform Vibrant Energy, in which India’s quasi-sovereign wealth fund National Investment and Infrastructure Fund Ltd is also participating.

     

    O2 Power is a significant player in India’s renewable energy landscape, with ambitious plans to build a portfolio of around 5 gigawatts (GW) over the next five years. Founded by former executives of ReNew Power, O2 Power already boasts a 2.6GW portfolio, with 600MW already commissioned.

     

    India’s green energy sector has been attracting substantial interest due to the country’s growing demand for power. Power demand recently reached a record 239.9GW, surpassing projections by the Central Electricity Authority (CEA). India currently has 172GW of installed renewable energy capacity, with an additional 128GW under development or awarded through bids.

     

    India is also leveraging its green economy to establish global energy partnerships, such as the agreement with Saudi Arabia to connect their power grids through a subsea cable. This collaboration aims to enhance grid security, particularly in dealing with variable energy sources like wind and solar.

     

    Furthermore, India is actively promoting initiatives like the International Solar Alliance (ISA) and One Sun One World One Grid (OSOWOG) to share its solar power expertise globally and interconnect power grids across regions for efficient energy sharing.

     

    The upcoming climate change conference (COP28) seeks to secure $100 billion annually in climate finance for developing nations, highlighting the global commitment to addressing environmental challenges and promoting sustainable energy solutions.