M&E industry to cross Rs 3 lakh crore in 2026: Report

New Delhi: Digital media will potentially overtake television as the leading segment in the media & entertainment sector in 2024 with an estimated size of Rs 75,100 crore, according to a joint report from industry body FICCI (Federation of Indian Chambers of Commerce and Industry) and EY on Tuesday.

While the Indian Media & Entertainment (M&E) sector grew by 8.1 per cent in 2023, reaching Rs 2.32 lakh crore and is expected to touch Rs 2.55 lakh crore and cross the Rs 3 lakh crore mark by 2026, it added.

"We expect the M&E sector to grow 10.2 per cent to reach Rs 2.55 trillion by 2024, then grow at a CAGR (Compound Annual Growth Rate) of 10 per cent to reach Rs 3.08 trillion by 2026," the report said.

Though in 2023 television remained the largest segment with Rs 69,600 crore, however, it had a degrowth of 1.83 per cent as against Rs 70,900 crore in 2022, it said. While, digital media in 2023 crossed Rs 65,400 crore and is expected to be around Rs 75,100 crore in 2024, which is ahead of the Rs 71,800 crore figure for the television media.

The report estimates digital media would be around Rs 95,500 crore in 2026, with a CAGR growth of 13.5 per cent between 2023-26.

While TV media would be Rs 76,600 crore, which would be around 20 per cent less than digital media.

"In 2024, digital media is poised for explosive growth, potentially overtaking television to become the leading segment of the M&E sector. This surge in digital media is forecasted to propel the M&E sector’s growth to a 10 per cent annual rate, crossing Rs 3 trillion (USD 37.1 billion) by 2026," said Kevin Vaz Chairman, the FICCI Media and Entertainment Committee.

This growth is buoyed by a robust digital infrastructure, widespread adoption of OTT platforms, significant growth in the gaming segment, and the availability of cost-effective options for consumers.

The report expects digital advertising to grow at a 13.5 per cent CAGR to reach Rs 84,200 crore, on the back of improved governance.

According to the report, the connected TV (smart TV) saw a 50 per cent growth as internet penetration continues to rise.

"The broadband market is growing with subscription numbers recording 904 million. Smartphone users have inevitably grown and consequently, the average usage time continues to rise," it said.

However, it also added despite high app downloads of 26.4 billion, India was behind in monetising this potential, with users spending half their time on social media apps. "The year also saw the growth of digital ad spending by 15 per cent, predominantly in search and social media. By 2026, the digital segment is expected to grow to Rs 95,000 crore with an increased focus on governance," it said.

The Media & Entertainment sector (M&E) sector, which was around Rs 2.14 lakh crore has grown around Rs 17,300 crore in 2023, led by growth from Digital media, Print, Online gaming, and Animation and VFX, the report said.

"While the sector was 21 per cent above its pre-pandemic levels, television, print, and radio still lagged their 2019 levels," it said.

The share of traditional media, which includes television, print, filmed entertainment, live events, OOH (Out-of-home), music, and radio stood at 57 per cent of M&E sector revenues in 2023, down from 76 per cent in 2019, it added.

In 2023, TV advertising fell 6.5 per cent due to a slowdown in spending by gaming and D2C brands, which impacted revenues for premium properties.

On the print media, the report said it has buckled the global trend and continued to thrive in India.

"Advertising revenues grew 4 per cent in 2023, with a notable growth in premium ad formats, as print remained a “go-to” medium for more affluent and nonmetro audiences. Subscription revenues grew 3 per cent on the back of rising cover prices. Digital revenues were insignificant for most print companies," it said.