India’s digital media and entertainment industry, valued at $12 billion, is set for substantial growth, expected to triple by 2030, as per insights from Redseer, a strategy consulting firm.
The current growth is fueled by the rise in non-real money gaming (on RMG) and the widespread adoption of over-the-top (OTT) platforms for both audio and video content. Despite challenges such as a slowdown in digital advertising spending and regulatory shifts impacting the RMG sector, the industry’s overall trajectory remains strong.
India’s internet user base is diverse, with around 450-500 million explorers, 300-320 million transactors, and a smaller group of 35-40 million mature users, according to Redseer.
In the fiscal year 2023, there was significant growth in the media and entertainment landscape, particularly in the paid user base and average revenue per paying user (Arppu). The growth, up to 90% across various segments, is attributed to factors like subscription bundling, affordable plans, micro-payment options, and pay-per-view services.
However, the industry faces challenges such as high customer acquisition costs and low user retention rates. Potential strategies to address these issues include innovative monetization models, a focus on localized and regional content for tier-two and beyond demographics, and offering the first episode of original series for free on OTT platforms.
In the audio series and audiobooks realm, there was significant growth, with leading platforms experiencing a ninefold increase in FY23. This growth is attributed to an increase in paid users, engaging content, and flexible payment options.
The gaming segment is also undergoing a transformation, with a community of 150 million mid-core or core gamers emerging in 2023. This demographic, transitioning from casual gameplay, is increasingly making in-game purchases, leading to a 40% growth in paid users. The shift to mature gaming is also boosting the viewership of gaming livestreams.
Short-form video (SFV) platforms in India have a user base of 250 million, with two-thirds from tier-two and smaller cities. Around 40% of these users are active online transactors, presenting an opportunity for brand and advertiser monetization. However, monetization on Indian SFV platforms is still in its early stages, currently limited to advertising revenue and influencer marketing, according to the Redseer report
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