Due to pandemic, advertising revenue 16% lower than 2019”: BCG & CII Report

Boston Consulting Group today launched The Annual CII Big Picture Report titled “Lights, Camera, Action…the Show Goes On”.

The following are the key highlights from the report -:

• Digital video usage increasing at ~15% between 2018-20

• TV and OTT subscriptions both continue to grow; OTT growing at a faster rate

• No. of hours of original content increase 3x between 2018 and 2020

• Advertising revenue expected to decline ~16% y-o-y, however m-o-m volumes are increasing

• M&E industry expected to contribute 3-3.5% of GDP and 4-4.5 mn jobs in 2020 (total of direct, indirect and induced impact)

India continues its unique multimodal growth story, with digital video being the fastest growing media platform over the last 2 years. Not surprisingly, this trend is expected to continue for the foreseeable future led by the ever-increasing smartphone and data penetration on the demand side and improving consumer experience with high quality and wide variety of content, and innovative pricing models on the supply side.

During lockdown, both TV and smartphone video consumption surged as people spent more time at home. Covid-19 accelerated the subscription trend as a result of out-of-home spending moving to in-home, and this is expected to be sticky due to the proliferation of platforms and high quality content that is now available to consumers. However advertising revenues saw a dip as a result of the pandemic and are expected to be ~16% lower than in 2019, with ads on all media except digital expected to experience double-digit rates of decline in 2020. Though a cautious recovery seems to be underway and marquee events such as IPL have been able to grow over their 2019 levels, smaller events may continue to face pressure for some more time.

While the Indian M&E industry already has a significant impact on India’s economy, benchmarking with other countries indicates plenty of headroom for growth. While segments like OTT are growing extremely fast and are making a significant contribution, a lot more segments can potentially scale up. However, to achieve the industry’s true potential, there are a few areas where concerted effort needs to be made. These areas include creating more original and local language content to cater to diverse audiences, provide better data and flexibility to advertisers, create content to tap the global market, and investments in skilling and technology.