Online news audience grew to over 450 million in 2020: FICCI-EY report
The global pandemic in 2020 led to businesses and individuals transitioning to Digital in a major way. While organisations moved on to Work From Home mode and switching their operations to Digital as the nation remained under lockdown for quite a few months; confined to their homes and observing social distancing, people began conducting almost every function – be it buying, consuming content, making payments, working, children’s education – in the Digital space.
FICCI and EY’s annual report on the M&E industry reveals that Digital and online gaming were the only segments which grew in 2020, adding an aggregate of Rs 26 billion and consequently, their contribution to the M&E sector increased from 16% in 2019 to 23% in 2020. The report states that Digital media grew 6% in 2020.
According to the report, Digital advertising stayed stable, led by increased allocation from traditional advertisers who accelerated their investments in digital sales channels. This could become a permanent phenomenon. SME advertisers continued to increase their spends on digital advertising and experimented more with online sales platforms like Amazon and Flipkart. News brands, whose reach crossed 450 million in 2020, also increased revenues from their digital platforms.
As per the FICCI-EY report, Indians spent 4.6 hours a day on their phones, as they came third in the world for the most amount of time spent on phones in 2020 overtaking China, Mexico, Argentina and South Korea. Consumers spent 1,669 billion minutes online in 2020, up 32% from 1,261 billion minutes in 2019.
Indians downloaded 24 billion apps in 2020
India remained the second largest market by app downloads in 2020, behind China. Indians downloaded almost 24.3 billion apps in 2020, a growth of over 20% over 2019. However, in terms of revenue, India lagged many smaller markets.
Games remained the most downloaded app category under entertainment
Indians downloaded 9.2 billion game apps in 2020, comprising 80% of entertainment app category downloads. Entertainment apps (12%) were most downloaded apart from games, followed by music apps (6%) and news apps (3%). Four of the top-5 app categories by usage were related to M&E. Usage among all app categories witnessed growth in 2020. 75% of Indian Internet users had used one or more entertainment or video apps during the last month. 57% had played games and 54% had streamed music.
Indians increased their time on entertainment apps
Time spent on online entertainment increased 49% in 2020. The entertainment audience grew 15% in 2020 to reach 450 million unique Indians. Video viewers increased 15% to reach 468 million, which is around 96% of smartphone owners. Video viewers are expected to grow to 650 million by 2023. India has amongst the highest consumption of online video in the world. Viewers in India watch the most online video each week at an average of 10 hours 54 minutes, an increase of 30% from 2019.
Online news subscribers grew between December 2019 and 2020 to reach over 450 million across mobile and desktop users of news sites, portals and aggregators; however daily regular users were much lower. This comprises approximately 57% of Internet users. Nine out of 10 top online newspapers are in regional languages. Online news and magazine app downloads increased 12% in 2020.
Seven news platforms crossed 25% national reach
Online news platforms have increased their reach in 2020 as circulation of physical newspapers faltered. At 73%, Times Network had the highest national reach, followed by Network18 with 38%. Zee Digital (35%), Dailyhunt (32%), HT Media (29%), Indian Express Group (29%), India Today Group (27%), NDTV (22%), Jagran New Media (17%) and ABP Network (17%).
Dailyhunt was the only news aggregator amongst the top news platforms. Most platforms have started putting some content behind a paywall in an effort to increase digital subscription revenues, but the report estimates that based on industry discussions, these aggregate to less than a million paying subscriptions across the country.
According to the FICCI-EY report, social media penetration reached 32% in 2020. With people confined to their homes due to the pandemic, around 448 million Indians were active on social media in 2020, a growth of 21% over 2019. Social media is now used by 32% of Indians aged 16 years and above, up from 29% in 2019. Most social media users subscribed to multiple platforms, but did not use each platform daily.
Top social media platforms included YouTube, Facebook, Whatsapp, and Instagram, among others. 99% of the respondents surveyed indicated using a social media platform on their mobiles, of which 91.6% claimed to have actively engaged with a chat app in the previous month. 47% of the respondents claimed to use social media for work purposes. Despite TikTok being barred in India in June 2020, it still featured in the top-ten most used platforms in 2020.
In 2020, digital subscription grew 49% to reach Rs 43.5 billion. Video subscription revenues grew 50% in 2020 as premium content – originals and sports – went behind the paywall particularly during the pandemic, when original content could not be produced for television. Paid video subscriptions crossed 50 million for the first time. Audio subscription grew comparatively slower at 15% in 2020 as several free products are available which reduce the need to subscribe. The percentage of paying subscribers to total OTT consumers remained less than 10% and 1% for video and audio, respectively. The FICCI-EY report expects digital subscriptions to grow at a CAGR of 25% till 2023.
In 2020, 29 million subscribers paid for 53 million OTT video subscriptions (not counting subscriptions bundled along with data plans). Key drivers for growth included Hotstar putting the IPL behind a paywall, release of direct to digital films during the pandemic and lack of fresh content on television for four months. Around 1,200 hours of original content were created for OTT platforms across films and episodic content, which led to increased demand for OTT subscriptions.
Original drama content was the most popular genre. OTT players spent upwards of Rs 10.2 billion on creating around 1,200 hours of original content across 220 titles in 2020, excluding acquired movie rights and sports. This is a reduction from Rs 14 billion in 2019 for around 385 titles due to stoppage of shoots during the pandemic for five months.
Netflix invested Rs 30 billion in content in India across 2019 and 2020; it has announced over 60 titles in India and launched 17 films and 11 series in 2020 alone, making India one of its largest content production hubs worldwide. Disney+ Hotstar claimed 26 million paid subscribers by the end of November 2020 on the back of the IPL going behind a paywall.
