Analysing Indian Media & Entertainment (M&E) Industry: Recent Insights
The Ernst & Young report of Apr 2023 has projected that the Indian Media & Entertainment (M&E) industry, currently valued at around $27 billion, is poised to become a $55-70 billion industry by 2030, driven by digital consumption, OTT platforms, gaming, animation, and visual effects (VFX).
The sector showcases multimodal growth with significant contributions from various sub-segments like TV, digital media, cinema, print, gaming, and others.
The industry’s recovery post-pandemic has been strong, fueled by innovations in content distribution and monetization strategies.
Content Creation
The value chain of the M&E sector begins with content creation, which involves developing media such as films, television series, digital shows, music, and news.
- Sub-segments: The process covers scriptwriting, production, and directing for platforms like television, cinema, OTT, and gaming.
- Moreover, regional content has emerged as a major growth driver, with over 40% of OTT consumption attributed to regional shows.
- Consequently, platforms like Zee5 and Disney+ Hotstar have expanded their regional offerings to capture broader audiences.
However, the segment faces challenges. On the one hand, competition is intensifying across digital platforms. On the other hand, the need for high-budget investments in original content is essential to attract and retain subscribers.
For instance, India’s OTT space witnessed a massive surge in investment, with original content increasing from 500 hours in 2018 to 2,600 hours in 2021, and further growth is anticipated.
Content Aggregation
Following creation, the next phase is content aggregation, where media houses, studios, and platforms package content for distribution.
- Key players such as Netflix, Amazon Prime, MX Player, and Zee5 aggregate diverse content to cater to consumer demand.
- In addition, licensing agreements allow platforms to distribute their libraries globally, thereby unlocking new revenue streams.
For example, MX Player and Zee5 have adopted innovative aggregation strategies by securing exclusive regional language films and TV series.
Distribution
Once aggregated, content must reach consumers through distribution channels.
- Traditionally, television and cinema dominated distribution.
- Nevertheless, digital platforms, particularly OTT services, now lead the landscape. With over 500 million internet users and low data costs, digital distribution has transformed the industry.
- Furthermore, the rollout of 5G is expected to boost high-definition video streaming, thereby expanding digital consumption even further.
Yet, bottlenecks remain. The 2022 BCG & CII report highlighted that low rural broadband penetration continues to hinder growth.
For instance, Amazon Prime has introduced affordable mobile-only subscription plans, strategically designed to penetrate wider consumer segments.
Monetization
The M&E industry adopts diverse monetization strategies depending on platform, audience, and content type.
- Advertising, subscriptions, and pay-per-view models dominate revenues.
- Moreover, digital advertising has grown rapidly, reaching $9.5 billion in 2022, driven by social media, search engines, and video platforms.
- Meanwhile, subscription-based video on demand (SVOD) is scaling quickly. In fact, by 2030, SVOD revenues are expected to overtake advertising-based models (AVOD).
For instance, Indian OTT platforms like Netflix and Amazon Prime offer localized, affordable pricing. Netflix’s mobile-only plan in India is nearly 70–90% cheaper than its U.S. version, thus expanding market penetration.
Consumption
At the final stage of the value chain, consumers interact with content through television, OTT, mobile apps, and cinemas.
- During the pandemic, digital consumption surged, with digital video making up 60% of total media consumption in India by 2021.
- Additionally, the rise of regional and short-form content on apps like Moj and MX TakaTak has successfully engaged Tier-2 and Tier-3 markets.
For example, Zee5 reported that half of its regional content consumption comes from audiences outside the home state, reflecting the universal appeal of localised entertainment.
Key Trends and Opportunities
The industry is also being reshaped by emerging opportunities:
- OTT and Gaming Growth: With over 40 OTT platforms and gaming growing at a 30% CAGR, these two are major accelerators.
- Interactive Advertising: Ads are evolving into interactive, commerce-driven formats, seamlessly blending with content.
- Post-Production & VFX: India now accounts for 10% of the global VFX market, aided by skilled talent and government incentives.
- Regional Focus: OTT platforms are investing heavily in regional films and shows. Notably, Amazon Prime reports that 50% of its regional movie viewership comes from outside the content’s home state.
Headwinds / Challenges
Despite rapid progress, several structural challenges persist:
- Piracy continues to hurt revenues, particularly for digital platforms.
- Monetization issues remain, as consumers are still drawn to free content on social media.
- Infrastructure gaps, especially poor rural broadband penetration, restrict high-quality streaming and gaming.
Future Outlook
Looking ahead, the Indian M&E sector is set for double-digit growth throughout the decade.
- By 2030, it is projected to reach $55–70 billion, primarily powered by digital innovations, OTT adoption, and gaming.
- Therefore, the industry’s strategic priorities must include differentiated content, sustainable monetisation models, and international expansion.
Multiple reports—including FICCI-EY (2023 & 2024), PwC Global Outlook (2023–27), and analyses by KPMG and Deloitte—all reinforce the view that digital transformation will be the cornerstone of future growth.
The Gist
In conclusion, India’s Media & Entertainment sector stands at a critical inflection point. With the convergence of digital innovation, rising regional demand, and evolving consumer behavior, the industry is positioned to become a global content powerhouse in the coming decade.