Digital advertising increased to 33% of total advertising in 2021 from 2019: FICCI-EY Report 2022

The FICCI-EY Report 2022 explains how Indian Media and Entertainment sector rebounds with digital advertising and online gaming witnessing a significant growth in 2021, along with other key findings.

According to the FICCI-EY Report 2022 titled, 'Tuning into consumer - Indian M&E rebounds with a customer-centric approach’, the Indian Media and Entertainment sector has grown by 16.4% to INR 1.61 trillion (US$21.5 billion) in 2021, still 11% short of pre-pandemic 2019 levels. This happened due to the second wave of COVID-19 which impacted the April – June quarter.

Assuming no further impact of the pandemic, the report stated that it is expected to grow 17% in 2022 to reach INR 1.89 trillion (US$25.2 billion) and recover its 2019 pre-pandemic levels, then grow at a CAGR of 11% to reach INR 2.32 trillion (US$30.9 billion) by 2024.

Digital media has firmly established itself as the second-largest segment. It grew by INR 68 billion in 2021. The share of traditional media stood at 68% of sector revenues.

Ashish Pherwani, Partner and Media & Entertainment Leader, EY India, stated, “India has always been a different kind of media and entertainment market. High on volume and low on ARPU, yet up top with the rest on technology and ahead of the pack when it comes to digital adoption.” He added “Technology has led to the democratization of M&E in India – content is now created for the people, by the people, and of the people. The flow of consumer data provides rich and real-time insights on what the consumer likes and dislikes, when where and how it is being consumed, and whether the price-points are appropriate.”

Sanjay Gupta, Chairman, FICCI Media, and Entertainment Committee, stated, The M&E sector had de grown 24% in 2020 but rebounded with a 16% growth to reach INR1.6 trillion, just 11% short of its 2019 pre-pandemic numbers. Except for cinema advertising, all segments of the M&E sector grew in 2021, though experiential segments – like events and films – are yet to get back to normal. What’s more, the sector should reach and exceed its pre-pandemic levels in 2022 itself.

Jyoti Deshpande, Co-Chairman, FICCI Media and Entertainment Committee, said, "The hyper-adoption of a digital ecosystem, an endless supply of creative and technically skilled workforce, governmental focus on ease of doing business and sectoral winds of consolidation – all point towards a supply pool capable of fuelling global content needs. All the momentum and tailwinds are likely to hurtle the Indian M&E sector to INR 2.3 trillion by 2024."

Also read: Data: India’s Quick Commerce Market to witness 15X growth in 3 Years

Advertising to Grow at 12% to Reach INR 1 trillion by 2024

In 2021, when India’s nominal GDP grew 19%, advertising growth outperformed and grew 25%. The highest growth was in television advertising of INR 62 billion, followed by digital advertising of INR 55 billion and then of INR 29 billion from a resilient print. By 2024, India’s advertising market should reach INR 1 lakh crores (INR 1 trillion).

Digital Infrastructure – Connected TVs, More Screens & Rise of Online Gaming

India now has 795 million broadband subscriptions, over 500 million smartphones, and 10 million connected TVs.

Further, the FICCI-EY Report 2022 elaborates on the rise of online gaming in the digital spectrum with 390 million Indians playing online games, 150 billion streams of online music were consumed, 40 million Indian households paid for 80 million online video subscriptions and 400 million subscribers consumed bundled content in 2021. We expect the number of screens in India to reach 1 billion by 2024-25.

The Indian Content Factory Goes Global

India is amongst the largest content producers in the world – with 150k hours of TV content, 2,500 hours of premium OTT content, and 2,000 hours of filmed content produced in 2021. India has over 950 animation and VFX studios, 185k electronic artists, and 139 universities – and is fast becoming the content back office of the world.

Over 100 M&E mergers and acquisitions in 2021

The massive pace of change in M&E led to over 100 deals in 2021 – 86% of which were in new media and gaming. In 2021, many internet companies were listed on Indian stock exchanges. Unicorns in the M&E sector are expected to enter capital markets through a listing on Indian stock exchanges or through a SPAC listing in the United States in the next 2-3 years.

M&E sector to reach INR 2.32 trillion by 2024

The Indian M&E sector is expected to grow at a CAGR of 13% and add INR707 billion in three years to reach INR2.32 trillion by 2024. The key contributors to this growth will be digital, films, and television (together adding 65% of the growth), followed by animation and VFX (14%) and online gaming (7%).