The Media & Entertainment is expected to contract by a significant 20 per cent in FY21 with major segments like TV, films and print all seeing major declines. The industry, according to the KPMG in India’s Media and Entertainment report 2020, has been significantly impacted, particularly with all forms of outdoor entertainment coming to a standstill, a significant slowdown in advertising spend and content supply chains breaking down.
It is expected to bounce back in FY22 with a growth of 33.1 per cent over FY21 to reach a size of Rs1.86 trillion, at a CAGR of 3.2 per cent over FY20-22. The report states that the M&E sector grew at a rate of 7 per cent in FY20 to reach a size of Rs1.75 trillion, a CAGR of 10 per cent over FY16-20. At the same time, owing to the slowing economy and the impact of COVID-19 at the fag end of the year, the advertising revenue growth was estimated at 3 per cent in FY20, with the advertising revenues reaching a size of Rs726 billion of FY20. The growth in overall revenues was driven by Digital and OTT video, which registered a growth of 26 per cent in FY20. The underlying factors for FY20 performance includes robust growth in digital infrastructure and content supply. It allowed the digital segment to post a 26 per cent growth in FY20 despite a slowing economy, with digital and OTT advertising growing by 24 per cent. The report highlighted the rapid growth of OTT platforms. Increased focus on animated intellectual property (IP) content and larger investments in VFX by studios has provided animation and VFX studios greater opportunities in both the domestic and international markets.
With the industry opening up slowly, content supply appears to be restarting with baby steps. Cinemas and events, however, continue to be shut and face significant uncertainty in regards to normalcy in the near term. The digital consumption segments, i.e, digital (including OTT) and online gaming are expected to be silver linings.