Investment Philosophy

Why In This Industry?

The Media and Entertainment Industry in India is worth INR 1.8 lakhs crores. It’s expected that the Indian Media and Entertainment Industry will cross INR 3.3 lakh crores (USD 43.93 Billion) by the year 2024. Currently Indian M&E Industry is just 1% of the total India’s GDP compared to the other larger markets standing at 3-4% although, M&E Industry in India is moving at a very high growth rate of 1.5x of GDP.

Currently, there is no dedicated organized pool of capital in the market to finance quality content, services or back a promising M&E focused digital business. Moreover, the bank arrangements are time consuming with additional asset coverage. These challenges provide a great investment opportunity as compared to the traditional asset classes and creates a diversified Investment Strategy along with risk-adjusted returns.

Why In This Industry?

The Media and Entertainment Industry in India is worth INR 1.8 lakhs crores. It’s expected that the Indian Media and Entertainment Industry will cross INR 3.3 lakh crores (USD 43.93 Billion) by the year 2024. Currently Indian M&E Industry is just 1% of the total India’s GDP compared to the other larger markets standing at 3-4% although, M&E Industry in India is moving at a very high growth rate of 1.5x of GDP.

Currently, there is no dedicated organized pool of capital in the market to finance quality content, services or back a promising M&E focused digital business. Moreover, the bank arrangements are time consuming with additional asset coverage. These challenges provide a great investment opportunity as compared to the traditional asset classes and creates a diversified Investment Strategy along with risk-adjusted returns.

clapperboard

Providing Bespoke solutions to Industry participants

partner

Partnering with like-minded people on long-term execution of projects and businesses

calendar

A prudent mix of debt and equity cut across various segments like films, digital platforms and live events

cost

Bring organised pool of capital to a “still” fragmented market

A platform approach, built for long term sustenance:

Resulting in capital deployment with a strong sense of risk adjusted returns, with robust security mechanism.

Media and Entertainment Industry Landscape

Media and Entertainment Industry can be divided into 3 major segments:

TV/Films Digital Ent. Games Music Sports Education Digital News

CONTENT:

Content is undergoing a shift to cater to more value driven stories, local tastes and youth driven

MOVIES
  • Filmed entertainment grew 9.5% YoY in 2019 with 1,833 films releases (~ 35 films per week) with total Industry size of INR 191 billion
  • Top 10 Hindi films earned a Gross Box Office Collection of INR 25.6 billion contributing 52% of total Hindi Gross Box Office Collection
  • 17 Bollywood movies made it to coveted INR 100Cr. club in 2019; with 6 films grossing INR 200Cr. and above
DIGITAL
  • Digital media grew by 31% in 2019 with Digital subscription grew 106% in 2019 to reach INR 29.2 billion
  • Fresh original content created for OTT platforms estimated to be 1,600 hours
  • Digital segment expected to reach INR 423 billion by 2023
GAMES
  • India contributed 13% to global game app downloads in 2019
  • Online gaming segment grew by 40% YoY in FY19 and is expected to grow at CAGR of 43% to reach INR 186 billion by 2023
  • Transaction gaming grew by 50% whereas Casual gaming grew by 20% YoY in FY19
MUSIC
  • Music segment grew 8.3% YoY in 2019 and is expected to grow at CAGR of 10% to cross INR 20 billion by 2023
  • Paid music subscriber base could cross 5 million by 2022 whereas Music concerts are expected to double by 2025
SPORTS & LIVE EVENTS
  • Indian sports segment grew 17% YoY in FY19 with media spends comprising over 50% of revenue
  • Indian organised events segment grew 10% YoY in FY19
  • Event spends estimated to increase by over 10% across the next two years

Source: EY-FICCI report “The era of Consumer A.R.T dated March 2020; Systematix estimates.

Broadcast OTT Print Exhibition Digital Radio Cable/DTH

DISTRIBUTION PLATFORMS:

Broadcast, OTT, Print, Exhibition, Digital, Radio, Cable/DTH

Growth across segments driven by higher smartphone and internet penetration

TELEVISION
  • 64% growth in HD viewership in 2019
  • Number of distribution platforms grew, especially the Multi-System Operators
  • Total TV subscriptions could increase to 220-235 million by 2025
OTT MARKET IN INDIA
  • OTT market in India is predicted to grow at 21.8% CAGR from INR 4,464cr. to INR 11,976 cr. between 2018 and 2023
  • Over 10 million subscribers paid for 21 million OTT video subscriptions in 2019
  • Audio streaming users grew over 30% YoY in 2019
  • India is projected to become one of the top 10 global OTT markets to reach USD 823 million by 2022
OTHER DISTRIBUTION PLATFORMS
  • 9,500 + screens; Multiplexes revenues increased to INR 61 billion in 2019
  • 1,000 + operational radio stations
  • 403 million reader base for blogs, newspaper, magazines and other reading mediums.

Source: EY-FICCI report “The era of Consumer A.R.T dated March 2020; report by Esya Centre “Embracing Nonlinerailty: The Future od India’s Entertainment Industry” dated November 2020 and India Brand Equity Foundation report on Media and Entertainment dated October 2020

Post Pord VFX Creative Digital Talent Mgmt Sports Education

SERVICES:

Post Production, VFX, Creative, Digital, Talent Management, Sports, Education

India is transforming into a Hub for media and entertainment related services

Animation and VFX
  • Animation and VFX segment grew 20% in 2019 of which Animation grew 18.5% and VFX grew 25%
  • 65% of the animation revenues have been from international clients
  • Global studios went from work for hire to IP owners , leading to sharp increase in business for Indian Service Providers
  • Indian Film Industry is witnessing increased demand for big-budget VFX productions as well
Post Production
  • Post production grew 12.8% in 2019 to reach INR 23.1 billion
  • In 2019, about 70% of post production work done was for the domestic market and this is expected to grow at a rate of 15% year on year
  • International companies continued to approach Indian production and post production companies, perceived as doing quality work at competitive rates, to work on global projects
Offshoring
  • India is becoming a hub for the offshoring services for Audio and Video services.
  • Companies like Spotify, Amazon Prime and other leading Digital as well as OTT companies have setup their backend team and data processing centres in India to service their global customers

Source: EY-FICCI report “The era of Consumer A.R.T dated March 2020

Investment and returns profile

film
Investment Profile - Filmed Content

Strategy - Structured Debt + Equity Upside
Est. Returns Profile - 12%+

audience
Live Entertainment /Entertainment IPs

Strategy - Equity /Structured Debt
Est. Returns Profile - 18%+

mobile-app
Media & Entertainment Technology

Strategy - Equity
Est. Returns Profile - 20%+