MUMBAI: Riding the digital wave, the Indian Media & Entertainment (M&E) sector has seen a 13% growth in the last year to reach Rs 1.5 trillion, noted the FICCI-EY report, ‘Reimagining India’s M&E sector’, released by union Information & Broadcasting minister Smriti Irani. 

The report forecasts that given the current growth trajectory, the sector is expected to cross Rs 2 trillion by 2020 at a CAGR of 11.6%. 
The media and entertainment (M&E) sector thus continues to grow at faster rate than the GDP growth rate, reflecting the growing disposable income led by stable economic growth and changing demographics, the report mentions. 

The report further highlights that the growth in digital demonstrated that advertising budgets are in line with the changing content consumption patterns. 

Ashish Pherwani, Partner EY India, said, “Growth in 2017 was led by the digital, film & animation & VFX segments. We expect sectors like digital and gaming to grow between 2 to 3 times by 2020.” 

Incidentally, while demonetisation and GST impacted advertising across sectors, digitisation has helped subscription revenue to grow at a faster clip in 2017. However, advertising is expected to continue growing till 2020 led by digital advertising, the report said. 

The report also estimates that approximately 1.5 million consumers in India today are digital only, and would not normally use traditional media. This customer base is expected to grow to ~4 million by 2020 generating significant digital subscription revenues of Rs 20 billion. This will be further accelerated through the Government of India led digital initiatives such as micropayments through the Unified Payment Interface (UPI) and Bharat Interface for Money (BHIM) platforms developed by the National Payments Corporation of India (NPCI). 

Farokh Balsara, Partner and M&E Leader, EY India, stated, "With digital revenues expected to cross Rs 220 billion by 2020 has Indian M&E reached it’s digital tipping point? We now need to re-imagine the Indian M&E sector." 


Digital media
Digital media has grown significantly over the past few years, and continues to lead the growth charts on advertising. Even as subscription revenues are emerging and are expected to make their presence felt by 2020, digital media grew 29.4% (27.8% net of the impact of GST) on the back of a 28.8% growth in advertising and 50% growth in subscription in 2017. 

Subscription, which was just 3.3% of total digital revenues in 2016, is expected to grow to 9% by 2020, the report adds. 

OTT platforms and consumption of content on these services is growing rapidly year on year with 93% of time spent on digital videos being in Hindi and other regional languages. OTT subscription in India is expected to touch Rs 20 billion by 2020 as the number of people viewing videos online is estimated to double to 500 million by 2020 from 250 million people in 2015.
In 2015, around 40% of total mobile traffic came from the consumption of video services. This figure is expected to touch 72% by 2020.