MEDIA AND ENTERTAINMENT For updated information, please visit www.ibef.org November 2020 Table of Contents Executive Summary……………….….……..3 Advantage India…………………..….……...4 Market Overview …………………….……...6 Recent Trends and Strategies……..……..16 Growth Drivers……………………..............20 Opportunities…….……….......…………….28 New Developments...……………....….......30 Key Industry Organisations…………....…..32 Useful Information……….......………….....34 EXECUTIVE SUMMARY Digital and OTT . ByY F 22, the digital and OTT market is expected to generate revenue of Rs. 338 billion (US$ 4.63 billion). Total of 243 FM channels (21 from the Phase I and 222 from Phase II) are operational. Under phase III, the Cabinet gave permission to 162 FM channels in 69 cities to operate and 17 cities were provided with licenses to operate. One of the largest broadcasting market . Telecom Regulatory Authority of India (TRAI) plans to introduce a policy for broadcasting sector with a vision for 2020. The policy aims to usher a new era in the broadcasting sector where MRP of the TV channel will be declared by broadcasters directly to the consumers and will bring more transparency and choices to the consumers. Fast growing Gaming . Gaming in India stood at Rs. 90 billion (US$ 1.23 billion) in FY20, increasing at a CAGR of 26% between FY20 industry and FY22 to reach Rs. 143 billion (US$ 1.96 billion) by FY22. Source: KPMG -Report, 2020; Dish TV Investor Presentation, Ministry of Information and Broadcasting (MIB), NASSCOM, Telecom Regulatory Authority of India (TRAI), Broadcast India 2018 Survey conducted by Broadcast Audience Research Council (Barc) India, EY's Media and Entertainment report 2019. 3 Media and Entertainment For updated information, please visit www.ibef.org Media and Entertainment ADVANTAGE INDIA ADVANTAGE INDIA . India's continued growth in digital . The Indian media and entertainment industry infrastructure is estimated to result in 907 is projected to increase at a CAGR of 13.5% million internet users by 2023, with 829 million from 2019 to 2024 and estimated to reach mobile users by 2027. US$ 43.93 billion by 2024. In terms of longer session duration for games, . Within the M&E sector, Animation, Visual this growth in digital infrastructure is expected Effects, Gaming and Comic (AVGC) sector is to fuel consumption, resulting in further growing at a rate of ~29%, while the revenue growth (primarily advertising audiovisual sector and services is rising at the revenues). rate ~25%; is recognised as of one of the champion sectors by the Government of India. ADVANTAGE INDIA . From April 2000 to June 2020, FDI inflow in . The Government has increased the FDI limit the information and broadcasting (including from 74% to 100%. print media) sector reached US$ 9.33 . Measures such as digitisation of cable billion. distribution to improve profitability and ease . The rapid growth of OTT channels, of institutional finance. increased emphasis on animated . Increasing liberalisation and tariff relaxation. intellectual property (IP) content and larger investments in VFX by studios has . In Sep 2018, the Government introduced provided animation and VFX studios with National Digital Communications Policy opportunities in both domestic and 2018 (NDCP-2018) for affordable digital international markets. communications infrastructure and services. Notes: AGV - Animation, Gaming and VFX, VFX - Visual Effects, M&A - Merger and Acquisition, FDI - Foreign Direct Investment, CAGR is calculated from Rs. figures, PE- Private equity, VC- Venture capital Source: KPMG report -India’s digital future, EY's Media and Entertainment report 2019 5 Media and Entertainment For updated information, please visit www.ibef.org Media and Entertainment MARKET OVERVIEW THE ENTERTAINMENT SECTOR IS SPLIT INTO TEN SEGMENTS Television Radio Online Gaming Print Animation and VFX Media & Entertainment Films Entertainment Out of Home (OOH) Live Events Music Digital Media Note: VFX - Visual Effects Source: : KPMG - FICCI Report, 2018,, EY's Media and Entertainment report 2019 7 Media and Entertainment For updated information, please visit www.ibef.org INDIAN MEDIA AND ENTERTAINMENT INDUSTRY IS GROWING RAPIDLY . India's media and entertainment (M&E) industry is expected to Market Size (US$ billion) expand at a CAGR of 3.24% between 2019-20 and 2021-22 to reach US$ 25.56 billion by 2021-22 due to acceleration of digital adoption 30 among users across geographies. India's sustained economic growth and the universal acceleration of digital adoption by users across geographies are the two areas that 25 25.56 offer encouragement. 23.98 . India could be home to a billion digital users by 2028, instead of the earlier projected 2030 timeline, according to KPMG's revised 20 estimates. 