The market research and audit firm KPMG, has just released its annual report on the media and entertainment (M&E) industry at the 16th FICCI Frames conference, being held in Mumbai.
The report titled 'The Future: Now Streaming' says that the Indian M&E industry is expected to grow at a CAGR of 14.3 per cent to Rs 2,260 billion by 2020, with advertising revenues expected to go up to Rs 994 billion at a CAGR of 15.9 per cent.
Some quick highlights:
Digital advertising will continue to grow at a high CAGR of 33.5 per cent with a shift towards mobile and video advertising, riding on the back of increase in mobile users and improved digital infrastructure. By 2020, it is expected that digital advertising will be Rs 255 billion and contribute to 25.7 per cent of total advertising revenues. Statistically, the consumption of online video content has risen from 49 to 66 per cent over the last year.
Mobile internet connections are expected to cross 500 million in India by 2020, representing 40 per cent of the total mobile connections. It is also expected that 3G and 4G connections will grow and comprise around 40 per cent of the mobile internet user base over the next couple of years.
The number of smartphone users is likely to cross from an estimate of 180 million in 2015, to 690 million by 2020 and will be the key enabler-driving data consumption.
Television registered a 14.2 per cent growth led by strong growth in advertising at 17 per cent on the back of increased e-commerce spends and renewed spending by other sectors such as auto, telecom, mobile handsets, contribution from cricket events, and two important state elections (Delhi and Bihar). Subscription revenue growth at 12.8 per cent was slower due to delays in Phase 3 digitisation and further delays in availing the on-ground benefits of Phase 1 and 2 digitisation.
The number of TV households in India increased to 175 million in 2015, implying a TV penetration of 62 per cent. The number of Cable & Satellite (C&S) subscribers is estimated to have reached 160 million. Excluding DD FreeDish, the number of paid C&S subscribers is estimated at 145 million in 2015, implying a paid C&S penetration of 83 per cent. TV households are expected to increase to 200 million by 2020, with paid C&S subscriber base expected to grow to 174 million by 2020, representing 87 per cent of TV households.
Sports continues to be a big driver of ad revenues on television. The ICC Cricket World Cup is expected to have pushed up TV ad spends, contributing Rs 6 billion in TV advertising in 2015. And, though IPL 2015 was expected to suffer from cricket viewership fatigue post the Cricket World Cup, both viewership and ad revenues were better than expected, with the IPL estimated to have earned approximately Rs 8.5 billion in 2015.
Radio continued its strong run with a 15.3 per cent growth in 2015. Following the new stations licensed in Phase 3 and consolidation in the industry, Radio is transforming from a 'coverage' media to a 'reach' platform. Major radio stations have been operating at high ad inventory utilisation levels and this coupled with the growing advertiser interest has enabled increase in ad rates. Release of additional inventory from launch of new stations will stabilise rates, but result in continued advertisement inventory pick up.
Here is the full report: