The Indian M&E sector recovered by 16.4% to INR1.61 trillion (US$21.5 billion), still 11% short of pre-pandemic 2019 levels, due to the second wave of COVID-19 which impacted the April – June quarter.
While television remained the largest segment, digital media cemented its position as a strong number two segment followed by a resurgent print.
It is expected that the M&E sector to grow 17% in 2022 to reach INR1.89 trillion (US$25.2 billion) and recover its 2019 levels, then grow at a CAGR of 11% to reach INR2.32 trillion (US$30.9 billion) by 2024.
Except for in-cinema advertising and TV subscription, all M&E segments grew in 2021.
Digital media grew the most at INR68 billion and consequently, increased its contribution to the M&E sector from 16% in 2019 to 19% in 2021.
Segmental performance in 2021
Television advertising grew 25% to end 2021 just 2% short of the 2019 levels. Subscription revenue continued to fall for the second year in a row; experiencing a 6.2% de-growth due to a reduction of six million pay TV homes and a fall in consumer-end ARPUs. Connected TV sets, however, increased to 10 million.
Digital advertising grew 29% to reach Rs 246 billion. In addition, advertising by SME and long-tail advertisers reached Rs 117 billion. Included in these revenues is advertising earned by e-commerce platforms of Rs 55 billion, which is now 16% of total digital advertising.
Digital subscription also grew 29% to reach Rs 56 billion. 80 million paid video subscriptions across almost 40 million Indian households generated Rs 54 billion, an amount which is around 50% of broadcasters’ share of TV subscription revenues. Due to a plethora of free audio options, just three million consumers bought music subscriptions, generating Rs 1.6 billion.
Print advertising revenues grew 24% in 2021, though ad rates remained subdued. Subscription revenues saw a growth of 12% on the back of recovery in direct to home and newsstand sales as well as rising cover prices. Corporate sales, metro circulation and English dailies remained under stress, though the situation seems to be improving.
Despite people going back to work as the effects of the pandemic receded, and regulatory uncertainty, the online gaming segment grew 28% in 2021 to reach Rs 101 billion. Online gamers grew 8% from 360 million in 2020 to 390 million. Real money gaming comprised over 70% of the segment revenues.
Despite capacity restrictions during the year, over 750 films were released in 2021, as compared to just 441 releases in 2020. Over 100 films released directly on streaming platforms, too. The segment grew 28%, but remained at half its 2019 levels.
Animation and VFX
At 57%, Animation and VFX was the fastest growing segment in 2021, as content production resumed, service exports increased and the industry adopted virtual production.
The segment grew 20% over an extremely depleted base, primarily due to the relaxation of event curbs in a few states and increase in vaccination rates; however, revenues were just 40% of 2019 revenues. It appears that pure digital events are here to stay: they have been adopted across several product and service categories.
OOH media grew 27%, but remained at 50% of the 2019 levels. Capacity utilisation improved towards the end of 2021, but rates remained challenged. OOH is expected to regain 2019 levels not before 2024.
The Indian music segment grew by 24% in 2021. 90% of the revenues were earned through digital means, though most of it was advertising led, there being around only 3 million paying subscribers. Performance rights witnessed a recovery and grew by 89% once lockdown restrictions were lifted.
Ad volumes recovered 29% over 2020, but are still 6% behind 2019 volumes. Ad rates fell 13% on average and recovery will only be seen once daily travel resumes fully and the retail sector recovers. Many radio companies are looking at alternate revenue streams to make good the differential. EY