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TV ad revenue to grow by Rs 394 billion by 2021: FICCI -KPMG Report 2017

Digital advertising to grow at a CAGR of 31 per cent to reach Rs 294.5 billion by 2021, contributing 27.3 per cent to the total advertising revenues.

The 'KPMG India-FICCI Media and Entertainment Industry Report 2017' that was recently launched at FICCI Frames 2017, aims to capture a comprehensive picture of the industry's growth story, challenges, future projections and key underlying themes.

TV ad revenue to grow by Rs 394 billion by 2021: FICCI -KPMG Report 2017

The story of 2016 was the evolution of FTA (free to air) channels post expansion of rural measurement in the television segment coupled with the impact of the 4G rollout and the resulting price wars. Both these factors have resulted in media consumption penetrating deeper into India, resulting in a realignment of strategy by media companies and advertisers alike.

Compared to 2016, the industry is projected to grow at a faster pace of 14 per cent over the period of 2017-21, with advertising revenues expected to increase at a CAGR (compound annual growth rate) of 15.3 per cent. The year 2017 is likely to witness a marginally slower rate of 13.1 per cent as the economy recovers from the lingering effects of demonetisation and initial uncertainties arising from GST (goods and service tax) implementation.

TV ad revenue to grow by Rs 394 billion by 2021: FICCI -KPMG Report 2017
TV ad revenue to grow by Rs 394 billion by 2021: FICCI -KPMG Report 2017

Commenting on the industry's performance and way forward, Uday Shankar, chairman, FICCI M&E committee and chairman and CEO of Star India, says in a press release, "The industry has gulped down the bitter pill of demonetisation trusting its long-term benefits and yet is set to bounce back to a steady growth, thanks to strong fundamentals. Building solid infrastructure and continued government support will help the industry reach the tremendous potential it holds for employment and creating socio-economic value for the country. A commitment towards a quick transition to digitisation will ensure growth for all stakeholders."

Girish Menon, director, media and entertainment, KPMG in India, says in a press release, "2016 was a mixed bag for the industry with digital media making its way to the centre stage rapidly from being just an additional medium. It is compelling existing players to rethink their business models. To accelerate growth, M&E organisations must rebuild their strategies to fit and thrive in the changing, digitally-oriented landscape. Nimbleness and flexibility will be at the core of sustainable businesses."

He adds, "The long-term factors driving the future growth are expected to remain positive, with growing rural demand, increasing digital access and consumption, and the expected culmination of the digitisation process of television distribution over the next two to three years. "