Mumbai: The revenue generated by India’s online broadcast and video sector increased by 159 per cent between 2012 and 2019.to reach $483 million. This is expected to touch $2.6 billion by 2025, according to a new report.
A white paper by Frontier Economics in partnership with Creative First, FICCI, Producers Guild of India and Motion Pictures Association Asia Pacific found that online curated content (OCC) providers’ investment in content and production was not only a significant engine of growth within the media and entertainment industry but also the wider economy. According to it, 60 per cent of production costs are spent outside the specific M&E sector in the general economy to support media companies’ investments, for example on catering, hospitality, construction and legal services.
The proportion of the Indian population using the internet has almost tripled since the entry of OCC providers in 2012, mainly due to the government’s initiative, but in part due to demand for OCC services drawing people to increase their internet usage; 34 per cent of Indians now use the internet (compared to 12.5 per cent in 2012)
The research found that the geographic distribution of OCC investment in original titles is broadly proportional to each country’s number of global OCC subscribers, and as subscriber numbers continue to grow in India, so will investment in local and regional content.
Globally, OCC providers are expected to pump $61 billion into original and licensed content by 2024. They collectively invested $24.7 billion in content in 2020. In 2019, The Walt Disney Company, NBCU, WarnerMedia, and ViacomCBS collectively poured $45 billion into content spending and creation globally (excluding sports).
The study also showed that 56 per cent of hours watched on Indian OCC services was local content. It also found via a survey that 70 per cent of Indians consider it important that their OTT platforms provide local content.
Investments in content have a disproportionately large contribution to the GDP as it provides skilled, well-paid employment stimulates economic growth, and supports a country’s exports. Since producing top-quality content is costly and content creation is a risky investment, policies like tax rebates or subsidies mitigate the risk and have been found to significantly increase investments in content, according to Frontier Economics.
According to it, India’s existing policy framework has encouraged investments in the M&E sector and created a virtuous cycle of content creation and skill development. However, it pointed out that policies that discourage or constrain foreign investment and market entry can disrupt this virtuous cycle. “Protectionist policies intended to shield local companies from international competition could result in local industries that are inward-looking, less innovative and less able to produce high-quality content that is in demand internationally,” it said.
“A light touch regulation has been our intention, the government being an enabler, rather than bring any brakes to the system of decision making, investment and employment opportunities,” said the ministry of information and broadcasting joint secretary Vikram Sahay on Friday.
He added “Policy is always an evolving process with time, experience, and learnings. The government has always worked with the industry and other stakeholders, and we look forward to your suggestions and views. The industry has taken the Digital Media Ethics Code positively and has incorporated the spirit of the ethics code diligently in its decision-making process. The grievances received by the Government have drastically come down and it shows that the regulatory mechanism with the self-certification process is working well.”
