India’s Media and Entertainment Industry to Grow Spearheaded by Online Gaming

A recent report by global consultancy PricewaterhouseCoopers (PwC) projects that the Indian media and entertainment (M&E) industry is likely to reach a total value of ₹4.3 lakh crore by 2026. Continuous growth is expected in a multitude of sectors such as OTT platforms, advertising, cinema, newspapers, and online gaming, with all of them having registered at least 6.3 percent growth.

The study highlights that India’s media and entertainment industry has successfully overcome the disturbances brought to it by Covid-19 and has been growing at a compound annual growth rate (CAGR) of 8.8 percent.

“We shall see a very different profile of media and entertainment-related businesses and revenue models emerging in the digital space once we have the rollout of 5G,” commented Rajib Basu from PwC India.

“The Indian media and entertainment outlook for the next few years is quite unique. There is an exciting pace of growth of digital media and advertising led by the deeper penetration of the internet and mobile devices in our market. At the same time, traditional media will hold its steady growth rate over the next few years,” Basu said.

Online Gaming Outperforms All M&E Sectors and is Poised for a New Boost Powered by VR

As per a March 2022 Ernst & Young (EY) report, online gaming in India has been growing at a rate of 28 percent outperforming all other M&E sectors in the country. Thus, gaming has expanded from a market size of $906 million in 2019 to a value of $1.3 billion as of 2021. According to PwC, with the advent of metaverse and virtual reality (VR), and the pending 5G roll-out, the country’s online gaming sector is poised for a further boost.

The PricewaterhouseCoopers report estimates the 2021 gaming industry market size at ₹16,200 crore and projects a CAGR of 18.3 percent which will lead to revenues of ₹37,535 crore in 2026.

“In the not-too-distant future (the metaverse) could become a stunningly virtually realistic world where individuals access immersive virtual experiences, through VR headsets or other connecting devices,” the report says and predicts that “the global installed base”, or the number of VR devices in use around the world, will grow from 21.6 million in 2021 to 65.9 million by 2026.

Eventual Regulation on Gambling May Prove Predictions Underestimated

Within the last several months, India made a series of steps towards the eventual legalization and regulation of gambling in the country. If this movement proceeds further and corresponding laws are adopted making online gambling a regulated activity like in the UK for example, the growth of the Indian gaming industry may well surpass the predictions presented in the PwC report.

The introduction of a Online Gaming (Regulation) Bill at the Lok Sabha, the establishment of an inter-ministerial panel to study global best practices in gaming regulation and draft a broad framework of laws on the subject, and the setting up of an Animation, Visual Effects, Gaming and Comics (AVGC) Task Force to devise measures to promote these sectors, are all signs that show India might soon do away with the status of an unregulated space.

“The social impacts of unregulated markets are predictably negative – ranging from unchecked access by minors to increased problem gaming (addiction). Economic impacts cannot be ignored either, as unlicensed and offshore operations deprive the public of tax income that can be directed towards several welfare programs,” states Svilen Madjov, industry researcher at SevenJackpots, one of India’s largest casino comparison platforms.

“In the end, the absence of consistent player protection, responsible gaming, and anti-money-laundering policies are all a direct consequence of unlicensed operations,” Madjov adds.

The incentives of a safe gaming environment and the advent of VR technology combined with the growing popularity of live dealer games, may produce a boost in the legitimate real money gaming subsector far beyond the expectations of PwC researchers.

Newspaper, TV Advertising and OTT Sectors Also Poised for Growth

Turning to other M&E sectors, India’s newspaper, TV advertising, and OTT (over-the-top) industries have been overcoming the setbacks and are also poised for growth over the forecast period, the PwC report predicts.

The expected CAGR for newspapers is 2.7 percent, with the sector’s value projected to increase from ₹26,378 crore in 2021 to ₹29,945 in 2026, overtaking the UK and France to claim the fifth position among the world’s largest newspaper markets and displacing China as the “biggest world market for print edition readership in 2025”.

After suffering a 10.8 percent decline in 2020 because of the pandemic, India’s TV advertising returned with a 16.9 percent growth in the next year. According to the forecasts of PwC, the sector will attract revenues of ₹43,410 crore in 2026, growing at a CAGR of 6.3 percent, and will become the fifth biggest TV advertising market in the world after the US, Japan, China and the UK.

Covid-related restrictions and the ‘binge-watching’ fashion doubled the market for OTT platforms, but then the reopening of cinemas and other public places slowed down the sector’s growth. Nevertheless, the OTT market is forecasted to enjoy a CAGR of 14.1 percent and reach a size of ₹21.032 crore by 2026.