New Delhi: Growth in the Indian media and entertainment (M&E) industry was driven by the digital segment riding on regional language consumption in FY19. At a rate of 43.4%, the digital segment continued to be the torchbearer of growth, contributing ₹173 billion out of the total ₹1,631 billion that the sector touched over the period.
According to India’s Digital Future, a report brought out by global auditing firm KPMG, the digital sector is expected to grow at a compounded annual growth rate (CAGR) of 29.1% between FY19 and FY24 to reach ₹621 billion by 2024. The emergence of regional content as a major driver across television, print, cinema, music and over-the-top (OTT) video-streaming segment is also inevitable.
About 70% of total TV channels launched during the year were regional channels while growth in the print industry is also on account of the increasing readership in regional languages, with English seeing a decline. Cinema has bet big on regional content and there has also been an increase in the investment by streaming services in non-Hindi video content.
“What has emerged with great clarity this time is the depth and importance of the digital medium and of regional markets in content creation and for marketers to target and monetize audiences," according to Girish Menon, partner and head, media and entertainment, KPMG, India.
As digital behaviour in the country evolves, the gaming segment is unsurprisingly another outperformer over the year, growing at a rate of 41.6% to reach a size of ₹62 billion with robust growth in both ARPUs (average revenue per user) and the number of gamers in India (estimated at 300 million by FY19), mainly driven by rapid and significant digital adoption. It is expected to notch up a CAGR of 32.2% between FY19 and FY24 and touch ₹250 billion.
Good news also came for the film industry, which witnessed a growth of 15.1% with more than 13 movies crossing the ₹1-billion mark at the box office, the best performance by the sector in the past decade. Content-driven movies such as Andhadhun, Badhaai Ho and Raazi set the cash registers ringing, as did regional films, which displayed strong growth as audiences’ propensity to consume content in local languages increased. As a whole, the movie segment is estimated to grow by 7.3% between FY19 and FY24 to reach ₹260 billion.
The animation and the VFX segment witnessed a strong growth of 18.7% in FY19, to reach a size of Rs. 87.7 billion, driven by audience addition for animation content on the OTT and rising demand for animation services from non-entertainment sectors such as education, healthcare, etc. The sector will grow at a CAGR of 16% between FY19 and FY24 and reach ₹184 billion.
Television revenues grew at a rate of around 9.5% to take the segment to a size of ₹714 billion. Disruption came on the back of the long-drawn process of implementing the new tariff order brought in by the Telecom Regulatory Authority of India, as part of which users can now choose and pay for individual channels, as opposed to stipulated bouquets. According to the report, this impacted subscription and advertisement revenues in the last quarter. The segment is expected to grow at a CAGR of 11.2% to reach ₹1,215 billion by FY24.
As expected, growth in the print sector was subdued at 4.5%, taking the industry to a size of ₹333.2 billion. While advertising remained the growth driver, muted circulation growth of 3.5% was observed on account of the decline in English circulation growth on the back of faster digital adoption, according to the report. The overall industry is estimated to witness a CAGR of 4.2% between FY19 and FY24.
“Consumers will shift from traditional to digital media in the long run but India with its size and heterogenity, will see much segmentation," Menon said, referring to the projected categorization of digital consumers for 2030 made in the report. This includes digital sophisticates (who will consume global content and tent-pole, original Indian programming tailored for the urban audience, typically behind a paywall in English and Hindi), digital enthusiasts (who will watch mainly Indian narratives in Hindi and regional languages and some pockets of English), digital mainstream (looking for free content available online or bundled plans through telcos and other distribution platforms) and fringe users (who will have sporadic digital access on account of either poor connectivity or irregular income).