Strong economic fundamentals coupled with growth in domestic consumption has aided the Indian M&E industry to maintain a growth of 11.6 per cent over the last five years. Domestic consumption has remained strong, accounting for around 70 per cent of the Gross Domestic Product (GDP) in FY 2017. In FY 2018, the GDP is expected to continue to grow above 7 per cent, while in the long-term both, demonetization and the Goods and Services Tax (GST) are likely to provide a boost to the country’s GDP.
The Indian media and entertainment sector is one of the fastest growing industries in the country. The sector grew 11% to USD 20 billion in total revenue, in the financial year 2016; according to a report by FICCI. It is expected to touch USD 35 billion by the financial year 2021. Television broadcasting, distribution, film, print, radio, advertising and digital are some of the segments that drove growth.
Even though Television witnessed a slow growth in 2016, primarily due to weak advertisement revenues; the strong performance of sports properties increased the market spends and helped channels alleviate the pull down factors to an extent.
The expansion of overseas markets in the Films sector, increase in the depth in regional content and rise in acquisitions of digital content are offsetting this decline and expected to drive growth in the future.
Digital Advertising continued its high growth trajectory with a 28 per cent growth in 2016 to reach 15 per cent share in the over advertising revenues. The advertisers’ interest had been captured by the continuing shift in consumption towards digital media due to the rapid growth in internet penetration. This trend is also positively impacting the gaming and music segments.
The Animation and Visual Effects (VFX) industry showcased a growth of 16.4 per cent, largely led by a 31 per cent growth in the VFX industry, which grew on the back of an increase in outsourcing work and the growing use of VFX in domestic films productions.
The 2300 crore valued Radio industry has registered 11 per cent CAGR over 2010-2015. Radio continues to remain the media of choice for music discovery, even in developed markets and hence it attracts interest from publishers and advertisers.
Source: FICCI-KPMG Report 2017