OTT players are expected to increase spends on original content to around Rs 19.2 billion in 2021 (a 17% growth over 2019) and further increase their total investment in content (including sports) during 2021-25 to Rs 300 billion. Around 500 original titles are expected to be released in 2021 across platforms.
Language OTTs proliferated
A key trend in 2020 was the entry of language OTT products like Aha (Telugu), Koode (Malayalam) and City Shor TV (Gujarati). The Marathi OTT space will also see the entry of Planet Marathi and Letsflix. Larger platforms, too, increased their investments in regional language original content. Language OTTs enable a deeper understanding of audiences and can provide wider offerings than just entertainment content, including religion, news and games.
Meanwhile, bundling of content continued. 284 million consumers consumed video content through data bundles. Telcos and aggregators provided premium OTT subscriptions bundled along with data and/or devices for as little as Rs 150 per month. Up to 85% of viewership volumes of certain OTT platforms were generated by telcos. The amount telcos paid for content was around Rs 7 billion in 2020 and is expected to grow. The report expects around 400 million consumers to consume content via telco and aggregator bundles by 2025 across a mix of minimum guarantee and per-stream deals.
Despite the accelerated transition to Digital, digital advertising remained flat, growing at a mere 1% at Rs 191.5 billion in 2020 while becoming the second largest advertising segment after television. While certain sectors like Travel showed marked decline, sectors like M&E, Auto, BFSI, Durables and Telecom increased spends as they implemented or widened digital sales channels during the pandemic.
SME and long tail advertisers spent an estimated Rs 90.6 billion, primarily on performance advertising on Google, Facebook and e-commerce platforms. Of the total, share of ad revenues generated by e-commerce platforms increased to Rs 35 billion, crossing 12% of total digital advertising. Total advertising, including SME and long tail grew by 1% in 2020.
All sectors increased their share of spends on digital advertising in 2020. Five ad sectors spent over 30% of their total ad spends on digital, with highest percentage growth seen in BFSI, Consumer durables, Telecom, Auto and M&E. In 2019, 4 sectors had spent over 30% on digital advertising.
The top five categories contributed 78% of total digital ad spends ► E-commerce, Consumer durables, and Telecom were the three categories which increased their contribution to total digital advertising. Significant growth was noted in the share of the Others category, showing the medium attracted a wider base of categories.
Advertising on E-commerce platforms achieved scale. Search and social media, across different platforms continued to provide 75% of digital ad revenues. Advertising on E-commerce platforms crossed Rs 35 billion to garner 12% of total digital advertising as more brands used online channels to drive sales, being closest to the point of purchase. OTT platforms of broadcasters and news companies garnered 13% of digital ad revenues, led by Hotstar and Times Internet.
Small and medium enterprise (SME) advertiser base grew. Large ad platforms claim that there are now over 400,000 small and medium enterprises who advertise on them, to generate business in India and abroad. They expect that this number is growing significantly and could reach 500,000 advertisers within two to three years. In addition, the pandemic spurred the growth of hyper local entrepreneurs who target audiences in specific localities within cities. SME spends are focused on performance advertising – predominantly search, social and classifieds – on platforms like Google, Facebook, Flipkart, Amazon, Just Dial, etc. The FICCI-EY report estimates these advertisers spent over Rs 90 billion in 2020.
Share of local language ads increased
The share of ads in local languages continued to increase in 2020 – YouTube released its first regional language Ads Leaderboard report, which showed that the top 10 most-watched advertisements spanning the second half of 2020 were in regional languages. As the reach of the Internet continues to be fueled by regional subscribers, the share of language advertising is expected to reflect that of TV. Eventually, only 3-4% of ads will be in English, approximately 47% in Hindi and the rest in regional languages.
Share of programmatic and contextual advertising increased
Interviews that FICCI and EY have had show that share of programmatic advertising increased from 10% of total digital spends in 2017 to 35-40% in 2020. Dentsu estimates that the contribution of programmatic advertising would continue to grow to reach 42% by 2022. Interestingly, the need for contextual conversations also increased at the same time and cohort-based curated advertising made a strong beginning as brands took to curated conversations.
The FICCI-EY report estimates that the Digital segment will grow to Rs 424.5 billion by 2023, at a 22% CAGR. The Digital segment became the second largest segment in 2020, overtaking print, and is expected to continue to reduce the gap with television as digital infrastructure (screens, broadband connections, e-commerce, digital payments, etc.) continue to grow.
Digital advertising will outpace all other media
Digital advertising will grow at a 21% CAGR, to equal television advertising by 2024 or 2025. Advertising on E-commerce platforms will reach Rs 10 billion by 2025 as e-commerce players like Amazon, Flipkart, Jio Platforms, Tata, Zomato and others growth their reach and active users.
The CPT will emerge as the common metric for cross-media measurement and the M&E sector will need to provide models to measure it. The metrics that matter will change from MAU to DAU and from audience numbers to engagement, loyalty and time spent, leading to platforms focusing on segmented audiences and community ownership. More advertisers will implement ad fraud management solutions and validate ad spend efficiency as digital becomes a larger portion of their media mix.
Digital subscription will achieve scale
Subscription revenues will grow at 25% CAGR as paid subscriptions double to over 100 million by 2023. Video paid subscribers will cross 50 million by 2023 and audio subscribers will reach 4-5 million by that time. Newspaper digital products will increasingly go behind paywalls and news and related products are expected to generate subscription revenues of Rs 4 billion by 2023.
Subscription will be driven by genres like women, audiences aged 50 years or above and non-metro audiences. The sharing economy will not pass by the digital media space – group subscription products across families, friends, neighbours, colleges and corporates could come into being. E-commerce apps will provide a significant opportunity to license news, library and interactive content on to their platforms to increase time spent and visitations.