Media and Entertainment Industry

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.

India’s advertising revenue is projected to reach Rs. 789 billion (US$ 10.81 billion) in FY22 from Rs. 726 billion (US$ 9.94 billion) in FY20. India’s advertising revenue is forecast to expand at a CAGR of 4.3% between FY20 and FY22. Digital advertisement revenues are likely to outweigh TV advertising revenues by FY21; an achievement previously projected to occur only by FY23. Digital advertising emerged as the second-largest advertising medium in India; generated revenues worth Rs. 199 crore (US$ 2.73 billion) in FY20.

Market Dynamics

India's media and entertainment (M&E) industry is expected to expand at a CAGR of 3.24% between 2019-20 and 2021-22 to reach US$ 25.56 billion by 2021-22 due to acceleration of digital adoption among users across geographies.

In FY20, television, print and digital and OTT platforms stood at Rs. 778 billion (US$ 10.66 billion), Rs. 306 billion (US$ 4.19 billion) and Rs. 218 billion (US$ 2.99 billion), respectively. These mediums are projected to reach Rs. 769 billion (US$ 10.53 billion), Rs. 296 billion (US$ 4.05 billion) and Rs. 338 billion (US$ 4.63 billion), respectively, by FY22.

In FY20, the Indian digital segment grew by 35% due to upsurge in paid subscriber base across all OTT platforms.

The online music market in India is expected to surpass US$ 273 million by end-2020.

In 2020, India’s mobile gaming segment registered a market size of US$ 1.2 billion and is expected to increase at CAGR of 6.1% by 2025. The country posted average revenue of US$ 8.8 per user, with user penetration rate of 10.1%.

In 2020, the television market size stood at Rs. 778 billion (US$ 10.66 billion) and is estimated to reach Rs. 769 billion (US$ 10.53 billion) by 2022. TV broadcasters witnessed a growth of 13% in FY20 to reach annual revenues worth Rs. 420 billion (US$ 5.75 billion). Share of the subscription revenues in the overall revenue of broadcasters rose from 32.4% in FY19 to 37.7% in FY20.

According to the Media and Entertainment Outlook 2020, India is likely to emerge as the world’s sixth-largest OTT (over-the-top) streaming market by 2024. The market is expected to post a CAGR of 28.6% over the next four years to generate revenue worth US$ 2.9 billion.

Recent development/Investments

Foreign Direct Investment (FDI) inflow in the Information and Broadcasting (I&B) sector (including Print Media) for the period April 2000 - June 2020 stood at US$ 9.33 billion as per the data released by Department for Promotion of Industry and Internal Trade (DPIIT).

• In November 2020, multiplex chain operator PVR Cinemas tied up with business accelerator firm India Accelerator (IA) to mentor start-ups working in the media and entertainment space. Selected start-ups will get access to PVR-IA’s technological and business infrastructure, mentoring, and network-building opportunities.
• In October 2020, Zee5 partnered with Kellton Tech, a global leader in digital transformation and integration, to build a next-generation, cloud-native content management system (CMS) that delivers relevant, real-time content experiences across all constituents of business.
• In October 2020, GB Labs launched ‘Unify Hub’ to provide tools to help maximize productivity of production and post-production artists in the media and entertainment industry.
• In October 2020, Zee Entertainment Enterprises Limited launched its first lifestyle channel, Zee Zest, featuring diverse lifestyle content such as food, travel, lifestyle, home improvement, wellness and culture.
• In September 2020, Langhard, a film investment, production and distribution company based in the UK, formed a joint venture with content company Divinity Studios. Langhard will make investments worth ~US$ 20 million to develop, commission, produce, and distribute over 20 films and web series in the next 36–45 months.
• In September 2020, Kolkata Knight Riders partnered with Meraki Sport and Entertainment to create and implement holistic solutions via a digital-first approach to enhance and engage its fan base worldwide.
• 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.

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 audiovisual 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.

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.

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 December 2020 is Rs. 1 = US$ 0.014

References: Media Reports, Press Releases, Press Information Bureau, Department for Promotion of Industry and Internal Trade (DPIIT), KPMG report - 2020

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.