Media and entertainment industry growth expected to double in five years : KPMG

Our Bureau Mumbai | Updated on August 20, 2019 Published on August 20, 2019

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Digital market is poised to attract the maximum advertising spend by FY’22

The media and entertainment industry in India has reached a size of Rs 1,63,100 crore in FY’19, posting a growth of 13 per cent, as well as clocking a CAGR of 11.5 per cent over the period FY15-FY19, stated KPMG India’s 11th edition of its Media and Entertainment (M&E) report. Titled ‘India’s Digital Future: Mass of Niches’, the report also said that the digital market is poised to become the second largest segment in India after TV, and also attract the maximum advertising spend by FY’22.

The M&E industry grew 13 per cent in FY19 on the back of rapid growth in digital user base and consumption, coupled with growing regional demand and monetisation, the report said.

The M&E industry is expected to post a CAGR of 13.5 per cent over FY19-FY24, to reach a size of Rs 3,07,000 crore in FY’24, the report stated. This will be on the back of a greater focus on monetisation of emerging digital business models, strong regional opportunities and favourable regulatory and operating scenarios across traditional business, it said.

However, it also identified headwinds like the New Tariff Order (NTO) implementation uncertainties, and early signs of economic slowdown, which have pulled down the overall growth.

“With no major constraining factors, digital is expected to be a dominant force going forward and in FY’23, 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, 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,” said Girish Menon, Partner & Head Media & Entertainment, KPMG in India.

Smartphone penetration and low data costs, as well as investments in original and regional digital content, were identified as favourable factors for digital access and content supply respectively, and these factors will continue to drive up online consumption.

The report drew attention to the “growing importance of regional language markets” in India. “With the digital migration of English speaking audiences almost complete, most new users coming online – and there are expected to be 500 million of them by 2030 – will access the internet in a local language,” it said.

Satya Easwaran, Partner & Head Technology, Media and Telecom, KPMG in India, said that the “digital disruption” has forced a pivot of business models in media and entertainment from a B2B2C model to a D2C one, and that segmentation and demographic, psychographic and behavioral profiling will become increasingly important.

“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 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,” said Menon.

Published on August 20, 2019
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