Global spends on digital will match those on traditional, says PwC in its entertainment and media outlook for 2016-2020. But that won’t be the case in India thanks to issues with data. PwC released the 17th annual edition of its global outlook at an event in Mumbai on 8 June.
Areas covered by the outlook are TV and video, TV advertising, internet advertising, internet access, radio, out-of-home advertising, video games, cinema, newspaper publishing, magazine publishing, business-to-business, book publishing and music.
The report expects the Indian entertainment and media industry to grow of 10.3 per cent (CAGR) to exceed Rs 2,66,400 crore by 2020.
Here are some of the highlights.
According to the outlook, Indian TV advertising revenue will be Rs 36,894 crore in 2020, up from from 21,232 crore in 2015. India is one of only seven countries expected to achieve double-digit growth over the next four years at 11.7 per cent. The global growth will be 3.35 per cent for the same period.
Indian internet advertising will grow at 14.2 per cent in India compared to 7.92 per cent globally, predicts the report.
Paid search internet advertising revenue is, and will continue to be, India's largest internet advertising sub-component. Paid search grew 26.7 per cent year-on-year in 2015, reaching revenue of Rs 1,405 crore. The outlook forecasts paid search to grow by 18.5 per cent over the next five years, taking it to Rs 3,273 crore.
According to the report, global digital spends will be as much as traditional media by 2020. This will include charges customers pay for data, advertising cost and subscription cost for content.
But, in India the (lack of) data issue will mean spends on digital will continue to lag those on traditional media in 2020.
Unlike the scenario globally, the outlook expects the magazine, books and newspaper market to grow in the time period. The biggest factor for this growth is the localisation of newspapers. English papers and magazine are being picked and read on the digital format but local print is still being consumed, observes the report.
In 2015, publishing revenues – including advertising and subscription – were at Rs 40,806 crore, an increase of Rs 2,009 crore over 2014. The rate of growth till 2020 is expected to be 3.8 per cent taking it to Rs 49,235 crore.
The report says that OOH's growth will be powered by digital but predicts that even non-digital OOH will hold firm. The OOH industry is to grow at 9.3 per cent to reach Rs 3,626 crore by 2020. With no changes in regulation, billboards are expected to be the mainstay in this medium.
In terms of admissions (tickets sold), India is currently the biggest cinema market, but that could change by 2020 with China emerging on top according to the report. But with the average ticket price currently being around Rs 53 in India compared to nearly Rs 400 in China, the revenue generated by China is a lot more already.
Box office revenue in India stood at an estimated Rs 10,915 crore in 2015 and will rise to 18242 crore in 2020, at a 10.9 pc.
"We expect that the digital infrastructure will take time to mature over the outlook period, thus providing room for traditional media such as publishing, cinema and TV to continue its pace of growth."
The pace of growth in the digital market, or rather the lack of pace, will determine the hold of traditional media in the growth spectrum."
"Having said the above, India’s trajectory on constitution of relative share of digital to traditional media will move towards the global model."
"Hence, recognising this, businesses need to take a call on how they will prepare for such eventuality."
Frank D’Souza, partner and leader – entertainment and media, PwC India, said, “Given India’s overall growth in GDP and PCI, it is not surprising that India is amongst the top 10 markets for growth in the sector. Although, in India traditional media like newspaper publishing and cinema has always shown strong growth, we expect that even in terms of absolute total US$ spend, it should get into the top 10 in the early part of the next decade. What would be more interesting, however, is how rapidly India would catch up with global trends, where traditional media is finding it hard to remain relevant, and the digital sector is leading the growth trajectory and consequently bringing in continuous disruptions. That will all depend on how quickly the Indian digital/broadband ecosystem matures, and how the Indian players adapt and drive business models in what would be a rapidly changing environment for consumption of data/content fashioned largely by India’s under-35 population.”