The media and entertainment have seen a wave of ups and downs this year. However, as per the KPMG Media and Entertainment Report 2018, the industry is on a slow yet steady path of growth, moving closer to the Rs. 1500 billion mark in 2017-18 (FY-18).
As the year started, the industry saw the effects of demonetization, along with the implementation of GST and the Real Estate Act (RERA). This somehow slowed down the pace of growth. But the growing digital user base pushed the industry to record 10.9% growth in this financial year, reaching Rs. 1436 billion. What it did for the media and entertainment industry was adding a positive impact across sectors like films, digital advertising, animation, gaming and, music.
The entertainment and media industry is expected to grow at a compound annual growth rate (CAGR) of 13.1% during FY 18-23 period taking it to Rs. 2660.2 billion by FY23.
The Blend of Telecom Media Technology
One of the most important convergences that took place was of the Telecom Media Technology (TMT). It has the capacity to make significant changes in how media is created, distributed and consumed by the consumer. As per KPMG in India; head – technology media and telecom Mritunjay Kapur said, “Digital technology, coupled with radical shifts in consumption patterns have undeniably resulted in the blurring of boundaries that define the TMT sectors. TMT convergence is now a reality and will likely cause significant disruptions across the value chain. Media organisations would need to re-evaluate their existing strategies and operating models to leverage the emerging opportunities and sustain against new evolving challenges.”
Indians Still Love their Television
The television industry was estimated at Rs. 652 billion in FY18, a growth of 9.5% from FY-17 having grown at a CAGR of 10.7% from FY 14-18. This market size consisted of advertisement revenues of Rs. 224 billion and subscription revenue of Rs. 428 billion in FY18. The significant contributors to this growth are the Indian Premier League, free to air (FTA) channels and multiple consumer promotions by FMCG companies during the festive time.
Gaming moving forward firmly
With the growth of mobile adoption, along with the falling prices of data, plus the multiple options of digital payments, the gaming sector revenues have grown significantly in FY18. The gaming industry grew by 35.1% in FY18 to Rs. 43.8 billion. Mobile games contributed to 89% of gaming revenue in FY18, while 90% of online gamers used smartphones and tablets to play games online.
What started at a mere 12% in 2012, as the smallest sector is now all set to reach 60% by 2021. This segment is already leading the front in India with 89% of all gaming revenue in India coming from mobile games in 2017. The fantastic growth that is seen in the gaming zone has primarily been due to the mobile gaming segment.
The other strong contributor has been the eSports that have been growing steadily. Even though it is not a sizeable number today, it shows a promising growth in the coming time.
What is making both these segments high is the localization factor. The Indian internet consumer speaks more than one language and demands content in their native tongue. Games offering multi-lingual options are doing much better compared to games offering just one language option.
Online Card Games Takes a Lead
Online card games take the lead as the gaming segment continues to grow. Teen patti, rummy online and, poker are the popular card games in India and continue to be the top grossing games on the Play Store as well as other channels. Players love these strategy-based games that they have grown up playing on different occasions.
Monetization for online games is quite strong with the mobile games ARPUs in India around USD2, as compared to USD 11-12 for countries like Indonesia and Vietnam.
If we talk about the business model of online games, it is the freemium models that dominate in India. Players prefer to start with a free game with access to full set of features once they are convinced of its attractiveness.
What the KPMG Media and Entertainment report reflect is the changing preference of the Indians. The common man is bored with the newspapers and magazines and overdramatic TV serials. These no longer hold the attention of the audience. So, comes in the newer avenues of entertainment and digital content. Paid entertainment channels like Netflix has become the hot favorite and localized games that are simple to pick like play rummy online real money and ludo are breaking the records. The taste has changed, not making it complex but tasteful. We can now expect, more local games to make it to the top charts, paid on-demand entertainment options making it big and regular mediums like newspapers taking a backseat.