The Indian Media and Entertainment (M&E) sector reached Rs1.67 trillion (US$23.9 billion) in 2018, a growth of ~13.4% over 2017 states the EY-FICCI report ‘A billion screens of opportunity,’ launched today at the FICCI Frames 2019 in Mumbai. With its current trajectory, the M&E sector in India is expected to cross Rs2.35 trillion (US$33.6 billion) by 2021, at a CAGR of 11.6%. While television retained its position as the largest segment, growth is expected to come from digital which will overtake filmed entertainment in 2019 and print by 2021. The report captures key insights from the exciting and fast-growing Indian M&E sector.
The sector continues to grow at a rate faster than the GDP, reflecting the increasing disposable income and economic growth. India has the second highest number of internet users after China with ~570 million internet subscribers growing at 13% annually. The report estimates that approximately 2.5 million consumers in India today are digital only and would not normally use traditional media. It is expected that this customer base will to grow to ~5 million by 2021.
Traditional media companies spent 2018 building their customer data through second-screen interactive propositions, polls, house-to-house surveys, integration of third-party data, etc. Digital consumption will grow, and monetization avenues will see great innovation to cater to the new Indian customer segments. Telco bundling will drive consumption for a majority of Indian OTT audience. Advertising growth outpaced subscription growth and is expected to comprise 52% of the total pie by 2021.
Ashish Pherwani, Partner and Media & Entertainment Leader, EY India, stated, “The M&E sector has a significant opportunity given India’s young demographics. The growth of digital infrastructure is further enabling Indians to fulfil the need for personal content consumption, across languages and genre. There is a large shift in consumer behaviour from mass produced content to specific content defined to audience segments. The sector has an opportunity to serve a billion screens in India and globally.”
Uday Shankar, Vice President, FICCI and Chair, FICCI Media and Entertainment Division, said, “The Indian M&E sector is entering a phase of accelerated growth. The status quo is being shattered by digital disruptions and that’s unshackling the creative economy in India like never before. These are exciting times for all it is to let our imagination and ambition guide us.”
The TV industry grew from INR 660 billion to INR 740 billion in 2018, a growth of 12%. TV advertising grew 14% to INR 305 billion while subscription grew 11% to INR 435 billion. Television viewing households increased to 197 million, which is a 7.5% increase over 2016. Regional advertising growth outpaced national adverting growth on the back of national brands spending more to develop non-metro markets where GST created a level playing field between national and regional brands. 77% of time spent on television was on general entertainment content and film channels.
Key insights – Broadcasters have started combined selling of ads across OTT and linear platforms to enable better monetization of marquee properties and increased utilization of digital inventory. The impact of the TRAI Tariff Order can have implications on total viewership, free television uptake, channel MRP rates and advertising revenues. However, 2019 promises further growth due to the elections and the ICC World Cup. The television segment can reach INR 955 billion by 2021, with advertising growth at 10% and subscription growth at 8%.
Print accounted for the second largest share of the Indian M&E sector, despite being static and growing at 0.7% to reach INR 305.5 billion in 2018. Advertising revenues stood at INR 217 billion and subscription revenues grew marginally by 1.2% to Rs 88.3 billion in 2018. Newspaper advertising de-grew 1% while magazine advertising fell 10%. The fall in advertising is due to both reduced ad volumes as well as pressure on effective rates. Hindi newspaper publications continued to lead with 37% of total ad volumes, while the share of English publications stood at 25%. Rising newsprint prices and a depreciation in the value of the Indian Rupee led to pressure on print sector margins in 2018.
Key insights – 2018 witnessed a 26% growth in digital news consumers over 2017 when 222 million people consumed news online. Page views grew 59% over 2017 and average time spent increased by almost 100% to 8 minutes per day in 2018. Print companies will tilt their sales pitch towards performance, linking physical space sales with digital inventory, activations (both physical and digital), interactive concepts like QR codes, digital couponing, etc. This will provide increased consumer data as well as a competitive plank to grow share of print.
The Indian film segment grew 12.2% in 2018 to reach Rs 174.5 billion driven by the growth in digital/ OTT rights and overseas theatricals. All sub-segments, except home video grew. Domestic film revenues crossed Rs 100 billion with Net Box Office collections for Hindi films at Rs 32.5 billion – the highest ever for Hindi theatricals. Overseas theatricals grew to Rs 30 billion from Rs 25 billion in 2017 where China became the largest international market for Indian content. 98 Hollywood films were released in 2018 as compared to 105 in 2017. The box office collections of Hollywood films in India (inclusive of all their Indian language dubbed versions) was Rs 9.21 billion. Multiplexes drove up the screen count to 9,601, though single screens continued to reduce.
Digital rights redefined the content consumption processes as the segment grew from Rs 8.5 billion to Rs 13.5 billion. Online platforms invested heavily in exclusive film rights and a digital-only film market has emerged. In-cinema advertising grew to Rs 7.5 billion in 2018 on the back of growing multiplex screens. Thirteen Hindi films entered the coveted Rs 100 crore club in 2018, which is the highest ever. The digital only film market came into existence in 2018.
In 2018, digital media grew 42% to reach Rs169 billion. Infrastructure propelled the growth in digital consumption. Digital ad spends grew 34% to Rs 154 billion and now contribute around 21% of the ad market. Digital subscription grew 262% to reach Rs 14 billion. Video subscription revenues almost grew three times in 2018 to reach INR 13.4 billion, on the back of new and relaunched video streaming platforms, growt