Media and Entertainment Industry

Introduction

The Indian Media and Entertainment (M&E) industry is a sunrise sector for the economy and is making high growth strides. Proving its resilience to the world, the Indian M&E industry is on the cusp of a strong phase of growth, backed by rising consumer demand and improving advertising revenues. The industry has been largely 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.

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 per cent of India’s gross domestic product. By 2021, Indian media and entertainment industry to reach Rs 2.35 trillion.

Market Dynamics

The Indian media and entertainment industry is expected to reach around Rs 307,000 core crore (US$ 43.93 billion) by 2024. Media and entertainment Industry is set to expand at a CAGR of 13.5 per cent over 2019-24. In FY19, major segments were television, print and films with a market size of Rs 713 billion (US$ 10.22 billion), Rs 333 billion (US$ 4.76 billion) and Rs 185 billion (US$ 2.62 billion), respectively. They are projected to reach Rs 1025 billion (US$ 14.67 billion), Rs 375 billion (US$ 4.76 billion) and Rs 228 billion (US$ 3.26 billion), respectively in FY22. Indian television market has an opportunity of catering to 100 million homes as 197 million homes out of the total 298 million have TV sets as of 2018.

Digital media & entertainment (M&E) platforms in India grew 13.3 per cent in FY19 to reach Rs 163,100 crore (US$ 23.34 billion), contributing the most to the growth of M&E sector in the country. India’s advertising revenue is projected to reach Rs 1,367 billion (US$ 19.56 billion) in FY24 from Rs 693 billion (US$ 10 billion) in FY19.

India ranked at 15th in the world in music industry and is expected to enter into the top 10 music markets by 2022.

Recent development/Investments

The Foreign Direct Investment (FDI) inflows in the Information and Broadcasting (I&B) sector (including Print Media) in the period April 2000 – March 2019 stood at US$ 8.38 billion, as per data released by Department for Promotion of Industry and Internal Trade (DPIIT).

• Netflix Inc. grew by 700 per cent with the help of local content and marketing that attracted more users during 2018-19.
• About 95 per cent of online video consumption is in Indian languages in Tier 2 and Tier 3 cities.
• Bharti Airtel’s direct-to-home (DTH) arm Airtel Digital TV and Dish TV going to be merged by end of August 2019.
• As stated in Union Budget 2019-20, government to launch dedicated channel for start-ups.
• Spotify to launch lite version for low-end Android phones in India.
• Star India signs up 35 advertisers for ICC World Cup, targets over Rs 1,000 crore (US$ 144million) in ad sales.
• Dailyhunt, a regional language news aggregator run by Verse Innovation Pvt Ltd, will receive investment of US$ 60 million in a new funding round led by Goldman Sachs Investment Partners.
• As of September 2018, Twitter announced video content collaboration with 12 Indian partners for video highlights and live streaming of sports, entertainment and news.
• As of August 2018, PVR Ltd acquired SPI Cinema for worth US$ 94.42 million.
• In H12018, 5 private equity investments deals were recorded of worth US$ 115 million.
• The Indian digital advertising industry is expected to grow at a Compound Annual Growth Rate (CAGR) of 32 per cent to reach Rs 18,986 crore (US$ 2.93 billion) by 2020, backed by affordable data and rising smartphone penetration.
• India is one of the top five markets for the media, content and technology agency Wavemaker where it services clients like Hero MotoCorp, Paytm, IPL and Myntra among others
• After bagging media rights of Indian Premier League (IPL), Star India has also won broadcast and digital rights for New Zealand Cricket upto April 2020.

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 the 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.

The Government of India has supported Media and Entertainment industry’s growth by taking various initiatives such as digitising the cable distribution sector to attract greater institutional funding, increasing FDI limit from 74 per cent to 100 per cent in cable and DTH satellite platforms, and granting industry status to the film industry for easy access to institutional finance.

Road Ahead

The Indian Media and Entertainment 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 factors such as several players entering the food and beverages segment, e-commerce gaining more popularity in the country, and domestic companies testing out the waters. The rural region is also a potentially profitable target.

Note: Conversion rate used as on September 2019, Re 1 = US$ 0.014019

References: Media Reports, Press Releases, Press Information Bureau, Department for Promotion of Industry and Internal Trade (DPIIT), KPMG report – Media ecosystems: The walls fall down – September 2018

Note: H12018 – January to June 2018

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