Media 2020

Media 2020 :
A Future Backward
Kaleidoscope
Jehil Thakkar
August 2012
The More I read...
...The less I know
So I read something more...
© 2012 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member
firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved .
1
Empirical studies indicate there is a positive relationship between the wealth
of a nation and newspaper readership
Source : WAN-IFRA – World Press Trends
© 2012 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member
firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved .
2
However, there also exists a strong positive correlation between growth of
economies and technology adoption which has significant potential to disrupt
media consumption
A Case Example of Newspaper Industry in Australia
Australia’s per capita GDP and internet
penetration
79.0
70,000
US $
50,000
63.0
66.0
69.5
48,226
35,884
37,565
74.3
76.0
65,890
55,920
40,000
30,000
71.7
44,694
44,776
20,000
10,000
0
2005
2006
2007
2008
GDP per capita
90.0
80.0
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0.0
per 100 people
60,000
Time spent on internet higher v/s print
2009
2010
2011
Internet penetration
Structural shifts in media consumption pattern
Digital adspend rising while TV/Print/Radio falling...
© 2012 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member
firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved .
3
India is observing a similar trend: with growth in household premiumisation,
media consumption is witnessing variable growth across categories
HPI – 14.3%
CAGR (Q2’10 to Q1’12) of consumption
of different media:
Any media
2.9%
Press
2.6%
TV
5.1%
14.1
%
C&S
Radio
Cinema
Internet
Source : IRS
5.3%
3.9%
34.0
%
*Household Premiumness Index (HPI) is a composite of 50
variables, including demographics, product ownership / usage &
services.
© 2012 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member
firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved .
4
Rapid proliferation of new-age user-devices...
Smart Phones and Tablets to drive on-line
media consumption
Frequency of accessing internet on
mobile/tablet
48%
50%
40%
39%
30%
20%
7%
10%
3%
1%
2%
0%
4-5 times
a day
Daily 3-4 times Once a Once in Once a
a week
week 15 days month
Source : Afaqs.com, 26th July 2012
A recent study by ViziSense and Komli
Media suggests that 2 crore mobile internet
users have reduced their newspaper
consumption significantly with 40 percent
of them preferring to access newspapers
and related content on mobile screens.
Emerging sources of
news consumption
Online
news
websites
Social
Networks
Blogs
Television
Source : Afaqs.com,26th July 2012
© 2012 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member
firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved .
5
...Giving rise to increasingly savvy and ‘new age’ consumers
...and augmenting the adoption of media
devices
Youth driving the Internet Usage...
Smartphone ownership among age groups
(as a % of mobile phone users)
Under 18 yrs
5%
18-24 yrs
75%
13%
25-30 yrs
8%
31-35 yrs
8%
36-40 yrs
8%
Above 40 yrs
5%
Source: Nielsen Informate Mobile Insights
Source: IAMAI, iCube report
Smartphone usage by age-groups
15-24 yrs
31 + yrs
Total Time spent on Smartphone
3 hrs
2 hrs
Total Time spent on Browsing &
Entertainment
2 hrs
1 hr
Total Time spent on Chat & SMS
31 mins
15 mins
On an average, Indian smartphone users are
spending about 150 minutes a day on their
phones and more than 50 percent of this time is
on Browsing, Entertainment and Applications.
Source: Nielsen Informate Mobile Insights
© 2012 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member
firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved .
6
Leap Frog to the Year 2020
Year 2020
A major shift in the global balance of economic power
World’s 10 largest economies in 2020
(GDP in PPP)
3,793 US$ billion
Economic prosperity
coupled with increased
literacy rates leading to
increased readership
9
4,857 US$ bn
5
6
4,189 US$ billion
7
2
28,830 US$ billion
29,590 US$ billion
10
3,831 US$ billion
32,884 US$ billion
1
3
46,795 US$ billion
India: Readership across Socio –
Economic Class (in crores)
13,363 US$ billion
8
World’s 3rd largest economy
and an affluent market
2.7
4.7
3,823 US$ billion
2nd most populous nation
3.2
2.8
3.8
6.0
4.1
2.7
81% literate population
Source : EIU, IRS, Census 2011, KPMG in India Analysis
*PPP- Purchasing Power Parity
© 2012 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member
firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved .
2.5
6.6
7.4
8.7
2005
2011
2020
Sec A/B/C
Sec D/E
Sec R1/R2
Sec R3/R4
8
Year 2020
India – Today in Tomorrow
August 8, 2020
Banking transactions and payments through
mobile crossed USD 700 billion mark
August 7, Friday, 2020
© 2012 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member
firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved .
