While there was an impact of the slowdown on TV and print advertising, the strong growth displayed by the digital, gaming and film segments contributed to the performance of the sector, a report said.
The ongoing economic slowdown had a considerable effect on the Media and Entertainment sector as the companies have lowered their advertisement spends on TV and print media. However, even amid slowdown blues, several segments performed well due to which the overall growth of this sector was within double-digits. “While there was an impact of the slowdown on TV and print advertising, the strong growth displayed by the digital, gaming and film segments contributed to the performance of the sector,” a research report from accounting organization KPMG said this week. The sector has shown a double-digit growth of over 13.3% in FY19 and has reached over Rs 1 trillion, the report added. In FY19, digital alone grew by 43% compared to the last fiscal while gaming grew by over 41%.
So, where is the slowdown?
Segments within Media and Entertainment took a hit in terms of revenues in FY19. For instance, revenues generated from television were lower than the expected growth due to the consumption slowdown along with other factors. Moreover, the advertising revenues for FY20 are expected to be lower than FY19. “Owing to the macroeconomic slowdown being observed since the last few quarters, which had led to a fall in domestic consumption and is likely to also have an impact on the advertising revenues,” the companies will not get much revenues from advertisements, the report said.
But, the Media and Entertainment industry is still going northward and is likely to be about the size of Rs 3 trillion. Projecting the industry growth to almost triple the current size, the report said that an expected CAGR of 13.5% is expected from Media and Entertainment during FY19-FY24. Riding high on the back of high-speed internet penetration and mobile consumption, the sector has benefitted largely as consumption habits have evolved. The same has also helped in getting rural population on-board.
Media and Entertainment is not the only industry which is taken aback by a demand slowdown. In fact, real estate, FMCG, auto and ancillary industries too have witnessed lesser sales due to a gamut of reasons which include, but are not limited to, NBFC crisis, rural distress, job insecurity and liquidity crunch. The consumer sentiment for purchasing has been downbeat since May 2019 and has been falling since then, according to a recent report by Ipsos and Thomson Reuters.