The Media & Entertainment (ME) sector, which is severely impacted by COVID-19 baring a few segments, will rebound by FY22 and reach a size of ₹1,866 crore, KPMG in India said in a report.

It said India was already experiencing a slowdown in economic activity even prior to the outbreak of COVID-19 in March, and the onset of the global pandemic and ensuing lockdown dealt a severe blow to the Indian economy and as a result all the traditional media received a big jolt.

Stating that the ME sector has been affected to varying degrees, it said the outdoor entertainment formats (films and events) and traditional media such as print and TV (to some extent) have been badly impacted as people stayed indoors and advertising spends dried up.

However, digital advertising, OTT and gaming fared much better, with massive spikes in digital consumption during the lockdown across geographies and socio-economic classes.

Digital advertising spends are now set to overtake those on TV by FY21, which is an important milestone and turning point in the evolution of M&E in India, it said.

Satya Easwaran, Partner and Head, Technology, Media and Telecom, KPMG in India said, “The distinction among segments of ME has become more pronounced with the experience of the lockdown. Marketing spend has moved perceptibly towards digital media and away from traditional segments like print, radio and to some extent TV.”

“A greater reliance on subscription and other paid options as well as the development of a credible digital business model is going to be inevitable for these traditional media segments,” he said.

Quoting the findings of a survey of CXOs, KPMG said customer focus and revenue growth would drive digital-first initiatives over the near term within organisations, with cost reduction also emerging as important to traditional media segments.

Girish Menon, Partner and Head, Media and Entertainment, said “There will be a deeper integration of digital technology across the ME value chain – from content production to distribution. Technology adoption could however face some challenges in terms of skill development and the shift to a digital-first mindset but will result in operational cost savings and potentially lower lead times over the longer term.”

As per our revised estimates, India could be home to a billion digital users by 2028 rather than the earlier projected 2030 timeline. There have been several structural changes to digital behaviour on account of the experience of the lockdown resulting in a new homogeneity among users, and it is our belief that many of these changes will translate into a more democratic and sophisticated digital citizenry within the country.