9
Year 2020
Indian consumption moves up the Maslow’s Hierarchy…from necessities to
lifestyle
…Communications being the major growth
driver
India’s share-of-wallet now dominated by
discretionary items…
Share of average household consumption (%)
Necessities
Discretionary
spending
100%
90%
29%
38%
80%
70%
5%
60%
5%
12%
50%
11%
3%
57%
Apparel
Housing and utilities
Household products
10%
Personal products
and services
20%
Transportation
3%
40%
Food, beverages
and tobacco
8%
30%
66%
18%
4%
Communication
2%
5%
7%
Education and Recreation
8%
11%
Health care
2010
2020
20%
10%
0%
Source : The Bird of Gold 2007, KPMG in India Analysis
© 2012 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member
firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved .
10
Year 2020
Technological developments alter the way of doing things
1
Electronic delivery and language translation software etc.
have increased the reach of news organisations
Coverage
2
Collaboration
3
Speed
Techno
Development
4
5
6
Flexibility
Security
Interactivity
© 2012 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member
firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved .
Social Networks: Technological advances
have enabled print players to collaborate
with social media and allow user
participation
High-speed mobile broadband has
increased the consumption of media
content
Cloud-based services: Availability and
adoption of cloud services have made
communication services deviceindependent
Biometric Identification: Provides enhanced
security of user accounts leading to increased
adoption of digital platforms
NFC: QR codes/Bar codes have provided a new channel
of advertising in newspapers/magazines.
11
Year 2020
Impacting the readership habits of Gen-C...
However, not reading the FINE PRINT
CONNECTED
Share in Total Readership by Age Groups
19%
21%
COMMUNICATING
25%
22%
50+ years
40 to 49 years
24%
27%
CONTENT CENTRIC
6%
7%
30 to 39 years
9%
28%
25%
COMMUNITY ORIENTED
21%
26%
CULTURALLY LIBERAL
23%
20 to 29 years
18%
12 to 19 yrs
2005
2011
2020
Source : IRS, KPMG in India Analysis
© 2012 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member
firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved .
12
Year 2020
...however, new centers of consumerism drive readership growth
12 distinct clusters of consumers emerge
Core city
Chandigarh
Cluster
Delhi
Kanpur
Jaipur
Ahmedabad
Kolkata
Vadodara
Surat
Mumbai
Nagpur
Pune
Hyderabad
Visakhapatnam
Bangalore
Chennai
Kochi
Source: Indian’s Urban Awakening, IRS, KPMG in India Analysis
© 2012 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member
firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved .
13
Year 2020
The Digital Divide creates parallel consumer segments with different reading
habits...
Isha, 20-yr old, Delhi
college student
Pragati, 35 yr-old, owns Kochi
based business of silk sarees
Shops Online
Uses her mobile
phone for
listening to
radio
On Cloud....
Music
Everything on
the go!
Videos
Contacts
Documents
Uses GPS to
locate her
friends and new
routes
Reads news online
rather than physical
Traditional but
Connected
Records her
favourite show on
digital TV
Reads Malayalam
daily and magazines
...pushing players to develop product offerings which cater to both the segments simultaneously
© 2012 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member
firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved .
14
Year 2020
Indian Print industry continues to grow to be worth ~INR 500 billion by
adopting various strategies
Evolution of Print Industry in India
•Youth/Women
specific editions
•By language
•By content
•By market
600
•Build paywalls
INR Billion
500
Monetization of
online platforms
•FT
•Wall Street
•NY Times
400
•M&A
•JVs
•Greenfield projects
Consolidation
Segmenting the
market
Entry of
international
players
300
New business models and
alternate revenue streams
200
Development of
online properties
100
•Brand Extension
•Media Businesses
•Non-Media Businesses
Indian players
widen geographic
spread
•Applications for tablets
•Websites in all languagesHindi, English and Vernacular
•Across regions in India
•International markets
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Source : KPMG in India Analysis
© 2012 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member
firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved .
15
Looking back at
10 years…
What did the leaders do right?
From fragmented to a
Consolidated industry
New business models and
alternate revenue streams
From newspaper organisation to
content organisation
Learned to collaborate
Focused on analysis and opinion
Connected with the youth
Operational Efficiencies
© 2012 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member
firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved .
17
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not intended to address the circumstances of any particular
individual or entity. Although we endeavor to provide accurate
and timely information, there can be no guarantee that such
information is accurate as of the date it is received or that it will
continue to be accurate in the future. No one should act on
such information without appropriate professional advice after
a thorough examination of the particular situation.
© 2012 KPMG, an Indian Registered Partnership and a
member firm of the KPMG network of independent member
firms affiliated with KPMG International Cooperative (“KPMG
International”), a Swiss entity. All rights reserved.
The KPMG name, logo and "cutting through complexity" are
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