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Digital Transformation to Boost Indian Media Revenue Growth to 8% by FY2027

The Indian media industry is projected to witness annual revenue growth of 8% by FY2027, driven by the increasing shift toward digital platforms, according to a recent CRISIL Ratings report. This marks an improvement from the 5% annual growth recorded between FY2019 and FY2024. The report, which analyzed 20 media companies accounting for 55% of the industry’s revenue, estimates that media revenue will reach approximately ₹60,000 crore by FY2027. Alongside revenue expansion, operating margins are expected to improve by nearly 500 basis points (bps) to 18%, aided by cost rationalization. Key Growth Drivers: Rising digital ad revenue as consumer preferences shift to online content Growth in traditional ad revenue from print, fueled by domestic retail demand in FMCG, automobiles, education, e-commerce, and real estate Increasing smartphone penetration, low-cost mobile data (approx. $0.2 per GB), and widespread 5G adoption Despite the delayed digital transformation by Indian media firms, the segment’s revenue share is expected to increase from 12% in FY2024 to over 18% by FY2027. However, high manpower, content creation, and marketing costs have kept digital ventures unprofitable, with the industry reporting a 20% operating loss in FY2024. Manish Gupta, Senior Director at CRISIL Ratings, stated: “To better leverage the digital wave, media companies have begun focusing on OTT platforms, social media, and mobile apps.” However, improved targeted advertising and customer segmentation are expected to enhance digital profitability, according to Ankit Hakhu, Director at CRISIL Ratings. At least 8 out of 20 companies in the study have successfully identified the right audience fit, allowing for more cost-effective promotional strategies. The report also warns of potential risks, particularly fluctuations in newsprint (NP) prices, which account for 30-40% of costs. Unexpected price surges, like the 23% spike in FY2023, could impact overall industry profitability. Conclusion: With an accelerated digital shift and stronger ad revenues, India’s media industry is poised for sustained growth. However, firms will need to optimize digital investments and mitigate supply chain risks to fully capitalize on this transformation. Source: Business Standard

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Karnataka Government Introduces Welfare Bill Imposing Cess on TV Channels, OTT Platforms, and Multiplexes

The Karnataka government has passed the Karnataka Cine and Cultural Activists Welfare Bill on July 26, 2024, aimed at supporting the entertainment sector by introducing a new cess on TV channels, OTT platforms, and multiplexes operating within the state. The bill, as reported by CNBC-TV18, seeks to provide financial aid to cine and cultural activists, thereby enhancing the welfare of individuals working in Karnataka’s cultural industries. The legislation imposes a cess of up to 2% on the revenues of TV channels and OTT services derived from Karnataka. This cess will be applied to cinema tickets and subscription fees, ensuring that it is paid based on the revenue generated within the state. Companies are required to remit the cess by the 9th of every month, as mandated by the bill. The primary objective of this initiative is to bolster financial support for the state’s cultural sector. By directing the collected funds towards cine and cultural activists, the Karnataka government aims to improve the livelihoods of those involved in the cultural and entertainment industries. The introduction of this cess marks a significant step in recognizing and addressing the financial challenges faced by individuals in the cultural sector. It is expected to provide much-needed relief and support, ensuring the continued growth and sustainability of Karnataka’s vibrant cultural landscape.

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The Evolution of Streaming Services: From Cable TV to Digital Domination

