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. India’s advertising revenue is projected to reach Rs. 672 billion (US$ 9.29 billion) in FY22. Subscription revenue in India is projected to reach Rs. 698 billion (US$ 9.65 billion) in FY22. The advertising-based video on demand (AVoD) segment is expected to rise at a CAGR of 24% to reach US$ 2.6 billion by 2025.

Market Dynamics

According to ratings firm Crisil, the Indian media and entertainment (M&E) sector’s revenue is projected to grow at 27% to reach ~Rs. 1.37 lakh crore (US$ 18.92 billion) in FY22, due to acceleration of digital adoption among users across geographies. In FY22, ad revenue is expected to increase by 31% YoY and subscription revenue by ~ 24% on the back of anticipated strong economic recovery. Ad revenue is expected to increase by 31% YoY and subscription revenue by ~ 24% in FY22.

In FY20, television, print & digital and films contributed ~ 86% to the total media and entertainment industry revenue. By FY22, the share of television is expected to increase to 53% from 50% in FY20 and digital is expected to increase to 13% from 10% in FY20.

According to a Media Partners Asia report, India's overall online video market is likely to post a CAGR of 26% to reach US$ 4.5 billion by 2025. The report anticipates the SVoD (Subscription Video on Demand) market to accelerate at a 30% CAGR and reach US$ 1.9 billion by 2025.

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.

Online gaming industry in India is expected to increase at a CAGR of ~40% to reach US$ 2.8 billion by 2022. By 2022, the online gaming industry in India is expected to witness an addition of ~40 million online gamers.

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

From April 2000 to September 2020, FDI inflow in the information and broadcasting (including print media) sector reached US$ 9.37 billion.

• In February 2021, BookMyShow launched a pay-per-view video streaming service—BookMyShow Stream. The platform aims to offer customers >2,000 movies by end-2021.
• In February 2021, Vodafone Idea Ltd. (Vi) launched the pay-per-view streaming service on Vi Movies and TV app to offer content as part of a contract with Hungama Digital Media Entertainment.
• In February 2021, Inox Leisure expanded its footprint in Kolkata, West Bangal; launched Metro INOX, a multiplex with digital features such as paper-less ticketing & check-ins, and touchscreen-enabled interactive food-ordering.
• In January 2021, Entertainment Network (India) has entered into a brand and content licencing agreement with a Dubai-based radio broadcaster—Dolphin Recording Studio LLC’ (DRS)—for use of the company's trademarks and content. The Hindi/Urdu language radio station is officially branded as 'Suno FM' by DRS. It will now be rebranded on mutually agreeable terms and conditions as 'Radio Mirchi/Mirchi’.

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 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.

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 February 2021 is Rs. 1 = US$ 0.014

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.