Ernst & Young released a report on the media and entertainment landscape in the emerging markets of Brazil, Russia, India and China (BRIC). The report provides an overview of the latest indicators of market attractiveness, as well as the opportunities, challenges and critical success factors in conducting business in these four countries.
"Global media and entertainment companies are increasingly focusing on the role emerging markets play in content consumption and creation. Leading global companies that fail to understand and optimize the opportunities in emerging markets may lose out on significant revenue growth," said John Nendick, Global Media & Entertainment Leader for Ernst & Young.
The report, "Tune in to emerging entertainment markets: spotlight on Brazil, Russia, India and China," examines the industry landscape of individual emerging markets. Highlights include:
· Corporate leaders are spending significant time assessing future market opportunities in the BRIC countries though currently, some of the largest media and entertainment companies generate less than 10% of their global sales from BRIC economies.
· The number of mobile subscribers in BRIC countries, which have a combined GDP of US$8.7 trillion, exceed broadband, Internet and television users, indicating huge potential for mobile entertainment.
· Brazil is shifting from free broadcast television toward pay television. When combined with the under-penetrated Internet market, the country could become more attractive to global media and entertainment companies.
· Russian Internet users socialize more than many Western European countries, creating new digital opportunities for domestic and foreign media and entertainment companies.
· In India, there is an increase in the number of channels and adoption of digital distribution platforms; the country has also become a hot bed for media content outsourcing and is the largest film-producing nation in the world.
· Satellite television subscribers in India, which currently account for 15% of the total 130 million television sets, are set to double in the next 2 years.
· Chinese youth are driving higher discretionary spending in entertainment-related activities. As a result, China is experiencing a growing purchasing power.
The critical success factors identified in the report include localizing content, thorough assessment of pricing and distribution channels, understanding regional nuances within each country, designing flexible business plans and mitigating business risks. The risks include local competition, fraud, corruption and piracy, ongoing structural and regulatory reforms and the development of corporate governance standards.
"The media and entertainment industry in India has been, and will continue to be, one of the biggest beneficiaries of India’s favorable demographics," said Farokh Balsara, Media & Entertainment Leader, Ernst & Young Private Ltd. in India. "Volumes of content consumption, vibrant indigenous content creation and a favorable regulatory framework, make India an attractive investment destination for global media and entertainment companies."
