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India’s media and entertainment industry is expected to reach $73.6 billion by 2027 with a compound annual growth rate (CAGR) of 9.48%, says consultancy firm PwC’s “Global Entertainment & Media Outlook 2023-2027” report.
In terms of growth percentage, streaming leads the way with revenue surging 25% in 2022 to reach $1.8 billion. The market will continue to grow at 14% CAGR to produce revenue of $3.5 billion in 2027. This will be driven by the competitive SVOD sector, which accounted for 78% of sector revenue in 2022, the report says, adding that while subscription service revenues will expand at 13% CAGR to reach $2.6 billion, ad-supported services (AVOD) will grow at a higher rate, albeit from a lower base.
Cinema, which touched a low of $402 million in 2021 during the pandemic, recovered to $1.1 billion in 2022 and is projected to grow 15% to reach $2.3 billion by 2027. Admissions recovered from 379 million in 2021 to 986 million in 2022 and are expected to reach 1.4 billion by 2027.
In terms of segment size, TV advertising remains the leader. it recovered from the pandemic downturn, with revenue expanding 19% in 2021 and 12% in 2022 to reach $4.7 billion. The report projects TV ad spend growth at 6.4% CAGR to reach $6.5 billion in 2027, making India the fourth-largest TV advertising market globally after the U.S., Japan and China.
In the video games and e-sports sector, India is the second-fastest-growing video games market in the world behind Pakistan. Revenue in the sector was $1.7 billion in 2022 and is expected to grow 19% CAGR to reach $4.2 billion by 2027.
In the internet advertising sector, a 12% CAGR is projected to see revenue climb from $4.4 billion in 2022 to $7.9 billion by 2027. Within this, the mobile segment is projected to grow at 14% CAGR to boost revenue from $3.1 billion to $5.8 billion.
India’s consumer book market will increase at a 3.7% CAGR between 2022 and 2027, with revenue increasing from $1.1 billion to $1.3 billion, with most of the growth coming from the electronic books sector, where revenue will increase at 10% CAGR. In the printed book sector, growth will be more modest, with increase at 1.7% CAGR expected. Print is still a dominant force in this market, however, accounting for 80% of revenue in 2022, with electronic books making up the other 20%.
India’s music, radio and podcasts market reached revenues of $1.1 billion in 2022 and is forecast to reach $1.5 billion in 2027.
Looking to the future, the report states that streaming is growing most rapidly in emerging pockets, where the combination of large historically underserved rural population and strong demand for local and sports content present major opportunities. With the nationwide rollout of 5G capability estimated to be complete by the end of 2024 and smartphone ownership in India set to grow by 125 million across the forecast period to 888 million, which is 62.52% of India’s population, behind only China, there is a huge opportunity in India’s mobile-fisrt market, the report says.
It cites the main challenge for the streaming market as the India’s low broadband penetration, at just 10.8% in 2022 and predicted to expand to only 14% in 2027. Investment in improved broadband infrastructure will unlock a vast market for streaming players, the report says.
Generative AI will enable brands to reach across the country’s many languages and regions with generic templates that can be adapted and customized to different geographies with local messaging. “Given that consumers are adopting the AI tool ChatGPT at an unprecedented pace, there is evidently potential for a dramatic increase in the capability and volume of content creation,” the report says.
Businesses in the retail space or technology, media and telecom sectors are capitalizing on the metaverse, AR and VR for innovation and monetization, the report adds. Driving most of the metaverse growth in this sector is advancement in AR-VR and blockchain technologies.
“As the adoption of emerging technologies such as AI, machine learning and the metaverse increase, the range of use cases will broaden, leading to a significant disruption in the media industry,” said Manpreet Singh Ahuja, chief digital officer and leader of technology, media and telecom at PwC India.
“Media companies and content creators are already striving to provide more interactive and immersive experiences to viewers. We anticipate that media and entertainment enterprises will invest heavily in the transformative ideas of the future to maintain relevance with their audiences.”
Rajib Basu, partner and leader, entertainment and media, PwC India added: “We have a good view of how the industry has reset itself after the pandemic. Increased mobile penetration and the use of digital technologies are poised to disrupt existing channels and create new possibilities in the years ahead for the sector. It is increasingly becoming important for traditional media and entertainment businesses to adopt the right strategies for growth as they face competition from digitally powered businesses.”
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