‘Indian M&E sector to see 27pc revenue growth’

24 February, 2021 12:00 AM printer

NEW DELHI: Indian media and entertainment (M&E) sector is expected to witness a strong 27 per cent growth in revenue to around Rs 1.37 lakh crore in 2021-22, after contracting 26 per cent this fiscal, according to ratings agency Crisil.

Segments such as digital and television (TV) will have relatively shorter time to bounce-back to pre-pandemic levels while print, films, outdoor, and radio would take longer, report agencies.

Crisil Ratings Ltd Director Nitesh Jain said advertisement and subscription revenues contribute nearly equally to the overall M&E sector’s topline, but since the former correlates strongly with economic growth, the pandemic has had a bigger impact on it.

“Next fiscal, with strong economic rebound on the cards, ad revenue should grow 31 per cent on-year and subscription revenue around 24 per cent,” Jain added.

The TV segment contributing around half of the sector’s topline has recovered fully and will report healthy growth next fiscal. Ad revenue saw a sharp contraction initially, but recovered swiftly thereafter, aided by airing of new content, sports events such as the Indian Premier League and a buoyant festive season, Crisil Ratings Ltd said in a statement. “As for subscriptions, TV was resilient even during the peak of pandemic as people remained indoors,” it added.

The print segment, which contributes a fifth of the M&E sector topline, is recovering, though at a much slower pace, and should be able to rebound fully only by the end of next fiscal, it added.

“Print is losing share in ad revenue mainly to the digital segment. Circulation too, especially for English language, could see a loss of 8-10 per cent, because of increased preference for e-papers in metros. However, print companies are rebooting their cost structure and accelerating digital adoption to stay relevant,” the ratings agency added.

Stating that digital has emerged as the medium of choice, Crisil Ratings Ltd Associate Director Rakshit Kachhal said the pandemic accelerated adoption of over-the-top (OTT) platforms, online gaming, e-commerce, e-learning, e-papers and online news platforms.

“This has meant the focus of advertisers has shifted from traditional to digital media. We expect the digital segment revenue to grow 14-16 per cent annually over the medium term. Its share of M&E sector revenue is expected to double to around 20 per cent by fiscal 2024 compared with last fiscal,” Kachhal added.

Credit profiles of large media companies would be unaffected due to strong balance sheets, liquidity and the revenue rebound, while mid-sized and small ones could see stress, Crisil Ratings citing an analysis of over 80 of them rated by the agency.

Accordng to Crisil Ratings, films segment that contributes a sixth to the sector topline, is one of the most impacted segment but occupancies in theatres should improve with the vaccination rollout and a strong pipeline of content. “However, this segment is likely to remain impacted even next fiscal due to social distancing norms and fear of closed spaces,” it said, adding that other traditional media such has radio and outdoor, are seeing persisting pain, and will likely take much longer to recover.


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