5 Key Trends in Media & Entertainment Industry to Watch Closely in 2023

Despite optimistic growth projections, the media and entertainment industry in India is at a tipping point. This is where it’s headed over the next year.

Projected to grow to $55-70bn by 2030, India’s Media & Entertainment (M&E) industry is undergoing a number of shifts. From changing composition of long-established share of channels like TV and filmed media to the rise of OTT and short-form video content, the industry is currently in one of its record growth phases. In turn, digital advertising will grow to $3.09bn this year, and increased FDI limits will result in the entry of external players into the market. Moreover, the consumption of content in regional languages will surge as internet users grow at a CAGR of 45% through 2025 along with increased network penetration. How will these factors shape the M&E industry in 2023? Let’s take a look.

M&E in 2023: 5 key trends

#1 Niche OTT platforms to have exponential growth

While OTT revenues led by subscription services are expected to grow to 21,000 Cr by 2026, audiences are beginning to lean towards services that cater to their own unique interests. In other words, niche OTT platforms with greater regional content will continue to expand that serves a diverse Indian audience.

To truly serve niche interests, OTT platforms will have to find unique ways of engaging their subscribers – for instance, by reaching out to them via influencers or reaching out to them on social media. There is more than just AI algorithms and personalised delivery that underpins this trend.

#2 Mobility will continue to drive the shift in content consumption pattern

Today, users exhibit greater mobility between devices and platforms. With the availability of high-speed broadband even in Tier 2 and Tier 3 towns, and growing sales of smart TV sets, omni-channel delivery has taken on new definitions. Users now watch their favourite shows on mobile when on the move, on their work laptops on a WFH evening, and on the big screen when it's time to unwind.

In this landscape, leading players will reach their users at every point of presence and deliver experiences with continuity across all the channels. In other words, Netflix-like experiences will be democratised, and channel agility will become the baseline of customer excellence.

#3 Greater AR, VR and metaverse adoption will create new opportunities

With the reducing cost of Augmented Reality (AR) and Virtual Reality (VR) sets, the AR/VR industry is expected to expand at a CAGR of 38% until 2027. As this technology goes mainstream, the redefinition of immersive entertainment is up for grabs – and leading M&E players are already experimenting with the technology along with new start-ups.

The onset of metaverse will create limitless possibilities which will further drive the demand for digital infrastructure.

At the moment, the technology is ripe for disrupting the gaming space, especially as mainstream smartphones now come with greater computational capabilities.

#4 Personalization will continue to be the big differentiator

While subscription models offer greater certainty when it comes to revenue projections, the cost of switching between services is essentially zero for users in the M&E industry. With competing services from multiple players across each segment, this high-mobility user base will inevitably opt for providers that offer the best experiences.

While growth becomes a game of user retention, personalization will win the day for M&E players. Hunting for the next-best watch, which ultimately subtracts from the user’s entertainment time, is fast becoming a hallmark of poor experiences, whereas YouTube-like recommendation algorithms are coming to define the ceiling of personalised delivery.

With a lower entry barrier for technologies like Artificial Intelligence (AI), even small and midscale M&E players will find themselves well-positioned to lead this wave of personalization.

#5 TV advertising will bounce back

At the start of 2020, TV advertisement suffered ~11% decline in comparison to 2019 levels. But the sector has not only bounced back strong in 2021 but continues to witness significant momentum. While the TV segment is contracting in the share of M&E services, it is still expected to remain the largest sector as it grows at a CAGR of 7% through to 2024.

Now with 890 mn viewers, television continue to attract strong interest from advertisers. In 2023, TV advertising is expected to grow to $4.89bn, up from $3.56bn in 2020. However, because the demography of viewers is now skewed towards Tier 2 and Tier 3 towns, its clientele is likely to see a shift in composition, as a result.

What next?

2023 will be an exciting year for the M&E industry especially in the light of expanding 5G networks, more capable devices, and new innovations with AI and XR technologies. In addition to the above-mentioned trends, the industry is likely to see significant disruptions from players that exude a high digital quotient as new opportunities lie abound.