The Indian media and entertainment (M&E) industry has always been acknowledged as one of the fastest growing in the country. When A.R. Rahman and Resul Pokutty won Oscars for their commendable work in Slumdog Millionaire, the spotlight understandably moved to India and its immense pool of talent.

From there to the post-pandemic scenario, the key segments of the industry – spanning film, television, advertising, prints media and music among others – have witnessed major growth in the last few years while passing through the occasional challenging phase. But its potential and resilience have once again taken centre-stage with the publication of a PwC report, which found that India’s media and entertainment sector will be the fastest growing globally in terms of both consumer and advertising spends. With the sector estimated to clock a compound annual growth rate (CAGR) of 10.75 per cent in the next four years, it will be worth more than $55-billion industry by 2025, the consultancy said.

Focus on TV ads

One of the biggest contributors to this growth will be television advertising which in 2021 will grow at 8.6 percent, becoming the fourth largest market globally. The report further said that multichannel advertising will account for nearly 92 percent of the total TV advertising market in 2025. Online TV advertising will make modest inroads in the forecast period, with broadband penetration remaining extremely low at 7.3 percent of households.

Another segment in advertising which will see strong growth is internet advertising,which PwC said is the fastest-growing internet advertising market in the world at a CAGR of 18.8 percent during 2020-2025.

"Despite the pandemic, the Indian entertainment and media sector has shown remarkable resilience," the consultancy's partner Rajib Basu said, adding that India will be the fastest-growing entertainment and media market globally in terms of consumer and advertising revenue. Technological advancement and deepening of internet access will continue to influence the way Indians consume content, he said – adding that there will be more appetite for localised content, and newer business models will also evolve.

Read more on entertainment sector in India:

Digi-tainment goes desi

Battleground India: The next frontier in online streaming

Indian film industry comes of age

Interest from overseas investors

The evolution of the industry has also sparked great interest among overseas investors. “The last 10-15 years has witnessed meteoric growth in this Alternative Asset Class with the support of ancillary revenue monetisation platforms like broadcasting, music amongst others, and now the recent OTT phenomenon,” said Nitin Menon, co-founder & managing partner, NV Capital. “The investment in programming by media houses in OTT more than doubled from $260m in 2017 to $700m in 2020. Further, with the recent Amazon-MGM and the Warner-Discovery deal, the war for content manufacturing is getting bigger globally and India would be a recipient of these content spends as the next big market,” he said. The PwC report said that the cinema industry which has been deeply hit by the pandemic will be back to pre-pandemic levels by mid-2023. The overall music, radio and podcast industry will grow 19.1 per cent per annum, the consultancy added. Interestingly, rural internet users at 227 million surpassed metropolitan cities (205 million) in 2020, and the total number of internet users is likely to reach 900 million by 2025. While India’s gaming market is dominated by the social/casual category, which accounted for 77 per cent of all video games and esports revenue in 2020, esports market is becoming a strong offering. The sector is expected to expand rapidly at a 31.6 percent CAGR by 2025, the PwC forecast said.