The India media and entertainment industry has displayed immense resilience over the last two years and has bounced back to the pre-COVID levels. The pandemic disrupted and transformed the consumption habits for content – both in home and outside. With the ongoing digitalization and the advent of new technologies, the media and entertainment industry is expected to show strong growth over the next few years.
As per estimates, the industry is poised to touch USD 55-70 billion by 2030, driven mainly by strong growth in OTT, gaming, animation and VFX. The industry continues to showcase multimodal growth with digital video leading the consumption boom. As always noted in the past, this is the potential for the industry, however, the realization of this potential depends on several supply-side and demand-side factors.
TV as a medium remains robust, given its function as a platform for family viewing and the evolution of content to meet everyone’s needs. India’s TV penetration has remained flat (unlike some advanced markets where it’s seeing a decline) and average revenue per unit have also been steady, with both trends expected to continue in the medium term.
In the coming times, subscriptions are expected to be driven by the strong performance of regional channels and cost advantage vis-à-vis OTT. Cord cutting is nascent and is expected to be limited in the medium term. TV ad volumes have bounced back to pre-COVID levels and are expected to continue growing in the future, driven by an increase in advertising on regional channels & growth in new advertisers.
The Indian OTT segment is currently in scaling stage with strong subscription growth and increased investments in premium and original content. More affordable data has led to an increase in internet access and digital payments, thereby improving access to OTT platforms and digital videos. The industry is one of the most competitive amongst emerging markets with 40+ players representing all types of content providers.
Subscription Video on Demand (SVOD) revenue has seen a remarkable surge over last few years and is expected to overtake Advertising-based Video on Demand (AVOD) in the coming years. This strong growth in subscription is due to various initiatives taken to expand the user base through bundling and pricing innovations, amply supported by significant investment in content.
Digital advertising is evolving towards more ‘interactive’ ads and is also witnessing increased blending of content and ads. Short form video platforms are growing and provide a unique value proposition to advertisers.
Gaming in India is currently underpenetrated compared to the US and China but is expected to witness strong growth due to the ‘mobile first’ phenomenon.
India is also emerging as a talent hub with more than ten-fold increase in the number of gaming companies over the last decade. This has led to a boom in VC funding for the sector over the last few years. The film industry has shown encouraging signs of recovery post a difficult 2020. There are a few growth factors for the future – continued growth in regional, direct to digital releases and the rise of ‘content films’, among others. The Indian postproduction, VFX and animation industry accounts for to develop infrastructure, intellectual capital and provide financial incentives for the industry.
The Indian media and entertainment industry is at a critical juncture, and hence, it is imperative for companies to take advantage of the current market situation and brace themselves for the challenges. In addition to investing in content and technology to improve user experience, companies should also leverage suitable distribution models to enhance reach, focus on providing integrated ad solutions and offer innovative marketing formats to enhance value proposition to advertisers.
Read the CII – BCG Big Picture 2021 Report