No big ticket M&A deals, says FICCI-EY report
The Indian Media and Entertainment (M&E) sector is expected to reach Rs.2.23 trillion (US$30.6 billion) by 2023 at a CAGR of 17%, according to a FICCI-EY report ‘Playing by new rules’ launched on 26 Mar 2021.
It is expected to grow by 25% in 2021 and is expected to reach Rs.1.73 trillion (US$23.7 billion). It was down by 24% to Rs.1.38 trillion (US$19 billion) in 2020.
The sector continued to witness moderate Mergers and Acquisitions deal activity, despite major disruptions brought by the COVID-19 outbreak. Although the number of deals increased from 64 in 2019 to 77 in 2020, deal value reduced to Rs.68 billion in 2020 from Rs.101 billion in 2019.
This was largely due to the absence of big-ticket deals with only two deals crossing the US$100 million threshold as compared to four such deals in 2019.
Digital media and online gaming were the only segments that grew in 2020 adding an aggregate of Rs.26 billion. Other segments had de-grown by an aggregate of Rs.467 billion. While M&E as a sector has usually grown and often outperformed India’s nominal GDP, the sector fell three times (3x) India’s nominal GDP fall by 8% due to the discretionary nature of the spend.
FICCI Secretary General Dilip Chenoy said that though the media and entertainment sector has been largely impacted by the pandemic, the positive news is that the digital subscription has grown by 49% and the online gaming industry has grown by 18%.
He further mentioned that different sectors of the media and entertainment industry will take different time to recover and this makes the report more crucial.
The M&E sector witnessed a shift in demand patterns as consumers actively sought alternatives and had the time to try new things, added Ashish Pherwani, Partner and Media & Entertainment Leader, EY India.
Consumption patterns shifted and increased across online news, gaming, and entertainment. The supply side too transformed as companies took the opportunity to reinvent themselves.
Every segment redefined itself across verticals by becoming medium agnostic and embedded video, audio, textual and experiential products to enhance their offerings.
However, the compelling content created around news and escapism, and the passion to build some of India’s most powerful brands remained resolute, said Pherwani. #banking #media #investment /fiinews.com
