Indian M&E CAGR 8.8%, nearly twice that of global

04 Jul,2022

Note: 2021 is the latest available data. 2022–2026 values are forecasts.
Source: PwC’s Global Entertainment & Media Outlook 2022–2026, Omdia

 

 

By Indrani Sen

 

Indrani SenPWC’s 23rd annual Global Entertainment and Media Outlook released on June 23, 2022 shows that globally after a setback in 2020 due to the pandemic, the entertainment and media industry is set on a steady path of recovery with a CAGR of 4.6% during 2021-26 to reach a market size of US$ 2.9 trillion in 2026 as shown in the chart below.

 

Under the title “Fault lines and fractures: Innovation and growth in a new competitive landscape” the report says: “But amid all the unpredictability, there is greater clarity about the overall trends of the market and the forces driving growth, and a better understanding of the fault lines and fractures that are altering the entertainment and media landscape.” It is worth quoting another interesting observation “But the stable overall growth pattern masks an underlying volatility. It is clear that the pandemic accelerated changes in consumer behaviour and digital adoption in ways that will affect future growth trajectories. Some of the sectors that saw immense gains amid the pandemic will not be able to sustain that growth, while others will continue to build from their higher bases.”

 

Turning its focus to India, the PWC report has made some interesting predictions. The Indian media and entertainment industry is expected to reach INR 4,30,410 by 2026 growing at a CAGR of 8.8%, nearly double the global CAGR of 4.6%. Deeper penetration of internet and mobile devices along with the roll out of 5G over next five years, are expected to fuel the growth of digital media and advertising while the traditional media, particularly TV will continue to hold a steady growth rate.

 

Let us take a closer look at the new media sector.

 

In terms of growth, India’s total video games and esports segment leads the media pack increasing at a CAGR of 18.3% from a revenue of INR 16,200Cr in 2021 to INR 37,535Cr in 2026. Given the size and population of India, it is comparatively a small market for video games and e-sports. Dominated by social and casual gaming, India currently is the third fastest-growing video games market in the world, after Turkey and Pakistan.

 

The OTT segment will have the second highest growth with a CAGR of 14.1% and will touch a total revenue of INR 21,032 crore in 2026. This growth will mostly be driven by various subscription services accounting for 90.5% of revenue in 2021 with a forecast to account for 95% of revenue in 2026.

 

OTT will be followed closely by the internet advertising with a 12.1% CAGR to reach INR 28,234 crore in 2026. Within the segment the mobile sector accounted for 6 0.1% of the total revenue in 2021 which is expected to increase to 69.3% in 2026.

 

India’s TV advertising market saw a -10.8% decline in 2020 over the 2019 levels due to the pandemic, but recovered in 2021 with a 16.9% growth to INR 32,374 crore. The market is predicted to grow at a 6.3% CAGR to reach INR 43,410Cr by 2026. According to PWC, this will make India the fifth-largest TV advertising market globally, after the US, Japan, China and the UK.

 

The total newspaper revenue is predicted to grow at a 2.7% CAGR from INR 26,378Cr in 2021 to INR 29,945Cr in 2026. India will become the fifth-biggest newspaper market by 2026 overtaking France and UK. Interestingly, in spite of a low CAGR, India will be the only country globally to grow total newspaper print revenue consistently across the 2020-26 period. During this period, India will also be the only country to grow daily print newspaper copy sales (by volume) at a 1.3% CAGR.  By 2026 India is expected to have 139mn daily average print newspaper sales, one-third of the global daily total earning the distinction of the biggest world market for print putting China in the number two position.

 

Among the other smaller media and entertainment segments, India’s music, radio & podcast segment grew at 18% in 2021 and is expected to grow at 9.8% CAGR to reach INR 11,536Cr by 2026. The subsegment recorded music industry will continue to make steady progress at a CAGR of 13.6%, thanks to audio streaming platforms and touch INR 4,849Cr by 2026. In comparison, live music industry continues to remain small.

 

India’s out-of-home (OOH) advertising market is predicted to grow at 12.57% CAGR to reach INR 5,562Cr in 2026. In 2020 this segment faced the biggest fall in revenue globally, however, it also recovered spectacularly in 2021 by 63.4% over the 2020 levels to INR 3,076 crore.

 

As far as cinema industry is concerned, India was the third-biggest market globally in terms of ticket sales after China and the US in 2021 and is expected to grow at the highest growth rate of 38.3% CAGR during 2020-26 to reach INR 16,198 Crore in 2026. It should be noted that in 2021, the number of total tickets sold was still much below the pre-pandemic level. In terms of advertising revenue, the share of cinema advertising is miniscule due to the inherent problem of building reach and OTS through the medium, though the big screen impact offered by cinema is undeniable.

 

To sum up, the Indian media and entertainment industry seems to be running on a healthy track with various prospects of creating new world records. Compared to various other such industry reports, the global comparisons across different segments makes the PWC report an interesting read.

 

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