The digital and online gaming sector’s contribution to the M&E sector increased from 16% in 2019 to 23% in 2020
The film entertainment sector contributed the largest to the decline by registering Rs 11,900 crore, while print and television posted Rs 10,600 crore and Rs 10,200 crore loss, respectively.
On the back of the worldwide coronavirus spread, the Indian media and entertainment sector registered a 24% decline to Rs 1.38 lakh crore (US$18.9 billion) in 2020, taking revenues back to 2017 levels, according to the latest FICCI-EY report. Titled, ‘Playing by new rules’, the report also highlighted that despite the dip, the sector expects to recover 25% in 2021 to reach Rs 1.73 lakh crore and then to grow at a CAGR of 13.7% to reach Rs 2.23 lakh crore by 2023.
As per the report, digital and online gaming were the only segments which grew in 2020 adding an aggregate of Rs 2,600 crore. The digital and online gaming sector’s contribution to the M&E sector increased from 16% in 2019 to 23% in 2020 while other segments fell by an aggregate of Rs 46,500 crore. Out of this, the film entertainment sector contributed the largest to the decline by registering Rs 11,900 crore, while print and television posted Rs 10,600 crore and Rs 10,200 crore loss, respectively. The share of traditional media (television, print, filmed entertainment, OOH, radio, music) stood at 72% of M&E sector revenues in 2020.
“Digital is fuelling an unprecedented growth in content creation and consumption in almost every Indian language, creating new economic opportunities for both the media and entertainment industry and creative professionals across the country. We need to capitalise on this and unlock the full potential of India’s creative ability to power India’s economic engine,” Sanjay Gupta, chairman, FICCI Media and Entertainment Committee, said.
Television registered a 22% fall in advertising revenues on account of highly discounted ad rates during the lockdown despite ad volumes posting only 3% decline. In addition, it also witnessed a 7% fall in subscription income, led by the continued growth of free television, reverse migration and a reduction in average revenue per user ARPU due to part implementation of NTO (new tariff order) 2.0 that called for individual pricing of channels and did away with bouquets offered by broadcasters earlier. TV advertising, however, is expected to be close to 2019 levels in 2021, growing over 20% on the back of a line-up of fresh sports content, regional channel rate increases and continued growth of free television. Meanwhile, digital advertising remained stable led by increased allocation from traditional advertisers who accelerated their investments in digital sales channels.
Print, on the other hand, also registered 41% decline in advertising and a 24% fall in circulation revenues. English language newspapers were hit harder and struggled to get back their circulation post the pandemic,particularly in metros, while regional language newspapers recovered a larger portion of their lost circulation. The segment saw the establishment of a new lower-cost operating benchmark, with most print companies reducing costs by over 25%.
Interestingly, Digital subscriptions saw 49% rise in 2020 followed by online gaming with 18% rise. “The M&E sector witnessed a shift in demand patterns as consumers actively sought alternatives and had the time to try new things,” Ashish Pherwani, partner and Media & Entertainment Leader, EY India, stated. According to the report, 28 million Indians paid for 53 million over-the-top (OTT) subscriptions in 2020 leading to a 49% growth in digital subscription revenues. Growth was led largely by Disney+ Hotstar which put the IPL behind a paywall during the year, along with increased content investments by Netflix and Amazon Prime Video and launch of several regional language products. In addition to this, 284 million Indians consumed content which came bundled with their data plans.
As for online gaming, the sector grew 18% in 2020 on the back of work from home, school from home and increased trial of online multi-player games during the lockdown. Online gamers grew 20% to reach 360 million in 2020. Transaction-based game revenues grew 21%, despite adverse regulation in certain states, while casual gaming revenues grew 7%.