Digital gives stand-out performance in a year that went off script: KPMG report

Our Bureau New Delhi | Updated on September 30, 2020 Published on September 30, 2020

The Indian media and entertainment (M&E) industry, which grew by 7.4 per cent in FY20, to reach a size of Rs 1.75 trillion, is expected to contract by a whopping 20 per cent in FY21, says KPMG in India’s Media and Entertainment report released today.

Segments such as films have been impacted the most, notes the report aptly titled ‘A Year off Script: Time for Resilience’.

However, in a year of dismal shows and de-growth, the digital and gaming segments have given a stand-out performance, growing at a rapid pace.

It is only by FY 2022 that the media and entertainment industry will regain its mojo, says the report.

However, for some segments, especially digital, there are silver linings. Thanks to changes wrought by Covid, the report projects that India’s digital ecosystem could reach a billion users earlier than the earlier projections.

Advertising spends on digital is set to overtake spends on TV by FY21 itself. In FY20, television was the largest segment in terms of both overall revenues as well as advertisement revenues, with a 9 per cent growth overall. However, the New Tariff Order (NTO) was responsible for some part of this growth as subscription revenues for TV channels grew on the back of this.

According to Girish Menon, Partner and Head, Media and Entertainment, KPMG, the third quarter (October to December) of this year may see a bounce-back to pre-Covid levels for television and print, which may attain the same revenues of FY20 third quarter.

But before rejoicing, a point to note is that this quarter includes the IPL as well as the festive season. IPL has in the past been responsible for pulling in 30 per cent of the ad revenues in a year, so in a sense this shows that advertisers are still holding back.


Also, says Menon, though it may reach back to pre-Covid levels of last year, the sombre fact is that last year itself the sector had underperformed compared to the year before, as the economy was slowing down. There was only a 3 per cent advertising growth in FY20.

Digital, however, posted an overall 26 per cent growth in FY20, with OTT advertising growing by 24 per cent. OTT subscriptions grew by 47 per cent in FY20 and this year, too, are expected to exceed as these became platforms of choice during the lockdown.

Menon feels that even when things normalise, the new users gained by OTT platforms will stick on, while in digital gaming, which has seen the number of average users go up phenomenally, there could be some drop-offs.

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Published on September 30, 2020
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