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Business News/ News / Indian media and entertainment sector to cross 3 tn by 2026
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Indian media and entertainment sector to cross ₹3 tn by 2026

Bucking the global trend, print continued to thrive in India. Advertising revenues grew 4% in 2023, with a notable growth in premium ad formats, as print remained a “go-to” medium for more affluent and non-metro audiences.

Except for television, all M&E segments grew in 2023, but the share of traditional media (television, print, filmed entertainment, live events, out of home, music, radio) stood at 57% of M&E sector revenues, down from 76% in 2019. (Pexels)Premium
Except for television, all M&E segments grew in 2023, but the share of traditional media (television, print, filmed entertainment, live events, out of home, music, radio) stood at 57% of M&E sector revenues, down from 76% in 2019. (Pexels)

The Indian media and entertainment sector that touched 2.3 trillion in 2023, is expected to grow at a compound annual growth rate (CAGR) of 10% to reach 3.08 trillion by 2026, according to the annual media and entertainment (M&E) report by Ficci and consulting firm EY.

However, the growth of 17,300 crore last year was half of the 37,100 crore growth that took place in 2022, mainly due to headwinds in advertising during the first half of the year, the report added. 

Except for television, all M&E segments grew in 2023, but the share of traditional media (television, print, filmed entertainment, live events, out of home, music, radio) stood at 57% of M&E sector revenues, down from 76% in 2019.

On the other hand, new media (digital and online gaming) grew the most, providing 12,200 crore of the total growth, and consequently, increased its contribution to the M&E sector from 20% in 2019 to 38% in 2023.

The M&E sector is expected to grow 10.2% to reach 2.55 trillion by 2024, while television, digital media, filmed entertainment and animation and VFX are estimated to touch 71,800 crore, 75,100 crore, 20,700 crore and 13,200 crore, respectively.

The report was released on Tuesday at Ficci Frames, an annual M&E event held in Mumbai.

As far as specific segments go, television advertising fell 6.5% due to a slowdown in spending by gaming and D2C (direct-to-consumer) brands, which impacted revenues for premium properties. 

The Hindi-speaking market was also soft, resulting in a 3% overall ad volume de-growth. Subscription revenue grew after three years of fall on the back of price increases, though pay TV homes fell by 2 million. While linear TV viewership, or traditional broadcast TV viewing, grew 2% over 2022, 19 to 20 million smart TVs connected to the internet each week, up from around 10 million in 2021, the report said.

In fact, several video streaming services are trying to attract family audiences, capitalizing on the increasing popularity of connected TV sets in India. 

Industry experts expect further surge in connected TV penetration, driven by family-oriented shows, following the success of the Indian Premier League last year. The success of catch-up TV content or linear TV programmes that stream online, also drives the growth of connected TV sets.

Meanwhile, bucking the global trend, print continued to thrive in India. Advertising revenues grew 4% in 2023, with a notable growth in premium ad formats, as print remained a “go-to" medium for more affluent and non-metro audiences. Subscription revenues grew 3% on the back of rising cover prices.

“While the M&E industry is estimated to grow at 10% CAGR through the next few years led by digital, traditional mediums such as television and print are also poised to grow. This growth underscores the enduring appeal of linear TV, particularly among established advertisers who value its unmatched brand-building capabilities at scale," Kevin Vaz, Ficci media and entertainment committee, and chief executive officer, broadcast entertainment, Viacom 18 Pvt. Ltd said at the event. 

“It's essential to acknowledge the continued significance of traditional media, including television, print, and outdoor advertising, in reaching diverse audience segments, especially in regional markets," Vaz said.

Digital advertising grew 15% to reach 57,600 crore in 2023, or 51% of total advertising revenues. Digital subscription, on the other hand, grew 9% to reach 7,800 crore, which was a third of 2022’s 27% growth, as premium cricket properties such as the IPL (on JioCinema) went free. 

Paid video subscriptions reduced by 2 million in 2023 to 97 million, across 43 million households in India.

Industry executives agree paid subscription growth has plateaued for OTT platforms since the covid-19 lockdown-led spike in user base. 

While the menace of piracy is impacting returns, the shift towards bundled offering from individual OTT subscriptions by a section of users, have also hit the average revenue per user (Arpu). 

Besides penetration of OTTs among the urban elite has reached a saturation point and the platforms are yet to devise a strategy to woo the lower-end of the target audience in a significant way.

Growth in the online gaming segment slowed to 22% in 2023 to reach 22,000 crore as it overtook filmed entertainment to become the fourth largest segment in the M&E sector. There were over 450 million online gamers in India, of which around 100 million played daily. 

The report estimates that over 90 million gamers paid to play; real money gaming comprised 83% of segment revenues. Impact of a higher GST levy was largely absorbed by larger players, impacting margins, but protecting growth.

The film segment grew 14% to reach 19,700 crore. Over 1,796 films were released in 2023, and theatrical revenues reached an all-time high of 12,000 crore. However, the rise in box office has been attributed mainly to increasing ticket prices as theatrical footfalls are still below pre-covid levels.

As far as animation and VFX go, the Hollywood writers’ strike impacted global supply chains, and consequently, the segment grew just 6% in 2023. 

Potential mergers and falling ad revenues also reduced the slate of animated content produced for broadcast in India, the report said.

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ABOUT THE AUTHOR
Lata Jha
Lata writes about the media and entertainment industry for Mint, focusing on everything from traditional film and TV to newer areas like video and audio streaming, including the business and regulatory aspects of both. She loves movies and spends a lot of her free time in theatres, which makes her job both fun and a bit of a challenge given that entertainment news often just talks about the glamorous side of things. Lata, on the other hand, tries to find and report on themes and trends in the entertainment world that most people don't notice, even though a lot of people in her country are really into movies. She’s a graduate of the Columbia School of Journalism.
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Published: 05 Mar 2024, 01:34 PM IST
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