Media & Entertainment

Last Updated: November 2010

Media, the fourth estate, when entwined with the entertainment component represents an effective facet of consumers in India. Technology has played a key role in
influencing the entertainment industry, by redefining its products, cost structure and distribution.

The Indian Media and Entertainment (M&E) industry stood at US$ 12.9 billion in 2009 registering a 1.4 per cent growth over last year, according to a joint report by
KPMG and an industry chamber. Over the next five years, the industry is projected to grow at a compound annual growth rate (CAGR) of 13 per cent to reach the size
of US$ 24.04 billion by 2014, the report stated.

Similarly, PricewaterhouseCoopers (PwC) in its report titled ‘Indian Entertainment & Media Outlook 2010’ predicts that the industry is poised to return to double
digit growth to touch US$ 22.28 billion growing cumulatively at a 12.4 per cent CAGR to 2014.

The Indian animation industry is expected to grow at 20 per cent to reach US$ 253 million by 2013 from the current US$ 122 million, according to a study by Deloitte
and an industry body. The Indian gaming market alone has been estimated at US$ 239 million and is expected to grow at a compounded annual growth rate of over 50
per cent to reach US$ 1.3 billion by 2013.

The information and broadcasting industry, including print media, witnessed FDI inflow of US$ 2.04 billion during April 2000 and September 2010, according to the
Department of Industrial Policy & Promotion (DIPP).

Television

The television industry is projected to continue to be the major contributor to the overall industry revenue pie and is estimated to grow at a rate of 12.9 per cent
cumulatively over the next five years, from an estimated US$ 5.69 billion in 2009 to US$ 10.45 billion by 2014, as per a report by PwC.

A report by research firm Media Partners Asia (MPA) stated that India is poised to become the world's largest direct-to-home (DTH) satellite pay TV market with 36.1
million subscribers by 2012, overtaking the US. Furthermore, in its report titled 'Asia Pacific Pay-TV and Broadband Markets 2010', MPA said India's DTH
subscriber base will increase from 17 million in 2009 to 45 million by 2014 and 58 million by 2020.

In a new survey of more than 50 organized pay-TV platforms in 16 Asia-Pacific (APAC) markets, research from Media Partners Asia (MPA) shows that India’s six
DTH pay-TV platforms will reach close to 8.6 million net new subscribers in 2010, almost 50 per cent year-on-year growth and representing more than a 55 per cent
contribution to net new additions across the APAC operator group in the survey.

Anil Dhirubhai Ambani Group's company, Reliance MediaWorks (RMW) has signed a memorandum of understanding (MoU) with IMAGICA Corp of Japan for film
processing services. Under this alliance, RMW, on behalf of IMAGICA, would provide film restoration, image processing and enhancement and high definition (HD)
conversion services to the Japanese clients. IMAGICA Corp would work with RMW's Los Angeles-based subsidiary Lowry Digital, which has handled projects for
leading studios like Walt Disney, Paramount Pictures, MGM and 20th Century Fox. RMW would be doing the processing job for IMAGICA either in India or in
California in the US.

Music

Due to the tremendous uptake of the mobile value-added services (VAS) market, the industry is projected to grow at a CAGR of 28.6 per cent over 2010-14, reaching
US$ 567.6 million in 2014, as per PwC. The key growth driver for the music industry over the next five years will be digital music, and its share is expected to move
from 29 per cent in 2009 to 75 per cent in 2014.

Radio

Radio is considered a mass medium. It ideally suits the Indian environment - leveraging its twin advantages of wide coverage and cost effectiveness. Currently, the
sector generates annual revenues worth US$ 49.5 million and is growing at around 20 percent annually, according to the joint report by KPMG and an industry
chamber.

The radio advertising industry is projected to grow at a CAGR of 12.2 per cent over 2010-14, reaching US$ 342.7 million in 2014 from the present US$ 192.8 million
in 2009, as per PwC.

Advertising

A report by consultancy firm KPMG stated that the US$ 5.2 billion advertising industry is set to grow at a compounded annual growth rate (CAGR) of 14 per cent in
2010, in comparison to the last year. KPMG observed that online advertising will grow about 30 per cent per annum, establishing itself as the fastest growing
advertising medium. While elaborating further it stated that the growth in regional advertising is partly driven by new sectors such as education, hospitality, jewellery
and real estate which often have local brands and therefore prefer to advertise through local channels.

