The media and entertainment industry in the coming years will be driven by digital media instead of traditional media such as print and film entertainment.
Digital media, which has registered more growth than print and film, will overtake film entertainment segment this year and print in next two years, said a report by EY and FICCI.
By 2021, digital media with CAGR 28% will become worth Rs 354 billion segment. In last year, digital media grew by 41%, only second to online gaming, which saw over 59% growth in the same period.
Online gaming grew across real money gaming (including fantasy and e-Sports) as well as casual gaming, on the back of a 52% growth in online gamers who reached 278 million in 2018.
About 2.5 million people digitally consume content last year, the number is expected to go up to 5 million by 2021, added the report.
“Technological disruptions are creating new opportunities for the sector. India is headed towards a billion screens of opportunity and one can hope that the sector’s incumbents shall innovate, transform and increase their relevance to mass and individual consumers,” said Uday Shankar chairman, Star and Disney India and vice president of FICCI
The rise in digital consumption will lead media firms to innovate new monetisation avenues and see a rise in the digital subscription.
The digital subscription market due to a rise in consumption increased 62% to reach Rs 4.2 billion, majorly contributed by video subscription. Currently, the percentage of paying subscribers to total consumers is less than 5% and 1% for video and audio respectively. In the next two years, the digital subscription is estimated to cross Rs 50 billion.
It was also supported by Telco bundling offerings, which is expected to drive consumption for a majority of Indian OTT audiences.
Advertising growth, which outran subscription growth with 51% of total revenue, is expected to comprise 52% of the total pie by 2021.
In regard to Print media, the report further said that due to not registering significant growth, a mere 0.7% over 2017 in last year, they will shift focus towards digital. Operating margins of print media companies declined by over 400 basis points during 2018 due to the rise in the cost of newsprint, which accounts for 35-45% of their total costs.
Around 222 million people consumed news online, which was 26% more than the figure in 2017, as pe the report. Page views and time spent on the digital platform also witnessed significant traction.
The film entertainment segment also had almost similar growth last year. The growth of the segment was hugely supported by online platforms, who invested heavily on film rights. In 2018, net box office collection from Hindi films stood at Rs 3250 crore.