In its latest report on global entertainment, Opportunities for Hollywood in Bollywood, it states that India is one of the four countries where there is significant opportunity for global media and entertainment companies to make money in the medium and long term.
The other countries with the same potential are Brazil, Russia and China.
The report also hints at consolidation in the sector in the near future, especially in view of the recent acquisitions by Disney.
The US giant had acquired 15 per cent stake in Indian film and television production company UTV and also bought out its children's channel Hungama a few months ago.
The report states that among the companies best positioned to leverage their Indian operations are News Corp, Sony and Walt Disney.
It may be noted that News Corp acquired the Tamil entertainment channel Vijay TV a few years ago and owns 26 per cent stake in TV production house Balaji Telefilms. Sony bought out Sab TV from Sri Adhikari Brothers.
The report says that companies like Viacom (MTV Networks, Nickelodeon), Time Warner (CNN, Cartoon Network and Pogo) and Discovery could further expand their operations here.
It expects most global media and entertainment companies, if not all, to establish a "play on India" at some point.
India also boasts of a sizeable population of local companies that are publicly traded. Their market cap sizes, however, are a fraction of the companies in the US. Clearly, consolidation opportunities are enormous.
Revenue and profit opportunity in India is particularly hot since the content distribution systems in the country are well established.
Besides the model for generating advertising and subscription revenue from television is also well developed. In fact, the latter is expected to grow as digital distribution platform penetrate the market.
The report also compares the entertainment and media market of India with China. It clearly states that the industry in India has grown because of a benign regulatory environment.
The regulatory environment is one of the reasons that foreign companies find India more attractive than China.
Though the Chinese advertising market at US $9,677 million is much bigger than India's at $ 3,428 million, foreign companies get to keep merely 6 per cent of the total ad pie compared with 30 per cent in India.