India’s media and entertainment (M&E) sector shrank 24% to ₹1.38 trillion in 2020 despite a last-quarter recovery, as the pandemic outbreak depressed revenues to 2017 levels.
According to a joint report by the Federation of Indian Chambers of Commerce and Industry (Ficci) and consulting firm EY, the sector is expected to grow 25% to touch ₹1.73 trillion in 2021. It is expected to grow at a CAGR (compound annual growth rate) of 13.7% to touch ₹2.23 trillion by 2023.
The pandemic showed the resilience of subscription models against ad-based models. Across streaming apps, print and television, the share of subscriptions in overall revenue rose from 49.7% in 2019 to 51.5% in 2020, said the report titled Playing by new rules, India’s media and entertainment sector reboots in 2020.
While advertising revenues fell 25% to ₹19,900 crore, subscriptions fell 20% to ₹15,400 crore. Digital advertising was unchanged, but the steepest falls were seen in print ( ₹8,400 crore) and television ( ₹6,900 crore) advertising.
Digital and online gaming were the only segments which grew in 2020, adding an aggregate of ₹2,600 crore, and their contribution to the M&E sector rose from 16% in 2019 to 23% in 2020.
Other segments fell by an aggregate of ₹46,500 crore. The biggest contributors to the drop was filmed entertainment segment ( ₹11,900 crore) as film theatres remained shut for most of the year. Print saw a fall of ₹10,600 crore owing to a huge hit to advertising and circulation in the early part of the lockdown. Television, meanwhile, dropped by ₹10,200 crore, as daily production was stalled and large sporting events got delayed.
“We’re going into a medium-agnostic future where there has to be integrated offerings for all audiences," said Ashish Pherwani, M&E sector leader at EY. No company can define itself as just TV, or radio, or print anymore, but will have to look at multi-media opportunities, he added.
Several digital trends accelerated their trajectory, fed by growth in broadband, personal devices and smart televisions, and the time and inclination to try online services, said Sanjay Gupta, chairman, Ficci media and entertainment committee. “New distribution models and monetization strategies are evolving across both large and small screens. These changes are driving a shift in monetization of content investments and this opportunity is global," Gupta added.
Television, the largest segment, saw a 22% fall in advertising revenues on account of highly discounted ad rates during the lockdown—though ad volumes reduced only 3%. In addition, it also witnessed a 7% fall in subscription income, led by the continued growth of free television (the number of channels on DD Free Dish rose from 120 to 200), reverse migration (connected TV could reach 40 million-50 million sets by 2025) and a reduction in Arpu (average revenue per user) due to part implementation of NTO (new tariff order) 2.0 that called for individual pricing of channels and did away with bouquets offered by broadcasters earlier. TV advertising, however, is expected to be close to 2019 levels in 2021, growing over 20% on the back of a line-up of fresh sports content, regional channel rate increases and continued growth of free television.
Digital advertising remained stable, led by increased allocation from traditional advertisers. While theatrical revenues plummeted to less than a quarter of their 2019 levels, a portion of this loss was made up through higher digital rights revenues .
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