We are witnessing a dynamic and vibrant growth in the Indian Media and Entertainment sector. According to various survey reports, it is a $22 billion industry which is expected to cross $31 billion by 2020, with a compounded annual growth (CAGR) of 11.6 per cent. This growth is predominantly being fuelled by the digital segment with increasing consumption of content over the mobile Internet.
This is an analysis that attempts to explain how digitalization is impacting the demand for creative and technical skilled labour, the supply of such labour, and the probable changes in employment and income in Indian Media and Entertainment sector.
To begin with, let us understand what is driving changes in the demand for skilled labour in the Media and Entertainment sector. Therefore, let us first check the trend in how Media and Entertainment is being consumed in the country.
According to a recent PWC report, OTT video revenue is growing rapidly at a CAGR of 22.6% and, therefore, India will move into the top 10 in global ranking by 2022. In the past 24 months, nearly 30 OTT platforms have come alive, including honchos such as Netflix and Amazon Prime Video, ALTBalaji, Hotstar and SonyLIV. The international and regional subscription Video on Demand (SVoD) platforms is growing with over 70% of revenue in 2017 attributable substantially to subscription services. According to the report, this trend will grow to 79.4% of total market revenue expected from SVoD by 2022.
On the other hand, mobile video advertising is the fastest-growing sub-segment of India’s Internet advertising market, expected to rise at 32.8% CAGR by 2022. The number of high-speed mobile Internet connections are expected to increase by 2.2 billion globally by 2022, expanding the market for mobile content consumption at faster speeds leading to a situation where mobile will become consumers’ primary means of accessing content, making it an increasingly important focus for advertisers. Spoilt for choice, with a wide variety of content and original programming, consumers tend to access and choose whatever is of interest to them, anytime and anywhere they desire to do so. With the diversity of audience tastes, audiences are fragmenting to levels not seen before. As a result of this development established Media and Entertainment platforms are in competition to attract and retain audience.
Such a phenomenon is giving rise to competition among producers to create quality content. Not just quality content but also niche content. So, how does the changing Media and Entertainment consumption patterns impact the demand for skilled labour in the Media and Entertainment sector? The production of niche-audience content results in more differentiated content production, even if intended for small audiences, increasing the number of jobs or job roles. However, this content, more often than not has a shorter lifecycle, which means that it supports the gig economy. Needless to say that competition for audiences increases demand for budget intensive content, which increases the demand for wages of top technical performers who deliver superb content.
Digital content and broad band Internet access have lowered the barriers to entry into the Media and Entertainment sector. Earlier, access to audience was totally controlled by television networks and cinema screen owners. Now it is easy both for the producers and the creative and technical talent to reach audiences directly and it is possible to monetize creative and technical work. According to an IBEF report, the industry provided employment to 3.5 to 4 million in 2017. More artists, creatives in general and technology geeks, can aspire to participate in the Media and Entertainment Sector leading to a situation of increasing the supply of skilled labour in the sector.
However the new job opportunities in digital media are varied in nature . Many of these job opportunities are in low-budget productions with smaller audiences. There is another development that is interesting for creatives and technologists. There is a spurt in work done for original programming distributed on streaming services such as Amazon and Netflix that is almost at par with the higher budget content for traditional television networks. While digital video content has been around for sometime but it is a recent development that this kind of content is being produced at budget levels comparable to television channels.
Increasing competition from streaming platforms is strengthening the resolve of traditional television channels to produce and demand more original programming in order to retain viewers and subscribers. This in turn is leading to an increase in job opportunities in traditional television channels due to competition from the digital warriors such as Amazon and Netflix muscling entering the media and entertainment slugfest.
However, the impact of digital platforms on talent income is varied. New digital platforms are opening the possibility of building and distributing content library. This is increasing aggregate earnings, as talent is now being compensated with new residuals streams. However, the competition among producers is increasingly contributing to a situation of stronger bidding and higher compensation for “star” talent as the race intensifies with the media and entertainment market becoming more crowded. Many producers will invest heavily to ride on the popularity of celebrities and to pull ahead of the pack.
While the above scenario is imminent , it might lead to a downward spiral in general for average talent income. With more accessible talent, increased competition for jobs may translate into lower earnings for talent that is yet to garner recognition and reputation. On the one hand, as content is likely to have a shorter shelf life, the average payment per job may tend to be lower leading to a situation of a “Winner-Take-All” talent market. Talent with reputation for quality and delivery will be able to earn even more, while majority of skilled workforce might receive little-to- negative increases in their earnings. Many might participate in the gig economy but few will pull ahead with top earnings.
The gig economy fuelled and sustained by digitalization has implications for both creative and technology based talent.One clear benefit is an increase in the number of jobs available to a young and aspiring workforce; another is the increase in aggregate compensation in the media and entertainment sector. For well recognised and reputed talent it might yield even greater compensation. However, these changes might bring significant downsides for engaged talent as well. Professional talent, both creative and technical, on an individual basis might witness swings in income and compensation at large will vary from year to year, resulting from increased competition . This ultimately means that developing a reputation and a track record of performance might turn out to be the only path to maintaining and sustaining a career in the media and entertainment sector. There is an emerging opportunity for collaboration between content technology companies, budding talent demonstrating hunger for learning and producers of content who are planning to adopt shared data centric environments and end to end digital acquisition, management and distribution strategies. Creatives and technology professionals can focus and specialize in helping the content players streamline their production workflows and maximize their return on investment.