Indian Media, Entertainment Industry to Hit Rs 3 Trillion by 2024

Indian Media, Entertainment Industry to Hit Rs 3 Trillion by 2024

Riding on the growing digital consumption via smartphones along with ultra-cheap data plans, the media and entertainment industry in India is likely to reach Rs 3.07 trillion by the financial year 2024, a new report said on Tuesday.

According to KPMG in India's ‘India's Digital Future: Mass of niches' report, the media and entertainment industry posted a solid growth of 13 per cent during the financial year 2019 to reach Rs 1631 billion with a compound annual growth rate (CAGR) of 11.5 per cent.

"With no major constraining factors, digital is expected to be a dominant force going forward and in FY23, it is likely to be the second-largest segment after TV and attract the highest marketing spend among all media formats," Girish Menon, Partner & Head Media & Entertainment, KPMG in India, said in a statement.

There are favourable factors for both digital access (smartphone penetration and low data costs) and content supply (investments in original and regional digital content), which together will continue to drive up online consumption. 

The investments in regional content is an outcome of the growing importance of regional language markets in India. With the digital migration of English-speaking audiences almost complete, most new users coming online – and there are expected to be 500 million of them by 2030 – will access the internet in a local language, the report said. 

The 500 million new users present digital businesses with an unparalleled market opportunity but not without some complexity. 

Segmentation will become important as the market evolves into a ‘mass of niches', the report said.

"By 2030, we estimate that there will be a billion people in India who are connected to the Internet. Our initial hypothesis is that the user will primarily be a non-English speaking, mobile phone user, from a developed rural area/non-metro urban setting who is increasingly willing to pay for content online," elaborated Satya Easwaran, Partner & Head Technology, Media and Telecom, KPMG in India. 

The digital disruption has forced a pivot of business models in media and entertainment from an erstwhile B2B2C model to a D2C (direct to consumer) one. 

"Therefore, segmentation and demographic, psychographic and behavioral profiling will all become increasingly important, as they have historically been in other consumer businesses," said Easwaran.

The television segment had a good year for the first three quarters of FY2019, but the challenges in implementation of the New Tariff Order (NTO) and the resultant uncertainty around viewership and subscription renewals affected both the advertisement and subscription revenues in the last three months of FY19. 

The market size this year includes advertisement revenues of Rs 251 billion and subscription revenues of Rs 463 billion.

The print media industry survived ups and downs over a period of FY2018 witnessing a rough patch due to disruptions caused by the implementation of the new GST regime, RERA regulations and demonetisation with the lowest growth in a decade at 3.4 per cent. 

According to the report, globally the print industry is on the decline but the Indian print industry continued to buck trends and grew at 5.6 per cent CAGR from FY15 to FY19.

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Source: IANS