India’s M&E industry to grow at 11.7% CAGR to reach $52,683 mn by 2022

India’s entertainment and media industry is projected to grow at a CAGR of 11.7 per cent from $30,364 million (Rs 1,978,045 million) in 2017 to $52,683 million (Rs 3,432,044 million) in 2022. Television, cinema and OTT will collectively account for 46 per cent of the overall growth in the Indian entertainment and media industry for the period 2017 to 2022. This was revealed in a joint study by Assocham and PwC – ‘Video on Demand: Entertainment reimagined’.  

The study provides a comprehensive understanding of the VoD/ OTT segment and its interplay with other segments of the media and entertainment sector. 

According to the study, India’s per capita media and entertainment spend will be capped at a mere $32 (Rs 2,080) by 2021 as nominal GDP per capita reaches $2,560 (Rs 166,400) for the projected year. The spend is much lower than that of China, which will stand at $222 (Rs 14,430) for the same period, and that of the USA, which will have the highest spend at $2,260 (Rs 146,900). 

India is set to be in the top 10 entertainment and media markets globally by 2021 in terms of absolute numbers. SVOD and TVOD will collectively grow from $296.69 million (Rs 19,328 million) in 2017 to $823.25 million (Rs 53,630 million) in 2022 at a CAGR of 22.6 per cent, with SVOD holding a majority share throughout the projected period. 

OTT has caused huge disruption in the content consumption space. Globally, the OTT market (TVOD+SVOD) is set to grow at a CAGR of 10.1 per cent during the period 2017-2022. During the same period in India, the segment is expected to grow from $297 million (Rs 19,328 million) to $823 million (Rs 53,630 million) in 2022 at a CAGR of 22.6 per cent. 

With increasing smartphone penetration and lower data tariffs, VoD is showing promising growth. Mobile video advertising (largely AVoD) is the fastest growing sub-segment of India’s Internet advertising market, projected to rise at a CAGR of 32.8 per cent from 2017 to 2022 and to reach $317 million (Rs 20,641 million) by 2022. 

The report highlights India’s highly diverse market and states that a one-size-fits-all approach would lead to dire consequences for companies. International OTT players such as Netflix and Amazon Prime have realised the importance of customised regional content. To compete with local players such as Hotstar and Voot, which have access to their respective parent companies’ extensive regional and local content library, the international OTT players are creating exclusive local content. Netflix is expected to invest Rs 500 crore – Rs 600 crore per year in original content in India. Similarly, in early 2018, Amazon announced that it would be investing about Rs 2,000 crore on original content in India. 

In the recent past, with heavy marketing and growing interest of the masses in sports, one of the biggest drivers of online content consumption is live sports. With Hotstar having exclusive digital rights for ICC Cricket, IPL and Wimbledon, it has managed to capture wider audiences across the country. Hotstar broke a world record in terms of number of people simultaneously streaming the live feed of an event online during the IPL 2018 finals. Further, digital rights of premier sports are the primary driver for Hotstar’s paid subscriber base. In fact, the demand for sports content is so huge in the online consumption space that even social media platforms like Facebook and Twitter are bidding for digital rights to broadcasting sports content online.