Emphasising on the Internet advertising industry, KPMG said the US$ 185 million industry would encourage both multinational companies and local brands to focus
on their marketing strategies.

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Meanwhile, Google India has seen a 96 per cent annual growth in 2009-10 in the number of users of its search-linked advertising business, and hopes
to continue the momentum by targeting small and medium enterprises.

Cinema

Films Division has been motivating the broadest spectrum of the Indian public with a view to enlisting their active participation in nation building
activities.

According to PwC, The industry is projected to grow at a CAGR of 12.4 per cent, reaching US$ 3.65 billion in 2014 from the present US$ 2.03 billion in
2009.

According to the joint report by KPMG and an industry chamber, the growth drivers for the sector would include expansion of factors like an increase in
the number of multiplex screens, digital screens facilitating wider releases, higher cable and satellite revenues, improving collections from the overseas
markets and supplementary revenue streams like DTH, digital downloads, etc, which are expected to emerge in future.

Print/Publishing

The print media industry is projected to grow at a CAGR of 9 per cent and targets to reach around US$ 5.93 billion by 2014, according to the joint
report by KPMG and an industry chamber.

As per the Indian Readership Survey (IRS) for the third quarter of 2010, conducted jointly by the Media Research Users Council (MRUC) along with
research firm Hansa Research Group Pvt. Ltd., Dainik Jagran, published by Jagran Prakashan Ltd, continues to be the most read newspaper in the
country. The average issue readership (AIR) of the newspaper in the last quarter increased to 15.95 million from 15.925 million readers in the last
round of the survey.

Among English newspapers, Hindustan Times expanded its readership from 3.453 million nationally to 3.517 million. Readership of The Times of India,
published by Bennett, Coleman and Co. Ltd, has risen from 7.088 million to 7.254 million.

The leader in the business news space, The Economic Times, increased its readership from 753,000 in the previous round to 798,000 readers.

Foreign investment, including foreign direct investments (FDI) and investment by non-resident Indians (NRIs)/person of Indian origin (PIO)/foreign
institutional investor (FII), up to 26 per cent, is permitted for publishing of newspapers and periodicals dealing with news and current affairs under the
Government route.

FDI policy for publication of Indian editions of foreign magazines dealing with news and current affairs is:

 Foreign investment, including FDI and investment by NRIs/PIOs/FII, up to 26 per cent, is permitted under the Government route.
 'Magazine', for the purpose of these guidelines, will be defined as a periodical publication, brought out on non-daily basis, containing public
news or comments on public news.
 Foreign investment would also be subject to the Guidelines for Publication of Indian editions of foreign magazines dealing with news and
current affairs issued by the Ministry of Information and Broadcasting (I&B) on Publishing/printing of Scientific and Technical
Magazines/specialty journals/ periodicals 100 per cent FDI is permitted under the Government route.

Publication of facsimile edition of foreign newspapers:

 FDI up to 100 per cent is permitted under Government route in publication of facsimile edition of foreign newspapers provided the FDI is by
the owner of the original foreign newspapers whose facsimile edition is proposed to be brought out in India.
 Publication of facsimile edition of foreign newspapers can be undertaken only by an entity incorporated or registered in India under the
provisions of the Companies Act, 1956.
 Publication of facsimile edition of foreign newspaper would also be subject to the Guidelines for publication of newspapers and periodicals
dealing with news and current affairs and publication of facsimile edition of foreign newspapers issued by Ministry of Information &
Broadcasting on 31.3.2006, as amended from time to time.

(Source: DIPP)

Theatre

Mexico-based multiplex operator Cinepolis plans to set up 40 screens over the next 12 months in India, which could entail an investment of US$ 28
million.
Milan Saini, Head and Managing Director, Cinepolis India Country stated that "India is a huge opportunity for us as the market is under-penetrated. We
plan to set up 40 screens over the next 12 months across seven properties in cities like Mumbai, Bangalore, Chennai and Hyderabad."

Digital Media

The digital technologies and their innovative applications have changed the entertainment sector considerably, especially the content production and its
quality. Internet has also emerged as the latest revenue stream and has become one of the fastest growing advertising medium and has made a
significant impression on the entertainment industry.

