The Indian media and entertainment (M&E) industry’s long-term outlook remains robust, even as the pandemic has resulted in a short-term drop.
As per PwC’s Entertainment & Media Outlook 2020-2024, the Indian M&E industry is expected to grow at 10.1% CAGR to reach $55 billion by 2024.
The report predicts a K-shaped bifurcated recovery for the industry, wherein sectors like OTT, internet advertising, video/games/e-sports, and music and podcasts are expected to spearhead growth in the industry.
“We find ourselves in extraordinary times, and the pandemic has accelerated on-going shifts in consumers’ behaviour, pulling forward digital disruption and reaching industry tipping points that wouldn’t otherwise have been reached in the next few years. Our research shows that India will be the fastest growing entertainment and media market globally in terms of pure consumer revenue,” said Rajib Basu, Partner & Leader – Entertainment & Media, PwC India.
In terms of individual segment market size as a percentage of total M&E revenue, OTT video in India is expected to see the largest gain and reach 5.2% by 2024, closely followed by internet advertising.
PWC forecasts that the breakneck rate of growth will see total OTT video revenue overtake South Korea, Germany and Australia to jump to being the sixth-largest market in 2024. Subscription video on demand (SVOD) will be the prime driver of revenue, increasing at a 30.7% CAGR from $708 million in 2019 to $2.7 billion in 2024.
Meanwhile, segments like advertising and those dependent on physical locations are likely to be further impacted in a negative manner whereas digital M&E spending will increasingly be regarded as a non-discretionary expense.
PWC also said that digital paywalls are yet to become commonplace in India. Furthermore, while India will remain the world’s biggest cinema market in admission terms, cinema revenue in India will contract at a -2.6% CAGR to total $1.5 billion over the next 5 years.
As per the report, over the next 5 years, the outlook remains highly positive for digital led segments such as OTT, internet advertising, online gaming and music and podcasts that were perfectly positioned to meet consumers where they are in 2020 – predominantly at home and online.
The report said that OTT video growth is coming from both inside and outside the home as Internet-connected devices proliferate as the new ‘at-home’ environment has led to the rise of direct-to-consumer apps, local ‘bite-sized’ entertainment platforms and user-generated content (UGC) formats.
In terms of internet advertising, India is already the sixth-largest market in the Asia Pacific region and mobile will be the primary driver of revenue in the Internet advertising market revenue due to increased data affordability, new mobile-first formats, ability to measure, and strategic targeting, PWC said. However, from a global perspective, Internet advertising in India remains underdeveloped and has massive headroom for growth.
Gaming and esports are capitalising on the need to bring live experiences into the home in more personalised and more engaging ways. E-sports represented less than 1% of the overall market in 2019, but has become one of the fastest growing segments today with a projected 33% CAGR by 2024 as per PWC. However, despite surging growth and enormous potential, the sector tackles the biggest challenge of low levels of app monetisation.
Podcast industry was already experiencing rapid growth prior to the COVID-19 outbreak. Fuelled by the uptake of music-streaming brands, the overall audio space is expected to grow at a 13.5% CAGR, to total revenue of nearly $1.7bn in 2024.
India will also see a strong increase at a 30.4% CAGR in its monthly podcast listener base over the next five years, supported by entry of foreign players and original content on topics including news, society and culture.