Valued at more than $27Bn the Indian media and entertainment industry is slated to grow to $55-70Bn by 2030 - A report by BCG
The Country’s media and entertainment industry shows immense resilience as it bounces back post the COVID-19 blip, currently valued at more than $27Bn, the industry is set to witness strong growth tailwinds as it primes itself to drive a continuously growing user base, consuming more and more content, through innovations on multiple fronts.
Historically, even as strong sectors like cinema chart their way back to pre-COVID levels, recovery in television has been encouraging. Although OTT & gaming continue to register strong growth that is expected to continue in the medium term. Consumer demand remains strong with a continued rise in TV and digital viewership amidst the new normal. Looking back, we believe that we have successfully navigated the most difficult times. Operations are returning to normal with best-in-class safeguards and SOPs being established, which should allow us to handle future perturbations. Correspondingly, a recovery in ad campaign spending is also being observed.
Moreover, with the continued support of more than 4.5 million strong industry members and more importantly the 1Bn+ consumers, the best is yet to come, as the industry works towards has reviving to pre-COVID levels and is expected to grow to $55-70Bn by 2030 at 10-12% CAGR, driven mainly by strong growth in OTT, Gaming, Animation and VFX.
The industry continues to showcase multimodal growth with digital video leading the consumption boom. We believe this is the potential for the industry, however, the realization of this potential depends on several supply-side and demand-side factors.
TV as a medium is expected to remain robust given its function as a platform for family viewing, strong user base, and the evolution of content to meet everyone’s needs. India’s TV penetration has remained flat (unlike some advanced markets where it’s seeing a decline) and ARPUs have also been steady, with both trends expected to continue in the medium term. Subscriptions will be driven by the strong performance of regional channels and cost advantage vis-à-vis OTT. Cord cutting is nascent and is expected to be limited in the medium term. TV ad volumes have bounced back to pre-COVID levels and are expected to continue growing in the future, driven by an increase in advertising on regional channels & growth in new advertisers.
The Indian OTT segment is currently in scaling stage with strong subscription growth and increased investments in premium & original content. More affordable data has led to an increase in internet access and digital payments, thereby improving access to OTT platforms and digital videos. The industry is one of the most competitive amongst emerging markets with 40+ players representing all types of content providers. SVOD revenue has seen a remarkable surge over last few years and is expected to overtake AVOD in the coming years. This strong growth in subscription is due to various initiatives taken to expand the user base through bundling and pricing innovations, amply supported by significant investment in content.
Digital advertising is evolving towards more “interactive” ads and is also witnessing increased blending of content and ads (vs. explicit ads). Short form video platforms are growing and provide a unique value proposition to advertisers.
Gaming in India is currently underpenetrated compared to the US and China but is expected to witness strong growth due to the “mobile first” phenomenon. India is also emerging as a talent hub with more than 10x increase in the number of gaming companies over the last decade. This has led to a boom in VC funding for the sector over the last few years.
The film industry has shown encouraging signs of recovery post a difficult 2020. There are a few growth factors for the future – continued growth in regional, direct to digital releases and the rise of “content films” and others. The Indian Postproduction, VFX and Animation industry accounts for <10% share of the global market and has the potential to be a booming sector this decade on the back of several Central and State Government initiatives
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– ET Insights
