Mumbai, March 30 (IANS) The media and entertainment industry will grow at 14.3 percent annually to touch earnings of Rs.2.26 trillion ($33 billion) by 2020 led by a fast growth in advertising revenues, said a study released here on Wednesday.
The report prepared by Ficci and KPMG says advertising revenue is expected to grow by a 15.9 percent annually to Rs.994 billion ($14.8 billion), with digital advertising expected to retain its strong run, having grown by 38.2 percent in 2015 over the previous year.
"We are going through a phase of rapid, sustained technological innovation that will permanently change the way consumers will access and consume content," said Ficci director general A. Didar Singh, releasing the report at the Ficci-Frames conclave on media and entertainment here.
"Changing user habits will disrupt existing business models as content providers and brands will need to match consumer expectations. While this will pose multiple challenges, we believe there are significant opportunities for media, entertainment firms to leverage the digital ecosystem."
Jehil Thakkar, partner and head of media and entertainment with KPMG India, said the films sector also returned to growth in 2015 led by Hollywood and regional cinema, rather than Bollywood.
According to the report: "Studios are also experimenting with fresh talent, which comes onboard for a lower fee. For instance, talent costs at Yash Raj Films are approximately 25 percent lower than the industry average because bulk deals are signed with new actors."
"Print saw a slower growth in the past year but TV and digital advertising have exceeded expectations."
As per the report, at 7.6 percent, the print industry witnessed a marginal slowdown in 2015 compared to 2014 -- an election year. For English language publications, e-commerce stood out as a category in a year of muted growth.
It said the television sector witnessed strong advertising-led growth at 17 percent with increase in e-commerce spends. Growth in subscription revenue was slower at 12.8 percent due to the delay in Phase III digitisation and further delays in securing on-ground benefits of Phase I and II.
Thakkar said that with the wide rollout of 4G finally underway, coupled with the "Digital India" initiative, the future of digital advertising is very bright.
"The year 2015 saw a number of OTT services being launched, and we expect this trend to continue in 2016 as well. However, this industry is yet to find a sustainable business model in India, which is likely to emerge in the next 12 to 24 months," Thakkar added.
