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