PwC’s Global Entertainment & Media Outlook: 2020-2024 report says the OTT market in India has grown at 28.6 percent CAGR on the back of closure of cinemas even as some film studios have sought to speed up new releases to home video platforms. India is also expected to become the sixth-largest market in 2024 and will overtake South Korea, Germany, and Australia.
The PwC Global Entertainment & Media Outlook: 2020-2024 released on Thursday has shown that for the first time, subscription video on demand (VOD) revenues have exceeded box office revenues following the closure of cinema halls and multiplexes in the wake of COVID-19 since March. OTT video growth has come in from both inside and outside homes with the increasing use of internet-connected devices, particularly new smartphones and connected TVs.
Subscription VOD is set to emerge as the key revenue driver, rising at the rate of 30.7 percent CAGR from $708 million in 2019 to $2.7 billion in 2024. The emerging at-home entertainment environment has stimulated the growth of new direct-to-consumer apps, user-generated content (UGC) formats, and, interestingly, local ‘bite-sized’ entertainment platforms.
A critical turning point is expected to be attained in CY 2020 when SVOD revenue exceeds box office spend, pointing to the speed at which consumers are taking to OTT platforms, according to the report. Another trend has been the increasing digital-first releases in the five southern states, a market that represents a significant segment of box-office collection revenues in the country.
MOBILE & GAMES
The report further says that mobile display will drive past wired-internet advertising in 2022, driven by deepening mobile video consumption and social media. In addition, games are expected to become the third-largest consumers of data by 2024, just behind video and communications — in fact, India’s billion-dollar gaming market will reach US$3.2 billion in 2024, increasing at an 18.8 percent CAGR.
The report says India is the sixth-largest Internet ad market in the Asia Pacific Region, having pushed back Taiwan in 2019. Mobile will, therefore, continue to be the first driver of revenue owing to increasing affordability of data, new mobile-first formats, ability to measure, and strategic targeting capabilities. But TV advertising will continue to be affected by the shift in consumer habits. Interestingly, traditional media such as newspapers are investing substantially in their own digital assets and are expecting to monetise through a blend of subscriptions and ad-based models.
In the music-streaming brands space, India is expected to expand to a revenue of $1.7 billion in 2024, at a 13.5 percent CAGR. The music industry has experienced increasing value in partnerships with e-sport and social media companies as they strengthen and consolidate their music library for integration with gaming events, videos, and messages.
In fact, the report says India will also see a strong increase at a 30.4 percent CAGR in its monthly podcast listener base over the next five years, supported by the coming of foreign players and original content in topics, such as news, society, and culture. Globally, consumer spending has overtaken advertising even as entertainment and media (E&M) companies increasingly take to the business of delivering experiences and content to consumers directly, and not the other way round of delivering audiences and eyeballs to advertisers.
The reports says a realignment is on as consumers and businesses adapt to the rapidly changing dynamics. Although more challenges are expected for E&M companies even after the pandemic, the “digital migration” that it has mobilized will also create opportunities across segments. The pandemic has pushed consumers faster and deeper into the digital world. Increasingly, more and more people are viewing live performances streamed online, concerts on gaming platform events, films on OTT platforms, and on-demand online seminars and events.
Digital is expected to garner a nearly 60 percent share of total E&M revenue in 2020. In terms of individual segments as a percentage of global E&M revenue, OTT video will claim the biggest slice. Others include internet advertising, video games, e-sport, music, radio, and podcasts. Overall, the report says India leads as the fastest-growing consumer market from a pure consumer E&M revenue perspective. E&M total revenue by territories has Egypt leading the way with a 17.3 percent CAGR with its total revenue expected to double in 2024.
However, from a pure consumer revenue point of view, India leads the way with a 8.8 percent CAGR through 2019-2024. Overall, global consumer revenue is expected to rise 2.2 percent for the forecasted period, the reports says. Meanwhile, digital advertising revenue exceeded non-digital advertising in 2019 even as digital consumer magazine advertising is expected to surpass print by 2023.