India's E&M sector to grow at 10.75% CAGR to reach Rs 412,656 cr by 2025: PwC Report
TV advertising has continued to expand in 2020 despite Covid, reaching Rs 35015 cr
India’s Entertainment & Media industry is expected to reach Rs 412,656 crore by 2025 at 10.75% CAGR. These figures come from PwC's Global Entertainment & Media Outlook 2021-2025, the 22nd annual analysis and forecast of E&M spending by consumers and advertisers across 53 territories.
Talking about the report, Rajib Basu, Partner & Leader – Entertainment & Media, PwC India, said, "Despite the pandemic, the Indian entertainment and media sector has shown remarkable resilience. As we predicted last year, India is forecasted to be the fastest growing entertainment and media market globally in terms of consumer and advertising revenue. Technological advancement and deepening of internet access will continue to influence the way Indians consume content. Our Outlook shows that the demand for great, localised content, increased internet penetration and the creation of new business models will drive the industry’s growth for the next 5 years.”
Key findings for India in this year’s Outlook include:
TV advertising: TV advertising has continued to expand in 2020, despite COVID, reaching Rs 35015 cr. India is the fourth-largest market globally after the US, China and Japan. Further expansion at a 7.6% CAGR will take TV ad revenues to the level of Rs 50586 cr in 2025. Multichannel advertising will account for nearly 92% of the total TV advertising market in 2025. Online TV advertising will make modest inroads in the forecast period, with broadband penetration remaining extremely low at 7.3% of households.
Internet advertising: India is the fastest-growing internet advertising market in the world at a CAGR of 18.8% during 2020-2025. Growth in mobile ad revenue overtook wired revenue in 2019 and is expected to be 74.4% of the total internet advertising revenue of Rs 30471 cr by 2025. In 2020, revenue from mobile internet advertising in India was Rs 7331 cr and will rise to Rs 22350 cr in 2025 – increasing at a 25.4% CAGR. This makes India the fastest-growing mobile ad market in the world, reflecting the potential for growth, with over half the population yet to take up a mobile Internet subscription in 2020.
Newspapers & consumer magazines: In 2020 the Indian newspaper & consumer magazines market was worth Rs 26299 cr and is likely to have a CAGR of 1.82% upto 2025. In 2020, print advertising revenue fell by 12.0% and print circulation revenue was down by 4.0%, mainly due to the pandemic. Digital magazine circulation and advertising revenue is set to increase between 2020 and 2025 from just Rs 231 Cr to Rs 358 Cr at a CAGR of 9.5%.
Cinema: Box-office revenues plunged by 75% year-on-year in a COVID-hit 2020 to Rs 2652 Cr. Local producers turned to digital streaming to make up the shortfall. Box-office revenue is expected to recover and grow at a CAGR of 39.3% grossing up Rs 13857 Cr by the end of 2025. The overall segment comprising box-office and cinema advertising is predicted to grow back to pre-covid level by mid of 2023.
Music, Radio & Podcast: India’s total music, radio and podcasts market revenues dropped in 2020 to Rs 4626 Cr, as the pandemic stripped almost Rs 522 Cr from the country’s live music sector. Digital channels account for almost 90% of the recorded music market. And, like elsewhere, streaming is the most-popular category. Ad-supported streaming is the dominant digital product in India, generating Rs 1088 Cr in 2020, almost twice the sum reported from subscription revenue (Rs 581 Cr). The growth for the overall segment is predicted at 19.1% CAGR 2020-25 to reach Rs 11026 Cr.
Video games & esports: The gaming market in India continues to enjoy exceptional growth and shows enormous potential. Video games and esports revenue reached Rs 11250 Cr in 2020 and is set to expand to Rs 24213 Cr in 2025, at 16.5% CAGR. India’s gaming market is dominated by the social/casual category, which accounted for 77% of all video games and esports revenue in 2020. India’s esports market is small but as awareness grows and, crucially, the mobile esports offering becomes stronger, this sector will see rapid expansion, at a 31.6% CAGR over the forecast period.
Other factors impacting the global E&M sector:
Generational shift: Youth will be served
Not surprisingly, many younger consumers have little awareness of, or interest in, traditional media. On the other hand, media platforms designed for young consumers or that enable lightly-produced, authentic content have boomed. Gaming is central to the youth movement and is becoming a significant driver of data consumption – in fact it is on pace to be the fastest-growing content category in that regard, accounting for 6.1% of total data consumption globally by 2025, up from 4.7% in 2020.
Regulatory shifts: pushback on platforms
The regulatory scrutiny of big tech is yet another shift impacting E&M. Antitrust pressures have increased with calls to break up big tech platforms along with government proposals for new media regulations. Changes to current regulatory regimes are inevitable and it’s vital that E&M players incorporate regulatory risks in their planning processes.
Werner Ballhaus, Global Entertainment & Media Industry Leader Partner, PwC Germany, concluded: “Even in the areas that offer the most compelling topline growth – like video streaming – the nature of competition is likely to change dramatically over the coming years. And all the while, the social, political, and regulatory context in which all companies operate continues to evolve in unpredictable ways. All of which means that sitting still, relying on the strategies that created value and locked up market share in the past, will not be the most effective posture going forward.”
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