Falling subscriptions, slowdown in animation, VFX taper entertainment sector's growth in 2024

M&E sector growth slows down in 2024.

Falling subscriptions and lack of work in the animation and visual effects sector slowed down the media and entertainment sector's growth in 2024, according to a report released by Ficci (Federation of Indian Chambers of Commerce and Industry)_and E&Y (Ernst & Young).

The report, 'Shape the future: Indian media and entertainment is scripting a new story', was released on March 27.

The Indian media and entertainment (M&E) sector touched Rs 2.5 lakh crore ($29.4 billion) last year.

It grew by Rs 8,100 crore from the previous year -- a 3.3 percent increase. Growth slowed down from 8.3 percent in 2023, due to falling subscription revenues, and a global decline in animation and visual effects (VFX) work outsourced to India, the report said.

Hollywood writers' strike hits business

Hollywood writers' strike and struggling international studios led to a 9 percent revenue decline in the animation and VFX sector last year. Reduced broadcast ad revenues also impacted the production of animated content in India.

On the television front, linear TV revenues fell for the second consecutive year, with a 6 percent drop in advertising revenue and a 3 percent decline in subscription revenue. Pay TV homes decreased by six million, while free TV and connected TV homes increased. Weekly active connected TVs grew to 3 crore in 2024 from 2.3 crore in 2023.

On the other hand, digital media overtook television to become the largest segment within the M&E sector, contributing 32 percent to the overall revenues.

Digital advertising grew 17 percent to reach Rs 70,000 crore, which is 55 percent of the total advertising revenues. Growth was led by short video and social media and e-commerce advertising, which reached Rs 14,700 crore.

Digital media is expected to be the first M&E segment to cross Rs 1 lakh crore in ad revenues in 2026.

Kevin Vaz, Chairman, FICCI, Media and Entertainment Committee said India is a unique market where television and digital media are thriving together. He said that television will grow from 190 million households in 2024 to 214 million households by 2026, while digital platforms continue to soar, creating a dynamic media ecosystem.

"Sports, especially the IPL (Indian Premier League), continues to drive content consumption, demonstrating the power of both TV and digital, reaching 525 million viewers on TV and 550-600 million on streaming platforms. This is the Indian way – embracing innovation without abandoning tradition. With the IPL 2025 underway in full fervor, it will be exciting to see how it reaches new heights and break records across both TV and digital platforms once again."

He added that OTT (over the top platforms) is set to become a major force in digital entertainment, while television remains the bedrock of our industry, commanding over 30 percent of the market.

"Looking ahead, India is on track to become the third-largest media and entertainment market by 2028, duly reflecting the amount of content being produced and consumed in this country," Vaz said.

The Indian M&E sector is expected to grow by 7.2 percent in 2025, reaching Rs 2.7 lakh crore ($31.6 billion), and expand at a Compound Annual Growth Rate (CAGR) of 7 percent to reach Rs 3.1 lakh ($36.1 billion) by 2027.