The Indian M&E Industry
The India Media and Entertainment industry is a thriving industry that has been growing steadily and providing ample opportunities for employment. According to the FICCI-KPMG Media and Entertainment Industry Report 2016, in the year 2015, the Indian Media & Entertainment industry registered a growth of 12.8 per cent over 2014 and generated INR 1157 billion. It estimates that the industry will grow at a CAGR of 14.3% to reach INR 2260 billion by 2020. India in Business, a website published by the Government of India says, “The Indian Media and Entertainment (M&E) industry is a sunrise sector for the economy and is making high growth strides. Proving its resilience to the world, the Indian M&E industry is on the cusp of a strong phase of growth, backed by rising consumer demand and improving advertising revenues. The industry has been largely driven by increasing digitisation and higher Internet usage over the last decade. Internet has almost become a mainstream media for entertainment for most of the people.”
In 2015, the Film Industry grew by 9.3 per cent to reach INR 138.2 billion and is expected to grow at a CAGR of 10.5% to reach INR 227.3 by 2020. There was a substantial growth in regional and Hollywood film collections. Regional films which are normally the mainstay of single screens, contributed up to 30 per cent in revenues at some national multiplexes. The enormous success of Baahubali: The Beginning, a Telegu film, showed that good content can break language barriers and achieve mainstream success. Another significant trend is the shift in audience preferences to content-driven rather than merely star driven films. According to FICCI-KPMG, digital content is expected to emerge as an independent revenue stream. In the coming years, the share of digital revenues is expected to grow significantly (upwards of 30 per cent).
The television industry in India is estimated at INR542 billion in 2015, and is expected to grow at a CAGR of 15 per cent to reach INR1098 billion in 2020. Ad revenues increased, boosted by e-commerce sector advertising growth and the sporting events including IPL 2015 and the ICC Cricket World Cup. The total TV advertising market is estimated to have grown at 17 per cent in 2015 to INR181 billion, higher than the 13 per cent projected last year. One of the most significant developments in 2015 was the establishment of a new viewership measurement system by BARC India. It has replaced the system operated by TAM India. The BARCsystem includes new markets such as rural India, North East and Jammu & Kashmir for the first time, and the number of households measured has also increased. It gives channels as well as advertisers more accurate data about viewership patterns. This is bound to impact the way advertisers plan their ad-spend mix and broadcasters their content strategy.
One of the interesting trends highlighted in the FICCI-KPMG report is the increase in mobile video consumption as a result of the proliferation of smart phones and mobile subscribers. The number of smartphone users is likely to increase from an estimate of 180 million in 2015 to 690 million by 2020. Mobile video currently represents more than half of global data traffic and it is estimated that mobile video will grow at a CAGR of 62 per cent between 2015 and 2020.
The Indian digital gaming market is likely to grow at a CAGR of 13.8 per cent growth from INR 26.5 billion in 2015 to INR 50.7 billion in 2020. Mobile gaming is expected to grow phenomenally, with the enormous growth of the use of smart phones. Virtual Reality is the most awaited and expected wearable technology integration for avid gamers. Nvidia states that there might be close to 600 companies working on VR.
VFX & Animation
2015 was a significant year for the Indian VFX industry with the release of one of the biggest hits, Baahubali – The Beginning, which spent INR 850 million on visual effects. The Animation & VFX industry grew by 13.8 percent in 2015 to rake in revenues of INR 51.1 billion. The Animation & VFX industry is estimated to reach INR 108 billion by 2020. Today, India has nearly 300 animation, 40 VFX and 85 game development studios with more than 15,000 professionals working for them. These studios have experienced a mix of content production, outsourced animation services and collaborative animation services. Over the last decade, the Indian animation industry has moved up the value chain from a traditional outsourcing model to creating its own intellectual property and co-productions. Television is probably one of the largest consumers of animation content created in India.