NEW DELHI: The Indian Entertainment and Media (E&M) industry is poised to grow at 19 per cent compound annual growth rate (CAGR) to reach Rs. 83,740 crore by 2010 from its present size of Rs. 35,300 crore, the FICCI-PricewaterhouseCoopers annual report has forecast.

The report released on Sunday says economic growth, rising income levels and consumerism, coupled with technological advancements and policy initiatives taken by the Indian Government, which is investor-friendly, will drive the entertainment and media industry.

"Two factors that will contribute to the industry's growth are low media penetration in lower socio-economic classes and low ad spends," Deepak Kapoor, Executive Director and Leader for PricewaterhouseCoopers' Entertainment & Media Practice in India said.

Amit Mitra, secretary general, FICCI, and Mr. Kapoor observed that while media penetration is poor among the lower socio-economic strata today, even efforts to increase it slightly would deliver much higher results, due to the absolute numbers being large.

Strong economic growth, a rise in consumer spending and regulatory corrections are drawing foreign investments in most segments of the E&M industry, especially the print media. "The media needs a consistent and uniform policy to attract more investments. To stop the piracy threat, which hinders investment in all sectors, there must be a concerted effort from industry bodies and the Government, with empowered officers enforcing anti-piracy laws," Mr. Mitra suggested. Indian advertising spending as a percentage of the Gross Domestic Product (0.34 per cent) is abysmally low, as opposed to other developed and developing countries, where the average is around 0.98 per cent. Advertising revenue is vital for the growth of this industry.

"While today, low ad spends may seem like a challenge for the E&M industry, it also throws open immense potential for growth," the report points out. This potential is estimated by the fact that "even if India was to reach the global average, the advertising revenues would at least double from the current level of around INR 132 billion," the report adds.

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