For the media and entertainment (M&E) sector which has been hit hard by the coronavirus outbreak, things may start looking up with the sector estimated to grow at 10.75 percent CAGR (Compound Annual Growth Rate), according to PwC's Global Entertainment & Media Outlook 2021-2025 report which was released on Monday.
One of the biggest contributors to this growth will be television advertising which in 2021 will grow at 8.6 percent in 2021. And it is set to become the fourth largest market globally.
TV advertising continued to expand in 2020, despite COVID-19 impact and reached Rs 35,015 crore. "Further expansion at a 7.6 percent CAGR will take TV ad revenues to the level of Rs 50,586 crore in 2025," the report said.
The report further said that multichannel advertising will account for nearly 92 percent of the total TV advertising market in 2025. Online TV advertising will make modest inroads in the forecast period, with broadband penetration remaining extremely low at 7.3 percent of households.
Another segment in advertising which will see strong growth is internet advertising which the report claims is the fastest-growing internet advertising market in the world at a CAGR of 18.8 percent during 2020-2025.
"In 2020, revenue from mobile internet advertising in India was Rs 7,331 crore and will rise to Rs 22,350 crore in 2025, increasing at a 25.4 percent CAGR," the report said.
Rural internet users at 227 million surpassed metropolitan cities (205 million) in 2020. The number of internet users is likely to reach 900 million by 2025.
Even the music space is seeing strong contribution from advertising. Ad-supported streaming generated Rs 1,088 crore in 2020, almost twice the sum reported from subscription revenue at Rs 581 crore.
Moving on from advertising, other segment in the M&E space -- video games and esports revenue reached Rs 11,250 crore in 2020 and is set to expand to Rs 24,213 crore in 2025, at 16.5 percent CAGR.
While India’s gaming market is dominated by the social/casual category, which accounted for 77 percent of all video games and esports revenue in 2020, esports market is becoming a strong offering.
The esports sector is expected to expand rapidly at a 31.6 percent CAGR by 2025.
When it comes to cinema, one of the hardest hit sectors in the M&E space, the report expects the sector to grow back to pre-covid level by mid of 2023.
"Box-office revenues plunged by 75 percent year-on-year in a COVID-hit 2020 to Rs 2,652 crore. Local producers turned to digital streaming to make up the shortfall. Box-office revenue is expected to recover and grow at a CAGR of 39.3 percent grossing up Rs 13,857 crore by the end of 2025," the report said.