By Kalpana Shah

Technology spending by the Indian media and entertainment industry will grow to $300 million by 2010, at a compound annual growth rate of 32 percent, according to a report released Friday.

In its report, Springboard Research found an increasing trend among Indian media and entertainment (M&E) companies to focus on technology products specific to their industry. The vast majority of companies surveyed said they have either invested or plan to invest the largest portion of their IT budget on industry-specific technology.

Another 47 percent said their largest IT investment was for technology tailored toward the M&E industry.

“One of the key ways for IT vendors to gain traction in this industry is to market the M&E industry-specific benefits that they can provide,” said Nilotpal Chakravrti, a market analyst for Springboard Research, in a statement.

One of the factors driving IT spending is the need for Indian M&E firms to reach new markets and focus on systems that better manage and deliver their content. IT is viewed as a way to help M&E firms achieve these two business goals and deliver their content more efficiently within the Indian subcontinent.

“Many Indian M&E firms are looking at investments in technology as a way to more effectively deliver their content to new audiences, especially cities and towns outside of the major metropolitan areas,” said Mr. Chakravarti.

IBM a Major Influence

Springboard also found that software represents the largest spending component for Indian M&E firms, followed by hardware and IT services. IT services are the fastest growth area of the market.

Local IT vendors are still viewed as the primary external influences in this industry, with IBM the only multinational vendor of note to gain a significant number of mentions as a primary influence.

The M&E industry globally is undergoing a rapid change, thanks to the Internet and digital media. Technology advancements are viewed as both a challenge and an opportunity, leading to a significant increase in IT investment across the industry.

Media and content companies in India are readying for an Internet TV boom, while others are investing in delivering content on mobile phones. Still other companies are pumping money into ventures to provide streaming video and Bollywood movies across the Internet.