Indian M&E sector expected to reach INR 2.5 trillion: FICC-EY Report

Digital media is expected to become the largest segment in the M&E sector, surpassing television by 2024

March 7, 2024

Despite an overall M&E growth, television, print, and radio remained below 2019 levels in 2023, with digital media predicted to overtake television in 2024

The TV segment saw a 2% decline in 2023 due to reduced advertising spending by gaming and D2C brands, impacting premium properties

Digital media revenue experienced a 15% increase to INR 65,400 crore, driven by e-commerce advertising and social media

The film segment reached an all-time high of INR 19,700 crore in 2023, with the online gaming segment surpassing filmed entertainment

The Indian media and entertainment (M&E) sector is expected to witness a growth rate of 10.2%, reaching INR 2.55 trillion by 2024 and further expanding at a 10% CAGR to touch INR 3.08 trillion by 2026, as per the FICC-EY Report 2024. In 2023, the sector experienced an 8% growth, reaching INR 2.32 trillion, surpassing pre-pandemic levels by 21%. However, according to the report, television, print, and radio remained below their 2019 levels. Anticipated to surpass television as the largest segment in the M&E sector in 2024, digital media is set to lead the way.

In 2023, all M&E segments, except television, showed growth. The TV segment witnessed a decline of almost 2% to INR 69,600 crore in 2023 compared to 2022 but is expected to rebound with a growth of over 3%, reaching INR 71,800 crore in 2024 and touching INR 76,500 crore by 2026. The report highlighted a 6.5% drop in TV advertising to INR 29,700 crore in 2023 due to reduced spending by gaming and D2C brands, impacting revenues for premium properties. The Hindi market also experienced softness, resulting in a 3% overall ad volume decline.

Subscription revenue increased to INR 39,900 crore after three years of decline, driven by price increases, despite a two-million drop in pay TV homes. Linear viewership grew by 2% in 2022, and the number of smart TVs connected to the internet each week nearly doubled, reaching 19 to 20 million in 2023 from around 10 million in 2021. The total number of TV homes reached 163 million, including 118 million pay-TV homes and 45 million free-TV homes. The monthly connected TV base reached 30 to 35 million unique sets, with an estimated 19 million weekly connections.

Digital media revenue witnessed a 15% increase, reaching INR 65,400 crore, with digital advertising revenue hitting INR 57,600 crore and digital subscriptions growing by over 8% to INR 7,800 crore. The growth in digital advertising was led by e-commerce advertising and social media, constituting 72% of total ad revenues. The report estimated the segment to reach INR 95,500 crore by 2026, with a 13.5% CAGR. 

Digital advertising is expected to grow at a 13.5% CAGR, reaching INR 84,200 crore. In contrast, e-commerce advertising is projected to touch INR 15,000 crore by 2026, and entertainment and sports OTT platforms are anticipated to reach INR 8,000 crore to INR 9,000 crore in advertising. Digital subscription revenue is forecasted to grow at a 13% CAGR, reaching INR 11,400 crore in 2026. By 2026, paid video subscriptions are expected to reach 138 million across 65 million households due to bundled services.

The print segment grew by 4% to INR 26,000 crore in 2023, driven by growth in advertising and subscription revenues. Ad volumes increased by 2%, ad rates grew by 2.4%, and the average insertion size increased by 4% due to increased demand for premium inventory. The print segment is projected to reach INR 28,800 crore by 2026, with a 3.4% CAGR. 

Advertising growth is expected at a 4.7% CAGR due to affluent audiences and premium inventory formats, while subscription growth is expected at a 0.7% CAGR due to cover price increases.

The film segment witnessed a 15% growth, reaching an all-time high of INR 19,700 crore. In 2023, 1,796 films were released in theatres, an 11% increase from the previous year. .

In 2023, the online gaming segment in India surpassed filmed entertainment as the fourth-largest segment, growing by 22% to INR 22,000 crore and is projected to grow at a 21% CAGR, reaching INR 38,800 crore by 2026. Online gamers in India reached 455 million in 2023, with a predicted increase to 491 million by 2024. The animation and VFX segments grew by 6% in 2023, reaching INR 11,400 crore. Despite a 5% contraction in Indian animation, the segment is expected to grow at a CAGR of 17.5% by 2026, reaching INR 18,500 crore.

Source: Economic Times

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