The Indian Media and Entertainment (M&E) sector demonstrated steady growth in 2023, crossing the Rs 2.3 trillion mark, marking an increase of Rs 173 billion or 8.1% from the previous year, as per the report published by Ernst & Young titled ‘#Reinvent: India’s media & entertainment sector is innovating for the future’. Despite this growth, traditional segments such as television, print, and radio still lagged behind their 2019 levels. Television remained the largest segment, although digital media is expected to overtake it in 2024. Forecasts predict a further 10.2% growth, reaching Rs 2.55 trillion by 2024, and a compounded annual growth rate (CAGR) of 10% to Rs 3.08 trillion by 2026.
New media, including digital and online gaming, were primary drivers of growth in 2023, contributing Rs 122 billion to the total increase. Traditional media’s share decreased to 57% of sector revenues, down from 76% in 2019. Experiential segments, including online gaming, filmed entertainment, live events, and out-of-home (OOH) media, collectively contributed to 48% of the total growth.
Television advertising faced challenges, with a 6.5% decline attributed to reduced spending by gaming and direct-to-consumer (D2C) brands. Despite this, digital advertising grew by 15%, comprising 51% of total advertising revenues. Digital subscription saw a 9% growth, reaching Rs 78 billion, driven by paid video and music subscriptions.
“It has been a while since the media and entertainment (M&E) sector grew slower than Indian GDP, but that was 2023 in a nutshell! Headwinds from geopolitics, the uncertainty of war, a funding scarcity and regulatory implications impacted advertising spends and reduced consumption. Yet the M&E sector grew, outpacing that of many developed countries,” Ashish Pherwani, M&E Sector Leader, Ernst & Young LLP, said.
Print media defied global trends with a 4% growth in advertising revenues, primarily from premium ad formats. Online gaming became the fourth largest segment, experiencing a 22% growth to reach Rs 220 billion. The film segment saw a 14% growth, with over 1,796 films released in 2023, and theatrical revenues reaching Rs 120 billion.
Live events grew by 20%, surpassing pre-pandemic levels, driven by government events, personal events, weddings, and ticketed events. OOH media also experienced a 13% growth, crossing its 2019 levels, with digital screens contributing 9% of total revenues. The music segment grew by 10%, reaching Rs 24 billion, with digital revenues accounting for 87% of total earnings.
Radio segment revenues increased by 10% in 2023, driven by more retail and local advertising. However, ad rates remained below their 2019 levels. Despite these growth figures, advertising growth lagged behind the nominal GDP growth of 9% in 2023.
Digital media comprised 51% of total ad spends, up from 31% pre-pandemic, with TV contributing 26%. National media dominated advertising spends, comprising 78%, while local media accounted for the remaining 22%.
Subscription revenues grew by Rs 75 billion, with new media contributing 58% of the growth. However, the subscription base remained heavily concentrated, with the top 40 to 50 million households powering most digital and film subscriptions.
Mergers and acquisitions activity slowed in 2023, with new media aggregating 86% of deal volumes but only 35% of deal value. Traditional media deals in television and film comprised 65% of deal value.
Looking ahead, the M&E sector is expected to grow at a CAGR of 10%, adding Rs 763 billion in three years. New media will contribute 61% of this growth, followed by animation and VFX (9%) and television (9%). Factors such as India’s GDP growth and evolving consumer preferences will continue to shape the sector’s trajectory.
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