A quick look at the Indian M&E Market

In 2023, the Indian media and entertainment (M&E) industry experienced a slowdown, growing at just about 8%, compared to the previous two years of double-digit growth. Despite this, it reached Rs 2.33 trillion in advertising and pay revenues. Notably, online gaming and live events showed significant growth, although from a smaller base.

Surprisingly, print media grew by 4%, while Indian cinema experienced robust growth at 14%. However, television faced challenges with a 2% decline, attributed to advertising slowdown and increasing digital migration.

According to the annual FICCI-EY report, the M&E sector is expected to grow by 10.2% to reach Rs 2.55 trillion by 2024 and then maintain a compounded annual growth rate of 10% to reach Rs 3.08 trillion by 2026.

The report highlighted the stagnation in the ad market, with advertising comprising 0.33% of India's GDP, much lower than in developed markets. New media accounted for 52% of total advertising revenues in 2023, with over 70% of sector growth driven by new media.

Digital media is anticipated to surpass television as the leading segment in 2024, with an estimated size of Rs 75,100 crore. It is projected to continue growing significantly, potentially reaching Rs 95,500 crore by 2026, with a CAGR of 13.5%. Factors driving digital media growth include robust digital infrastructure, widespread adoption of OTT platforms, significant growth in gaming, and cost-effective consumer options. Digital advertising is expected to grow at a 13.5% CAGR to reach Rs 84,200 crore, supported by improved governance.

Despite challenges, the M&E sector grew by around Rs 17,300 crore in 2023, led by digital media, print, online gaming, and animation and VFX. However, traditional media's share decreased to 57% of sector revenues in 2023 from 76% in 2019.

Overall, while there were setbacks, particularly in television advertising and traditional media, the report suggests a promising trajectory for the M&E sector, driven by digital media's rapid expansion and evolving consumer preferences.

Credits : Infogram - Khalid Anzar

Credits : Infogram - Khalid Anzar

Segment Performance

Segmental performance in 2023 saw various trends across different sectors of the media and entertainment industry in India:

Television: Linear viewership saw a modest increase of 2% compared to 2022, while the number of smart TVs connected to the internet weekly doubled to 19-20 million from 10 million in 2022. However, television advertising faced a decline of 6.5% due to reduced spending by gaming and D2C brands, impacting premium property revenues. The Hindi speaking market (HSM) witnessed softness, leading to a 3% overall decline in ad volume. Subscription revenue, after three years of decline, experienced growth driven by price increases, despite a decrease of two million pay TV homes.

Digital advertising: Digital advertising expanded by 15% to reach INR 576 billion, constituting 51% of total advertising revenues. This figure included advertising by SMEs and long-tail advertisers totalling over INR 200 billion, along with advertising earned by e-commerce platforms amounting to INR 86 billion.

Digital subscription: Digital subscription grew by 9% to reach INR 78 billion, accounting for a third of the growth seen in 2022. The growth was attributed to premium cricket properties moving behind paywalls. Paid video subscriptions decreased by two million in 2023 to 97 million across 43 million households in India, while paid music subscriptions grew from 5 million to 8 million, generating INR 3 billion. Online news subscriptions generated INR 2 billion.

Print: Contrary to global trends, print media flourished in India, with advertising revenues growing by 4% in 2023. There was notable growth in premium ad formats, as print remained preferred for affluent metro and non-metro audiences. Subscription revenues also grew by 3% due to rising cover prices.

Online gaming: The segment's growth slowed to 22% in 2023, reaching INR 220 billion, surpassing filmed entertainment to become the fourth largest segment. India saw over 450 million online gamers, with approximately 100 million playing daily. Real money gaming comprised 83% of segment revenues, with larger players absorbing the impact of higher GST levy, impacting margins but maintaining growth.

Film: The segment grew by 14% to reach INR 197 billion in 2023, with over 1,796 films released. Theatrical revenues reached an all-time high of INR 120 billion, and the number of screens grew by 4%. Additionally, 339 Indian films were released overseas.

These performance indicators illustrate the diverse landscape of the media and entertainment industry in India and its resilience amid various challenges and opportunities.