Traditional media grows despite digital onslaught: KPMG

New Delhi: Revenues in India’s television and print media grew in 2017-18 despite stiff competition from digital media, an industry report showed. While digital revenues expanded the fastest on a small base, print media revenues grew at the decade’s slowest pace, still faring better than global rates.

Television revenues grew 9.5% from a year ago to touch Rs. 65,200 crore in 2017-18, global auditing firm KPMG said in a report titled Media ecosystems: The walls fall down. During the period, the overall number of television households rose to 188 million, while the number of homes with cable and satellite television touched 183 million.

Print media revenues rose 3.4% to touch ₹ 31,800 crore. Of this, Hindi and regional language newspapers showed comparatively better numbers (4.6% and 4.2% respectively) while English struggled at 1.5%.

The growth in the Indian media and entertainment sector was driven by rapid penetration in the digital user base which led to a significant positive demand across various M&E sectors like films, digital advertising, animation and VFX, gaming and music. Further, the strong demand from regional and rural markets also provided a boost to ad revenue generation in television and print though the sector faced challenges due to the lingering effects of demonetization, the GST rollout and the Real Estate (Regulation and Development) Act (RERA).

“Advertising on digital media, which is a new entrant and is expected to make up for one-fourth of India’s total advertising market by 2020, has come by eating into traditional media like print and television,” said Ashish Bhasin, chairman and chief executive (South Asia) at Dentsu Aegis Networks. “While all media in India continue to grow, advertisers may have different objectives, television would be the choice to reach out to a wider audience quickly while print may be preferred for detailed messaging.”

According to KPMG, 225 million Indians watched online videos in FY18, which is projected to reach 550 million by FY23. Digital advertising grew 35% during the year to reach Rs. 11,600 crore, driven by developments in digital infrastructure, increased adoption of non-urban users, improved penetration of mobile phones and overall maturity in the ecosystem through public and private investments.

“The Indian media and entertainment industry is seeing positive long-term outlook on the back of rapid growth in digital access and consumption, coupled with strong domestic demand especially from the rural and regional markets,” said Girish Menon, Partner and Head, Media & Entertainment, KPMG in India. “Growing presence of telecom and technology players in media distribution has led to convergence of business models across TMT and media companies will have to evolve to successfully operate in the new paradigm.”

The Indian film industry, too, witnessed a revival in the last two years on the back of strong domestic box office performances coupled with emerging overseas markets like China coupled with the welcome addition of ancillary streams like digital rights. The industry grew at 9.6% in 2017-18 to reach Rs. 15,800 crore, with regional cinema doing particularly well and contributing 40-45% of the overall business.

The radio industry grew showed muted growth of 7.9% between FY17-FY18 on the back of the GST rollout and the launch of new stations that put pressure on ad rates. Driven by streaming services, music industry revenues grew a healthy 14.7%, taking total revenues to Rs. 1,400 crore.

The animation, VFX and post-production sector boomed as well, growing 18.6% to reach ₹ 7,300 crore, while growing digital and smartphone penetration took the online gaming industry to ₹ 4,300 crore. Out-of-home media grew 11.9%.

Overall, the Indian media and entertainment (M&E) industry is expected to grow at a compound annual growth rate (CAGR) of 13.1% to reach ₹ 2,66,000 crore by FY23. The M&E sector grew by around 10.9% in FY18 to reach ₹ 1,43,600 crore, with total advertising revenues growing by 11.5% to reach ₹ 60,800 crore, the report said.