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Indian events & activation industry to touch Rs 4,375 crore

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eema

The Event and Entertainment Management Association (EEMA) launched the first ever white paper written in India on the events and activation Industry at EEMAGINE 2012. The White paper was launched by Minister of Information and Broadcasting, Ambika Soni and Farokh Balsara, Media & Entertainment Leader – Europe, Middle East, India and Africa (EMEIA), along with research agency Ernst & Young.

According to the report the organised portion of the Indian events and activation industry is estimated at around Rs 2,800 crore in 2011-12. The industry has grown at over 20 percent during the last two years and is expected to grow to Rs 4,375 crore by 2013-14. The report was produced by EEMA and Ernst & Young.

The report identifies the unorganised events and activation sector as well, which could be as large as or even larger than the organised portion of the industry.

Brian Tellis

Brian Tellis,President, EEMA India

More than 150 event management companies from all across the country along with speakers like  Ekta Kapoor, Indian TV and Film Producer and Joint Managing Director and Creative Director of Balaji Telefilms; Ranjivjit Singh, CMO, PPS, HP India; Amit Tiwari, Director, Country Head Media, Phillips India, among others, participated in the event. Subjects like ‘The changes in the industry so far and the essential changes to be done in future’; ‘Creating harmony together’; ‘Mantras to success’; ‘Looking at the key areas for change’, ‘Awakening the internal motivation to make the change happen’ were discussed.

Commenting on the growth of the industry, Brian Tellis, President – EEMA India, said, “The business has shown an unswerving growth pattern, with 20 per cent increase during the last two years. And I look forward to a more strengthened position with the help from regulatory bodies.”

Sharing his views on the subject, Ashish Pherwani, Partner & Segment Champion – events, Ernst & Young said, “Over the past few years, the industry has grown considerably and through this paper, we have endeavoured to capture the trends and challenges that this dynamic industry faces.”

Pherwani said that the industry’s growth will be driven by development of IP, sports properties, digital activation and rural properties.  In fact, industry leaders are of the opinion that growth will be driven by development in these areas, which target rural audiences in consideration with increased spends in tier 2 and tier 3 cities. Marketers plan to increase the proportion of their BTL spends from 17.8 per cent today to 19.6 per cent by 2013–14. “The organised portion of this industry is poised to increase as advertisers’ increase their below-the-line spends over the next two years, build communities and amplify the customer experiences they create,” Pherwani added.

Ashish Pherwani

Ashish Pherwani, Partner & Segment Champion – events, Ernst & Young

According to the report, the organised events and activation sector showed an average growth rate of more than 20 per cent during the last two years because of increasing confidence being shown by marketers in events and activation for their business growth. The organised sector accounts for around 40 per cent of the total events industry.
The total number of events delivered grew 24 per cent in 2011–12 as compared to 2010–11. The number of IP doubled in terms of share of total events from 1 per cent to 2 per cent, while the main growth was noted in managed events, which increased its share from 65 per cent to 70 per cent of total events conducted.

According to the report events and activation industry in India has seen the lowest transactions activity among all segments of the media and entertainment sector because of its small size, lack of human resources and absence of bankable IP.

However, on a more positive note, most marketers indicated that they are likely to increase their expenditure on events and activations if the ROI can have a fixed standard. However, because of the unparallel events, there is no universally accepted standard today to measure return on events and activation spends.

Earnings before interest, depreciation, taxes and amortization (EBIDTA) figures show that the current profit margin, on average, stood at around 19 per cent of total revenues. Debtors days stood at a healthy 59 days, as most events and activation companies only paid creditors and vendors from advances of collections made from customers.

Thus, it was suggested that rationalisation of entertainment tax is a necessity. If a uniform percentage is developed, events in many states can be made viable. Ticketed events have fared extremely poorly in India due to high taxes.  As a conclusion to this, the report says that there is a need for a tax waiver/ holiday for five years to give a boost to the live entertainment segment of the industry. Growth in the live events segment can lead to economic growth, increased tourism and employment generation.

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