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The advent of the internet has transformed nearly every aspect of our lives, and the entertainment industry is no exception. Gone are the days when families gathered around the television to watch their favourite shows at a prescribed time. The rise of streaming services has ushered in a new era of entertainment consumption in India. In this blog, we will explore the evolution of streaming services in the Indian context, from the early days of cable TV to the current era of digital domination. The Cable TV Era For decades, cable television was the primary source of entertainment for Indian households. It brought a variety of channels into our homes, offering a mix of regional and international content. Cable TV allowed viewers to watch news, sports, movies, and TV shows, but it had its limitations. Viewers had to adhere to fixed schedules, missing out on shows if they weren’t home at the right time. Moreover, the content was limited, and viewers had little control over what they could watch. The Birth of DTH Services The introduction of Direct-to-Home (DTH) services in the early 2000s marked a significant shift. DTH providers offered a wider range of channels and improved picture quality. Viewers could now choose from various subscription packages, customizing their entertainment experience to some extent. However, the fundamental constraints of scheduled programming and limited content still prevailed. Also Read: Top 12 Reasons to Attend the ArdorComm ELSA Summit in Bengaluru on 22nd Sept 2023 The Streaming Revolution The real revolution began when streaming services entered the Indian market. Netflix, Amazon Prime Video, and Hotstar (now Disney+ Hotstar) were among the pioneers. These platforms allowed users to stream content over the internet, breaking free from the shackles of cable TV schedules. Netflix: Netflix made its debut in India in 2016, introducing a vast library of international and original content. Its ad-free, on-demand streaming model was a breath of fresh air for viewers tired of commercials interrupting their favourite shows. Amazon Prime Video: Amazon Prime Video followed suit, offering a mix of original series, movies, and a diverse catalogue. It also bundled its streaming service with its Prime membership, attracting a considerable audience. Hotstar (Disney+ Hotstar): Hotstar gained popularity for its sports content, including cricket matches and the Indian Premier League (IPL). The platform also featured a wide array of Bollywood and regional content. The Evolution of Regional Content One of the most significant advantages of streaming services was their focus on regional content. India is a diverse nation with multiple languages and cultures, and streaming platforms recognized the importance of catering to these differences. They began producing and showcasing regional content, including web series, movies, and documentaries, attracting a more extensive and diverse audience. Also Read: Eco-friendly Living for Better Health: How Sustainable Choices Improve Well-Being Original Content Boom Streaming platforms not only brought international content to Indian audiences but also invested heavily in producing original Indian content. Shows like “Sacred Games,” “Mirzapur,” and “Paatal Lok” became cultural phenomena. The quality of storytelling, production values, and the freedom to explore diverse themes set a new benchmark for Indian entertainment. Accessibility and Convenience One of the key reasons behind the digital domination of streaming services is their accessibility and convenience. Viewers can watch content on their smartphones, tablets, laptops, or smart TVs, anytime and anywhere. Mobile data becoming more affordable and widespread further facilitated this shift. The Rise of Competition As streaming services gained momentum, more players entered the Indian market. Disney+ Hotstar, Voot, ZEE5, SonyLIV, Jio Cinema and others offered a plethora of options. This competition not only led to a wider choice of content but also competitive pricing, benefitting consumers. Also Read: ArdorComm ‘New Normal – Education Leadership Summit & Awards 2023’ to be held at Bengaluru, Karnataka on 22nd September 2023 #ELSABengaluru #ELSAKarnataka Challenges and Future Prospects While streaming services have come a long way, they are not without challenges. The digital divide still exists in India, with rural areas lacking reliable internet access. Additionally, the rise of OTT (Over-The-Top) platforms has led to discussions about content regulation, which is an ongoing debate. In the future, we can expect further growth and innovation in the streaming industry. The integration of augmented reality (AR) and virtual reality (VR) into content consumption, interactive storytelling, and personalized recommendations will likely play a significant role. Regional content will continue to flourish, and more players may enter the market. Conclusion The evolution of streaming services in India represents a remarkable journey from the constraints of cable TV to the boundless freedom of digital streaming. The combination of accessibility, convenience, and a diverse content library has propelled streaming platforms to the zenith of entertainment in the Indian context. As technology continues to advance, we can only envision a future brimming with exciting possibilities for this ever-expanding industry. The story of streaming services is one of relentless innovation, expanding horizons, and a renaissance of storytelling, and it continues to captivate audiences across India. The author, Pratik Ghosh is associated with ArdorComm Media

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