Disruption, Challenges, and Opportunities

The Indian broadcasting industry continues on a high growth trajectory. In 2016, estimated at Rs. 1.16 lakh crore, a 12.8 percent increase over 2014, it is projected to reach Rs. 2.26 lakh crore by 2020.

As the promise of the media and entertainment (M&E) industry begins to unfold, companies will face enormous challenges and disruptions, as well as opportunities, from technology in the half-decade ahead. Successful will be those who can look at future platform directions, technologies to use, and emerging opportunities.

While audio and video consumption is high, a large portion of media services used by phone users is low-average-revenue per user (ARPU) consumers, sitting in the lower half of the socioeconomic pyramid. With streaming and downloads coexisting, media companies will need to develop their own unique business models rather than adopt global ones.

With NOFN, 4G, and Smart Cities initiative increasing the penetration of Internet to Tier-II and Tier-III cities, entertainment apps will grow significantly and be a key driver for bandwidth use for operators, across wireless and wireline. Across both, the challenge will be access models and cost.

Other challenges such as physical infrastructure, digital access, content availability, user behavior, and monetization are currently inhibiting the development of a sustainable digital ecosystem.

A recently released KPMG-FICCI report identifies digital disruption primarily in content, digital infrastructure, mobility, and consumer analytics.

A number of systemic concerns need to be addressed and resolved, such as completion of cable digitization and Phase-III auctions for radio, which could have a significant positive impact on the long-term growth potential of this sector. The Telecom Regulatory Authority of India is also regularly addressing issues, the most recent ones being set-top box interoperability and interconnection framework for broadcasting services distributed through addressable systems.

In the face of multiple challenges, the underlying fundamentals have not changed with continuing robust domestic demand and strong advertiser interest. To leverage these opportunities, the M&E industry needs to invest for the future and be willing to look dispassionately at the changes required in both mindset and approach.