The Indian Media and Entertainment (M&E) sector
is expected to cross the $40 billion mark by 2021 growing at compounded annual
growth rate (CAGR) in excess of 10%. M&E industry has started to witness
transformation with growing importance on the digital media.
Traditional media i.e., print and television will
continue to grow. Cinema is has a good future as it is recognized globally and
animation and VFX is becoming an integral part. Localized reach of radio is
catapulting the growth of radio industry. Future of OTT is very bright and original
content along with regional content will be a key driver of OTT growth.
Here are the five trends and challenges in the media
and entertainment industry:
Television
o Trends
Television industry will continue to grow at a CAGR
exceeding 13%. Rapid advance in technology is expected and this will
further stimulate growth as high-end content transmission will follow.
o Challenges
Even though the growth of the traditional media is increasing, changes in
preferences, due to urbanization, may be a factor that would hamper the growth
in a long run. These include consuming ‘television on the go.’
Print
o Trends
Print still has positive growth numbers even when
the same are on the decline in developed economies. The growth area are
more regional than national, as regional language publications, particularly
newspapers, continue their slow but positive growth. Maybe the reason for
newspapers to be where they are in the country is due to the reason that we
Indians still love to read the newspaper with a morning cup of tea. The Indian
newspaper industry will continue to grow and may cross Rs. 24k crore in 2021.
o Challenges
Print industry would certainly grow in the near term
however, digital consumption of news will be a disruptor in a few years to come.
Cinema
o Trends
Film entertainment sector is expected to register a
good growth, with box office revenue estimated to rise from about Rs 11k crore
in 2016 to about Rs 18k crore in 2021, at a CAGR of around 10%. Content will
continue to be king and drive growth in this sector. VFX and animations is
slowly becoming integral part of Indian film making. A recent trend includes
mid and small-budget movies getting viewership in overseas markets,
particularly the middle east.
o Challenges
Online piracy of film and television content in
India is rampant and investments in preventive technology need to be
significant if this needs to be checked.
Radio
o Trends
Success of radio is attributed to its localized
reach. Radio has witnessed increase in numbers in metros, as listeners
prefer mobile and on-the-go (car radio) devices. The first lot of the Phase III
license roll-out resulted in 96 channels out of 135 channels being allotted in
56 cities. Consolidation in the industry is a key trend. Expansion in
Tier 2 and 3 cities, though slow will happen over the next few years.
o Challenges
Radio listeners will continue to have more choices
to consume content – music, news, entertainment etc. by tuning into web radios,
podcasts, audio-on-demand, etc. It is also important to note that high-end
smartphones have done away with FM tuners altogether.
OTT (Over the Top)
o Trends
Original content will be a key driver of OTT growth
and regional content library is expected to increase its share on OTT platform.
OTT is witnessing 35% growth year on year. Currently there are about 30 OTT
players in India. Many media companies have begun offering OTT video on demand
(VoD). It is expected that here will be an increase in the amount of time spent
on digital platforms through mobile devices. Changing tech trends in digital
advertising will be the key to success for revenue models in the platform.
o Challenges
OTT faces challenges around fragmentation. The
majority of Indian audiences are still stuck to the free or ad-supported model
as of now. OTT heavily relies on broadband connectivity which is yet at a
development stage in the country.
Regulatory updates
The Government is taking various initiatives that
support the M&E industry’s growth such as increase in FDI limit from 74% to
100% in cable and DTH satellite platforms, digitizing the cable industry to get
more institutional funding, and granting industry status to the film industry.
Further, single window clearances are planned for approvals for outdoor events,
e.g. film shooting etc. Incentive based models are being worked out to
attract overseas production houses to shoot in India including ease in direct
and indirect taxes.
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