M&E Sector Outlook 2016 by Deloitte

23 Dec,2015


We were a little surprised receiving this from Deloitte’s communications agency. Normally consulting firm presentations come with PowerPoint decks or PDFs justifying the words, but this one had only prose. But, guess, it works for those not interested in the numbers and projections.


The media and entertainment sector has evolved over a period of time and even though it has many sub-segments, the industry overall is growing at a fast pace. Certain segments of this sector have grown exponentially whereas other have grown at a steady pace. This sector is growing 10% annually over the past five years. If one has to list the sub-segments of this sector then it would include television, advertising, social media, print, film, radio, music, gaming, animation and OOH, among other smaller sub-sectors.


Television and print media continue to shine by contributing the largest share of advertising revenue. In future the same trend is expected to continue. Digitisation has helped improving the customer experience by improving the viewing quality. Digitisation is also leading to segmentation of the television content. Regional channels are growing at a faster pace. Print industry is a fragmented one, with both national and regional players in the market. Aggressive campaigns like Make in India, Swacch Bharat etc. have heavily spent money on the print medium. Regional editions have been steadily growing.


Digital and mobile platforms are becoming preferred mediums for advertising after the television and print mediums. Internet has grown gigantically from 10 million users to 100 million in a decade and from 100 to 200 million in just three years. The stakeholders are analyzing the user/customer behaviour on the web and accordingly are targeting and customising the advertisement content. Recently, there is a trend of using videos for advertising over the digital platform as they seem to be more effective than just words and images. Apps can do everything that websites can, but in a more intuitive and a convenient way. Mobile adverti through various apps and mobile sites is now gaining momentum. The highest traffic on mobile platform is drawn by the social media sites. Large population of India is active on social media. It is also noted that there is an increasing trend observed for the number of people in the age group of 35 to 65 years who are downloading apps for social media.


The Indian film industry is the largest producer of films globally. Revenue from overseas market is growing and will continue to do so. Indian movies are now also available on Netflix app. Regional movies too are becoming popular. Domestic exhibitors are willing to give more screen space to regional content. The limited shelf life of films has resulted in the film being premiered on the television within three months of its’ theatrical release. The number of screens in Tier 2 and 3 cities still remains limited as compared to urban areas.


Radio has also seen a good growth rate as well. New upcoming sectors like E-commerce have aggressively advertised to gain market and have used radio extensively in their ad campaigns. Advertisers no longer see Radio as an add-on medium but it has become an integral part of their media plans. This medium also gained attention of many as a mass medium with popularity of PM’s address to nation through his show “Mann Ki Baat”.  The Phase 3 license auctions have also given a boost to the industry – the reach and competition, both, have increased tremendously.


India’s recorded music business will nearly double in size over the next five years. The number of music apps and streaming apps will steadily increase on the mobile platform over the next few years.  The revenue business models for these will also evolve over the period. People are getting ‘hooked’ onto these apps and thus CDs too soon are on their way out.  The transformation in which music is consumed will result in many iconic music stores closing shop – e.g. Rhythm house in Mumbai.


Gaming has benefited and grown, thanks to the mass availability of smart phones in the country. Android and iOS offer a low-cost alternative to expensive gaming systems. Monetisation of games is difficult as pay model for downloads is not a preferred mode.  Thus gaming will have limited growth as compared to the other sub-sectors.


Presence of VFX industry is felt in all segments i.e. films, television and advertisements. Few movies that were nominated for Oscars had the VFX work been done in India. The demand for local animation content has been rising over the past few years. Popularity of “Hanuman”, “Chota Bheem”, “Pakdam Pakdai”, is increasing amongst the younger generations.


We spend a lot of time outside our home – getting from one place to another. Therefore, outdoor advertising is still here to stay.OOH advertising such as at airports, malls, metro stations etc., has gained popularity. With digital use, digitized hoardings have changed the traditional OOH platform.  Here too centralized feeds and monitoring of eyeballs etc. will help ‘specific-target’ campaigns and will help fuel the growth trend in OOH.


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