Indian media & entertainment industry revenue to decline by 16% this year

Advertisement revenue to see a big impact

Severe impact on GDP growth is expected due to COVID-19

The Indian media and entertainment industry’s revenue in the current financial year is expected to decline by 16%, or INR 25,000 crore, to INR 1.3 lakh crore due to the COVID-19 induced economic slowdown, according to a report by rating agency Crisil. The analysis is based on 78 media and entertainment companies rated by Crisil.

Advertisement revenue, which accounts for about 45% of the overall revenue, will see a sharper cut of 18%, while subscription revenue, which accounts for approximately 55%, will be relatively resilient with a likely decline of 14%. TV, print, and digital are the top three segments in terms of advertisement revenue for the media and entertainment industry.

The Crisil report says that advertisement revenue, which correlates strongly with economic growth, will take a hit as India’s gross domestic product growth is expected to hit a multi-decade low in the current financial year owing to the extended lockdown driven by the COVID-19 pandemic. Weak economic conditions had kept advertisement revenue muted even last fiscal, the report said.

Revenue in the digital segment will continue to grow but at a slower pace. All the traditional segments such as TV, print, radio, out-of-home media, and films, will see a significant decline. According to the report, if not for digital, the overall decline would be worse at about 25%.

The resilience of the digital segment is driven by the increasing use of devices and applications. For TV, the impact on advertising revenue will also be because of the lack of new content on popular channels and postponement of major sporting events such as the Indian Premier League. For newspapers, longer recovery time for key advertiser-industries such as automobiles, real estate, and e-commerce would keep advertisement spend muted.

The top three segments for subscription revenue are TV, print, and cinema, of which, TV continues to be healthy even during the lockdown, according to the report. Newspapers have faced distribution challenges in certain areas leading to a temporary blip in the circulation revenue.

The report says that the large companies will surmount the stress given their ample liquidity and strong financials. But smaller players could see a sharp impact on their credit profiles as revenues decline and liquidity gets squeezed.

Any rebound in advertising revenue depends on the economic growth, the report said, adding that given the low base likely this fiscal, next fiscal would see revenue grow 18-20%.

2023 promises an interesting ride for print in India

Indian Printer and Publisher founded in 1979 is the oldest B2B trade publication in the multi-platform and multi-channel IPPGroup. While the print and packaging industries have been resilient in the past 33 months since the pandemic lockdown of 25 March 2020, the commercial printing and newspaper industries have yet to recover their pre-Covid trajectory.

The fragmented commercial printing industry faces substantial challenges as does the newspaper industry. While digital short-run printing and the signage industry seem to be recovering a bit faster, ultimately their growth will also be moderated by the progress of the overall economy. On the other hand book printing exports are doing well but they too face several supply-chain and logistics challenges.

The price of publication papers including newsprint has been high in the past year while availability is diminished by several mills shutting down their publication paper and newsprint machines in the past four years. Indian paper mills are also exporting many types of paper and have raised prices for Indian printers. To some extent, this has helped in the recovery of the digital printing industry with its on-demand short-run and low-wastage paradigm.

Ultimately digital print and other digital channels will help print grow in a country where we are still far behind in our paper and print consumption and where digital is a leapfrog technology that will only increase the demand for print in the foreseeable future. For instance, there is no alternative to a rise in textbook consumption but this segment will only reach normality in the next financial year beginning on 1 April 2023.

Thus while the new normal is a moving target and many commercial printers look to diversification, we believe that our target audiences may shift and change. Like them, we will also have to adapt with agility to keep up with their business and technical information needs.

Our 2023 media kit is ready, and it is the right time to take stock and reconnect with your potential markets and customers. Print is the glue for the growth of liberal education, new industry, and an emerging economy. We seek your participation in what promises to be an interesting ride.

– Naresh Khanna

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