Officials in the Information and Broadcasting Ministry have planned a roadmap for making broadcasting operations completely digital. The Telecom
Regulatory Authority of India (TRAI) has suggested a three-stage process for digitisation, wherein tier one cities would be covered by 2013, tier two
cities by 2014 and tier three cities by 2017. They further stated that the digital transmission helps in enhancing the audio and picture quality.

Government Initiatives

The Government has initiated the following measures:

 The government has allotted US$ 50.13 million in the current Five-Year Plan (2007-2012) for various development projects for the film
industry. The funds will be utilised to set up a centre for excellence in animation, gaming and visual effects
 To offer better audio quality and sharper picture to millions of its viewers, public broadcaster Doordarshan plans to go completely digital by
2017

According to the Consolidated Foreign Direct Investment (FDI) Policy document released by the Department of Industrial Policy and Promotion (DIPP),
Ministry of Commerce and Industry, Government of India, foreign investment, including foreign direct investments (FDI) and investment by non-resident
Indians (NRIs)/person of Indian origin (PIO)/foreign institutional investor (FII), up to 26 per cent, is permitted for publishing of newspapers and
periodicals dealing with news and current affairs under the Government route.

The Consolidated FDI Policy document brings forth the following guidelines for the M&E industry:

 Terrestrial Broadcasting FM (FM Radio): Foreign investment, including FDI, NRI and PIO investments and portfolio investments are
permitted up to 20 per cent equity for FM Radio's Broadcasting Services with prior approval of the Government subject to such terms and
conditions as specified from time to time by Ministry of Information and Broadcasting for grant of permission for setting up of FM radio
stations
 Cable Network: Foreign investment, including FDI, NRI and PIO investments and portfolio investments are permitted up to 49 per cent for
cable networks under Government route subject to Cable Television Network Rules, 1994 and other conditions as specified from time to
time by Ministry of Information and Broadcasting (I&B)
 Direct–to-Home: Foreign investment, including FDI, NRI and PIO investments and portfolio investments are permitted up to 49 per cent for
Direct to Home under Government route. Within the limit of 49 per cent, FDI will not exceed 20 per cent. This will be subject to such
guidelines/terms and conditions as specified from time to time by Ministry of Information and Broadcasting (I&B)
 The total direct and indirect foreign investment including portfolio and foreign direct investment in Headend-In-The-Sky (HITS) Broadcasting
Service shall not exceed 74 per cent. FDI upto 49 per cent would be on automatic route and beyond that under government route. This will
be subject to such guidelines/terms and conditions as specified from time to time by Ministry of Information and Broadcasting (I&B)
 FDI policy in the Up-linking of TV Channels is as under:
o Foreign investment of FDI and FII up to 49 per cent would be permitted under the Government route for setting up Up-linking
HUB/ Teleports;
o FDI up to 100 per cent would be allowed under the Government route for Up linking a Non-News & Current Affairs TV Channel;
o Foreign investment of FDI and FII up to 26 per cent would be permitted under the Government route for Up-linking a News &
Current Affairs TV Channel subject to the condition that 48 the portfolio investment from FII/ NRI shall not be "persons acting in
concert" with FDI investors, as defined in the SEBI(Substantial Acquisition of Shares and Takeovers) Regulations, 1997;

2010 Media Industry Fact Sheet

Nielsen delivers the most comprehensive picture of what and how people watch across

television, online, mobile, radio, books and music. In 2010 we see a continuation, if not an

acceleration, of current trends with consumers watching and connecting more.

Television

• U.S. homes with at least one TV: 114.9M

• U.S. homes that are cable and/or

satellite ready: 103.6M

• U.S. homes with digital cable: 50.9M

• U.S. homes with satellite TV: 32.7M

• TVs in the U.S. that are HD capable:

47.4M

• U.S. homes with a VCR: 75.8M (down

10% since 2007)

• U.S. homes with a DVD player: 101M

(up 1% since 2007)

• U.S. homes with a DVR: 36.7M (up 12%

since 2007)

Mobile Phones

• U.S. mobile phone users 13+: 223M

• Number of mobile Web users: 60.7M

(up 33% from 2008)

• Percentage of mobile devices that are

smartphones: 18% (up from 13% in

2008)

• Percentage of mobile device owners

that streamed audio: 8%

• Percentage of mobile device owners

that viewed video via their mobile

phone: 7%

• Percentage of mobile devices sold in

Q3 2009 that were smartphones: 25%

(estimated 40%-50 in 2010)

