Mumbai, March 13 2019: The Indian Media and Entertainment (M&E) sector reached ₹1.67 trillion (US$23.9 billion) in 2018, with a growth of 13.4 per cent over 2017. The sector in India is expected to cross ₹2.35 trillion (US$33.6 billion) by 2021, at a CAGR of 11.6 per cent.
The EY-FICCI report 'A billion screens of opportunity' was launched at FICCI Frames 2019 yesterday.
While television retained its position as the largest segment, growth is expected from digital which will overtake filmed entertainment in 2019 and print by 2021.
India has the second highest number of internet users after China with ~570 million internet subscribers growing at 13 per cent 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.
Television: The TV industry grew from ₹660 billion to ₹740 billion in 2018, a growth of 12 per cent. TV advertising grew 14 per cent to ₹305 billion while subscription grew 11 per cent to ₹435 billion. Television viewing households increased to 197 million, which is a 7.5 per cent increase over 2016. Regional advertising growth outpaced national adverting growth on the back of national brands spending more to develop in non-metro markets where GST created a level playing field between national and regional brands. Seventy-seven per cent of time spent on television was on general entertainment content and film channels.
Key insights - Broadcasters have started combining selling of ads across OTT and linear platforms to enable better monetisation of marquee properties and increased utilisation 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 ICC World Cup. The television segment can reach ₹955 billion by 2021, with advertising growth at 10 per cent and subscription growth at 8 per cent.
Print: Print accounted for the second largest share of the Indian M&E sector, despite being static and growing at 0.7 per cent to reach ₹305.5 billion in 2018. Advertising revenues stood at ₹217 billion and subscription revenues grew marginally by 1.2 per cent to ₹88.3 billion in 2018. Newspaper advertising shrunk by 1 per cent while magazine advertising fell 10 per cent. 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 per cent of total ad volumes, while the share of English publications stood at 25 per cent. Rising newsprint prices and depreciation in the value of the Indian Rupee led to pressure on print sector margins in 2018.
Key insights - 2018 witnessed a 26 per cent growth in digital news consumers over 2017 when 222 million people consumed news online. Page views grew 59 per cent over 2017 and average time spent increased by almost 100 per cent to eight 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.
Films: The Indian film segment grew 12.2 per cent in 2018 to reach ₹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 ₹100 billion with Net Box Office collections for Hindi films at ₹32.5 billion - the highest ever for Hindi theatricals. Overseas theatricals grew to ₹30 billion from ₹25 billion in 2017 where China became the largest international market for Indian content. Ninety-eight 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 ₹9.21 billion. Multiplexes drove up the screen count to 9,601, though single
Digital rights redefined the content consumption processes as the segment grew from ₹8.5 billion to INR 13.5 billion. Online platforms invested heavily in exclusive film rights and a digital-only film market has emerged. In-cinema advertising grew to INR 7.5 billion in 2018 on the back of growing multiplex screens. Thirteen Hindi films entered the coveted INR 100 crore club in 2018, which is the highest ever. The digital-only film market came into existence in 2018.
Digital media: In 2018, digital media grew 42 per cent to reach ₹169 billion. Infrastructure propelled the growth in digital consumption. Digital ad spends grew 34 per cent to ₹154 billion and now contribute around 21 per cent of the ad market. Digital subscription grew 262 per cent to reach ₹14 billion. Video subscription revenues almost grew three times in 2018 to reach ₹13.4 billion, on the back of new and re-launched video streaming platforms, growth of smartphones, spread of affordable broadband, regional language content, exclusive content and live streaming of major cricket and other impact properties.
Key insights: Digital subscription reached ₹14 billion primarily due to telco bundling of content with their data plans to drive sales of data packs. The number of wireless subscribers grew from 1,167 million in December 2017 to 1,171 million in November 2018. This growth primarily came from rural subscribers who grew from 499 million to 526 million in the same period. Up to 60 per cent of video viewership volumes were generated by telcos and the amount spent by them on acquiring content for their subscribers was ₹3.5-4 billion
Ashish Pherwani M&E Sector Leader Ernst & Young LLP writes
The M&E product will always remain relevant for a young country like India, thirsting for escapism and knowledge. The growth of digital infrastructure is enabling Indians to fulfil their need for personal content consumption, and the M&E sector has responded by producing more content than ever before – across languages and genre.
We estimate that India produced and licensed around 750,000 hours of content in 2018, a majority of which was made in India. We expect the amount of content being produced to keep increasing. This phenomenon is causing large shifts in consumer behaviour. For a country where the lowest common denominator was catered to on mass platforms, creators are now producing content for well-defined audience segments.
This year we have seen films with strong storylines triumphing over those with high-power talent. New content genres are being tried across digital. Creative experimentation is at an all-time high! In addition, global OTT platforms – and Indian platforms available globally – have made it possible for people across the world to experience Indian content, something which was out of the reach of most Indian content creators just a few years ago.
The opportunity this provides is enormous, both to create content for the world and support global content creators with our talent, production, animation and VFX capabilities. The sector has to serve a billion screens in India and globally. Through this report, we have tried to showcase the changes brought about by digital, data and direct-to-customer on the various segments of the Indian M&E sector.