Growing at 10.5% CAGR, M&E industry to reach Rs 2.8 lakh crore by 2025: FICCI-EY

The M&E sector will grow 11.5% in 2023 to reach INR 2.34 trillion (US$29.2 billion), then grow at a CAGR of 10% to reach INR 2.83 trillion (US$35.4 billion) by 2025, said FICCI-EY report at the FICCI Frames on Wednesday.

According to the report, the Indian M&E sector continued its strong growth trajectory and grew by INR 348 billion (19.9%) to reach INR 2.1 trillion (US$26.2 billion) in 2022, 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,” said the report.

However, the share of traditional media (television, print, filmed entertainment, OOH, music, radio) stood at 58% of M&E sector revenues in 2022, down from 71% in 2019, EY said.

Segment-wise growth

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 INR 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 INR70 billion.

Digital subscription – Digital subscription grew 27% to reach INR 72 billion. 99 million paid video subscriptions across almost 45 million Indian households generated INR 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 INR 2.2 billion while online news subscriptions generated INR 1.2 billion.

Print – Advertising revenues grew 13% in 2022 as print remained a “go-to” medium for more affluent and nonmetro 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 INR 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 INR 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 INR 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 INR 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 INR 21 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.

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