India’s M&E industry to reach $55-70 bn by 2030: CII – BCG Big Picture 2021 Report

OTT, gaming, VFX and animation to lead the next wave of growth

Mumbai: Currently valued at around $27 bn, India’s media and entertainment industry is all set to grow at 10-12 per cent CAGR to become a $55-70Bn industry by 2030, the Confederation of Indian Industry (CII) and Boston Consulting Group (BCG) have projected in their new report, released on Thursday.

Ending the year on an optimistic note, the report highlighted how the industry has already revived to pre-Covid levels and its next phase of growth will be led by OTT, gaming, VFX and animation.

“Our industry has always been at the forefront of disruption and we will continue to innovate over the next decade. We will now need new answers and will need them fast, even on the most fundamental things like talent pool to run our companies and methodology for measuring the impact we are delivering to advertisers on our platforms. We will need to continue to embrace change going forward,” said CII National Committee on M&E - chairman and The Walt Disney Company India and Star India president K Madhavan.

Robust growth for TV

According to the report - ‘Blockbuster Script for the New Decade: Way Forward for Indian Media and Entertainment Industry’, TV as a medium is expected to remain robust given its function as a platform for family viewing, strong user base, and the evolution of content to meet everyone’s needs. Unlike global markets, India’s TV penetration has remained flat and ARPUs have also been steady, with both trends expected to continue in the medium term. Subscriptions will be driven by the strong performance of regional channels and cost advantage vis-à-vis OTT. Cord cutting is nascent and is expected to be limited in the medium term. TV ad volumes have bounced back to pre-Covid levels, and are expected to continue growing in the future, driven by an increase in advertising on regional channels & growth in new advertisers.

OTT sector in the scaling stage

The Indian OTT segment is currently in scaling stage with strong subscription growth and increased investments in premium & original content, stated the report. More affordable data has led to an increase in internet access and digital payments, thereby improving access to OTT platforms and digital videos. The industry is one of the most competitive amongst emerging markets with 40+ players representing all types of content providers. SVOD revenue has seen a remarkable surge over last few years and is expected to overtake AVOD in the coming years.

“The share of traditional media is slowly declining with increased digital adoption but there is still high headroom for penetration with only 54 per cent of Indian households having a pay TV connection compared to more than 70 per cent in China. For many households, TV continues to be the center of the home and a significant part of family time,” said BCG India MD and partner Mandeep Kohli.

Film industry’s road to recovery

According to the report, the film industry has shown encouraging signs of recovery post a difficult 2020. There are a few growth factors for the future – continued growth in regional, direct to digital releases and the rise of “content films” and others. The Indian Postproduction, VFX and Animation industry accounts for <10 per cent share of the global market and has the potential to be a booming sector this decade on the back of several Central and State Government initiatives.

“After a long period of shutdown, cinema halls are now back in business with a bang. A record number of big-ticket movies are lined up for release well into 2022. That augurs well for the sector but caps on occupancies, closures of cinemas and modified audience behaviour might impact the speed of recovery,” said CII National Committee on M&E co-chairman and founder & MD Roy Kapur Films Siddharth Roy Kapur. “On the other hand, streaming has provided new avenues for screening and broad-based the options available for producers, artistes and technicians. Along with the rise of regional cinema, this marks the start of a truly fantastic decade ahead for the Indian content business.”

Way ahead for the industry

According to Technicolor India country head Biren Ghose, who is also CII National Committee on Media and Entertainment vice chairman, the success of India’s media and entertainment will ultimately depend on the ability to scale world-class creative talent in order to capitalise on the global opportunity, especially in the gaming sector.

The projections showed that the industry is at a critical juncture of transformation, offering rapid growth in some areas. “But, to realise this growth, companies must tweak their strategies to take advantage of the current market situation,” said BCG India MD and senior partner Kanchan Samtani. “In addition to investing in content and technology to improve user experience, companies should also leverage suitable distribution models to enhance reach, focus on providing integrated ad solutions and offer innovative marketing formats to enhance the value proposition to advertisers.”

“This year’s report put together by BCG with the help of CII Media and Entertainment Committee, looks at the decade ahead, and will help businesses chart their growth path and aide the government in framing enabling measures to facilitate further expansion of the sector,” said CII director-general Chandrajit Banerjee.

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