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LATEST NEWS

Sector Overview

Indian Media ad Entertainments sector is growing very fast and is projected to be the 2nd fastest growing advertising market in Asia after China. Due to the increasing digitisation, higher usage of internet, rising incomes and evolving lifestyles in the past two decades, Indian Media and Entertainment sector has seen tremendous growth in all the segments. Despite of slow growth witnessed in the worldwide market, the Indian M&E industry is on the cusp of a strong phase of growth, backed by rising consumer demand and improving advertising revenues. Internet has almost become a mainstream media for entertainment for most of the people. India is today the 2nd largest television market in the world with US$ 10.14 billion in revenue in 2017.

India’s large consumer base of 168 Million television households, 99,7000 newspapers, close to 2,000 multiplexes and close to 300 Million Internet users makes it 2nd largest entertainment market in Asia which is expected to reach out to 640 million by 2019. Digital advertising is projected to have the highest CAGR of 30.2%, while all other sub-sectors are expected to grow at a CAGR between 8% and 18% by 2019.

Media & Entertainment Industry Comprises of

imag
  • Television
  • Films
  • Out of Home (OOH)
  • Radio
  • Animation and Visual effect (VFX)
  • Music
  • Gaming
  • Digital Advertising
  • Print Media
  • Live Events
 

Key Industry Trends

Indian M&E Sector reached INR1.5 Trillion (USD 22.7 Billion) in 2017 with growth of 13% from 2016. It is expected to cross INR 2 Trillion market by 2020.

Indian M&E Sector grew at a CAGR of 12.25 per cent from 2011-2017. Expected to grow at a CAGR of 11.6 per cent to touch Rs 2,032 billion (US$ 31.53 billion) by 2020 from Rs 1,308 billion (US$ 19.46 billion) in 2016.

Indian advertising industry is projected to be the 2nd fastest growing advertising market in Asia after China

Industry provides employment to 3.5-4 million people, including both direct and indirect employment in the year 2017

Indian M&E Industry has maintained a growth of 11.6 % for the last 5 Years.

Television followed by Print, Films, Digital Media, animation, etc. are the major contributors to the growth of the segment for the last many years.

M&E Industry Growth in India (2017) is led by Digital (29%), Film (27%), Animation (23%), Gaming (18%), Events (15%), etc.

 

Segment Specific Trends

Television

It is the largest segments contributing to M&E Industry. In 2017, Television sector has contributed 44.8% to total M&E Industry.

The television industry grew to Rs 660 billion (US$ 10.14 billion) in 2017 from Rs 594 billion (US$ 8.84) in 2016 at a CAGR of 11.2 %.

In 2017, television market generated revenue of Rs 660 billion (US$ 10.19 billion).

In 2017, advertising and distribution revenues increased to Rs 267 billion (US$ 4.10 billion) and Rs 393 billion (US$ 6.03 billion), respectively.

In 2017, broadcaster’s revenue increased to Rs 99 billion (US$ 1.52 billion) from Rs 90 billion (US$ 1.34 billion) in 2016

Print

The Print market is expected to reach US$6.69 billion by 2021The print industry accounted for the second largest share in M&E to reach Rs 303 billion (US$ 4.66 billion) in 2017, with a CAGR of 7 per cent till 2020.

Increasing income levels and evolving lifestyles have led to robust growth in niche magazines segment.

The Print market is expected to reach US$6.69 billion by 2021

Films

The Indian film industry is largest producer of films globally with 400 production and corporate houses involved in film production.

The revenues earned by the Indian film industry in 2018 would reach Rs 165.7 billion (US$ 2.56 billion) and are expected to further grow at a CAGR 4.98 per cent during 2018-2020.

OOH & Digital

The market size for Out of Home (OOH) entertainment reached Rs 34.3 billion (US$ 526.72) million in 2017

Digital is an important contributor in M&E Industry with 4.5% share in 2017. With increasing penetration of internet and digital mediums, digital segment is expected to outperform other sectors of entertainment.

Radio

In 2017, the radio industry in India accounted for a market size of Rs 26 billion (US$ 399.26 million), registering growth of CAGR 8.33 per cent during 2016-17

In 2017, the total number of radio frequencies auctioned were 266 across 92 cities, only 66 frequencies got sold to 11 companies. Increasing FM enabled phones and car music systems Leading to more expansion of Radio.

Animation & Gaming

The Online gaming industry grew from INR25.9 Billion in 2016 to INR 30.4 Billion in 2017.

As per data available from Nazara DRHP, 87% population in India are playing online games which is expected to increase to 97% in 2020.

Animation industry grew by 23% in 2017 and reaches INR 67 Billion Market & revenues from Animation segment is expected to grow to INR23.2 Billion in 2020 from INR17 Billion in 2017.

Animation and VFX industry in India is expected to grow at a CAGR of 20.4 per cent over 2016-2020 and the online gaming industry is expected to grow at a CAGR of 27.5 per cent during the same period.

Music

Indian Music Industry has reached INR 12.8 Billion in 2017 and is expected to rise to INR 18 Billion by 2020.

Digital music on mobile continues to drive music industry revenue and digital revenues are expected to reach US$394.22 million by 2021. Digital revenues contribute 55 % of the music industry and is expected to contribute close to 62% by 2018.