How (and How Much)

We Watch

• Almost 99% of video content watched

in the U.S. is on traditional television

• The average American watches 31.5 hrs

of TV per week

• An average DVR user watches 7 hrs 54

mins of timeshifted TV each month (up

22.5% from 2008)

• Kids aged 6-11 watch 28 hrs of live

TV a week

Looking ahead - Mid-2011

• Estimated smartphone user base: 150M

• Estimated mobile subscribers: 300M+

• Estimated users of mobile web: 120M

• Estimated users watching mobile video:

90M

Growth of cellphone only homes

in the U.S.

Percentage of TV households that own:

• 1 TV Set (16.7%)

• 2 TVs (28.3%)

• 3 TVs (25.1%)

• 4 or more TVs (29.9%)

15% 18% 21%

21.00

10.50

2007 2008 2009Media Industry Fact Sheet

For more information, contact

Karen Gyimesi at 646-654-8631 or karen.gyimesi@nielsen.com

Michelle McGiboney at 408-941-2930 or michelle.mcgiboney@nielsen.com

or visit www.nielsen.com

Copyright © 2010 The Nielsen Company. All rights reserved. Produced in the U.S.A. Nielsen and

Nielsen logo are trademarks or registered trademarks of CZT/ACN Trademarks, L.L.C. 09/787

All data source: The Nielsen Company as of Nov 2009, company-wide reports and surveys

Internet

• Active Internet users: @195M (U.S.)

• People who accessed the Internet

via a broadband connection: 160.3M

(93.3%... up 16% from 2008)

• Unique viewers of video: 138.4M (up

11.4% from 2008)

• Total online video streams viewed

monthly: 11.2B (up 17% from 2008)

• Average time spent viewing online video

per viewer monthly: 200.1 minutes (up

12.5% from 2008)

Social Networking
• Facebook reaches 56% of the active U.S.

Internet universe with an average usage

of 6 hrs a month per user

• Facebook is the #3 site visited by users

65 and older

• Twitter grew 500% year over year

Top 5 Smartphones

• Blackberry 8300 Curve – 17%

• Apple iPhone 3G – 15%

• Apple iPhone 3G S - 12%

• Blackberry 9530 Storm – 6%

• Blackberry 8100 Pearl – 5%

Video Games

• Percentage of households that own a

device they specifically use for

gaming: 73%

• Percentage of households that own

a video game console or handheld

system: 54%

• Household penetration of the 7th

generation of game consoles: 41%

Top 5 Mobile Web Sites

• Google Search

• Yahoo! Mail

• Gmail
Top Social Networks on

Mobile Phones

• Facebook

• Time spent on social networking sites in

the U.S. increased 277%

• The average U.S. worker spends 5 hrs

a month visiting social networks at the

office

• 32% of all mobile web users visited a

social network

Top 5 computer brands among

U.S. adult by percent of ownership

• Dell – 49.8%

• HP – 26.4%

• Compaq – 12.6%

• Mac/Apple – 11.3%

• Percentage of U.S. adults who have two

or more computers: 57.7%

• Percentage of U.S. adults who

purchased a laptop computer in the past

12 months: 12.9%

• Percentage of households that own a

handheld console: 23%

• Percentage of active gamers that are

female (defined as playing at least one

hour per week): 45%

• Percentage of Nintendo Wii owners

and of Sony Playstation Portable (PSP)

owners that are female: 49% and 52%,

respectively

Top game consoles ranked by share of

total usage minutes

• Xbox 360 – 23.1%

• PlayStation 2 – 20.4%

• Nintendo Wii – 19.0%

Audio File

• U.S. homes with MP3 players: 49.1M

• U.S. homes with satellite radio: 20.5M

Top Networking Sites Year Over Year Trend

Unique Audience

Site Nov.2007 Nov.2008 Nov.2009

Facebook 21.97M 47.54M 109.7M

Myspace 57.39M 59.12M 50.92M

Twitter N/A 3.17M 19.07M

Classmates 11.46M 14.6M 12.27M

Linkedin 5.44M 11.64M 12.13M

• Weather Channel

• Facebook

Top 5 Mobile Video Channels

• YouTube
• Fox Interactive Media

• Weather Channel

• Comedy Central

• CBS

• MySpace • Twitter