Despite a widespread consumption slowdown taking the wind out of the sails of the television and print industries, as advertising expenditure slowed down, the digital media segment has been maintaining its growth momentum.
According to a recent report from KPMG India, the Indian media and entertainment sector grew at a robust 13.3 per cent overall in FY19, driven along by a whopping 43.4 per cent growth in the digital media segment.
“While there was an impact of the slowdown on TV and print advertising, the strong growth displayed by the digital, gaming and film segments contributed to the performance,” the report noted, adding that the continued increase in high speed internet penetration and mobile consumption has led to an evolution in consumption habits and distribution. “This has resulted in the emergence of new business models,” it said.
This evolution has had a positive impact on the lesser penetrated rural markets, KPMG said, pointing out that with regional markets emerging as the next growth frontier, demand is expected to continue increasing.
According to the report, going forward, the media and entertainment sector is expected to grow at a compounded annual growth rate (CAGR) of 13.5 per cent over the next five years up to FY24. The digital segment is expected to begin pulling substantial weight, with a projected CAGR of 29.1 per cent while gaming is expected to grow at a sharp 32.2 per cent.
Other segments expected to see substantial growth are Music (15.8 per cent), Animation and VFX (16 per cent) and television (11.2 per cent).
However, traditional medium like television and print, alongside other legacy business models, are likely to see significant revamping. “Going ahead, with digital media distribution and consumption taking centre stage, traditional businesses will need to innovate around their business models to stay relevant,” KPMG noted, adding that given the vast demographic profile of the country, the growth of digital media “does not spell doom for traditional media”. “Rather, there is a scope for harmonious coexistence,” it concluded.