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. According to a FICCI-EY report, the advertising to GDP ratio is expected to reach 0.4% by 2025 from 0.38% in 2019.
According to an EY report, the Indian media and entertainment (M&E) sector stood at Rs. 1.38 trillion (~ US$ 18 billion) in 2020 and is estimated at Rs. 1.79 trillion (~ US$ 24 billion) in 2021. Further, it is projected to grow to Rs. 2.23 trillion (~ US$ 29 billion) by 2023, due to acceleration of digital adoption among users across geographies.
The market is projected to increase at a CAGR of 17% between 2020 and 2023.
In FY20, digital and online added revenue stood at Rs. 26 billion in the M&E sector and their contribution to the sector increased to 23% in 2020 from 16% in 2019.
Within the M&E sector, Animation, Visual Effects, Gaming and Comic (AVGC) sector is growing at a rate of ~29%, while the audiovisual sector and services is rising at the rate ~25%; is recognised as of one of the champion sectors by the Government of India.
Advertising revenue in India is projected to reach Rs. 915 billion (US$ 12.98 billion) in 2023, from Rs. 596 billion (US$ 8.46 billion) in 2020.
India’s subscription revenue is projected to reach Rs. 940 billion (US$ 13.34 billion) in 2023, from Rs. 631 billion (US$ 8.95 billion) in 2020.
According to 'India: Online Video Trends and Omdia Consumer Research Highlights' report published by Omdia (published in 2021), the Indian SVOD market, with OTT video subscriptions, reached ~62 million in 2020 from ~32 million in 2019. According to EY-Parthenon, India’s publishing industry is likely to reach Rs. 80,000 crore (US$ 10.74 billion) by 2024.
Key growth drivers included rising demand for content among users and affordable subscription packages.
The Indian gaming industry stood at US$ 930 million in 2020 and is expected to reach US$ 3.8 billion by 2024. The online gaming market in India is projected to reach Rs. 155 billion (US$ 2.12 billion) by 2023, from Rs. 76 billion (US$ 1.08 billion) in 2020, due to rapid increase in consumption.
The music industry is expected to reach Rs. 23 billion (US$ 330 million) by 2023, from Rs. 15 billion (US$ 210 million) in 2020 at a CAGR of 15% between 2020 and 2023. According to a study conducted by Kantar and VTION, an audience measurement and analytics company, Gaana, the streaming service owned by Times Internet Ltd., had 30% market share, followed by JioSaavn (24%), Wynk Music (15%), Spotify (15%), Google Play Music (10%), and others (6%) in 2020.
Growth of the sector is attributable to the trend of platform such as YouTube that continues to offer recent and video content-linked music for free, which is expected to drive the paid OTT music sector reaching ~5 million end-users by 2023, generating revenue of ~Rs. 2 billion (US$ 27 million).
By 2025, the number of connected smart televisions are expected to reach ~40-50 million. 30% of the content viewed on these screens will be gaming, social media, short video and content items produced exclusively for this audience by television, print and radio brands.
According to the FICCI-EY media and entertainment industry survey, those who watch online videos through bundled packages (online video services bundled with mobile and broadband connections) will account for half of all online video viewers (399 million) by 2023, up from 284 million in 2020.
As of 2020, India registered ~803 million online video viewers, including streaming services and videos on free platforms such as YouTube. Mobile video viewers stood at 356 million in 2020, driven by rising number of users preferring video content over the last few years.
OTT video services market (video-on-demand and live) in India is likely to post a CAGR of 29.52% to reach US$ 5.12 billion by FY26, driven by rapid developments in online platforms and increased demand for quality content among users.
FDI inflows in the information and broadcasting sector (including print media) stood at US$ 9.5 billion between April 2000 and March 2021.
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.
In June 2021, the Union Ministry of Information and Broadcasting notified the Cable Television Network (Amendment) Rules, 2021, which aims to establish a three-layer statutory mechanism for citizens to raise grievances with respect to broadcasted content.
As part of the expansion to include all digital platforms and digital (OTT) players under a single roof, in May 2021, the Indian Broadcasting Foundation (IBF) announced the move to be renamed as the Indian Broadcasting and Digital Foundation (IBDF).
As per the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, IBDF would also form a self-regulatory body (SRB) soon.
On February 25, 2021, the government outlined the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules 2021 to establish a progressive institutional mechanism and a three-tier grievance redressal framework for news publishers and OTT platforms on the digital media.
In February 2021, the digital entertainment committee of the Internet and Mobile Association of India (IAMAI) finalised a code of conduct to form the basis for self-regulation code for OTT content. The code has been endorsed by 17 OTT platforms including Netflix, Amazon Prime Video, Disney+ Hotstar, ZEE5 and Voot.
In February 2021, Prasar Bharati (India) and PSM (the official State Media of Maldives) inked an agreement to facilitate collaboration and capacity building in the field of broadcasting.
Digital audio–visual content including films and web shows on over-the-top (OTT) streaming platforms, as well as news and current affairs on online platforms, have been brought under the Ministry of Information and Broadcasting in November 2020.
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 July 2021 is Rs. 1 = US$ 0.01342
References: Media Reports, Press Releases, Press Information Bureau, Department for Promotion of Industry and Internal Trade (DPIIT), Crisil report
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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