Indian media & entertainment sector to touch ₹2 trn by 2020
The country’s media and entertainment (M&E) sector touched ~1.5 trillion ($22.7 billion) in 2017, with a growth of around 13 per cent over 2016. A study by the consultancy firm EY India said this is expected to cross ~2 trillion ($31 billion) by 2020, with a compounded annual growth (CAGR) of 11.6 per cent.
This growth is being led by the digital segment, showing that advertising budgets are in line with the changes in content consumption patterns. The report observes the sector continues to grow faster than that of the country’s gross domestic product. Subscription growth outpaced advertising during 2017 but advertising will continue to grow till 2020, led by the digital segment.
Farokh Balsara, partner and M&E leader at EY India, asked, “With digital subscribers expected to reach 20 million by 2020, has Indian M&E reached its digital tipping point? We need to re-imagine the future of Indian M&E.”
Digital
Ashish Pherwani, partner and M&E advisor at EY India, said: “Growth in 2017 was led by the digital, film and animation and VFX (visual effects) segments.”
Digital media has grown significantly over the past few years. And, continues to lead the growth charts in advertising. Subscription revenues are emerging and are expected to make their presence felt by 2020. In 2017, digital media grew 29.4 per cent (27.8 per cent, net of the impact of goods and services tax), on the back of 28.8 per cent growth in advertising and of 50 per cent in subscription.
Subscription was only 3.3 per cent of total digital revenues in 2016. It is expected to grow to 9 per cent by 2020. Around 250 million viewed videos online in 2017 and this is expected to double by 2020. Around 40 per cent of all mobile traffic came from the consumption of video services in 2015. This is expected to touch 72 per cent by 2020.
Television
The TV industry grew from ~594 billion in 2016 to ~660 billion in 2017, at 11.2 per cent (9.8 per cent, net of taxes). Advertising grew to ~267 billion, while distribution grew to ~393 billion and comprised 41 per cent of revenues. Distribution was 59 per cent of total revenues. At a broadcaster level, however, subscription revenues (including international subscription) made up about 28 per cent of the total. Advertising is 41 per cent of total revenues. The report expects this to grow to 43 per cent by 2020.
Print continues to hold the second-largest share of the sector, despite growing under 3 per cent to reach ~303 billion in 2017. The segment is estimated to grow at an overall CAGR of 7 per cent till 2020, with the non-English segment at 8-9 per cent and English a bit slower. This is expected despite the foreign direct investment limit remaining unchanged at 26 per cent for the sector, restricting access to foreign print players. And, despite imposition of the GST at 5 per cent on the advertising revenues of the print industry for the first time in history. While magazines contributed 4.3 per cent to the print segment, the latter was largely at status quo, with not many significant new launches in 2017.
Films
Films grew 27 per cent in 2017, on the back of box office (BO) growth, both domestic and international. Coupled with increased revenues from sale of satellite and digital rights. All sub-segments grew, with the exception of home video, and the film segment reached ~156 billion in 2017.
For full report, visit www. business-standard.com