Digital Media Revolution: India's M&E Sector Witnesses Historic Shift as Digital Overtakes TV

In a groundbreaking move, digital media has surpassed traditional television as the largest segment in India's Media and Entertainment (M&E) industry, marking a significant shift in consumer behavior and business strategies. According to the latest FICCI-EY report, titled "Shape the Future," digital media contributed an impressive Rs 80,200 crore to the sector's total revenue in 2024, accounting for 32% of the total M&E revenue of Rs 2.5 trillion. This development underscores India's rapid digital adoption and the evolving preferences of Indian consumers, who are increasingly gravitating towards digital platforms for entertainment and information.

Industry Growth and Challenges

The Indian M&E sector grew by 3.3% in 2024, reaching a total valuation of Rs 2.5 trillion (USD 29.4 billion), contributing 0.73% to India's GDP. While this growth is notable, it reflects a slowdown from the previous year's 8.3%, primarily due to falling subscription revenues across traditional media segments like TV and print. The sector is projected to grow by 7.2% in 2025, reaching Rs 2.68 trillion, and is expected to surpass Rs 3 trillion by 2027, driven by digital expansion and strategic alliances.

Key Trends:

• Digital Growth: Digital media saw a remarkable 17% growth in 2024, driven by substantial increases in digital advertising and subscription revenues. Digital advertising alone accounted for 55% of total advertising revenue, reaching Rs 70,000 crore. This surge has been fueled by e-commerce advertising and social media ads.

• Streaming Services: OTT platforms such as Netflix, Amazon Prime Video, and JioHotstar have capitalized on the digital boom by expanding their content offerings in multiple languages. However, the number of new original productions has decreased, reflecting cost-conscious strategies and reduced post-theatrical acquisitions.

• Television: Despite digital media's rapid rise, television remains a significant player in the M&E sector. Although linear TV saw a decline in advertising and subscription revenues for the second consecutive year, viewership levels remained stable. Connected TV households grew significantly, indicating a transition towards more digital viewing practices.

• Print Media: Print media continued to face challenges, with subscription revenues falling slightly. However, there was a small growth in advertising revenue, driven by premium ad formats catering to an affluent and loyal readership.

Advertising Revenues: A Shift Towards Digital

The Indian M&E sector's advertising revenues witnessed an 8.1% growth in 2024, primarily driven by performance advertising on digital platforms, including e-commerce websites. The resilience of print and radio retail advertising also contributed to this growth. Digital media, live events, and Out-of-Home (OOH) media were key drivers, reflecting the industry's shift towards more targeted and interactive advertising formats.

Future Projections:

• Market Growth: The M&E sector is expected to grow at a CAGR of about 7% over the next few years, reaching Rs 3.1 trillion by 2027.

• Digital Leadership: Digital media is projected to be the first M&E segment to cross Rs 1 trillion in advertising revenues by 2026, further solidifying its position as a leader in the sector.

Impact on Other M&E Segments

Beyond digital media and television, other segments of the M&E industry have faced varying challenges:

• Cinema: The film industry encountered a tough year with revenues declining by 5% to Rs 18,700 crore in 2024. High ticket prices and weak content led to decreased theatrical admissions, and only 11 Hindi films crossed the Rs 100 crore mark, a drop from 17 in 2023.

• Gaming: The online gaming sector experienced a slowdown due to a 28% GST on player deposits, resulting in a 2% contraction. Despite this, casual gaming saw a 16% increase, highlighting its potential despite regulatory challenges.

• Music and Print: Paid music subscriptions grew from 7 million to 10.5 million, while digital news subscriptions remained low. Print advertising saw a slight increase, though overall print revenues continued to struggle.

Conclusion: A New Era in Indian M&E

The overtaking of traditional TV by digital media marks a significant milestone in India's M&E sector, reflecting broader trends in digital adoption and consumer preferences. As the sector navigates these changes, it is poised for substantial growth, driven by innovative content models and strategic alliances. With digital media at the forefront, India's M&E industry is on track to surpass Rs 3 trillion by 2027, positioning itself as a global leader in content creation and consumption.

Key Takeaways:

• Digital Media Dominance: Digital media now accounts for 32% of India's M&E sector revenues.
• Growth Projections: The M&E sector is expected to reach Rs 3.1 trillion by 2027.
• Advertising Shift: Digital advertising accounts for 55% of total advertising revenue.
• Future Focus: Digital media is projected to cross Rs 1 trillion in advertising by 2026.

As India's media landscape continues to evolve, understanding these shifts will be crucial for industry stakeholders to capitalize on emerging opportunities and navigate challenges effectively.