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Tag: KPMG 2019

  • Digital segment projected to reach Rs 386 billion by FY22: KPMG

    Digital segment projected to reach Rs 386 billion by FY22: KPMG

    MUMBAI: The digital segment of the India media and entertainment industry is projected to reach Rs 386 billion by FY22 from Rs 173 billion in FY19. The burgeoning sector is set to overtake print media and be behind TV within the same period, according to India’s Digital Future, a report by KPMG. By FY24, the digital market will be half that of TV in the Indian economy.

    Moreover, advertising growth will also be driven by the digital billion with close to 580 million OTT consumers by FY24. The report also added that with the proposed third party digital measurement systems coming into place in India over the next 12 months, the CPMs are also likely to see some growth from FY21 onwards, contributing to the overall growth of the segment. As per the report, video ads on OTT platforms are likely to constitute the bulk of the segment revenues.

    On the other hand, the revenue from OTT digital video is expected to reach 129 billion by FY22. While Indian OTT market’s revenue will continue to be dominated by advertising, the direct subscriber base in India will rise to as much as 55-65 million by FY24, driven by the availability of high quality content curated for different audiences.

    While the subscription revenues registered a nearly 3x increase in FY19, totalling Rs 12 billion, direct subscriptions contributed around 65-70 per cent and the rest were realisations from telco partnerships. Despite the growth of direct subscriptions, the revenue from telco partnerships is also expected to achieve robust growth, although slower as compared to direct subscriptions.

    The digital consumers have also been divided into four categories. The digital sophisticates who consume global content and tent-pole, original Indian programming tailored for the urban audience, typically behind a paywall in English and Hindi. The second is digital enthusiasts who will watch mainly Indian narratives in Hindi and regional languages and some pockets of English. The third is digital mainstream who are looking for free content available online or bundled plans through telcos and other distribution platforms and the last is fringe users who will have sporadic digital access on account of either poor connectivity or irregular income.

    On the course of digital segment evolution, technology and associated tools such as artificial intelligence will provide much needed direction around decisions relating to content creation, distribution and monetisation for digital businesses. It has also been pointed out that micro-segmentation of target markets in an increasingly upwardly mobile economy would be essential for effective monetisation.

  • TRAI tariff order impacted uptake of niche channels: KPMG

    TRAI tariff order impacted uptake of niche channels: KPMG

    MUMBAI: Even as TRAI is mulling over changes to its existing tariff order, a report by KPMG, India’s Digital Future, highlighted that niche channels were affected especially due to lesser focus on such channels in broadcaster packs.

    “The uptake of niche channels has suffered in the new regulatory environment as broadcasters focused on creating packs that ensured pick-up of their GEC and movie channels with DPOs building on top of them with FTAs at their disposal. While niche channels belonging to larger broadcasters are likely to do better than others in the long run owing to the network effects enjoyed by their parent company, they will still need to be innovative in order to survive and remain relevant in the long run,” the report read.

    According to the report, niche genres on TV in this new era are expected to be under pressure from rival offerings on digital platforms. It also added the English channels are also likely to encounter challenges in terms of viewership and subscription in the new regime. But the uptake of pay regional channels, especially top GECs and movie channels, has remained firm in the regional markets in the new regime, particularly in the Southern markets.

    Despite the tariff order giving consumers options to choose channels, the report noted that initial trends indicate that the monthly bills of viewers wishing to watch the same number of channels as earlier has gone up significantly. However, the ARPUs have increased across all the markets with phase III and phase IV markets witnessing massive growth of 30-35 per cent in average realisations.

    “This choice of channels has come at a dearer price for individuals at the lower end of the ARPUs who are either paying more for watching the same number of channels or are content with lesser number of channels at their disposal. As per industry discussions, some choice is taking place at the higher end of the subscription pyramid, leading to lower TV bills, however, the same is definitely accompanied by a lower number of viewable channels at the disposal of the consumers,” the report added.

    It went on to say that viewership and reach for the TV universe is likely to change as the effects of NTO start to play out. But it also added that the broadcasters will need to renew focus on content quality to ensure survival and pick-up of their channels.