 
THE INDIAN M&E INDUSTRY PROJECTIONS
(INR in Billion)

Segment

2016

2017

2018E

2020E

Television

594

660

734

862

Print

296

303

331

369

Films

122

156

166

192

Digital Media

92

119

151

224

Animation

54

67

80

114

Live Events

56

65

77

109

Gaming

26

30

40

68

Out of Home Media

32

34

37

43

Radio

24

26

28

34

Music

12

13

14

18

Total

1308

1473

1660

2032

Source: KPMG – FICCI Report 2018


 

Market Size (US $ Billion)

 

Source: IBEF M&E Report, 2018

  • As per data available from KPMG/FICCI Industry Analysis, The Indian M&E Industry is projected to grow at a faster pace of 14% over the period 2016-21, with advertising revenue expected to increase at CAGR 15.3%.
  • By 2019, the combined market size of Indian media and entertainment industry will be USD 30 billion, according to the joint report titled ‘Indian Media and Entertainment Industry 2015’.
  • India is one of the top five markets for media, content and technology agency Wavemaker where it services clients like Hero MotoCorp, Paytm, IPL and Myntra, etc.
 
 

References: Data and reports available in the public domain including Ministries Annual Reports and Data Statistics, IBEF Sectoral Reports, Department of Industrial Policy and Promotion (DIPP), RBI handbook of Statistics on Indian Economy, Media & Industry Reports, Press Information Bureau (PIB), Union Budget 2018-19

Disclaimer - This information has been collected through secondary research and is available in public domain. We are not responsible for any errors in the same.

 

India’s Value Proposition/Advantages

1 Young Consumers – 61% Population below the age of 25 years from present to 2020 onwards.
Urbanization – More than 35% of population will reside in Urban Areas by 2020 2
2 FDI Inflows – From April 2000- June 2017, FDI Inflows in Information and Broadcasting Services (Including Print media) has reached US$6.6 Billion.
Open FDI Policy – 100% FDI allowed in Advertising, TV Broadcasting, cable Network. 2
Telecom Growing Digital Infrastructure – 2nd Largest Smartphone Market in the world, High Speed Broad Penetration to reach 53% by 2020, 15 times increase in Mobile wallets, High Data Consumption

Other Major advantages includes-

  • 2nd Largest TV market- Household televisions increased to 183 million in 2017* from 181 million in 2016 with 780 million TV viewing individuals. n 2017, television market generated a revenue of Rs 660 billion (US$ 10.14 billion).
  • India is an attractive outsourcing hub for animation, post production and VFX segments. These segments are expected to grow CAGR of 20% by 2020, to reach INR114 billion.
  • Increasing liberalization and tariff relaxation. The Government of India increased the FDI limit from 74 % to 100 %.
  • Rising incomes and evolving lifestyles, leading to higher demand for aspirational products and services. India’s per capita income at current prices grew at the rate of 8.6 per cent to reach Rs 112,835 (US$ 1,750.74) in FY18
  • Higher penetration and a rapidly-growing young population coupled with increased usage of 3G and portable devices to augment demand.
  • Entry of big players across all segment of industry as well as more M&A Deals. Total number of Mergers and Acquisition deals increased to 63 in FY17 from 58 in FY16.
  • High growth in digital subscription strongly impacted M&E sector in the past few years. At present there are 2 million paid subscribers which is expected 4 million digital subscribers by 2020.

Sector Contribution to Economy

There are multi-faceted economic benefits of the Industry on the overall economy as there is both direct as well as indirect impact of employment and revenues, with high multiplier effect.

imf The Direct revenue generated by the M & E Industry is estimated at around Rs 1.3 – 1.35 lakh crores for 2016-17. Considering the direct, indirect and induced benefits, the total output is placed at around Rs 4.5 lakh crores which essentially means that each rupee earned in the industry translates to 3.5 rupees to the country with a total contribution of 2.8% to Indian GDP.

 

imgdf The Indian M & E Industry employs around 1.1-1.2 million people and significantly contributes to job creation in the country. These jobs are spread across various verticals including films, print, television, music, and radio as well as smaller sectors such as gaming, animation etc.

Foreign Direct Investment (FDI)

The Foreign Direct Investment (FDI) inflows in the Information and Broadcasting (I&B) sector (including Print Media) in the period April 2000 – September 2017 stood at US$ 6.86 billion, as per data released by Department of Industrial Policy and Promotion (DIPP).

Demand growth, supply advantages and policy support are the key drivers in attracting FDI.

Graph

Source: IBEF M&E Report, 2018

Policy Support & Government Initiatives

Television

FDI limit for DTH satellite and Digital cable network raised from 74 % to 100 % by the government as per FDI Policy, 2017.

As per consolidated FDI policy, for up-linking and down-linking of TV channels other than news and current Affairs, 100% FDI under automatic route is allowed. For News channel up to 49% through government route is allowed.

Digitisation of the cable distribution sector to attract greater institutional funding, improve profitability and help players improve their value chain.

Film

Co-production treaties are initiated with various countries such as ltaly, Brazil, UK and Germany to increase the export potential of the film industry.

Granted ‘industry’ status in 2001 for easy access to institutional finance.

FDI of up to 100 % through the automatic route has been granted by government.

Entertainment tax has been subsumed in the GST, to create a uniform tax rate regime across all states and reduce the tax burden on consumers.

Radio

FDI limit in radio, including private FM channels have been increased from 26 % to 49 %

Private players allowed to carry news bulletins of All India Radio

Private operators allowed to own multiple channels in a city, subject to a limit of 40 per cent of total channels in the city.

Print

FDI/NRI investment of up to 26 % in an Indian firm dealing with publication of newspaper and periodicals is allowed

FDI/NRI investment of up to 100 % in publications of scientific and technical magazines/ specialty journals/ periodicals

Music

Parliamentary approval on the Copyright Act (Amendment) Bill, 2012, which strengthens the royalty claims of musicians, lyricists, etc.

Policies are adopted against digital piracy and file-sharing to block illegal music websites

Adoption of revenue sharing model by Copyright Board requiring FM radio companies to share 2.0 % of their net advertising revenues with music companies.

Animation, Gaming and

VFX (AGV)

100% FDI allowed in the sector through automatic route.