The media and entertainment industry in India is on the fast track to growth, according to a report by EY and FICCI (Federation of Indian Chambers of Commerce and Industry) released on Tuesday.
The report, ‘A billion screens of opportunity’, says the sector is poised to cross $33.6 billion by 2021 at a compounded annual growth rate of 11.6%. The sector was worth $23.9 billion in 2018, growing 13.4% from 2017.
The report said growth in the industry will be driven by digital media, which will overtake filmed entertainment in 2019 and print by 2021.
In a statement released, EY said the media sector continues to grow at a rate faster than India’s GDP, which reflects the rise in disposable income here. “India has the second highest number of Internet users after China with 570 million Internet subscribers growing at 13% annually. The report estimates that approximately 2.5 million consumers in India today are digital only and would not normally use traditional media. It is expected that this customer base will to grow to 5 million by 2021,” the statement said.
EY says that growth in digital consumption will spur media companies to innovate new monetisation avenues and service new customer segments. “Telco bundling will drive consumption for a majority of Indian OTT audience. Advertising growth outpaced subscription growth and is expected to comprise 52% of the total pie by 2021,” the company went on to say in the statement.
On the television front, the report said India’s TV industry grew from $9.47 billion (₹66,000 crore) in 2017 to $10.62 billion (₹74,000 crore) in 2018, registering a growth of 12%. TV advertising grew 14% to touch ₹30,500 crore while subscription grew 11% to ₹43,500 crore. There was a 7.5% rise in TV viewing households.
“Regional advertising growth outpaced national adverting growth on the back of national brands spending more to develop non-metro markets where GST created a level playing field between national and regional brands. 77% of time spent on television was on general entertainment content and film channels,” the report said, adding that 2019 promises further growth for TV due to the upcoming general election and the ICC World Cup. “The television segment can reach ₹955 billion [₹95,500 crore] by 2021, with advertising growth at 10% and subscription growth at 8%,” it further said.
For print media, which accounted for the second largest share of the media sector, the report said growth in 2018 was a mere 0.7% over 2017. It went on to say that with rising pressure on advertising and subscription revenues, print media companies will shift focus to digital as well.
“2018 witnessed a 26% growth in digital news consumers over 2017 when 222 million people consumed news online. Page views grew 59% over 2017 and average time spent increased by almost 100% to 8 minutes per day in 2018. Print companies will tilt their sales pitch towards performance, linking physical space sales with digital inventory, activations (both physical and digital), interactive concepts like QR codes, digital couponing, etc.,” the report said.
Meanwhile, India’s film segment grew 12.2% in 2018 driven by growth in digital/OTT rights along with overseas theatricals. Net box office collections from Hindi films in 2018 stood at ₹3,250 crore, the highest ever for Hindi theatricals. Here too, the emphasis on digital was evident. “Digital rights redefined the content consumption processes as the segment grew from ₹8.5 billion to ₹13.5 billion. Online platforms invested heavily in exclusive film rights and a digital-only film market has emerged,” the report said.
Commenting on the findings of the report, Uday Shankar, chairman, Star and Disney India and vice president of FICCI said, “The status quo is being shattered by digital disruptions and that’s unshackling the creative economy in India like never before. These are exciting times for all it is to let our imagination and ambition guide us.”
Ashish Pherwani, partner and media and entertainment leader at EY India, too, emphasised the scope for growth in the digital space. “There is a large shift in consumer behaviour from mass produced content to specific content defined to audience segments. The sector has an opportunity to serve a billion screens in India and globally,” he said.