If there may be one sector that punches a lot above its weight, it’s Media & Entertainment (M&E). Its actors and anchors are family names. From that includes on billboards they’ve discovered their option to political events. Television exhibits like ‘Big Boss’, and ‘Kaun Banega Crorepati?’ are the stuff of household debate and commuter gossip.

Yet the businesses who produce the leisure content material, and produce us information and reside sports activities, are struggling. As the best way folks devour leisure and information adjustments, firms should shortly modify or die away. The massive multiplex firms of yore – PVR and INOX – are of their final gasp as households now favor to eat their chips and watch films on Netflix.

The motive for the gradual progress of media and leisure is as a result of it’s a ‘secondary’ trade. It is basically depending on promoting income, which in flip relies on how a lot different trade sectors are prepared to spend on promoting, which isn’t a lot. For the person client, ‘entertainment’ is at all times an ‘optional’ spend relying on how a lot is left after shopping for necessities like meals. The poor progress of leisure income is a mirrored image of India’s gradual consumption story.

Television shrinks

Every yr the M&E Industry does a spherical of introspection. Hosted by FICCI and branded as ‘Frames’, the annual jamboree in its twenty fourth yr, convened in Mumbai as soon as once more this week. The attendance was low, the audio system middle-order and the temper tepid. Kevin Vaz, chairman of FICCI’s media & leisure committee, did attempt to work up some froth claiming, “India’s entertainment industry was poised to captivate the world.”

Mrinalini Jain, Chief Development Officer at content material firm, Banijay Asia and Endemol, then again mentioned at one of many classes that although Indiansoap opera captures the intricacies of human relations, it’s struggling to search out markets abroad. The motion is just one approach – ‘The Good Wife’, ‘Big Boss’ and ‘Fear Factor’ – are all codecs lifted from profitable US exhibits.

As Vaz reminded us, India produces a staggering 200,000 hours of content material yearly. This consists of over 1,700 movies, 3,000 hours of premium OTT content material, and 20,000 songs. But the income they generate is a pittance. Does it replicate on the standard of the merchandise? Or is it a advertising and marketing failure? The jury continues to be out on these questions.

The spotlight of the 3-day trade analysis is the Ernst & Young standing report. It had, because it does yearly, an optimistic ring; however a cautious learn reveals how a lot the trade is struggling. If there’s a ray of hope, it’s digital media.

The E&Y report mentioned the M&E sector grew at about 8% in calendar 2023, an growth of about Rs 17,300 crore, to achieve Rs 2.32 lakh crore. While general this was 21% above the pre-pandemic years, the report conceded conventional media – tv, print and radio – lagged behind 2019 ranges.

The massive slowdown in promoting within the first half of CY2023 took a toll, particularly tv, the most important of the leisure segments. Ad income really fell 6.5% as a consequence of a slowdown in spending by gaming and D2C manufacturers. There was a marginal progress in subscription, however general tv revenues had been down 2% to Rs 69,600 crore in 2023 from Rs 70,900 crore within the earlier yr.

Change in pecking order

Regulation and the tight management over broadcasting licenses is an enormous concern. From the sooner galloping progress of TV channels, there may be now a downturn: the whole variety of channels on air declining from 906 in 2021 to 899 in 2023. On the bottom too the variety of MSOs, the final mile cable-wallahs, have sharply fallen from 1,702 in December 2020 to 998 in December 2023.

There has been a marginal progress within the conventional segments, however it’s linear and single-digit. Films as an illustration confirmed income of Rs 19,700 crore, a rise of 14% over the earlier yr. But evaluate it to the pre-pandemic income of Rs 19,100 crore, and it’s crawling at 3%.

Expectedly, digital media was marked out because the hope for the long run. Digital promoting grew 15% to achieve Rs 57,600 crore, or 51% of whole promoting revenues. There was a slowdown in digital subscription although with income of Rs 7,800 crore. E&Y expects digital media, as a section, to overhaul tv by the top of 2024.

All that is reflecting within the new pecking order. The two Big Tech firms – Google and Meta (previously Facebook) – are strides forward of the largest conventional M&E firms. Of the present estimated annual promoting income of Rs 1.2 lakh crore, simply Google India and Meta garner Rs 43,308 crore, forward of the mixed advert income of Disney Star, Zee, Times and Sony.

Unfortunately ‘Ficci Frames’ failed to debate the largest modern shakeout roiling the trade – the approaching merger of Reliance Industries (RIL), Viacom 18 and Disney Star. The new Rs 70,000 crore ($ 8.5 billion) large will compete ruthlessly with the Big Tech firms Meta and Google India for advert income and eyeballs.

It will finally be a Reliance firm. Disney Star which can maintain 37% can be diminished to a minority, maybe previous a whole exit

from India. The merger raises massive questions: Can an entity that can management 45% of the TV promoting market and about 34% of OTT gross sales cross our anti-monopoly legal guidelines? And will this suffocate inventive content material? But then that’s one other story.