All hopes are not lost at a time when the world in general and M&E industry in particular is facing a tough time due to COVID-19. For, a future outlook, part of the FICCI-EY report of March 2021 titled ‘Playing By New Rules’, says the sector to rebound in 2021 and double to around Rs 2.68 trillion by 2025
Path To Recovery
The report said while it expects the M&E sector to rebound in 2021 and double to around Rs 2.68 trillion by 2025, the recovery of various segments will vary. “We expect that different segments will take different periods of time to regain their 2019 (pre-pandemic) revenue numbers.” Assuming no further setbacks, it will take one to two years for TV, film, music, two to three years for animation and VFX, events and beyond three years for print, radio, OOH.
Given that video, audio, text and experiences are available across almost all segments, the M&E sector is redefining itself across these 4 verticals: Video – TV, video OTT; Experiential – Online gaming, cinemas, events, OOH; Textual – print, online news; Audio – radio, music, audio OTT.
Premium consumers (comprising Digital only and tactical digital) will cross 100 million by 2023. The fastest growing segment will be the bundled digital consumer, growing to 399 million by 2023. The free consumer base will also grow as progress continues to spread amongst the 50 million homes today which do not have access to television.
Smart connected TVs will exceed 40 million by 2025, thereby ending the monopoly of broadcasters on the large screen and leading to around 30% of content consumed on large screens to be social, gaming, digital, etc.
Screen count will almost double to near a billion by 2025, of which around 220 million would be television screens and over 750 million would be smartphone screens. This could lead to a massive increase in content creation (news and entertainment) from the around 170,000 currently to over 250,000 hours, as personal consumption (as opposed to group consumption) increases to over 50% of total video time, across a wider set of genres and niche content types.
The share of regional content will increase to 60% of television consumption in 2025 from around 55%1 in 2020 and will increase to around 50% of OTT consumption from 30% in 2019. The need for dubbing, titling, formatting, etc. services to make content mobile will increase.
Online gaming will continue to grow and reach 500 million gamers by 2025 to become the third largest segment of the Indian M&E sector. The segment will grow across all its verticals viz, esports, fantasy sport, casual gaming and other games of skill, but revenue growth will be led by mobile-based real-money gaming applications across these verticals.
Split In Cinema Audience
While cinemas today largely cater to 100 million Indians, mostly top-end audiences, they will now begin to go deeper into India to cater to a wider audience base. Cinemas will continue to cater to top end multiplex audiences who watch movies for their spectacular experience and to enjoy an evening out with friends and family, comprising around over 100 million customers by 2025.
News Reach To Go Up
In 2020, Comscore data indicates that online news had a reach of 454 million as compared to 450 million for online entertainment.
Power of Newspaper
With the shift of premium customers to SVOD, print will increase in importance with respect to such audiences. Large news networks will focus on increasing the collection of regional news to create very strong regional products (print + digital) of extremely high relevance to audiences – news that national and large digital news aggregators may not be able to provide.
Reduced Ad Reliance
Cover price growth is critical for the print segment, in order to reduce the variable loss incurred on each newspaper printed by most print companies, and India could see a doubling of newspaper average cover prices by 2025.
More Focus On Margins
Continued focus on operating margins will be required and made possible by creating state-wide shared services across news gathering, production and distribution while print companies focus on their core capabilities of brand building, community management and editorial excellence.
Video & Audio
Content produced for the video OTT segment will begin to play a more important role in using and promoting music – akin to Bollywood’s link to music – and we could see a lot more music led innovation from this segment.
If YouTube continues to provide recent and video content-linked music for free, the paid OTT music sector will reach 5 million top-end users by 2023, and grow to INR2 billion in revenue, leading to consolidation in the music OTT segment; if not, paid subscribers could cross 50 million.
Radio, the most affordable of all media for consumers, will continue to exist and serve large portions of India through smart phone FM receivers, and play a vital role in retail advertising.