India's media & entertainment sector over $55 billion by 2024

Driven by online channels, India’s media & entertainment (M&E) sector is expected to grow at a compound annual growth rate (CAGR) of more than 10% in the lead up to 2024, passing the $55 billion mark.

Growth in the M&E sector will be splintered across segments, and Covid-19 has a significant role to play in how the spoils are distributed. An upshot of lockdowns and widespread infection risks: All things physical will suffer, be it cinema revenues or events such as concerts, festivals, etc.

In fact, India’s cinema market – the largest in the world – will contract at a compound annual growth rate (CAGR) of nearly -3% over the next half a decade. This is according to Big Four accounting and advisory firm PwC, which analysed trade association and government data, supplemented by interviews with industry leaders and regulators.

The firm also notes a boom in other segments, which will fill the gap left by the physical entertainment landscape. “We find ourselves in extraordinary times,” noted PwC partner & lead for M&E Rajib Basu, pointing to the fact that years of M&E disruption are now unfolding in a matter of months since the pandemic.

“The pandemic has accelerated ongoing shifts in consumers’ behaviour, pulling forward digital disruption and reaching industry tipping points that wouldn’t otherwise have been reached in the next few years. Our research shows that India will be the fastest growing entertainment and media market globally in terms of pure consumer revenue,” added Basu.

OTT domination

While cinemas and physical events will suffer, a few segments are ideally positioned to win out from this M&E boom. Most notable here is over the top (OTT) content, which covers subscription based video models such as Netflix and Prime for instance. The segment was already pegged for substantial growth before the crisis, but nothing like the incline that is currently projected.

In the lead up to 2024, PwC predicts a staggering CAGR of nearly 29% for OTT in India, making it the fastest growing OTT market in the world. The steady rise should take revenues in the segment to in and around $3 billion. The boom is a product of immediate factors, combined with certain underlying enablers.

In the immediate realm, PwC reports that most film studios are now designing their content for direct distribution via OTT platforms, in the knowledge that cinemas are out of contention for the near future. Basking in the ballooning demand, OTT distributors are also in a position to optimise their pricing and maximise revenues.

Then there are the underlying enablers, mainly an increase in data access and affordability across India and the corresponding rise of mobile-first streaming formats. The OTT boom aside, these trends will also drive growth in other key M&E segments, and consequently growth for the sector as a whole.

Segments such as internet advertising, gaming, radio & podcasts are all expected to get a leg up in the next half a decade or so, as an increasing number of people look to their devices for entertainment. For Basu, this trends marks the growth in competitiveness across M&E in India.

According to him, brands “will need to build and maintain direct-to-consumer relationships, offer enough differentiation or scale to compete, and unlock greater value using the right technologies. This is a unique window of opportunity for M&E businesses to transform and make themselves more resilient and relevant for the future.”