While ad-spend pressures will linger on India’s media and entertainment (M&E) industry on the back of a weak economy and lower domestic consumption even after normalcy returns, the COVID-19 impact on certain sectors like print media, online gaming and over-the-top platforms will be low, a KPMG report said on Monday.
In fact, print media can get a new lease of life after the normalcy returns.
What will work in favour of the Rs 333 billion print media is higher credibility in the face of proliferation of fake news on the social media, said the report, adding that circulation will pick up in near term once restrictions are lifted, which will also result in improved ad monetisation.
For the print media, digital presence is now more critical and could translate into greater monetisation opportunities, added the report titled “COVID-19: The many shades of a crisis- A media and entertainment sector perspective”.
The media and entertainment sector in India was estimated at Rs 1,631 billion in FY19 and grew at a compounded annual growth rate of 11.5 per cent over five-year period FY15-FY19.
This was against an overall rate of growth in the country’s GDP at 7.2 per cent during the same time.
“The COVID-19 pandemic has resulted in a drastic cut in advertising expenditure across all media. However, with people being homebound, consumption of media and entertainment – and digital media in particular – has seen considerable growth,” Satya Easwaran, Partner and Leader — Markets Enablement, Technology, Media and Telecom (TMT), KPMG in India, said in a statement.
“Post the crisis, we anticipate an even greater integration of technology into our everyday lives with a marked digital progression of Indians across socio-economic classes. Monetisation however might remain a challenge in the near term.”
The report pointed out that typically, media consumption has tended to be income inelastic, but the current environment is unprecedented and could result in a dip in media consumption in the near term and importantly, a realignment in consumption models.
During the lockdown which started from March 24 midnight in India, however, certain segments of M&E are seeing consumption growth, particularly in TV, gaming, digital and OTT.
On the other hand, outdoor consumption models — films, events, theme parks etc. — are witnessing a dramatic fall due to social distancing norms.
Further, most segments (except news related businesses) are unable to offer new content with production stalling across formats.
Many segments of M&E also depend on contract employees/ freelance agents and hence the impact of the crisis on livelihoods in this sector is also considerable, KPMG said in the report.