TV Still King in India as Digital Closes Gap on Film, Print: FICCI-EY Report

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TV Still King in India as Digital Closes Gap on Film, Print: FICCI-EY Report
Highlights
  • 60 percent of streaming video consumption is telco-driven
  • Catch-up TV accounts for 70-90 percent of online viewing
  • Streaming services paid big for Bollywood satellite rights

Though television is king in India and will remain so for the near future, digital media is expected to overtake the world of film and print by 2019 and 2021, respectively, according to a new report by Ernst & Young, released during the annual Frames conference in Mumbai, organised by the Federation of Indian Chambers of Commerce and Industry (FICCI). India's media and entertainment sector — which comprises TV, print, film, digital, animation and VFX, live events, online gaming, and radio among others — grew 13.4 percent year-over-year to reach Rs. 1.67 trillion (about $23.9 billion) in 2018, per EY, which estimates it will bloom into Rs. 2.35 trillion (about $33.6 billion) by 2021.

Online gaming and digital media led that growth, the EY report says. Real-money gaming — fantasy and e-sports — and casual gaming the main benefactors in the former, pushed by a 52 percent growth in total gamers that now number 278 million. Meanwhile, digital subscriptions grew by 262 percent in India — the market now estimated at Rs. 14.2 billion (about Rs. 204 million) — with the majority driven by video streaming. 60 percent of streaming video consumption is thanks to partnerships with telecom operators such as Airtel and Vodafone, which provide free access to Amazon Prime Video and Netflix for a limited time.

Over 200 million people watched digital content owing to telco bundling, according to the EY report, with the companies spending about Rs. 3.5-4 billion (about $50-57 million) to acquire content. Paid subscriptions increased from 7 million in 2017 to around 12-15 million in 2018, which is still less than 5 percent of total video consumers, estimated at 325 million in 2018, a growth of 25 percent. Indians spend 30 percent of their phone time on entertainment, the report adds.

In terms of content, catch-up TV is 70-90 percent of what viewers see on online platforms of large broadcasters, but that isn't keeping other companies from spending big on original content. EY notes that Zee is the largest spender with Rs. 25-30 billion (about $359-431 million), with Amazon and Netflix spending Rs. 10 billion (about $143 million) combined, and Hotstar promising to spend Rs. 1.2 billion (about $17 million) on its new slate, dubbed ‘Hotstar Specials'. Demand for originals increased by around 1,200 hours in 2018, EY states.

Streaming services are also helping Bollywood, with satellite rights being sold for big bucks. EY says Amazon leads the race, having picked up 13 of top 25 box office earners between June 2017-18. Padmaavat was one of them, whose digital rights reportedly went for Rs. 800 million (about $11.5 million). Sanju — another top earner at the box office — earned Rs. 500 million (about $7 million) in satellite rights. The box office failure, Race 3, recovered much of its budget via broadcast rights: Rs. 1.5 billion (about $21.5 million), reportedly the highest ever in Bollywood. Total expenditure grew from Rs. 8.5 billion (about $122 million) to Rs. 13.5 billion (about $194 million).

That said, Hindi-language films still had the best year at the Indian box office, garnering Rs. 35.2 billion (about $505.7 million) in net collections. Hollywood films too had a successful year in India, accounting for 10 percent of the total box office in the country. Local ‘dubbed' versions in Hindi, Tamil and Telugu make up 50-60 percent of Hollywood revenue in India. The biggest earner, by far, was Avengers: Infinity War with Rs. 2.22 billion (about $31.8 million), making up one-fourth of all Hollywood revenue in India.

It was followed by the likes of Jurassic World: Fallen Kingdom (Rs. 826 million), Mission: Impossible – Fallout (Rs. 802 million), Deadpool 2 (Rs. 580 million), Aquaman (Rs. 526 million) and the Oscar-winning Black Panther (Rs. 525 million). In total, Hollywood earned Rs. 9.21 billion (about $132 million) in net collections, with the top 10 films making up Rs. 7.5 billion (about $107 million).

The biggest hindrance to India's film sector is the lack of screens and screen penetration in tier-II, tier-III and tier-IV cities, per the EY report. India (9,601) has less than 25 percent of screens compared to the likes of China (55,623) and the US (40,837). Multiplexes account for a large portion of that and contributed around 55 percent of the domestic box office.

Over in television, the total time spent watching increased to 3 hours 46 minutes per day, estimates EY, with 77 percent of that time spent on general entertainment and movie channels. A third of total TV viewership in India comes from young people aged 15-30. And surprisingly, wrestling overtook cricket as the most viewed sport, narrowly beating it out with 20 to 19 percent of the share. The report also notes that number of Indian households with TVs grew 7.5 percent to 197 million, while HD viewership increased by 57 percent.

Lastly, the audio streaming sector grew by 62 percent to reach Rs. 800 million, with the user base growing by 50 percent to 150 million unique users. But despite the relatively low pricing to international markets, the EY report says, the percentage of paying subscribers for music in India is negligible, between 1 and 1.5 million, which is less than 1 percent. Piracy remains a big issue, with 76 percent of Indians surveyed admitting doing so.

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