AVGC sector can play a major role in achieving M&E target of $100 bn by 2030: K Madhavan

The CII Media and Entertainment Department has commenced the second edition of CII Summit FX 2021 – a global platform for the Animation, Visual Effects, Gaming, and Comics (AVGC) sector. This virtual conference is spread over 5 days – August 24 to 29. The AVGC sector is undergoing major transformation across segments and genres and is in the process of creating innovative solutions for growth and business opportunities.

K Madhavan, Country Manager & President, The Walt Disney Company India and Star India, and Chairman, CII National Committee on Media & Entertainment, delivered the opening address, where he focused on showcasing the cutting edge of content and technology in the Media & Entertainment industry.

Madhavan observed how the pandemic inspired the M&E sector to adapt and accelerated its transformation. He also pointed out the changes in the consumption habits of the audience, changes in the ways content is created, as well as new and evolved methods of distribution and revenue generation.

He further noted, “While the industry revenues for 2020 dropped to around $19 billion, the industry is on track to reach $30 billion in 2023 (FICCI-EY M&E Report, March 2021). Last year, we had shared a goal for the industry – to reach $100 billion by the end of the decade. This goal is an ambitious one – but not impossible. Through the work of industry bodies like CII, we are committed to realising the true potential of the creative economy in India.”

Madhavan also mentioned how Digital video had witnessed an exponential rise in consumption in 2020. “Over 55-60 million Indians subscribed to video-on-demand services, more than doubling from the 23 million in 2019. This momentum is expected to continue, reaching 89 million subscribers by the end of 2021 (FICCI-EY M&E Report, March 2021). Unlike the Western markets, this rise in digital subscription was not accompanied by a corresponding drop in the television audience. In fact, television viewership has also continued to increase, with growth especially seen in many regional languages,” he added.

Across the developed markets, the Media & Entertainment industry contributes around 3% of a country’s GDP. In India, however, the M&E industry is only around 1% of the GDP, and thus there is a lot of headroom to grow. “This contribution does not include the indirect impact on allied industries, and the intangible soft power that results from having a globally recognised media industry,” Madhavan said.

According to him, “Growing the industry will require investment in technology and skilling as well as a continuous investment in content. It will also require the support of the government through light-touch regulation and positive policy incentives.”

Elaborating on the AVGC sector, Madhavan noted that it remained one of the segments of the industry with the highest potential to grow. “I am told that the total global market size of the AVGC sector is close to $260 billion, whereas our share is under 1,% which comes to $2.1 billion. By all probability, we should aim for a 5% global share, with an annualised growth rate of 25-30%,” he added.

Adding further, he said that Gaming and eSports is another sector that has made massive strides. He pointed out that the global gaming industry, which stands at $160 billion, may be larger than the music and film industry. Sharing some numbers, Madhavan said, “Last year, the number of online gamers in India reached 360 million. Viewership of eSports has also doubled to 17 million. The emerging eSports landscape is projected to grow at a massive 36% CAGR over the next few years, and can power an entire ecosystem of game designers, coders, players, marketers and viewers. The industry is still in its infancy and needs be given the freedom to grow without conflicting and ambiguous regulation.” 

While stating that overall, the AVGC sector has the potential to be another global success story for India and help transform the country the same way that the IT revolution did, Madhavan said that the question here was how fast India could be converted into a global AVGC hub. “The growth potential is huge and the AVGC sector can play a major role in achieving the Media & Entertainment target of $100 billion by 2030.”