India’s M&E industry sees 13% growth in FY19: KPMG report

The digital market is set to become the second largest segment in India after TV, and will attract maximum advertising spend by FY22, says the report

by exchange4media Staff
Published - Aug 20, 2019 1:52 PM Updated: Aug 20, 2019 1:52 PM

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KPMG

KPMG has launched the 11th edition of its Media and Entertainment (M&E) report, titled ‘India’s Digital Future: Mass of Niches’ that examines the evolution of India’s digital demography to 2030. It also covers the industry’s performance across segments, along with the key underlying themes and growth drivers.


As per the report, the M&E industry in India has posted a growth of 13 per cent during FY19 to reach Rs 1,63,100 crore with a CAGR of 11.5 per cent over FY15-FY19.


The report says, digital has been a recurring theme across all segments of M&E causing disruption in TV and print and fuelling growth in digital advertising and gaming. The digital market is poised to become the second largest segment in India after TV, and also attract the maximum advertising spend by FY22. There are favourable factors for both digital access (smartphone penetration and low data costs) and content supply (investments in original and regional digital content), which together will continue to drive up online consumption. The investments in regional content is an outcome of the growing importance of regional language markets in India, which is another key theme of the report this year. With the digital migration of English speaking audiences almost complete, most new users coming online – and there are expected to be 500mn of them by 2030 – will access the internet in a local language.


The 500 million new users by 2030 present digital businesses with an unparalleled market opportunity but not without some complexity. The report examines major consumer archetypes that together provide a framework to better understand the socio-economic profile as well as media and entertainment consumption patterns and preferences of the projected billion internet users.


The greater monetisation of emerging digital business models, and a favourable regulatory and operating environment should continue to support the growth of the M&E industry in India, which is expected to post a CAGR of 13.5 per cent over FY19-FY24, to reach a size of Rs 3,07,000 crore.


Girish Menon, Partner and Head Media & Entertainment, KPMG in India, said: “The theme of the report this year is India’s digital future – and although the term ‘digital revolution’ has become somewhat of a cliché, there can be no other way to explain the extent of digital integration in our lives today. With no major constraining factors, digital is expected to be a dominant force going forward and in FY23, it is likely to be the second largest segment after TV and attract the highest marketing spend among all media formats. In 2019, as digital behaviour evolves, there seems to be a growing consensus that in the future, subscription models will have a greater role in monetisation of digital platforms. Further, evolving technologies are also presenting opportunities for companies in the media and entertainment industry to achieve greater operational efficiencies.”

Girish added, “In the coming years, it will be hard to ignore the pessimistic signals emerging from global economies but they will not have long term impacts on the industry and are unlikely to alter the strong fundamentals and momentum of M&E consumption, especially digital, in India. As an industry, we will remain upbeat on the prospects for both.”

Satya Easwaran, Partner and Head Technology, Media and Telecom, KPMG in India, said: “By 2030, we estimate that there will be a billion people in India who are connected to the internet. Our initial hypothesis is that the user will primarily be a non-English speaking, mobile phone user, from a developed rural area/ non-metro urban setting who is increasingly willing to pay for content online. But why is the profile of India’s digital demography relevant? The digital disruption has forced a pivot of business models in media and entertainment from an erstwhile B2B2C model to a D2C one. And therefore, segmentation and demographic, psychographic and behavioral profiling will all become increasingly important, as they have historically been in other consumer businesses.”

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