Unexpected shifts in consumer behaviour post a global pandemic; a slowing global economy and high prices bridling consumer spending; storylines that failed to resonate — media and multiplex managers faced a barrage of challenges in 2022.
The transition from legacy to internet-based media distribution had changed the rules of the game already, constraining movie theatres and TV broadcasters in 2022. Total OTT revenue in India more than doubled by end 2020, a trend that continued in 2021 and 2022. In-person entertainment — plus allied businesses and physical hosting platforms — faced the greatest pressure ever to move beyond simply bringing people out of their pandemic cocoons to replicating the ‘living room’ out of home.
By February-March, as pandemic restrictions began to ease, people started going back to theatres. And what did they watch? Mostly south movies: K.G.F: Chapter 2 (Kannada; domestic gross: Rs 1,000 crore), RRR (Telugu; Rs 944 crore) and Kantara (Kannada; Rs 361 crore) were among the top grossers this year, even as Bollywood flicks with A-list cast such as Akshay Kumar’s period drama Samrat Prithviraj, Aamir Khan’s Laal Singh Chaddha — made on a colossal Rs 186 crore — and Kangana Ranaut’s Dhaakad bombed at the box office.
That said, analysts predict revenues of multiplexes will cross pre-pandemic levels in 2022-23. The revenue is expected to rise to an all-time high of over Rs 6,000 crore, or 13-15% above the 2019-20 level, rating agency Crisil Ratings said in a report. With a generous help from some much anticipated Hollywood releases towards the year-end, the triad — of a jump in average ticket prices, higher spend per head on food and beverages, and addition in the number of screens — are expected to script the growth story for the sector, as per the Crisil Ratings report.
The average ticket price this year was Rs 240-245, 20% higher than the pre-pandemic level. Theatre occupancy hovered around 32% this year.
What about in-home entertainment? According to the EY FICCI M&E 2022 report, the ad revenue on TV — the centrepiece of family entertainment — is expected to touch Rs 34,400 crore in 2022 and Rs 39,400 crore in 2024. Revenue from subscriptions for TV channels is expected to reach Rs 41,500 crore this year. Subscription income will see a marginal 2% CAGR growth to reach Rs 43,200 crore by 2024.
The pandemic years were a golden era for streaming media in India with people falling back on stay-at-home entertainment instead of live events and theatre-hopping. Streaming services took centrestage during pandemic lockdowns only to come under pressure in 2022 when viewers shifted their attention to live entertainment and sports. Can the media and entertainment sectors capitalise on the emerging opportunities?
Speaking at the Big Picture Summit held in November, Apurva Chandra, secretary, ministry of information and broadcasting, said the ministry, along with the Indian media and entertainment industry, has set a goal of making the M&E sector a $100-billion industry by 2030.
The fact is, the M&E sector in India is underpenetrated, with a contribution of 0.9% to the GDP compared to 3-4% for many developed economies. In other words, the potential of growth is huge with about 100 million of a total of 300 million households in India not having access to television.
As per the Changing Landscape of Indian Television report 2022 by GroupM Finecast and Kantar, India will become the third-largest TV advertising market within the next two years, due to a rise in digital natives and buildout of smart TVs and OTTs.
As Indian customers switch to smart TVs and devices, connected TVs (CTV) will dominate. India’s smart TV shipments grew 38% year-on-year in Q3 2022, with 90% of units sold being smart ones. “The future of TV in terms of advertising looks bright as the emergence of new technologies like CTV creates even more room for customisation,” believes Prasanth Kumar, CEO, South Asia, GroupM.
What next? One thing the industry is talking about a lot these days is the growing use of superapps and how these would pivot growth in in-home entertainment in 2023 just like many other sectors. As that happens, consumers will use one app to control every other device within their entertainment ecosystem. According to Gartner, more than half the global population will be daily users of superapps.
Study after study says we are just months away from a big revolution in the way people consume media and entertainment. The only question to ask ourselves is, are we ready?