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New Delhi: The Indian media and entertainment industry is estimated to touch $55-$70 billion by 2030, growing at a CAGR of 10-12% driven mainly by strong growth in digital segments like OTT (over-the-top) streaming platforms, gaming, animation and VFX, according to the latest report by the Confederation of Indian Industry (CII) along with Boston Consulting Group (BCG). The industry is valued at $26 billion-$28 billion in 2021.

As of 2021, television contributed 33-35% to the Indian M&E industry, followed by print (22-25%), gaming (9-10%), OTT (7-9%), search and social platforms (7-9%), audio (5-7%), cinema (5-7%), animation, VFX and post-production facilities (2-4%) and out-of-home and other segments (1%).

Clearly, though, growth in digital is outstripping all other segments, amid the covid-19 pandemic. The number of hours spent per day per user on digital and video platforms has risen from 1.8 in 2018 to 2.9-3.2 in 2021. For television, the same has increased from 3.6 to 4.3-4.5.

The SVoD (subscription video-on-demand) market is estimated to grow 51% to reach 90-100 million users by 2022, on the back of cheaper data plans and increasing Internet penetration, and touch $13 billion-15 billion by 2030. The report estimates that data consumption has risen by 40-50 times since 2014 and the share of digital in total video watch time has quadrupled, as has the number of OTT platforms in India. By 2030, SVoD will make up 55-60% of the total OTT revenue in India while AVoD will make up the remaining 40-45%. As of 2021, the total SVoD users in India are estimated at 70-80 million. Investments in original local content will be key in the coming years, the report said. There has been a 60-70% rise in local language original programming between 2018 and 2021, and a 30-40% rise in investments in the same, which now stands at $600-700 million.

The short-form video market that grew 150% plus on the back of homegrown players since the TikTok ban, hosts 180-200 million active users. Tier-two cities are driving usage of short-form video apps, forming 60% plus userbase, according to the report, with 40% of the users belonging to the 16-24 age group.

The gaming market that has grown at a CAGR of 30% between 2019 and 2021, is estimated at $2-3 billion with mobile gaming making up 90% of it. Influencer-driven user-generated content, live streaming and the nascent but growing esports industry are driving gaming adoption and higher engagement, the report said. The industry is estimated to have raised funding of $549 million in the first quarter of 2021 alone.

To be sure, marginal growth is expected in pay television, of 2%, between 2019 and 2022, with penetration as of 2021 remaining at 54% with 215-220 million households. Of this, 73 million are DTH (direct-to-home) households, 42 million have Free Dish and 102 million use cable services. Broadcasters are increasingly evolving target specific audience segments with deeper content in regional languages and micro-genres, the report said, while admitting the country is in early stages of cord-cutting. TV, however, continues to be a family viewing medium with 82% of TV-owning individuals watching it with someone else.

“The share of traditional media is slowly declining with increased digital adoption but there is still high headroom for penetration with only 54% of Indian households having a pay TV connection compared to more than 70% in China. For many households, TV continues to be the center of the home and a significant part of family time," Mandeep Kohli, managing director and partner, Boston Consulting Group India said in a statement.

The Indian VFX and animation market bounced back by 30-50% post a difficult year in 2020, and is valued at $0.9 billion-1.1 billion in 2021. Budget allocation to VFX in big-budget films is expected to rise to 30-35% by 2023 from 25-30% currently.

“The media and entertainment industry has always been at the forefront of disruption and we will continue to innovate over the next decade. We will now need new answers, even on the most fundamental things like talent pool to run our companies and methodology for measuring the impact we are delivering to advertisers on our platforms. We will need to continue to embrace change going forward to create the most value for consumers as well as our partners," K Madhavan, chairman, CII national committee on media and entertainment and president, the Walt Disney Company India and Star India, said in a statement.

ABOUT THE AUTHOR

Lata Jha

Lata Jha covers media and entertainment for Mint. She focuses on the film, television, video and audio streaming businesses. She is a graduate of the Columbia School of Journalism. She can be found at the movies, when not writing about them.
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