Digital advertisingis expected to outpace all other ad media by 2024 or 2025.
- Online gaming was the fastest growing M&E segment in 2020. The online gaming segment grew 18% in 2020 to reach INR 77 billion.
Digital media and online gaming were the only segments which grew in 2020 adding an aggregate of INR26 billion. Other segments have degrown by an aggregate of INR467 billion. While M&E as a sector has usually grown and often outperformed India’s nominal GDP, the sector fell three times (3x) India’s nominal GDP fall of 8% due to the discretionary nature of the spend. Subscription revenues however proved their mettle by holding up better than advertising revenues.
Sanjay Gupta, Chairman, FICCI Media & Entertainment Committee, said, “Digital is fuelling an unprecedented growth in content creation and consumption in almost every Indian language, creating new economic opportunities for both the media and entertainment industry and creative professionals across the country. We need to capitalise on this and unlock the full potential of India’s creative ability to power India’s economic engine.”
Ashish Pherwani, Partner and Media & Entertainment Leader, EY India, stated, “The M&E sector witnessed a shift in demand patterns as consumers actively sought alternatives and had the time to try new things. Consumption patterns shifted and increased across online news, gaming and entertainment. The supply side too transformed as companies took the opportunity to reinvent themselves. Every segment redefined itself across verticals by becoming medium agnostic and embedded video, audio, textual and experiential products to enhance their offerings. However, the compelling content created around news and escapism, and the passion to build some of India’s most powerful brands remained resolute.”
Key insights – Television segment revenues are expected to grow at a CAGR of 7% to reach INR847 billion by 2023 driven by increased base of subscribers as households continue to get televised. Growth will be driven by connected TVs which could cross 40 million homes by 2025 and free television could cross 50 million homes by then, thereby making core television a more massified product. The smart television will usher in an era of connected viewing which will enable viewers to interact with each other, as well as the broadcaster, through the content. The importance of regional and sports programming will increase, driving up both ad rates as well as end-consumer package pricing, subject to regulatory action.
- Digital media:
Key insights: Digital advertising is expected to outpace all other ad media by 2024 or 2025. The metrics that matter will change from monthly active users to daily active users, from audience numbers to engagement, loyalty and time spent, leading to platforms focusing on segmented audiences and community ownership. Newspaper digital products will increasingly go behind paywalls and it is expected to generate subscription revenues of INR4 billion by 2023. It is estimated that demand for original content will double by 2023 from 2019 levels to over 3,000 hours per year. The share of regional language consumption on OTT platforms will cross 50% of total time spent by 2025.
Key insights –Transformation in the print segment is expected to be in the areas of product realignment, revenue transformation, cost intelligence and digital demarcation. Print will need to focus on growing reach in its existing markets through a combination of identifying new micro-markets which are underpenetrated as well as forging bundle deals with direct to consumer aggregators like television, e-commerce platforms, OTT platforms, etc. Significantly, more industry-level shared services initiatives are expected to ensure cost efficiencies. Publishers can also implement process automation for productivity improvement across key business processes. The focus will remain on strengthening the print segment’s core capability to building communities but with a wider scope of offerings to them apart from just news.
- Online Gaming:
Key Insights: The segment is expected to reach INR155 billion by 2023 at a CAGR of 27% to become the third largest segment of the Indian M&E sector. Gaming will become all pervasive and will proliferate across our lives. The segment will grow across all its verticals viz, esports, fantasy sport, casual gaming and other games of skill, but revenue growth will be led by mobile-based real-money gaming applications across these verticals. A nodal agency is required to bring clarity in regulations and well as implement responsible gaming guidelines and monitor areas like minor game play, security, data protection, content guidelines and training.
- Mergers and Acquisitions in M&E