India’s digital media market to triple by 2030, says report

New Delhi: India's digital media and entertainment sector, currently valued at $12 billion, is poised for a remarkable expansion, with projections to triple by 2030, according to insights from the strategy consulting firm Redseer. 

The current growth trajectory is primarily driven by the surge in non-real money gaming (on RMG) and the widespread adoption of over-the-top (OTT) platforms in both audio and video formats. Despite challenges like a slowdown in digital advertising spending and regulatory shifts impacting the RMG space, the industry's trajectory remains robust.

India's internet consumer base is characterized by a diverse user base. A substantial group of 450-500 million explorers leads the way, followed by 300-320 million transactors and a smaller segment of 35-40 million mature users, as per Redseer.

Fiscal year 2023 marked a significant uptick in the media and entertainment landscape, notably in the growth of the paid user base and the average revenue per paying ser (Arppu). Paid user growth of up to 90% across various segments has been fuelled by factors such as subscription bundling, affordable plans, micro-payment options, and pay-per-view services. 

However, the sector is not without its challenges. High customer acquisition costs and low user retention rates pose ongoing hurdles. Potential long-term strategies to counter these issues include innovative monetization models, a focus on localized and regional content targeting tier-two and beyond demographics, and approaches like offering the first episode of original series for free on OTT platforms.

In the realm of audio series and audiobooks, a significant growth was observed, with leading platforms in India experiencing a ninefold increase in FY23. This surge is attributed to an increase in paid users, engaging and immersive content, and flexible payment options. The expanding availability of both immersive and regional content, coupled with competitive subscription pricing, has notably contributed to the growth of audiobooks.

The gaming segment, too, is witnessing a remarkable transformation, with a community of 150 million mid-core or core gamers emerging in 2023. This demographic, largely transitioning from casual gameplay, is increasingly engaging in in-game purchases for accessories and costumes, leading to a 40% paid user growth in gaming. This shift from casual to mature gaming is also driving a rise in the viewership of gaming livestreams.

Short-form video (SFV) platforms in India boast a user base of 250 million, with two-thirds originating from tier-two and smaller cities. Notably, around 40% of these users are also active online transactors, providing a fertile ground for brand and advertiser monetization. This presents a significant opportunity to reach a broader audience in tier-two areas. However, monetization on Indian SFV platforms is still in its infancy, currently limited to advertising revenue and influencer marketing, according to the Redseer report.