While the time was tough for the media and entertainment industry last year due to the coronavirus outbreak, two sectors brought some relief to the industry.
Out of the 12 segments in the media and entertainment space, only digital subscription and online gaming grew last year while rest of the segments saw a decline, according to FICCI-EY report titled 'Playing by new rules' which was released on March 26.
Every segment in the media and entertainment industry saw a double-digit decline last year except music and digital advertising which saw neither positive nor negative impact due to the pandemic.
On the other hand, both digital subscription and online gaming saw growth in double digits.
Digital subscription grew by 49 percent whereas online gaming segment grew by 18 percent in 2020 as compared to 2019.
When it comes to digital subscriptions, revenue coming from video subscriptions grew 50 percent in 2020 as premium content originals and sports went behind the paywall, particularly during the pandemic.
-As many as 29 million subscribers paid for 53 million over-the-top (OTT) video subscriptions in 2020 and this is excluding subscriptions bundled along with data plans.
"Video subscriptions grew largely due to the Indian Premier League (IPL) going behind paywall. Then direct to digital releases also had an impact on this (video subscription) growth and the last factor was lack of fresh content on TV for several months," Ashish Pherwani, Partner and Media & Entertainment Leader, EY India, told Moneycontrol.
In terms of direct to digital releases, Amazon Prime Video pointed out that Varun Dhawan and Sara Ali Khan's Coolio No. 1 and Vidya Balan-starrer Shakuntala Devi was the most watched Bollywood movie both in and outside India.
In fact, Coolie No.1 recorded viewership from viewers across 3,700 cities and towns in India and 165 countries on the film's opening weekend.
While sports and digital first movies were the primary factor for the growth in video subscriptions, Pherwani pointed out another aspect as well.
He said, "There is a fourth reason that some of the CEOs mentioned and that is pricing of TV increasing due to NTO (New Tariff Order). It has kind of reduced the difference between TV especially for viewers watching more English content."
Content is king
When it comes to content, as Pherwani mentioned, video OTTs offered a lot of new content to viewers last year which was around 1,200 hours of original content across films and web series and this helped increase the demand for OTT subscriptions.
However, there was a reduction in number of original titles even on streaming platforms as total number of titles reduced to 220 last year from around 385 in 2019. Even the investments by OTTs on content came down as platforms spent Rs 1,020 crore last year as compared to Rs 1,400 crore in 2019.
But for this year, video OTTs are geared up to offer as many as 500 original titles, according to the report.
Along with video OTTs, audio streaming platforms also helped in the overall growth of digital subscriptions. However, the growth was slow for audio OTTs as they grew at 15 percent in 2020 due to availability of several free products which reduce the need to subscribe.
In addition to video and audio OTTs, the report bets big on online news platforms and estimates that news and related products are likely to generate subscription revenues of Rs 400 crore by 2023.
Overall, subscription revenues are expected to grow at 25 percent CAGR (Compound Annual Growth Rate) as paid subscriptions are likely to double to over 100 million by 2023, the report noted.
Online gaming grew and how
The other sector that brought cheer to the media and entertainment industry is online gaming.
Online gamers grew 20 percent to reach 360 million in 2020. Transaction-based game revenues grew 21 percent, while casual gaming revenues grew seven percent. For gaming apps, users invested in in-app purchases which grew 15 percent last year while advertisement revenues grew eight percent.
The online gaming segment which in 2020 recorded overall revenue of Rs 7,500 crore is expected to become the third largest segment of the media and entertainment industry. Currently, online gaming is the fourth biggest and is preceded by the print segment.
Overall, while segments like print, films de-grew last year by an aggregate of Rs 46,700 crore, digital media and online gaming brought some respite as the segments added an aggregate of Rs 2,600 crore to the total revenue of the media and entertainment industry.