Indian Media and Entertainment sector to hit $34.8 billion by 2021

12 October 2017 Consultancy.in

The Indian Media and Entertainment (M&E) industry is projected to demonstrate a Compounded Annual Growth Rate (CAGR) of nearly 12% over the next five years, expected to nearly double in size to around $35 billion (2.27 lakh crore) by 2021.

In a new report titled ‘Digital Inflection Point: Indian Media and Entertainment,’ Big Four accounting and consulting firm EY have studied the M&E sector in India against the backdrop of an increase in demand for luxury entertainment in an increasingly prosperous consumer market. The report, which was released at the FICCI-IIFA global business forum in New York, describes the M&E sector as the fastest growing industry in the country, even outpacing the growth rate of the GDP itself.

M&E growth outpaces GDP

While rapid digitisation has been a source of disruption across sectors, the media and entertainment industry has stood to gain substantially from digital development. The spread of digital access to rural areas, combined with the diversification of digital entertainments access are the primary drivers of growth in the country.

As per the report, the sector registered year-on-year growth of 11% to arrive at $20 billion in 2015. The CAGR is expected to rise even further to 11.8% over the next five years, bringing the net worth of the sector up to $34.8 billion by 2021.

M&E market size

Within the sector, the largest segment remains that of television entertainment in India, which is currently the world’s second largest TV market behind China. The segment contributed 46% of the revenues to the sector in 2016. Currently, 181 million households in India have access to TV, which is expected to rise to 200 million households by 2020, demonstrating a CAGR of 11%. Print media is the second largest segment, occupying around 23% of the sector. The TV and print segments combined account for approximately 80% of the sector.

The overall advertising segment in India was worth $8.18 billion (Rs. 53,369 crore) last year, and will grow to $16.69 billion (1 lakh crore) by 2020 according to the report. Within the segment, TV and Print advertisements generate 72.6 % of the total advertising revenues. Digital advertising, which includes mobile advertisement and OTT (over the top video), is the third largest advertising medium, but is expected to grow the fastest over the next few years at 26%. This is primarily because India is expected to become the second largest smart phone market by the end of this year, with 41% smart phone penetration.

Subscription and advertising market

Commenting on the substantial projected growth of the M&E sector as a whole, Ashish Pherwani, Partner at EY for Advisory, Media and Entertainment said, “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 digitisation, 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.”