The Indian Media and Entertainment (M&E) industry is a sunrise sector for the economy and is making significant growth strides. Proving its resilience to the world, the Indian M&E industry is on the cusp of a strong phase of growth, backed by rising consumer demand and improving advertising revenues. India has the 5th largest M&E market in the world, with more than 850 TV channels and over 17,000 newspapers as on 2019. It is also one of the most diverse and vibrant media markets globally and has positive growth fundamentals across every type of media. The M&E sector is categorized into television, print, filmed entertainment, digital media, animation and VFX, live events, online gaming, out of home media, radio and music.
Further, the Indian advertising industry is projected to be the second fastest growing advertising market in Asia after China. The advertising revenue accounted for around 38.1 percent of India’s media and entertainment industry in 2019.
Production and Exports
The digital infrastructure, quantity of content and number of viewers has witnessed multifold increase since the past decade. According to an EY FICCI report, ‘The era of consumer A.R.T. – Acquisition Retention and Transaction’, the Indian media and entertainment industry reached US$ 225.7 billion in 2019 and registered growth of 9 percent as compared to the previous year.
Television sector is a dominant segment in the M&E industry. It is the second largest source of advertising after digital segment. There are over 300 pay channels and 577 Free-to-air(FTA) channels, producing content in more than 15 languages. The tele density has reached to approximately 89 percent, and there are nearly 688 million internet subscribers and nearly 400 million smartphone users, as per EY FICCI report. The Indian film industry is the world’s largest in terms of both number of films produced annually, as well as footfalls; however, it lags behind heavily in terms of box office collections and screen density.The revenue from FM channels reached ₹ 174.5 crores during 2019-20, as compared to₹ 172.7 crore in the previous year, registering y-o-y growth of 1 percent. A total of 384 FM channels were operational during 2019-20.
As per the data from ITC Trade Map, the exports of ‘Other personal, cultural and recreational services (except audiovisual and related services) stood at US$ 1.3 billion in 2019 as compared to US$ 919.7 million in 2015, registering a CAGR of 8.9 percent during 2015-19. The export of audio visual and related services during the same period registered CAGR of 22.2 percent, increasing from US$ 346 million in 2015 to 772.4 million in 2019.
FDI
Radio: FDI limit in radio, including private FM channels has been increased from 26 percent to 49 percent. Private operators are allowed to own multiple channels in a city, subject to a limit of 40 percent of total channels in the city.
Television: FDI of upto 100 percent is allowed for DTH satellite and digital cable network. There are no restrictions on foreign investments for up-linking and downlinking of TV channels other than news and current affairs.
Film: FDI of up to 100 percent through the automatic route has been granted by government.
Print: FDI/NRI investment of up to 26 percent is allowed under approval routein an Indian firm dealing with publication of newspaper and periodicals. FDI/NRI investment of up to 26 percent is permitted in publications of Indian editions of foreign magazines under approval route. FDI/NRI investment of up to 100 percent is allowed under approval routein publications of scientific and technical magazines/ specialty journals/ periodicals.
Animation, Gaming and VFX (AGV): FDI of 100 percent allowed in the sector through automatic route, provided it is in compliance with RBI guidelines.
During April 2000 to March 2020, FDI inflows in information and broadcasting (including print media) sector reached US$ 9.20 billion and constituted 1.96 percent of the total FDI inflows into the country.
Outlook
Advertising, the lifeline of India’s M&E industry, remains amongst the lowest in terms of spending as a percentage of GDP. Small and medium enterprises have typically advertised in the yellow pages, or used local print, out of home and radio in limited numbers. With digitalization, there is a wide scope of SMEs entering digital media for marketing and promotional activities, primarily through Google and Facebook.
As per FICCI-EY Report titled “A billion screens of opportunity- India’s Media & Entertainment sector”, online population is expected to rise over 60 percent by 2022. With the global launches in 5G services, mobile broadband users are expected to cross 70 percent during the same period. As per the same report, the OTT platforms are sure to benefit due to increased parity between television and OTT content choice and costs. Since large broadcasters have removed their content from Free Dish, OTT’s attractiveness may be impacted.
As a new decade begins, 5G is set to power digital cities, autonomous vehicles, e-commerce, tech innovation and the next generation media. The M&E industry overall is expected to register a CAGR of 21 percent between 2018-2021. The outlook for the industry is positive in the medium term.
