Media & entertainment in India continues to grow despite slowdown
Despite slowing in India’s consumption expenditure in recent months, the country’s media & entertainment (M&E) sector appears to be thriving, according to a new report from KPMG. India’s M&E sector grew by more than 13% in the financial year 2019 (FY19), surpassing a value of Rs. 1.6 trillion.
Growth in M&E last year continues a steady upward trend from previous years, with the M&E sector growing at a compound annual growth rate (CAGR) of 11.5% between FY15 and FY19. Experts have predicted this trend in recent years, given that the number of online users in India is expanding at an unprecedented rate.
The advent of Reliance Jio – which heavily reduced mobile data rates in the country – has driven a mass transition to the online domain across India, extending to the rural economy as well. By 2025, the Boston Consulting Group (BCG) predicts that Indian will have as many as 850 million online users.
Market watchers have rushed to predict the implications of such a scenario on a variety of sectors, particularly M&E, ecommerce and digital advertising. Big Four accounting and advisory firm EY provided analysis earlier this year, indicating that the M&E sector surpassed the Rs 1.7 trillion mark last year.
KPMG’s overview is roughly the same, placing the overall value atRs.1.63 trillion. The firm places growth in India’s M&E sector in the context of the overall consumption slowdown, which has impacted segments such as TV and print advertising, but has not permeated to digital video consumption and other domains.
The findings are consistent Deloitte’s dissection of M&E in India earlier this year, which positioned digital video consumption as a driver of digital growth in the country. Gaming an film consumption are other segments that remained untouched by the overall slowdown.
Growth in online consumption has also injected pace into the business ecosystem surrounding the digital sphere, with a number of new models emerging that can analyse consumer habits and data, and better streamline the distribution of content. Other developments in the sector include more permeation into rural areas.
‘The digitisation and evolution of consumption has had a positive impact on the lesser penetrated rural markets and with regional markets also emerging as the next growth frontier, there is an increasing demand in terms of media consumption across both traditional and digital media, with respect to these markets,” reads the KPMG report.
‘This ever expanding reach of media distribution, coupled with the relatively strong fundamentals of the economy have resulted in a robust advertising growth for the industry across both traditional and digital media in FY19’ it adds. Further growth is expected in years to come.
Alongside the closing of the urban0rural divide, the spread of internet access has also created a more gender-equitable landscape of internet consumption in the country. Between 2017 and 2018, the number of female subscribers per 100 population increased from 38 to 42, while the figures for males fell from 61 to 58.
As a result, a significant percentage of the Indian population is now online, and each consumer is gradually growing more sophisticated in the online sphere. In this context, Many businesses are now developing what KPMG terms a ‘direct to consumer’ model, eliminating intermediaries such as broadcasting studios, among others.
