India's entertainment sector is set to double in size within five years, according to data presented over the weekend at the Frames 2002 industry seminar in Bombay.
Consulting firm Arthur Andersen said that the local film industry would grow steadily at a compound annual rate of 15%, to reach a value of $1.03bn (Rup50bn) by 2006 up from $502m (Rup25bn) last year.
The firm also reported that India's TV sector had grown by 38% last year to reach $1.93bn (RUP94bn) and that by 2006 would hit $4.52bn (RUP220bn).
According to Andersen, the outlook for film is "strong" although piracy, high state entertainment taxes and problematic access to financing were still major issues.
"With the availability of broadband Internet access, new revenue streams such as pay-per-view and video on demand will open up," it said.
New tax incentives proposed in the budget for the new financial year (beginning in April) are expected to increase multiplex building in certain areas.
Andersen also said that increased access to institutional finance will boost film production and that digital technology will improve image quality and projection, making distribution easier and less costly.
By 2006, broadcasters' revenue is forecast to increase by 125% to $1.66bn (RUP81bn), cable companies' revenue by 160% to $2.87bn (RUP104bn) and programme production revenue by nearly 100% to $720m (RUP35bn). Last year cable TV revenue surged 68% to $820m (RUP40bn), primarily due to climbing subscription charges and the move by several leading broadcasters to begin charging for some previously free premium channels.
But there were many at the conference, including James Murdoch chairman of STAR India, who suggested that there is significant under-reporting of cable connections and that providers are currently receiving only 5% of the sector's total revenue.
While confirming the importance of the dominant Hindi-language Bombay or Bollywood sector, which accounted for about a third of the 1,013 films produced last year, other production centres are now also mushrooming.
Some 630 films were shot in the four south Indian languages of Telugu, Tamil, Malayalam and Kannada, respectively the primary languages spoken in the states of Andhra Pradesh, Tamil Nadu, Kerala and Karnataka.