India's M&E industry to grow at 9.48% CAGR to reach Rs 6,828,944 cr by 2027: PwC

India’s Entertainment & Media industry is expected to reach Rs 6,828,944 crore (US$73.6bn) by 2027 at 9.48% CAGR, according to the PwC's Global Entertainment and Media outlook 2023-2027. 

E&M revenue in India witnessed a 15.9% growth to USD 46,207 million in 2022 compared to 2021.

It is PwC’s 24th annual analysis and forecast of E&M spending by consumers and advertisers across 53 territories in 13 sectors.

Key findings for India in this year’s outlook include:

OTT Video:

With new launches from international players and increasing “pay-lite” options, OTT revenue has surged in recent years, expanding a further 25.1% in 2022 to reach Rs 148,554 crore (US$1.8bn).

This is over six times the revenue of 2018. The market will continue to grow at an impressive rate, increasing at a 14.3% CAGR to produce revenue of Rs 288,855 crore (US$3.5bn) in 2027.

This will be driven by the competitive SVOD sector, which accounted for 78.1% of market revenue in 2022. Although subscription service revenue will expand at a 13.0% CAGR to reach Rs 214,578 crore (US$2.6bn), advertising-supported services (AVOD) will grow at a higher rate, albeit from a lower base.

Video games and Esports:

India is the second-fastest-growing video games market in the world behind Pakistan. India’s total video games and esports revenue was Rs 140,301 crore (US$1.7bn) in 2022 and is expected to reach Rs 346,626 crore (US$4.2bn) by 2027, increasing at a formidable 19.4% CAGR. Year-on-year growth in 2022 was 28.8%, a slight slowing of 2.1 percentage points over the previous year. Although growth will continue to slow across the forecast period, it will remain significantly faster than the global average.

Internet advertising:

The Indian Internet advertising market is among the fastest-growing in the world, with a 12.3% CAGR expected to see total revenue climb from Rs 363,132 crore (US$4.4bn) in 2022 to Rs 651,987 crore (US$7.9bn) by 2027.

There will be growth across the market over the forecast period, with the strongest performances coming in the mobile sector, where an overall CAGR of 13.7% is expected to push total revenue from Rs 255,843 crore (US$3.1bn) to Rs 478,674 crore (US$5.8bn).

In the wired sector, revenue will increase from Rs 115,542 crore (US$1.4bn) to Rs 173,311 crore (US$2.1bn), at a CAGR of 8.9%.

Newspapers and consumer magazines:

India’s consumer book market will increase at a 3.7% CAGR between 2022 and 2027, with total revenue increasing from Rs 90,783 crore (US$1.1bn) to Rs 107,289 crore (US$1.3bn).

Most of the growth will come from the electronic books sector, where revenue will see an increase at a 10.3% CAGR.

In the print sector, growth will be more modest, with an increase of a 1.7% CAGR expected. Print still dominates the Indian market, accounting for 80.1% of total revenue in 2022, with electronic books making up the other 19.9%. Electronic books will gain ground over the forecast period, making up 27.2% by 2027.

Out-of-home advertising:

India’s out-of-home (OOH) advertising market is rapidly expanding. In 2022 total OOH revenue increased by 63.4%, this saw revenue valued at a new high of Rs 56,202 crore (US$681mn). This pace will be sustained for years to come. An increase at a 9.9% CAGR will outperform every other OOH market in Asia Pacific and the world over the forecast period. OOH has a low penetration rate in India and a number of hurdles have held back further development to date.

TV advertising:

India’s TV advertising market recovered rapidly from the COVID-19 pandemic downturn, with revenue expanding 19.0% in 2021 and 11.9% in 2022 to reach Rs 387,891 crore (US$4.7bn). There remains considerable room for growth with advertisers keen to access India’s vast population and large live audiences.

TV ad spending will grow at a 6.4% CAGR to reach Rs 536,445 crore (US$6.5bn) in 2027. At this time, India will be the fourth-largest TV advertising market globally, after the US, Japan and China. The market’s expansion continues to be based on economic development and an increasing proportion of households having television sets.

Cinema:

The Indian cinema sector suffered badly during the COVID-19 pandemic but is now rebounding rapidly. Total cinema revenue in India was up sharply in 2022, reaching Rs 90,783 crore (US$1.1bn), up from Rs 3317 crore (US$402mn) in 2021. Revenue is expected to reach Rs 189,819 crore (US$2.3bn) by 2027 representing an increase at a 15.1% CAGR. Admissions are also rebounding. They were at 379 mn in 2021 but went up to 986 mn in 2022 and are expected to reach 1.4bn by 2027.

Music, Radio and Podcast:

India’s total music, radio and podcasts market passed the Rs 82,530 crore (US$1.0bn) milestone in 2022 to reach Rs 90,783 crore (US$1.1bn) and is forecast to reach Rs 123,795 crore (US$1.5bn) in 2027.

Radio and recorded music revenue are the key drivers. As Indian consumers log onto their favourite streaming platforms en masse, the business for recorded music added over Rs 16,506 crore (US$200mn) in the five years to 2022.

India’s relatively small live music market has rebounded, and eclipsed pre-pandemic results. Revenue from live is expected to come in at Rs 10,398 crore (US$126mn) in 2023 and lift to Rs 11,884 crore (US$144mn) by 2027, a CAGR of 5.5%.

Manpreet Singh Ahuja, Chief Digital Officer and Leader of Technology, Media and Telecom at PwC India, stated, "As the adoption of emerging technologies such as AI, ML and the metaverse increase, the range of use cases will broaden, leading to a significant disruption in the media industry. Media companies and content creators are already striving to provide more interactive and immersive experiences to viewers. We anticipate that Media & Entertainment enterprises will invest heavily in the transformative ideas of the future to maintain relevance with their audiences."

Rajib Basu, Partner and Leader – Entertainment & Media, PwC India, said, “The Indian Media and Entertainment outlook for the next few years will show an exciting pace of growth. We have a good view of how the industry has reset itself after the pandemic. Increased mobile penetration and the use of digital technologies are poised to disrupt existing channels and create new possibilities in the years ahead for the sector. It is increasingly becoming important for traditional media and entertainment businesses to adopt the right strategies for growth as they face competition from digitally powered businesses.”

Werner Ballhaus, Global Entertainment and Media Industry Leader, PwC Germany, said: “We have seen impressive growth in the entertainment and media industry over the past two years following a surge in demand for digital products during COVID-19. However, macroeconomic challenges, increased industry competition, and a reduction in production costs – particularly in digital services and experiences - have reduced revenues and consumers’ willingness to pay. If companies in the EM industry are to successfully engage consumers and drive growth, they need to transform their service offerings and tap into new and emerging markets and technologies, such as Asia and generative AI.”

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