MUMBAI: The Media and Entertainment (M&E) industry is poised to start recovery in 2010, after hitting a rough patch in the previous year due to economic slowdown. Growth in the industry is expected to be driven, amongst other factors, by the growth in subscription through enhanced penetration and expansion of digital delivery infrastructure.

This prognosis is held out by a FICCI-KPMG report on the Media and Entertainment industry.

The report notes that rising disposable incomes of the working population and increased spend on discretionary items, not only in Tier 1 but also Tier 2 and 3 cities is expected to continue impacting the M&E industry favorably.

Growth of newer delivery platforms with superior technology and functionality is likely to expand horizons for the M&E business. Aspirations of Indian players to go global and foreign players entering the industry will also help the industry target a double digit growth in next 5 years.

The report states that the role of new media is becoming increasingly important in the distribution portfolio of advertisers. Focus on talent development, consumer research and innovation will help the players in differentiating themselves amidst growing competition.

The FICCI-KPMG report will be released at FICCI-FRAMES 2010 in Mumbai on March 16 by Maharashtra Chief Minister Ashok Chavan and Union Information and Broadcasting Minister Ambika Soni in the high profile presence of eminent actors like Shah Rukh Khan and Katrina Kaif besides noted filmmaker Yash Chopra and Karan Johar.

The FICCI-KPMG report points out the Indian M&E industry went through a tough phase in last two years due to the economic slowdown which impacted businesses in the country. The industry which is dependent on advertising for almost 40% of its revenues was hit due to shrinking ad budgets of the corporate world. However, the industry as a whole remained at an almost flat rate registering a very modest growth of around 1.3% in 2009 compared to 12 % in 2008. It is poised for recovery in 2010, riding on the back of economic growth picking up and favorable demographics of the country.

2009 was a year marked with innovations and cost efficiencies which came about in all the sectors, more as a necessity to combat the pressures on bottom line. Newer content formats and strategies adopted by the players in the industry ensured that customers had more choices and led to the evolution of the industry. Cost efficiencies which came about last year proved to be a silver lining for the industry in a bad year as the industry feels some of the measures adopted are here to stay and will benefit players in the long run.