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M&E Special: To Hell & Back
The Indian M&E sector faced serious setback in 2020, bracing for a drop of nearly 20 per cent in 2021. On the back of digital, OTT, gaming, TV & even print, though, it is expected to rise back by FY22
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Indian media comes to grinding halt’, ‘content production cessation’, ‘interrupted printing as presses close’, ‘no traffic impacts radio listenership’, ‘India out of home (OOH) on a standstill’, ‘theatres closed’ -- there were barely any popularly used terms or headlines that augured well for the Indian media and entertainment (M&E) sector in the first half of 2020, leading to a long period of ‘washed out revenues’. The resilience of the sector however kicked in, and soon silver linings emerged amid the chaos.
The rise of digital including video streaming apps, television recording some of the highest viewership numbers with a captivated in-home audience, the return of print, and the resumption of content production all gave some breathing space to the sector.
The M&E sector in India, according to KPMG’s ‘Media & Entertainment Report 2020’ will contract 20 per cent in FY21 with major segments such as film, TV, print recording decline. The overall revenue of print, OOH and radio in FY 2020 dropped 8, 9 and 11 per cent respectively.
Even as the ad revenue in TV faced a major hit, when it turned around in the second half, it allowed the sector to hold its own. The combined revenue rise in TV was 9 per cent making it a Rs 778 billion market. The highest growth in the year, as per expectations, was recorded by digital. The digital and OTT segment in India grew 26 per cent to Rs 218 billion in FY20. This brings it closer to the print sector, which in FY20 was pegged at Rs 306 billion.
In all, the M&E sector grew 7 per cent in FY20 to reach a size of Rs 1.75 trillion, a CAGR of 10 per cent over FY16-20, with digital and OTT video being primary drivers.
More importantly, the sector however is expected to bounce back in FY22 with a growth of over 33 per cent over a FY21 base to reach Rs 1.86 trillion.
New World Order
The significance of digital video led for some landmark decisions to take place in the year. Digital video and digital news, for instance, were slated to come under the Ministry of Information and Broadcasting (MIB). Analysts reiterated that this may not lead to censorship of digital content but the MIB may be forming some framework for regulating the OTT space. In more ways than one, it may allow for a fairer competition between television and digital video in the times to come.
The year also saw an important shift when big ticket releases moved to the OTT space. While this is not expected to become a norm once cinemas open, it can be regarded as a beginning for an important trend. OTT’s growth increased focus on animated and visual effects content leading to a growth in this segment as well. Similarly, music too grew in FY20 by 15 per cent even as it is among the smallest in base in India (Rs 19 billion) at the moment. Online gaming registered a 45 per cent growth in revenue, reaching a market size of Rs 90 billion, growing its distance from OOH (Rs 31 billion) and radio (Rs 25 billion).
While print declined in 2020, the impact was lesser in Hindi and regional segments, and in Tier-2 and smaller markets. This can be considered a reason why expectations still continue from the print sector. OOH in India saw a bad year but as markets and retail opened up, this sector too has raised hopes in 2021. Radio is facing several challenges in India at present, leading industry experts to keep a watch on how this sector will evolve to remain relevant in the future.
The Indian M&E sector has seen a huge shift in 2020 but all expectations are that these will only hold the sector in good stead in the years ahead.