The Media and Entertainment Sector's Potential in India In 2024 and Beyond

According to the annual media and entertainment (M&E) study by FICCI and consulting company EY, the Indian media and entertainment sector, which reached ₹2.3 trillion in 2023, is predicted to rise at a compound annual growth rate (CAGR) of 10% to reach ₹3.08 trillion by 2026. The study also stated that the rise of ₹17,300 crore in 2022 was only half of the ₹37,100 crore growth that occurred in 2022 because of challenges in the advertising sector in the first half of the year.

All M&E categories had growth in 2023, with the exception of television. However, the proportion of traditional media, which includes television, print, filmed entertainment, live events, out-of-home, music, and radio, decreased to 57% of M&E sector sales from 76% in 2019. 

Conversely, new media - digital and online gaming - grew at the fastest rate, accounting for ₹12,200 crore of the overall growth. As a result, its share of the M&E industry jumped from 20% in 2019 to 38% in 2023. By 2024, the M&E industry is predicted to have grown by 10.2% to ₹2.55 trillion, while the forecasted values for digital media, VFX, filmed entertainment, television, and animation are ₹71,800 crore, ₹75,100 crore, ₹20,700 crore, and ₹13,200 crore, respectively.

The study was made public on Tuesday at Mumbai's annual M&E event, FICCI Frames. Regarding certain markets, the decline in gaming and D2C (direct-to-consumer) brand expenditure resulted in a 6.5% decline in television advertising, which affected premium properties' earnings.

The market for Hindi-speaking consumers was similarly lackluster, which led to a 3% decline in the total amount of ads. Due to price hikes, subscription income increased after declining for three years, despite a two million decrease in pay TV homes. The number of smart TVs linked to the internet each week increased from around 10 million in 2021 to 19 to 20 million in 2022, despite a 2% increase in linear TV viewership, or traditional broadcast TV viewing.

Actually, a number of streaming video services are attempting to draw in family audiences in an effort to profit off India's growing craze for linked TVs. Following the success of the Indian Premier League last year, industry experts anticipate that connected TV penetration will continue to rise, driven by family-oriented shows. The growth of connected TV sets is also driven by the success of catch-up TV content, or linear TV programmes that stream online. Meanwhile, print continued to thrive in India, defying the global trend, with advertising revenues growing 4% in 2023 and premium ad formats seeing a notable increase as print remained a "go-to" medium for more affluent and non-metro audiences.

Traditional media like print and television are also expected to thrive, even if the M&E business is predicted to grow at a 10% CAGR over the next several years, driven mostly by digital. "This growth highlights the enduring appeal of linear TV, especially for long-standing advertisers who appreciate its unparalleled brand-building capabilities at scale," Kevin Vaz, Chief Executive Officer of broadcast entertainment at Viacom 18 Pvt. Ltd. and member of the Ficci media and entertainment committee, stated at the event.

Vaz stated, "It's critical to recognize the ongoing significance of traditional media, such as print, television, and outdoor advertising, in reaching a variety of audience segments, particularly in regional markets."

In 2023, digital advertising accounted for 51% of all advertising sales, growing by 15% to ₹57,600 crore. As premium cricket products like the IPL (on JioCinema) become free, digital subscription climbed 9% to reach ₹7,800 crore, or a third of 2022's 27% rise.

In 2023, digital advertising accounted for 51% of all advertising sales, growing by 15% to ₹57,600 crore. As premium cricket products like the IPL (on JioCinema) become free, digital subscription climbed 9% to reach ₹7,800 crore, or a third of 2022's 27% rise. In 2023, the number of paid video subscriptions fell by 2 million, reaching 97 million in 43 million Indian households. Industry leaders concur that since the COVID-19 lockdown-induced surge in user base, the growth of paid subscriptions for OTT services has plateaued.

While the threat of piracy is hurting profits, some customers' move away from individual OTT subscriptions and toward packaged offerings has also negatively impacted average revenue per user (Arpu).

While the threat of piracy is hurting profits, some customers' move away from individual OTT subscriptions and toward packaged offerings has also negatively impacted average revenue per user (Arpu).

In addition, the urban elite's OTT penetration has reached a saturation point, and the platforms have not yet come up with a meaningful plan to court the lower end of the target demographic.

Online gaming surpassed film industry  to become the fourth largest market in the M&E industry in 2023, although its growth slowed to 22% to reach ₹22,000 crore. In India, there were more than 450 million internet gamers, of whom about 100 million engaged in daily gaming.

Over 90 million players paid to play, according to the study, with 83% of category profits coming from real money gambling. Larger businesses bore the majority of the burden of a higher GST rate, which hurt margins but shielded growth.

At ₹19,700 crore, the film segment had a 14% growth. In 2023, there were almost 1,796 films released, and box office receipts hit a record ₹12,000 crore. But since theater attendance is still lower than it was before the COVID pandemic, the increase in box office has mostly been ascribed to higher ticket costs.

The Hollywood writers' strike affected worldwide supply chains, which led to a 6% growth in the animation and visual effects market in 2023.  According to the research, there was a decrease in the amount of animation material generated for broadcast in India due to possible mergers and declining ad income.