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India is among the top emerging markets for online media companies: Ernst & Young

In terms of earning
potential for both online media and entertainment companies, emerging markets
like China, India, Russia, and Mexico are fast catching up to their western
counterparts, reports TechCrunch.

In terms of earning
potential for both online media and entertainment companies, emerging markets
like China, India, Russia, and Mexico are fast catching up to their western
counterparts, reports TechCrunch.

 According to a new report by Ernst &
Young, which says that growth will be fueled by rapidly increasing Internet
penetration, there are expected to be 2 billion broadband connections by 2016
in the emerging markets covered by the report, which is twice the numbers of the
mature markets smartphone shipments to emerging markets will also double
between 2014 and 2018.

  1. China
    – The top emerging
    market for online media companies is expected to have 500 million wireless
    broadband connections by 2016. However, the country’s regulations make it an
    infamously difficult market for foreign companies to enter. Facebook and Google
    are just two U.S. tech giants that have been blocked or restricted.
  2. India – The country presents a challenge for
    online media companies due to its limited smartphone and broadband penetration.
    Although, telecoms are gradually beginning to launch 4G service, Ernst &
    Young says India is still not expected to generate much online advertising
    revenue in the near-term, especially in comparison to other emerging markets.
    Its online advertising market is expected to reach just $1 billion next year,
    compared to China’s forecast for $23 billion. On
    a positive note, India will not only have 300 million wireless broadband
    connections by 2016, but it will also become the country with the youngest
    average age (29) by 2020, which means there are plenty of long-term growth
    opportunities. Furthermore, the increasing availability of affordable
    smartphones from makers like Xiaomi and Micromax means that India is one of the
    fastest growing markets in the Asia Pacific region.
  3. Russia – Although the country enjoys higher penetration
    rates for both broadband (87%) and smartphones (50%) but, like in China, there
    too foreign companies face several roadblocks. Ernst & Young says that out
    of the countries included in its report, Russia ranks the lowest in political
    stability and also has the highest level of digital piracy. Russia has also introduced
    a law limiting foreign ownership of media, which means that many companies will
    have to sell part or all of their stakes by 2017.
  4. Mexico – According to the report, Mexico too is
    a difficult market to enter for foreign companies is Mexico, because it has “a
    higher perception of bribery and corrupt practices,” which means media and
    entertainment companies have to deal with a higher risk for fraud. The country’s
    smartphone penetration is also just 21%, much lower than other Latin American
    countries like Argentina and Brazil. On the other hand, Mexico’s per capita
    consumer spending is the highest among emerging markets covered by the study,
    at $11,000 per person.

 

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