Statsguru: M&E sector resilient despite growing at slower pace than economy

The Indian media and entertainment industry is resilient despite growing at a slower pace than the economy.

The sector grew 8 per cent in 2023, noted a report by EY and the Federation of Indian Chambers of Commerce and Industry. Nominal gross domestic product (GDP) growth was about 9 per cent.

Growth is expected to reach double-digit levels in the next few years. Before the pandemic, a similar report in 2019 estimated that the industry would reach Rs 2.4 trillion by 2022. The industry’s size in 2023 was at Rs 2.3 trillion and is expected to touch Rs 3 trillion by 2026.

Overall the sector is 21 per cent above pre-pandemic levels, though television, print and radio lag their 2019 numbers. Higher growth is expected to come with a change in the pecking order. Digital advertising spending has overtaken traditional media this year. The gap is only expected to widen.

This comes on the back of an internet boom powered by low-cost data and increasing speed. India’s mobile internet speed is better than many large economies and emerging market peers, according to data from international tracker Ookla.

Global headwinds have made their presence felt despite these positives.

Mergers and acquisitions have declined. 

The value of deals was last this low in 2020.

The three years leading into the pandemic saw an average of over $1 billion in foreign direct investment coming into the media and entertainment space in terms of equity flows. It has been more muted in the last few years.

A challenge to sustain momentum in the digital age could be to bring online the substantial number of Indians still not active on the internet. They numbered over 660 million according to a recent estim­ate. Rural areas are the most unconnected.