16 Feb 2019
Considering that the global media and entertainment (M&E) is expected to touch USD 2.2 trillion by 2021, new opportunities are surely on the horizon for the Indian USD 22.28 billion segment amidst exciting opportunities and challenges.
The portents of growth are already visible. India has the second largest TV market with well over 183 million household televisions viewed by over 780 million people generating revenue of over USD 10 billion. Its digitised broadcasting market has over 240 FM channels and 64 million set-top boxes. The nation is currently witnessing the price of TV channels being formulated by broadcasters directly with consumers to establish transparency.
Indian M&E industry is currently growing at a CAGR of 13.10 per cent, providing employment to about 4 million people in 2017 and is expected to touch USD 39.68 billion by 2023. Significantly, its media consumption has grown at a CAGR of 9 per cent between 2012-18, almost nine times that of USA and two times that of China. It has received over USD 7.17 billion in FDI in the Information & Broadcasting sector in the last eighteen years.
The emerging Indian advantage emanates from several related factors. Increasing usage of 3G and 4G on portable devices by its growing young population is fuelling robust demand. India has the largest number of users of mobile devices in the world.
The entertainment industry, comprising of TV, online gaming, animation and VFX, OOH, music, digital advertising, films, print and radio is set to expand at a CAGR of over 11.8%, one of the highest rates globally.
The animation and visual effects industries itself are expected to grow at a CAGR of over 17%. The digitally enabled Indian film industry is expected to grow at 12% across 3000 multiplex screens and has already notched USD 2.47 billion revenue in FY18. It is already witnessing increased investment activity.
Going forward, rising incomes, favourable consumer habits, investments and government initiatives will continue to boost the M&E industry. India’s per capita income has already reached over USD 1,750 in 2018. By 2025, more people will enjoy higher incomes. Amidst Government support, significant number of mergers and acquisitions will continue to take place in this industry.
Growth is expected in retail advertisement, on the back of factors such as several players entering the food and beverages segment, e-commerce gaining more popularity in the country, and domestic companies testing out the waters. The rural region is also a potentially profitable target.
The Government of India has helped significantly in the Media and Entertainment industry’s growth. These initiatives include digitising the cable distribution sector in 2011 to attract greater institutional funding, increasing FDI limit from 74 per cent to 100 per cent in cable and DTH satellite platforms, and granting industry status to the film industry for easy access to institutional finance. Its continuing policy support will further enable Television and AVG (Animation, Visual effects and Gaming) segments to offer attractive opportunities to digital technology players.
Under the overall control of the Ministry of Information and Broadcasting (MIB), Government of India has already established regulators, quasi-regulators/self-regulators and enactments like the News Broadcasting Standards Authority (NBSA), Advertising Standards Council of India, The Information and Technology Act, The Cable Television Network Rules, Telecom Regulatory Authority of India (TRAI) and Central Board of Film Certification (CBFC).
In this blossoming market, regulations are slowly veering towards self-regulation for the print, broadcasting and internet based and other modern-day media segments. As a result, international players like Netflix, Amazon, Bloomberg, Walt Disney and Viacom are becoming household names in urban Indian markets, signalling the pro-industry approach.
The future is exciting for the Indian M&E sector whose impressive growth path is set to beat the global average rate.