19.20 . The&E M sector has been substantially affected, by the types of outdoor entertainment coming to a standstill, due to the extended 15 lockdown and slowdown in media spending and supply chain of content. Therefore, it is expected that the M&E sector would contract in FY21 by 20 percentage points with segments such as television, 10 films and print experiencing major declines. On the other hand, extended lockdowns accelerated data usage and consumption. Segments such as digital and gaming are seeing rapid 5 growth in user penetration and engagement levels. M&E sector is projected to bounce back in FY22, with the fastest growing segments being gaming and digital. 0 2019-20 2020-21 2021-22 Notes: P - Projected, CAGR is calculated from Rs. figures Source: KPMG report - India’s digital future, EY's Media and Entertainment report 2020 8 Media and Entertainment For updated information, please visit www.ibef.org SEGMENTS OF INDIAN MEDIA AND ENTERTAINMENT INDUSTRY Share of Major Industry Segments FY20 Share of Major Industry Segments FY22P Television Television 1.4% 0.9% 0.9% 1.8% 1.1% 1.5% Print Print 5.1% Digital and OTT Digital and OTT 7.7% 5.8% Films 4.1% Films 10.5% 9.7% 44.4% Animation, VFX and 41.2% Animation, VFX and post-production post-production Gaming Gaming 12.5% 18.1% Out of home Out of home 17.5% Radio 15.9% Radio Music Music . InY F 20, television, print and digital and OTT platforms stood at Rs. 778 billion (US$ 10.66 billion), Rs. 306 billion (US$ 4.19 billion) and Rs. 218 billion (US$ 2.99 billion), respectively. These mediums are projected to reach Rs. 769 billion (US$ 10.53 billion), Rs. 296 billion (US$ 4.05 billion) and Rs. 338 billion (US$ 4.63 billion), respectively, by FY22. InY F 20, the Indian digital segment grew by 35% due to upsurge in paid subscriber base across all OTT platforms. Notes: P - Projected, OOH - Out of Home, TV - Television Source: KPMG report -India’s digital future , Economic Times 9 Media and Entertainment For updated information, please visit www.ibef.org TELEVISION, ONE OF THE LARGEST AND FASTEST GROWING SEGMENT . In 2020, the television market size stood at Rs. 778 billion (US$ BroadcasterVisakhapatnam Market port Size traffic Forecast (million (US$ tonnes) billion) 10.66 billion) and is estimated to reach Rs. 769 billion (US$ 10.53 billion) by 2022. TV broadcasters witnessed a growth of 13% in FY20 to reach annual 7 revenues worth Rs. 420 billion (US$ 5.75 billion). Share of the subscription revenues in the overall revenue of broadcasters rose 6 from 32.4% in FY19 to 37.7% in FY20. 2.26 . InY F 20, subscription revenues witnessed a growth of 11.4% to 5 1.72 reach Rs. 516 billion (US$ 7.07 billion) as NTO 1.0 was implemented fully and stabilised over the course of the year. 1.53 4 1.39 3.75 3.59 3 3.21 2.90 2 1 0 2017 2018 2019 2020 Advertising Subscription Notes: P - Projected Source: KPMG report - 2020 10 Media and Entertainment For updated information, please visit www.ibef.org GAMING AND DIGITAL ADVERTISING ON HIGH GROWTH PHASE . Gaming and digital advertising are emerging as the fastest growing segments. IndustryVisakhapatnam Size of Emerging port traffic Segments (million (US$ tonnes) billion) . BetweenY F 20 and FY22, these segments are expected to witness a 5 CAGRs of: 4.14 • Digital Advertising (20.6%) 4 • Animation and VFX (-13.1%) 4 • Gaming (25.5%) 3.16 3 • OOH (-5.4%) 2.85 . India’s gaming market is projected to reach Rs. 143 billion (US$ 1.96 3 billion) by FY22, due to rapid increase in consumption. 2.03 . The online gaming segment registered a 45% growth in revenues in 2 FY20 with the user base surpassing 365 million by March 2020, with 1.45 1.40 real money games (RMG), both card-based and fantasy witnessing 2 1.09 strong traction. Casual gaming also recorded 1.29 1 strong consumption uptake, with in-app monetisation seeing 0.70 momentum in FY20. 1 0.44 0.40 0.23 0 FY20 FY21P FY22P Digital Advertising Animation & VFX Gaming OOH Note: VFX- Visual Effects, P - Projected, E-estimated, OOH - Out-of-home advertising, CAGR is calculated from Rs. figure Source: KPMG report - 2020 11 Media and Entertainment For updated information, please visit www.ibef.org ADVERTISING REVENUES Advertising Revenue Share FY20 Advertising Revenue (US$ billion) 2% 3% 12 4% TV 10 10.81 Digital and OTT 9.94 36% 8 Print 7.93 27% 6 OOH 4 Radio 2 Films (In-Cinema 27% Ad) 0 2020 2021 2022 . India’s advertising revenue is projected to reach Rs. 789 billion (US$ 10.81 billion) in FY22 from Rs. 726 billion (US$ 9.94 billion) in FY20. India’s advertising revenue is forecast to expand at a CAGR of 4.3% between FY20 and FY22. Digital advertisement revenues are likely to outweigh TV advertising revenues by FY21; an achievement previously projected to occur only by FY23. Digital advertising emerged as the second-largest advertising medium in India; generated revenues worth Rs.