India’s E&M industry to grow at 9.48% CAGR to reach INR 6,828,944Cr by 2027: PwC Report

India’s Entertainment & Media industry is expected to reach INR 6,828,944Cr (US$73.6bn) by 2027 at 9.48% CAGR according to PwC's Global Entertainment & Media Outlook 2023-2027.

The industry witnessed a 15.9% growth to USD 46,207 million in 2022 compared to 2021. OTT, gaming, TV and internet advertising is driving the growth for the sector says the report.

OTT and Internet advertising

There is huge long-term potential for the OTT and connected TV (CTV) market in India, courtesy the size and diversity of the country’s population. The report says, OTT video will continue to get its boost from regional play. 5G and broadband infrastructure, if improved further in the country, will open an even bigger market for OTT players.Efforts made to digitalise the Indian economy will only hasten this segment’s growth. While the global growth rate for the OTT segment is 8.4%, India is way ahead with a CAGR of 14.32%.

OTT revenue surged in India reaching USD 1.8 billion in 2022 – over six times the revenue of 2018 and a 25.1% increase from USD 1.4 billion in 2021. SVOD (subscription video on demand) will continue to lead the sector’s boom. In India, the SVOD sector will expand at a CAGR of 13.0% to reach USD 2.6 billion in 2027.

AVOD (advertising video on demand) will account for 22.3% of OTT revenue, while SVOD will have a 73.8% share. In 2022, SVOD accounted for 78.1% of the market revenue in India, while AVOD constituted 15% of the market revenue.

Coming to Internet advertising, the report states, there are 782 million mobile internet subscribers in 2022, which is only set to rise. With this, internet advertising in India, is growing the fastest in the world with a 35% growth in 2022 (USD 3.3 billion in 2021 to USD 4.4 billion in 2022). Meanwhile, the global internet advertising market growth fell from 30.8% in 2021 to 8.1% in 2022.

Gaming and esports

India is the second fastest growing video games market in the world, with only neighbouring Pakistan exhibiting a faster growth rate. India’s total video games and esports revenue stood at USD 1.7 billion in 2022 and is expected to reach USD 4.2 billion by 2027, at a formidable CAGR of 19.4%.

The video games market in India revolves almost entirely around social and casual gaming. Social and casual gaming revenue in India was almost USD 1.4 billion in 2022, representing 80.3% of the market. With a CAGR of 22.5%, revenue is expected to rise to over USD 3.8 billion by 2027, at which point social and casual gaming will account for 91.3% of India’s total video games and e-sports revenue. Year-on-year growth in social and casual gaming was 37.6% in 2022, with the growth rate expected to slow steadily to 19.7% by 2027.

In India, the total e-sports revenue is expected to grow at the second-fastest rate globally (22.3%) after Saudi Arabia. This revenue is likely to nearly triple from USD 7.6 million in 2022 to USD 21 million in 2027, driven mainly by a significant rise in sponsorship revenue from USD 3.0 million to USD 9.0 million, says the report. The fastest-growing segment will be consumer ticket sales revenue, which will expand at a CAGR of 26.2% to reach USD 3.5 million in 2027 as live e-sports events grow in popularity after disruption due to the COVID-19 pandemic in 2020 and 2021.

TV advertising 

India’s TV advertising will grow at a 6.4% CAGR to reach Rs 536,445 crore (US$6.5bn) in 2027. India will be the fourth-largest TV advertising market globally, after the US, Japan and China. The market’s expansion continues to be based on economic development and an increasing proportion of households having television sets.

OOH advertising

As per the report,  OOH revenue increased by 63.4%, this saw revenue valued at a new high of Rs 56,202 crore (US$681mn). An increase at a 9.9% CAGR will outperform every other OOH market in Asia Pacific and the world over the forecast period. 

Manpreet Singh Ahuja, Chief Digital Officer and Leader of Technology, Media & Telecom at PwC India, states, "As the adoption of emerging technologies such as AI, ML and the metaverse increase, the range of use cases will broaden, leading to a significant disruption in the media industry. Media companies and content creators are already striving to provide more interactive and immersive experiences to viewers. We anticipate that Media & Entertainment enterprises will invest heavily in the transformative ideas of the future to maintain relevance with their audiences."

Rajib Basu, Partner & Leader – Entertainment & Media, PwC India says, “The Indian Media and Entertainment outlook for the next few years will show an exciting pace of growth. 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.”

Other keypoints:

The report briefly speaks about Generative AI will boost productivity and automate workflows for the industry. It says Generative AI can also be leveraged to generate greater advertising revenues through more targeted and personalised advertisements.

The report says that India's B2B market has been buoyant and is set to become the fastest-growing market globally. The ongoing adoption of digital channels for purchasing goods and services, and the rising middle class in India (globally the second largest) will underpin growth and emergent consumption trends on which B2B market growth relies.

For India, seals will continue to be a means of gaining scale. In February 2023, the Competition Commission of India (CCI) conditionally approved the USD 10 billion merger between two large media conglomerates, paving the way for the creation of one of India’s largest conglomerates spanning television channels, digital platforms and content production.