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India’s entertainment and media industry is expected to see a growth of 9.7% annually in revenues to reach $73.6 billion by 2027, according to a PwC report.

Evolving consumer preferences, increased internet access and emerging technologies are fast reshaping the entertainment and media (E&M) industry, PwC said on Tuesday in a report, titled ‘Global Entertainment & Media Outlook 2023-2027’, the 24th annual analysis and forecast of E&M spending by consumers and advertisers across 53 territories in 13 sectors.

For the industry, it said 2022 marked an important inflection point. The total global E&M revenue of $2.32 trillion witnessed a sharp decline from a 10.6% growth rate in 2021 to 5.4% in 2022. This sluggish E&M growth comes on the back of a decline in consumer spending.

For some key sectors, the surge in uptake and revenues experienced during COVID-19 ran out of steam, for example, podcasts, which were among the industry’s major success stories in the pandemic, fell by an estimated 80% in 2022.

The global slowdown was further pronounced in advertising, as the internet advertising segment—by far the single largest contributor to overall advertising revenues—saw sluggish growth in 2022, the report said.

In India, though, the picture is more promising. E&M revenue in the country witnessed a 15.9% growth to $46,207 million in 2022 as compared to 2021.

“In fact, the Indian market is poised to grow at a compound annual growth rate (CAGR) of 9.7% in the forecast period to reach $73,560 million in 2027,” PwC said.

Powered by over-the-top (OTT) platforms, the gaming sector, traditional TV, internet and out-of-home (OOH) advertising and the use of the metaverse, India’s E&M industry is expected to grow exponentially.

With multidisciplinary cultural spaces being set up in different metros, a rise in in-person events will also provide considerable room for growth as advertisers are keen to access India’s diverse demography and large live audiences.

The report said the launch of commercial 5G services in India in 2022 is an important factor shaping the E&M industry capex in 2023.

With new launches from international players and increasing ‘pay-lite’ options, OTT revenue surged in India to reach $1.8 billion in 2022—over six times the revenue in 2018 and a 25.1% increase from $1.4 billion in 2021, it said.

In India, the report added, the market will continue to grow at an impressive rate of 14.3%, yielding a revenue of $3.5 billion in 2027.

Manpreet Singh Ahuja, Chief Digital Officer and Leader of Technology, Media and Telecom at PwC India, said, “As the adoption of emerging technologies such as AI (Artificial Intelligence), ML (Machine Learning) and the metaverse increase, the range of use cases will broaden, leading to a significant disruption in the media industry. We anticipate that media and entertainment enterprises will invest heavily in the transformative ideas of the future to maintain relevance with their audiences.”

Rajib Basu, Partner and Leader, Entertainment and Media at PwC India, said that the Indian media and entertainment outlook for the next few years will show an exciting pace of growth. “We have a good view of how the industry has reset itself after the pandemic.”

“Increased mobile penetration and the use of digital technologies are poised to disrupt existing channels and create new possibilities in the years ahead for the sector.

“It is increasingly becoming important for traditional media and entertainment businesses to adopt the right strategies for growth as they face competition from digitally powered businesses,” Basu said.

According to the report, India bucked the global trends again this year and has emerged as the fastest-growing newspaper market, with both print and digital segments registering a CAGR of 3.212%.

Stressing that deals will continue to be a means of gaining scale, it noted that in February 2023, the Competition Commission of India (CCI) conditionally approved the $10 billion merger between two large media conglomerates, paving the way for the creation of one of India’s largest conglomerates spanning television channels, digital platforms, and content production.

The report further said that there is a huge long-term potential for the OTT and connected TV (CTV) market in India, courtesy of the size and diversity of the country’s population. OTT video will continue to get its boost from regional play.

“While the global growth rate for the OTT segment is 8.4%, India is way ahead with a CAGR of 14.32%,” it said.

On gaming and e-sports, it said India is poised to be one of the fastest-growing markets (currently it is Saudi Arabia) in the world for e-sports with market revenue forecast to grow from $7.6 million in 2021 to $21 million in 2027.

The report also said among its other uses, generative AI will enable brands to reach across the country’s many languages and regions with generic templates that can be adapted and customised to different geographies with local messaging.