Entertainment & Media industry with revenue of USD 17 billion has always been in the news, whether it is for the glamour quotient, myriad controversies, its growth in the past or the future potential of the same. Although, there are enough forums and tabloids that cover the glamour as well as the controversy part of this huge industry, not much has been written about the growth and the future aspects of the same.
Through this blog, my endeavour is to provide a two-way platform to discuss the future growth potential as well as the business model of an industry that is in the throes of a big change worldwide. The other reason for this blog is more personal as I want to remain connected with an industry sector where I have worked very closely with the constituents in the past seven years as head of the PwC Entertainment & Media team in India. After an early retirement from PwC earlier this year, I have started my firm Sapphire Professional Services. This blog will hopefully keep me connected and become a platform for discussion on the future of the Industry.
Fortunately, with the kind of change taking place throughout the world with digital becoming the new normal, myriad of different businesses under the E&M umbrella growing differently, we probably will have no dearth of discussion topics in the short-term. However, to kick-start the conversation let us look at the future growth potential of the E&M Industry in India in general. This was also the subject of discussion at a recent industry event held in the capital with most of the industry captains and the Government in attendance.
To start the discussion, I would like to put forth my thought process on a macro level and share it with you. The India E&M Industry as per recently released PwC report is a USD 17 billion revenue industry. In India this industry is largely driven by non-digital elements unlike elsewhere in the world where digital streams are showing the highest growth rate. Again, quoting from the PwC report, this sector is likely to grow at a CAGR of 17-18 % over the next five years making the industry more than double its present size at USD 38 billion in the year 2016. If one was to take the linear progression and assume that the industry will continue to grow at the same rate up to 2020, the industry size will be approx. USD 70 billion. Therefore, it seems that India will have to do a few things very differently to achieve an additional USD 30 billion. Few facts need to be kept in mind as we look to suggest solution for the extra growth: –
The current revenue of the industry is largely from non-digital platforms as TV, Print and Film account for almost 85% of the industry.
Shift from non-digital to digital could decrease the value in the short-term.
Advertising spend and Consumer spend are the two key contributors to the revenue with advertising contributing at over 35% of the total revenue pie.