Introduction
The Indian Media and Entertainment (M&E) industry is a sunrise sector for the economy and is making significant strides. Proving its resilience to the world, Indian M&E industry is on the cusp of a strong phase of growth, backed by rising consumer demand and improving advertising revenue. The industry has largely been driven by increasing digitisation and higher internet usage over the last decade. Internet has almost become a mainstream media for entertainment for most of the people.
Media is consumed by audience across demographics and various avenues such as television, films, out-of-home (OOH), radio, animation, and visual effect (VFX), music, gaming, digital advertising, and print.
The Indian advertising industry is projected to be the second fastest growing advertising market in Asia after China. At present, advertising revenue accounts for around 0.38% of India’s gross domestic product. By 2021, Indian media and entertainment industry will reach Rs 2.35 trillion.
India ranks 15 in the world in the music industry and is expected to enter the top 10 music markets by 2022.
Market Dynamics
The M&E industry will grow at a CAGR of 13.5% during FY19–FY24. It is expected to reach around Rs 3.1 lakh crore (US$ 43.93 million) by 2024.
India’s advertisement market is projected to grow 10.62% y-o-y to Rs 85,250 crore (US$ 12.06 billion) till 2021. In 2020, India’s advertisement spending is estimated to increase by 2.3% (YoY basis). Digital advertising has emerged as the third largest advertising medium in India. It generated revenue worth Rs 15,467 crore (US$ 2.21 billion) in 2019. Digital will contribute 29% of the ad market size by 2021.
The online video market in India is estimated to reach US$ 4 billion by 2025, with subscription services contributing more than US$ 1.5 billion and advertising adding US$ 2.5 billion.
The Indian film industry reached Rs 100 billion (US$ 1.43 billion) in 2019. Increasing share of Hollywood content in Indian box office and 3D cinema is driving the growth of digital screens in the country. India’s video streaming industry is expected to grow at a CAGR of 21.82% by 2023.
Recent development/Investments
Foreign Direct Investment (FDI) inflow in the Information and Broadcasting (I&B) sector (including Print Media) for the period April 2000 – March 2020 stood at US$ 9.20 billion as per the data released by Department for Promotion of Industry and Internal Trade (DPIIT).
- In September 2020, Dream11’s (Indian fantasy sports app) parent firm, Dream Sport, raised US$ 225 million, increasing its valuation to ~US$ 2.5 billion. Tiger Global Management, TPG Tech Adjacencies (TTAD), ChrysCapital and Footpath Ventures led the financing round.
- In September 2020, Zee Entertainment Enterprises Ltd., launched pay-per-view movie service, Zee Plex, a new film distribution service, to display new films on DTH and OTT platforms. This move aims at meeting the growing demand for watching movies among consumers amid coronavirus pandemic.
- In September 2020, BenQ (display technology devices manufacturer) launched a new Home Entertainment Projector TH585 to meet the growing demand of content-viewing experience at home and enhance the OTT market in India
- In September 2020, ALTBalaji partnered with Chingari (a short-video app) to increase its reach in the ‘Hindi Speaking Market’ (HSM) and strengthen its market presence in India.
- In September 2020, Nickelodeon India partnered with Nickelodeon International to co-produce a new series. This collaboration aims at fusion elements of western and eastern storytelling elements.
- Shipment of TVs in India increased 15% annually to reach the highest-ever level of 15 million units in 2019.
- In April 2020, Hotstar, owned by the Star network, was rebranded as Disney+Hotstar. It plans to localise Disney+ movies and shows by dubbing or adding subtitles in Indian languages, including Hindi, Tamil and Telugu.
- As stated in Union Budget 2019–20, Government was to launch a dedicated channel for start-ups.
- Spotify will launch lite version for low-end Android phones in India.
Government Initiatives
The Telecom Regulatory Authority of India (TRAI) is set to approach the Ministry of Information and Broadcasting, Government of India, with a request to Fastrack the recommendations on broadcasting, in an attempt to boost reforms in the broadcasting sector. The Government of India has agreed to set up National Centre of Excellence for Animation, Gaming, Visual Effects and Comics industry in Mumbai. The Indian and Canadian Government have signed an audio-visual co-production deal to enable producers from both the countries exchange and explore their culture and creativity, respectively.
On September 2, 2020, Government of India announced its plans to develop an Animation, Visual Effects, Gaming and Comic (AVGC) Centre for Excellence in collaboration with IIT Bombay. The centre is expected to launch in the next 1–2 years (2021–2022). The AVGC sector is the fastest growing sector, rising at a rate of ~ 29% between 2019 and 2024, while the audio-visual and services sector is expanding at a rate of ~25%.
The Government of India has supported M&E industry’s growth by taking various initiatives such as digitising the cable distribution sector to attract greater institutional funding, increasing FDI limit from 74% to 100% in cable and DTH satellite platforms, and granting industry status to the film industry for easy access to institutional finance.
Road Ahead
Indian M&E industry is on an impressive growth path. The industry is expected to grow at a much faster rate than the global average rate.
Growth is expected in retail advertisement on the back of several players entering the food and beverages segment, E-commerce gaining more popularity in the country, and domestic companies testing out the waters. Rural region is also a potentially profitable target.
Note: Conversion rate used for September 2020 is Rs 1 = US$ 0.01370
References: Media Reports, Press Releases, Press Information Bureau, Department for Promotion of Industry and Internal Trade (DPIIT), KPMG report –India’s digital future, EY’s Media and Entertainment report 2019
