Indian M&E ad revenue to grow by 14% in next fiscal: CRISIL

According to CRISIL, the Indian media and entertainment1 (M&E) sector may log revenue growth of 12-14% on-year to Rs 1.6 lakh crore in fiscal 2024, against the 16% growth expected this fiscal. 

Advertisement (ad) revenue, which accounts for 55% of the sector’s revenue, will grow by 14% given its strong correlation with economic activity. Also, the general elections expected in mid-2024 will trigger an increase in ad spend in the last quarter of next fiscal. 

Subscription revenue, accounting for the balance of 45%, will grow at a slower pace of 12%, led by a strong recovery in films. Excluding film exhibitions, the revenue growth would be modest at 4-5%. 

Says Naveen Vaidyanathan, Director, CRISIL Ratings, “While television (TV) will continue to dominate ad revenue share given its wider reach, digital will lead in growth, rising 15-18% annually over the medium term. It has emerged as the medium of choice in the past few years amid accelerated adoption of over-the-top (OTT) platforms, online gaming, e-commerce, e-learning, and online news platforms. After the pandemic, digital has become the second-largest segment after TV in terms of ad spends. Together, they account for over three-fourths of the ad revenue for the M&E sector, followed by the print segment with a one-fifth share.” 

Says Rakshit Kachhal, Associate Director, CRISIL Ratings, “Increasing digitalisation would affect TV and print subscription in the long run, necessitating accelerated integration of digital media into traditional segments. Moreover, while moviegoers are back in cinema halls, increased OTT consumption could impact theatrical collections. Some of the pandemic-driven changes in consumer behaviour may lead to structural changes in business models in the M&E sector over the long term and will need to be monitored.”