Mumbai: The FICCI-EY report ‘Windows of opportunity - India’s media & entertainment sector maximizing across segments’ was launched on 3 May at the FICCI FRAMES 2023 which was held at Westin, Powai,Mumbai.

The key trends in the report speak about the various facets of the media & entertainment industry, the most important being that the Indian M&E (Media & Entertainment) sector grew 20% in 2022 to reach INR2.1 trillion. It grew by Rs 348 billion (19.9%) to reach INR2.1 trillion (US$26.2 billion), 10% above its pre-pandemic 2019 levels

While television remained the largest segment, digital media cemented its position as a strong number two segment, followed by a resurgent print.

The filmed entertainment segment recovered as theatrical releases doubled, and reclaimed the fourth position overtaking online gaming.

The share of traditional media (television, print, filmed entertainment, OOH, music, radio) stood at 58 per cent of M&E sector revenues in 2022, down from 71 per cent in 2019.

The M&E sector is expected to grow 11.5 per cent in 2023 to reach Rs 2.34 trillion (US$29.2 billion), then grow at a CAGR of 10 per cent to reach INR2.83 trillion (US$35.4 billion) by 2025.

Analyzing the Rs 348 billion growth

Except for TV subscription, all M&E segments grew in 2022

Digital media grew the most at INR132 billion and consequently, increased its contribution to the M&E sector from 16% in 2019 to 27% in 2022. If one were to include data charges associated with digital consumption in sizing, its share would stand at 50% of the total M&E sector

Experiential (outside the home) segments recovered in 2022, and consequently, filmed entertainment and live events segments recovered by INR79 and INR41 billion, respectively

Overall, half the growth was driven by traditional media, and the balance by digital, online gaming and VFX segments.

Segmental performance in 2022

Television – Television advertising grew 2% to end 2022 just behind its 2019 levels, on the back of volume growth. Subscription revenue continued to fall for the third year in a row, experiencing a 4% de-growth due to a reduction of five million pay TV homes and stagnant consumer-end ARPUs. While linear viewership declined 7% over 2021, 8 to 10 million smart TVs connected to the internet each day, up from around 5 million in 2021.

Digital advertising – Digital advertising grew 30% to reach Rs 499 billion, or 48% of total advertising revenues. Included in this is advertising by SME and long-tail advertisers of INR180 billion and advertising earned by e-commerce platforms of Rs 70 billion.

Digital subscription – Digital subscription grew 27% to reach Rs 72 billion. 99 million paid video subscriptions across almost 45 million Indian households generated Rs 68 billion, an amount which is over 60% of broadcasters’ share of TV subscription revenues. Due to a plethora of free audio options, just 4 to 5 million consumers bought music subscriptions, generating Rs 2.2 billion while online news subscriptions generated Rs 1.2 billion.

Print – Advertising revenues grew 13% in 2022 as print remained a “go-to” medium for more affluent and non-metro audiences. Subscription revenues grew 5% on the back of rising cover prices and has stabilized at 15% to 20% below the pre-COVID-19 levels. Digital revenues remain elusive for most newspaper companies.

Film – The segment grew 85% to reach 90% of its 2019 levels as theaters re-opened. Over 1,600 films were released in 2022, theatrical revenues crossed Rs 100 billion, and fewer films released directly on digital platforms. 335 Indian films were released overseas.

Online gaming – New players, marketing efforts, specialized platforms and brand ambassadors all worked to grow the segment 34% in 2022 to reach Rs 135 billion. Regulatory clarity improved, and this could lead to more FDI in this segment. There were over 400 million online gamers in India, of which around 90- 100 million played frequently. Real money gaming comprised 77% of segment revenues.

Animation and VFX – As content production resumed, service demand – both domestic and exports – increased, resulting in the segment growing 29% and crossing Rs 100 billion for the first time.

Live events – The fastest growing segment of 2022, organized events grew 129% over a depleted base as weddings, corporate events and activations, government initiatives, and large marquee IP with international participation took place after a gap of almost two years.

OOH – OOH media grew 86% in 2022 and reached 94% of 2019 levels. Capacity utilization improved in 2022, but rates remained challenged. Digital OOH screens increased to around 100,000 and contributed 8% of total segment revenues.

Music – The segment grew by 19% to reach Rs 22 billion. Film music, which had reduced during the pandemic, returned at scale. 87% of revenues were earned through digital means, though most of it was advertising led, there being around only 4 to 5 million paying subscribers despite streaming reach of over 200 million.

Radio – Radio segment revenues grew 29% in 2022 to INR21 billion but were still just 66% of 2019 revenues. Ad volumes increased by 25% in 2022 as compared to the previous year, though ad rates remained 20% below their 2019 levels. Many radio companies are looking at alternate revenue streams to grow faster.

 Advertising growth continued to outperform Indian GDP growth

In 2022, when India’s nominal GDP grew 15%, advertising recovered 19%.

Advertising is usually around 2x to 2.5x of real GDP growth, which is expected to be 7% for FY2023.

However, when GDP is impacted, the discretionary nature of the M&E sector results in a disproportionately higher contraction, as was seen in 2020.