Film, TV, Online Video Service to grow at 10–11% in next 3–4 years

The film, television, and OVS industries (together referred to as “creative industries”) in India represent a combined revenue of about Rs 93,000 crore (US$ 13.3 billion). Against the backdrop of a sluggish economy, these industries on aggregate have been resilient and performed well, states a report by Deloitte India, titled ‘Economic Impact of the Film, Television, and Online Video Services in India, 2019’.

According to the report, the creative industries are expected to grow at a CAGR of 10–11 per cent over the next 3–4 years. However, creating a supporting environment could put these industries on a higher growth trajectory of 14–15 per cent. This higher growth can unlock a correspondingly larger indirect and induced impact on the overall economy, the report states.

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The film sector is expected to post a growth of about 20 per cent in FY20202, while the Online Video Service (OVS) industry remains in strong investment mode. The TV industry is in transition due to regulatory changes. Even the advertising revenue in FY2020 has been affected by the economic slowdown as the Indian economy moves towards formalisation.

India’s young population and rising incomes are expected to translate into rapid growth in discretionary spends. Unlike several developed markets, Deloitte India expects traditional video to continue growing in India and OVS to have an additive (as against a disruptive) impact (at least in the medium term).

Commenting on the report, Jehil Thakkar, Partner and Leader - Media and entertainment, Deloitte India, said, “The report illuminates for us the broader trends of the film, television, and online video services sectors. Unsurprisingly, online video services made a statement, generating a total economic contribution of USD 2.1 billion (INR 15,374 Cr) in 2019, up from USD 230 million (INR 1,612 Cr) in 2017 – an increase of 854% in local currency. India has developed a dynamic video on demand ecosystem that is satisfying the huge appetite for quality content, especially during the coronavirus pandemic. Perhaps the biggest threats to continued growth, and more job opportunities, are rampant piracy and the imposition of artificial barriers that impact on the quality of a customer’s experience. Addressing these challenges is the task of the day.”

Key highlights:

• India is the largest producer of movies in the world and has the largest DTH and the second-largest pay TV subscriber base in the world.
• The film sector is expected to post a growth of about 20 percent in FY2020, and the OVS industry remains in strong investment mode
• The advertising revenue in FY2020 has been affected by the economic slowdown as the Indian economy moves towards formalisation.
• Regional markets continue to be important for media industry: Star India is also following a similar strategy and has recently launched its sixth regional sports channel in Star Sports 1 Bangla. Its other regional sports channels are available in Hindi, Marathi, Tamil, Telugu, and Kannada
• Distributors offering additional services - in India, the emergence of low-cost smartphones, coupled with low data charges, has resulted in mobile becoming a key medium for media consumption
• Impact of New Tariff Order 2.0 on key stakeholders in the value chain
• Affordable connectivity driving data usage: India has the highest data usage per smartphone in the world
• Video consumption is expected to dominate data usage and entertainment is a large part of this video consumption