Business Standard

Media flux

- ASHLI VARGHESE

The Indian media and entertainm­ent industry is resilient despite growing at a slower pace than the economy. The sector grew 8 per cent in 2023, noted a report by EY and the Federation of Indian Chambers of Commerce and Industry. Nominal gross domestic product (GDP) growth was about 9 per cent.

Growth is expected to reach double-digit levels in the next few years. Before the pandemic, a similar report in 2019 estimated that the industry would reach ~2.4 trillion by 2022. The industry’s size in 2023 was at ~2.3 trillion and is expected to touch ~3 trillion by 2026 (chart 1).

Overall the sector is 21 per cent above prepandemi­c levels, though television, print and radio lag their 2019 numbers. Higher growth is expected to come with a change in the pecking order. Digital advertisin­g spending has overtaken traditiona­l media this year. The gap is only expected to widen (chart 2). This comes on the back of an internet boom powered by low-cost data and increasing speed. India’s mobile internet speed is better than many large economies and emerging market peers, according to data from internatio­nal tracker Ookla (chart 3). Global headwinds have made their presence felt despite these positives. Mergers and acquisitio­ns have declined. The value of deals was last this low in 2020 (chart 4).

The three years leading into the pandemic saw an average of over $1 billion in foreign direct investment coming into the media and entertainm­ent space in terms of equity flows. It has been more muted in the last few years (chart 5).

A challenge to sustain momentum in the digital age could be to bring online the substantia­l number of Indians still not active on the internet. They numbered over 660 million according to a recent estimate. Rural areas are the most unconnecte­d (chart 6).

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