IT spending by the Media and Entertainment industry is expected to grow from the current $100 million (Rs 445 crore or Rs 4.45 billion) to $300 million (Rs 1,320 crore or Rs 13.2 billion) by 2010. It was around $62 million (Rs 275 crore or Rs 2.75 billion) in 2005.
The market is growing at a compound annual growth rate of 32 per cent.
In its 'India's Booming Media & Entertainment Industry: IT Market Trends and Opportunities 2006-2010', Springboard Research data shows an increasing trend among M&E companies to focus on IT solutions.
The report revealed that the majority of M&E companies have spent more than $225,000 (approx Rs 1 crore or Rs 10 million) each on IT in the past 24 months. Around 41 per cent of them have spent more than $700,000 (approximately Rs 3 crore or Rs 30 million) implementing IT solutions during the same period.
The findings of the study are based on sampling of 80 M&E companies in India, which includes all the major M&E houses in the country. Almost 47 per cent of the respondents said their largest IT investment was for a technology solution tailored towards the M&E industry.
Ishwar Jha, senior vice-president, Business Technology, Zee Entertainment Enterprise agrees, "Unlike in the banking, financial services and insurance segment where the IT vendors are selling solutions to the problems in M&E
sector, they are just talking about products."
He gives Zee's example, "A few years back when we planned to get our digital asset management systems, it took us eight to nine months to find an IT vendor."
The IT budget for Zee is between Rs 10-12 crore (Rs 100 to Rs 120 million) for the financial year 2007. A vast majority of the M&E companies Springboard surveyed said, they have either invested or plan to invest the largest portion of their IT budget on industry-specific solutions.
Some of the reasons for increase in IT investment are digitisation of content, urgency to reach new markets and increasing competition.
"Many Indian M&E firms are looking on investments in technology as a way to more effectively deliver their content to new audiences, especially in the cities and towns outside of the major metropolitan areas,"
explains Nilotpal Chakravrti, market analyst, Springboard Research.