The media and entertainment industry grew 9% to reach ₹1.82 lakh crore in 2019, a report by Federation of Indian Chambers of Commerce & Industry (FICCI) and EY said on Friday. Television and print remained the top two media segments. Digital media overtook filmed entertainment to become the third-largest segment in the M&E sector and is expected to overtake print by 2021, the report said.
The report titled ‘The era of consumer A.R.T. – Acquisition Retention and Transaction’ said that the M&E sector outperformed the Indian economy. “India’s nominal GDP grew at 7.8% in 2019, an eight-year low in growth terms while M&E sector grew at 8.9%,” it said.
“While the economy felt the effects of a slowdown during the second half of 2019, the M&E sector continued to grow at a faster pace than India’s GDP, driven primarily by growth in subscription revenues. The current situation around the Coronavirus will, unfortunately, impact the 2020 estimates we have provided in this report, and we will update the same as soon as we can reasonably estimate its impact,” said Ashish Pherwani, partner, and media and entertainment leader, EY India.
The report also said that last year growth was driven by direct-to-customer segments like online gaming, which continued to be the fastest-growing segment on the back of transaction-based games, mainly fantasy sports. There was a 39.8% growth in online gaming while digital media grew by 30.9%. “Digital subscription grew over 100% in 2019 as sports and quality video content went behind a paywall and telcos paid more to bundle content with their data packs; it now comprises 13% of total digital segment revenues,” the report said.
Animation and VFX was the third-largest growing segment due to increased demand from domestic content companies (which produced over 1,600 hours of original OTT content, 1,800+ films and over 200,000 hours of entertainment television).
“Riding the wave of exponential progress made towards digital accessibility and adoption, the M&E industry has been a forerunner of a dynamic and aspirational India. New products and business models are being imagined to capitalise on the rise in media consumption,” said Uday Shankar, vice president, FICCI, and chair, FICCI media and entertainment division.
Traditional segments like print and radio ended the year with slower growth in ad revenues, despite being relatively flat for the first seven to eight months of 2019. The subscription growth was driven by OTT video consumption (111%), film (10%) and television (7.5%). “Global players are recognizing the need to build India-centric offerings. The coming years are likely to usher in greater innovation in content formats, means of dissemination, and business models,” Shankar said.
The report said that streaming video revenues grew over 100% from 2018 as sports and premium content went behind the paywall, leading platforms launched sachet-priced packages and the number of consumers consuming content on telco bundles crossed 260 million. “Audio streaming revenues grew as well, though the growth was relatively muted at 18% due to an abundance of free streaming services. Many newspaper companies put digital versions of their print products behind a paywall, though monetization of the same remained nascent,” the report said.
From around 550 million television and smartphone consumers today, FICCI and EY expect a billion screens by 2025, of which 250 million screens would be television-sized while 750 million would be smartphones. “This could result in continued growth in demand for content – both long-form, episodic and short-form – as well as provide significant opportunities for content creators and UGC platforms,” the report said.
When it comes to mobile phone penetration, the rapid proliferation of mobile access is enabling on-demand, anytime, anywhere content consumption nationwide. With a population of 1.3 billion, a tele-density approaching 89% of households, 688 million Internet subscribers and nearly 400 million smartphone users, India’s telecom industry is poised to become the primary platform for content distribution and consumption, according to EY and FICCI.
“The M&E sector witnessed a surge in content consumption as digital infrastructure, quantum of content produced and per-capita income increased in 2019. Driven by the ability to create direct-to-customer relationships, the sector firmly pivoted towards a B2C operating model, changing the way it measured itself,” Pherwani adds.
