Media, entertainment industry to touch Rs. 8 trillion in revenue by 2022
The Indian media and entertainment industry is soaring at the moment, particularly on the back of rapid digitalisation across the country. A new report from the Boston Consulting Group (BCG) indicates that the industry will grow to nearly Rs 8 trillion by 2022, up from its current level of more than Rs 4 trillion.
The substantial size of the Indian population, and the relatively low permeation of digital technology makes the country an exceptionally lucrative market for digital expansion. Companies from within India and from abroad have been active with their efforts to capitalise on this market.
The Reliance Jio network, for instance, is set to make billions through its low-cost 4G network service, aimed at the expansive rural population in the country. As a result of such initiatives, the country is set to have 850 million online users by 2025, which opens up a world of opportunity for industries that rely on the digital space.
One such industry is the media and entertainment (M&E) sector. Be it film and television entertainment or digital journalism, the M&E sector relies heavily on the digital space, and the two sectors often grow in tandem. Earlier this year, Big Four professional services firm EY reported that the Indian M&E sector was due to hit a value of $35 billion (Rs. 2.3 trillion) by 2021, up from its current value of $20 billion (Rs. 1.3 trillion), at a compounded annual growth rate (CAGR) of nearly 12%.
While these figures are monumental, they have now been dwarfed by the estimates released by BCG, in a report produced in collaboration with the Confederation of Indian Industry (CII). According to the report, the M&E sector already stands at a value of between Rs. 4.5 and Rs. 5 trillion, contributing 2.8% of the country’s GDP.
However, the reason for the discrepancy in the figures from the two consulting firms is that BCG doesn’t only count the revenue generation for the industry, but also calculates the indirect as well as the induced benefits that the sector has on the economy as a whole. For example, according to the report, the sector currently provides employment for between 1 and 1.2 million people across the formal and informal sectors. The employment generation leads to an overall boost of purchasing power, which will further provide impetus to the already flourishing consumer market in India, thereby building up an induced impact.
In terms of actual revenues, the sector created between Rs. 1.3 and 1.35 trillion according to the BCG report. In terms of performance in recent times, the M&E sector added approximately Rs. 500 billion in the period between 2012 and 2016, which reflects a CAGR of more than 10%.
Gathering momentum
In addition, BCG and CII report that the M&E industry is due to nearly double in its overall economic impact over the next five years. As per the report, the overall value of the market including the indirect and induced impact, is estimated to reach between Rs. 7.5 trillion and Rs. 8 trillion by 2022, growing at an impressive CAGR of between 11% and 12%. In terms of actual revenues, the sector will grow by Rs. 1 trillion to hit a value of more than 2.3 trillion by 2022.
The indirect and induced impact is particularly driven up, primarily due to the fact that the sector will generate between 700,000 and 800,000 jobs in the next five years, nearly doubling the current employment levels and taking the total up to approximately 2 million jobs for the sector.
As per the report, the growth over the next few years will be driven by three primary factors. Firstly, as mentioned above, the increased digitalisation of the rural population will propel growth in the near future. Secondly, as more aspects of daily life are transitioned to the digital domain, the media is able to capture more of a connected individual’s time. And lastly, the diversity within India allows for a naturally strategic segregation of the target audience in the country.
Commenting on the report, Kanchan Samtani, a Partner and Director at BCG said, “It’s the need of the hour for the industry to identify the creative, technological and analytical skills that will be required over the next five-seven years to restructure its business model for the upskilling exercise.”
Meanwhile, the Director General of CII, Chandrajit Banerjee said, “The Indian M&E sector has huge room for growth and can create four-five million jobs without much spending from public infrastructure. Digital platforms are proliferating and there are tremendous opportunities that never existed before—especially for creators, storytellers and technology providers.”
