The Indian media and entertainment (M&E) industry is expected to touch $34.8 billion by 2021, up from $20 billion in 2016, growing at a compound annual growth rate (CAGR) of 11.8% between 2016-2021, said a report titled ‘Digital inflection point: Indian media and entertainment’, published by consulting firm EY.
The report was unveiled at FICCI-IIFA global business forum in New York on Friday.
In 2016, total advertising spend across all sectors in India stood at $8.18 billion and is estimated to reach $16.7 billion by 2020. Subscription revenue will grow to $15 billion by 2020, up from $9.3 billion in 2016, the report said.
While print media and television together accounted for 76.2% of the total advertising revenue in 2016, mobile advertising emerged as the third largest advertising medium in India after TV and print.
“The Indian M&E sector is at a digital crossroads today. Every segment of the industry, including print, TV, radio, film, experiential marketing and OTT, is being impacted by digitization, and is showing growth, consolidation and innovation. It presents an excellent opportunity for companies looking at establishing and expanding their presence in the country, and making the most of the India digital growth story,” said Ashish Pherwani, partner – advisory, media and entertainment at EY, in a statement.
Growth for digital advertising is expected to be the fastest at 26% CAGR (between 2016-2021), while television advertising is expected to grow at 11% CAGR.
“Digital is already eating into the advertising revenue of television and print. With the increasing smartphone and internet penetration and availability of cheaper data across the country, digital is going to be a lot more viable than it already is. The compositions of advertising revenue will change soon,” said Pratik Gupta, founder of digital advertising agency Foxymoron.
Among traditional mediums, radio is projected to register the highest growth at a CAGR of 15%. Print media will see a CAGR of 7%. “Radio is expected to be the fastest growing sub sector among the traditional mediums, propelled by operationalization of new stations and launch of new genres. The strong growth in the sector in the last year was driven by volume increases in small cities, limited rollout of batch 1 stations and a minimal increase in advertising rates,” the report said.
Additionally, the report highlighted that government initiatives like cable digitization (which concluded on 31 March 2017) and recent tariff changes introduced by the Telecom Regulatory Authority of India (Trai) will further boost growth in traditional media, particularly television.
Earlier in June, a report released by consulting firm PwC had said that the Indian media and entertainment (M&E) industry will grow at a CAGR of of 10.5% to touch $45.1 billion by 2021 from $27.3 billion in 2016. While the Indian M&E will grow in double digits, globally the industry is projected to grow at 4.2% CAGR, according to the PwC report titled ‘Global Entertainment & Media Outlook 2017-21.’