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Reaching new markets, content delivery and distribution, and digitization have emerged as the top strategic focus of Indian media and entertainment (M&E) companies, according to a leading innovator in the IT market research industry.

Many Indian M&E firms are looking at investments in technology as a way to more effectively deliver their content to new audiences, especially cities and towns outside of the major metropolitan areas.

Springboard Research, in its report, India’s Booming Media & Entertainment Industry: IT Market Trends and Opportunities 2006-2010, has showed that there is an increasing trend among M&E companies in the country to focus on IT solutions that are specific to the media & entertainment industry. A vast majority of the M&E companies Springboard surveyed said that they have either invested or plan to invest the largest portion of their IT budget on industry-specific solutions. A further 47 per cent said that their largest IT investment was for a technology solution tailored towards the industry.

“From our research, we are seeing that one of the key ways for IT vendors to gain traction in this industry is to market the M&E industry-specific benefits that they can provide,” said Nilotpal Chakravarti, market analyst for Springboard Research. “While many of the IT challenges Indian M&E companies are experiencing are similar to other industries, they are perceived as being specific to M&E and these companies are looking for industry-specific solutions to these challenges,” he said.

The findings of the study are based on the data generated from of an exhaustive sampling of 80 M&E Companies in India, which included all the major media and entertainment houses in the country. Perspectives were also sought from the vendors of all the leading IT vendors in this space. “We are very bullish on this sector, since this industry is witnessing lot of traction thanks to rapid technological advancements and growing competition to catch eyeballs and readership,” Chakravarti said.

Springboard found that the majority of M&E companies spent more then US$ 225,000 each on IT in the past 24 months. Over 40 per cent of them spent more than US$ 700,000 implementing IT solutions during the same period. Springboard’s study revealed that M&E companies spent the largest share of their IT budget (48 per cent) on software, followed by hardware (41 per cent). IT services came in as the third-highest IT budget expenditure, with 11 per cent of the budget spent in this area, in the past 24 months.

Chakravarti said future investments in industry-specific solutions are high on the agenda of 20 per cent of the respondent M&E companies for the next 12 months. Storage and data warehousing solutions was named as another future IT investment by 11 per cent of respondents. The highest response rate came from 57 per cent of the respondents who are not looking at any major new investments in IT as they feel their current IT set-up is sufficient.

Springboard’s IT in the Media & Entertainment Industry report series aims to help IT vendors understand more about the opportunities that are being created by the growth of the M&E market in Asia. Springboard’s report also details the size of the M&E market and how IT can effectively tap into that market.

Drivers for IT spending in the M&E industry include the urgency of Indian M&E firms to reach new markets (named by 27 per cent of the respondents) and the focus on solutions that better manage and deliver M&E content (according to 24 per cent of the respondents). IT is viewed as an enabler to help M&E firms achieve these two business goals and deliver their content more efficiently within the Indian sub-continent.

“Many Indian M&E firms are looking at investments in technology as a way to more effectively deliver their content to new audiences, especially cities and towns outside of the major metropolitan areas,” Chakravarti explained.

Springboard Research’s report findings also show that software represents the largest spending component by Indian Media & Entertainment firms, followed by hardware and IT services. IT services is indicated as the fastest growth area of the market. Local IT vendors are still viewed as the primary external influencers in this industry, with IBM being the only multinational vendor of note to gain a significant number of mentions as a primary influencer.

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