White paper on events Industry in India

The business of experiences: The Indian events and activation industryJuly 2012

The business of experiencesPage 2

Thank you, events industry!

The business of experiencesPage 3

The Indian events and activation industry – what are we?

Events and activation company

Events

Media amplified

Corporate

Activations

Personal

IP

Owned

JV

Managed

Others

Exhibitions

Celebrity management

Etc

• TV / Film production

• In-house event divisions of advertisers

• MICE from pure-play travel companies

• Sports leagues, unless IP is owned

• Value of IP not owned

• Media value of others’ events

What we are not…

The business of experiencesPage 4

The organised events industry – where we are and where we will be

Rs crore

2009-10 2010-11 2011-12 (E)

2012-13 (E)

2013-14 (E)

1,850

2,267

2,800

3,500

4,375

1,420 1,570

1,840 2,061

2,308

840 1,050

1,240 1,500

1,815

Organized Events OOHRadio

The business of experiencesPage 5

Growth drivers – Increased BTL spends

2011-12 2013-14

82.2% 80.4%

17.8% 19.6%

Increase in events and activation spends by adver-tisers

BTL

ATL

Drivers

More IP

Production cost inflation

Regional growthSports

Increase in BTL

The business of experiencesPage 6

Growth drivers – IP

Drivers

More IP

(~2 each)

Production cost inflation

Regional growthSports

Increase in BTLManaged Events

Activations

IP

93%

66%

55%

Services Provided

Managed Events

Activations

IP

65%

34%

1%

70%

16%

14%

Company revenues vis-à-vis events or-ganized

Percentage of total revenuePercentage of total events

The business of experiencesPage 7

The “missed” IP opportunity

Event company

Magazine

TV channel

Newspaper

1.75

2.2

11

9

Number of IP

The business of experiencesPage 8

Events and activation companies must build communities for their clients

Mar Apr May Jun Jul Aug Sep Oct Nov Dec

AwardsB2B Newsletter 3

White paperB2B Newsletter 2

B2B Newsletter 1

Round table 1 – customer experience

Round table 3 - Procurement

Round table 2 – Meet the regulator

Article written by a CEO, published in the business paper

The business of experiencesPage 9

Growth drivers – Regional growth

Drivers

More IP

(~2 each)

Production cost inflation

Regional growthSports

Increase in BTL

2007 2011

7055

20

30

10 15

Movement of marketing spends to non-metro locations

ROUIKUTMetros

The business of experiencesPage 10

Growth drivers – Sports

Drivers

More IP

(~2 each)

Production cost inflation

Regional growthSports

Increase in BTL

The business of experiencesPage 11

The space for sports

Cost of rights

Cos

t of m

edia

BCCLIPLWimbledonAsian Games

Costly rights, mass media

Niche, subscription based sports channelsEg, Golf

Costly rights, narrow media

Existing space for most event

companies

Inexpensive rights, narrow or no media

Inexpensive rights, mass

media

Low High

High

Opportunity for event

companies

The business of experiencesPage 12

Growth drivers – Costs

Drivers

More IP

(~2 each)

Production cost inflation

Regional growthSports

Increase in BTL

Admin12%

Payroll13%

Direct variable

costs75%

Cost breakup

Profit margin Debtors days

19% 59

The business of experiencesPage 13

Challenges which haunt the industry now and in the future

Cumbersome tax structure

Inability to demonstrate ROI

Talent acquisition and retention

Inadequate event infrastructure

17%

11%

15%

13%

11%

11%

12%

14%

FutureNow

Percentage of respondents

The business of experiencesPage 14

Voice of your clients

One-stop shop

National reach

Transparency

Proactive ideation

RoI

50%

50%

60%

70%

80%

Wish list from your existing events agency

The business of experiencesPage 15

Proposed approach to demonstrate RoI

Define objectives

• Awareness• Sales• Trial• Database

creation• Share of

wallet / preference

Set targets

• Define numeric targets for the event's objectives

Measure performance

• Implement processes to collect relevant data

Report and course correct

• Analyse performance against objectives

Agreed objectives Standard methodology Open to audit Increased trust

The business of experiencesPage 16

Better infrastructure tops the EEMA wishlist

Others

Availability of credit

Service tax waiver

Rationalisation of entertainment tax

Easing out permissions

Infrastructure

1%

15%

20%

21%

21%

22%

Key issues requiring regulatory support

The business of experiencesPage 17

If you fail to plan, you plan to fail

Onerous regulations (permissions, taxes, etc)

Inadequate infrastrucuture

Quality control over large events

Procurement efficiency / rising costs

Safety

0% 20% 40% 60% 80%

47%

63%

70%

70%

70%

Key operating challenges faced by event & activation companies

The business of experiencesPage 18

EY’s event risk management frameworkSM

Awareness / Sales / Viewership / Trial / etc

Objective

Celebrity participation

Benefit of viewership / participation

Relevance

Attraction points(Enable achievement

of objectives)

Entertainment value /

knowledge

Hype / peer acceptance

Timing

Contestant / jury

acceptability

Processes & credibility

Venue and decor

Hygiene

Hygiene factors(repel achievement of objectives if not

managed properly)Rules and regulations

Participation effort

Thank you!

ashish.pherwani@in.ey.com

The views presented are based on research and interviews, and analysis of the same. The presentation does not carry any warranties, and any use made of the same is at the risk of the person making the same © EYPL. No tax or other advice is provided.

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