Here's how subscription revenue will grow TV, Digital and Print

While overall subscription revenue grew by 13%, its share reduced from 40% of total revenues in 2019 to 34% in 2022, according to the EY-FICCI latest report.

Altogether, the subscription revenues were 8% below 2019 levels due to:

• Lower theatrical revenues due to the relatively poor performance of Bollywood and ticket pricing regulations in certain states.                                                                                      
• Reduction in absolute print circulation, particularly in metros and English dailies
  Fall in pay TV households
• The report further stated that across segments, subscription is focused on the top end of the consumer pyramid, which is resulting in a heavily concentrated subscription base.

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

TV: 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.

While HITS remained relatively stable, DTH saw a decline of one million homes while cable lost four million homes.

The fall in paid subscriptions is attributed to:

• Subscribers who are churning out and moving to free TV and/ or digital streaming, including social media, short video, and gaming platforms.
• Some number of subscribers moving consumption to connected TVs.
• Broadcasters whom EY interviewed claimed to have earned revenues for between 107 to 115 million paid subscriptions in 2022, as compared to 110 to 130 million reported in 2021, indicating a potential base of pirated connections between five and ten million homes.

Subscription income will see a 2.7% CAGR growth to reach Rs 425 billion by 2025, on account of growth in population, the low entry barrier to consuming free TV, electricity penetration in rural areas, distribution of free STBs, relative pricing of TV to broadband and availability of TV sets at a lower cost.                                                       

Digital subscription – Digital subscriptions 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. In digital, paid video subscriptions reached 99 million in 2022, across almost 45 million households in India, with a total viewership of around 135 to 180 million users.

EY expects digital subscription revenues will grow at 11% CAGR to reach Rs 97 billion in 2025.

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 have stabilised at 15% to 20% below the pre-COVID-19 levels. Digital revenues remain elusive for most newspaper companies.

When it comes to print news publications, cover price growth is critical. In order to reduce the variable loss incurred on each newspaper printed by most print companies, India could see a 25% to 50% growth in average newspaper cover prices by 2025.

Custom news and information solutions will emerge for specialist and niche groups, as well as corporates with teams in the knowledge economy.

Online subscription models for digital products have become prolific since 2021 and should keep seeing increased interest over the next few years to generate Rs 2.4 billion by 2025, or INR 5 billion if bundled aggressively.

If one includes data charges, the contribution of subscription revenue changes invariably

As per EY estimates, the amount paid by retail consumers for data charges, if apportioned to M&E use cases (AVOD and SVOD entertainment, social media, gaming, short video, music, news, etc.) would aggregate Rs 940 billion.

If these data charges were to be included in EY analysis of subscription revenues:

• The size of the M&E sector would be Rs 3.04 trillion (US$38 billion). Currently, the M&E sector will grow 11.5% in 2023 to reach Rs 2.34 trillion (US$29.2 billion), then grow at a CAGR of 10% to reach Rs 2.83 trillion (US$35.4 billion) by 2025.
• Subscription would be Rs 1.65 trillion, and comprise 54% of the M&E sector.
• The subscription revenue mix would look significantly different, with digital comprising the largest portion at 61%, as compared to just 10% without data charges.
• Digital segment revenues would be ~Rs 1,500 billion, or around twice the television segment

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