Home » 22 October 2019 » Where does India stand on the internet advertising revenue front?

Where does India stand on the internet advertising revenue front?

Image

 

The entertainment and media industry globally has been intertwined since the advent of the internet. Further, reestablishing revenue streams through advertising for content creators and promoters alike on the internet. This global expansion through the internet has made the world a significantly smaller place. However, despite this expansion, India is still a smaller market in comparison with other Asia-Pacific regions. However, with the heavy internet penetration backed by cheap data costs, the emolument can be gambled on Tier II and III cities.

Over a bracket of five years, India has faced head-on challenges in monetising content through advertisements. But the Indian media and entertainment industry is burning the candle on both ends to catch up to the global market.

According to a report by EY and FICCI (Federation of Indian Chambers of Commerce and Industry), this sector is ready to cross USD 33.6 billion by 2021 at a compounded annual growth rate (CAGR) of 11.6%. The sector was worth USD 23.9 billion in 2018, growing 13.4% from 2017.

The report further discloses that the media sector is growing faster than India’s GDP. Advertisement revenue

While linear mediums still retain the pole position as the largest segment, film and print are expected to overtake by 2021. Also, with gaming forging its way through to advertising, the revenue streams have only broadened.

The music segment in this sector has made a huge recovery due to digitisation. From a host of ever-growing audio streaming platforms, the user base grew by 50% in 2018.

Radio, on the other hand, grew from the additional inventory sold on stations operationalized during the last 18 months (though advertising volume drops were seen in some large markets) and from non-advertising revenues, led by events, activation, content production and syndication.

 

Advertising vs. Subscription

The maximum number of OTTs run on advertisements with a very weak strength in subscriptions. While the Indian user-base has options amongst OTTs and very cheap internet access, the preference of the users lies in shifting across the platforms than deciding to pay.

However, advertising in India grew by 12.7% in 2018, while subscription grew by 11.2%. The advertising revenue comprised 51.2% of the total in 2018. This is further expected to grow to 52.4% of the total by 2021. This growth has been led by digital advertising which was by 34% over 2017.
Subscription growth, meanwhile, was driven mainly by international film exhibition revenues, digitization of DAS-III and IV television markets and digital streaming on OTT video platforms.

Advertising
The good news for the subscription base of users is that Indians have started to pay for online content more than they used to. The estimate of the number of Indians who paid for any content in 2018 (not including those who consumed content through bundled telco offerings) increased from 7.5 million in 2017 to 12-15 million in 2018.

The digital subscription market accordingly grew 262% to reach INR 14.2 billion, of which the majority was video subscription. Telco bundling remained key, with an estimated 60% of consumption coming from such offerings.

 

 

While there is a lot of catching up to do for the Indian market, the U.S. digital advertising revenues reached USD 57.9 billion during the first six months of 2019. According to the latest IAB Internet Advertising Revenue Report released by IAB and prepared by PwC US, this is the highest spend in history for the first half of the year.

The record-breaking total marks a 17% year-over-year increase from the first half of 2018.

The key driver for this growth was cited as video advertising with 36% year-over-year to a total of USD 9.5 billion for the first half of 2019. Television, social video content and other types of non-conventional video content have acted as other factors in increasing investments from advertisers.

That said, audio advertising is rising with the emergence of smart speakers an up by 30% year-over-year to a total of USD 1.2 billion for the first six months of 2019. Also, mobile advertising reached USD 40 billion for the first half of the year. This was again a 29% increase from the USD 30.9 billion spent on mobile during the same time period in 2018.

The advertisers spent USD 1.7 billion on rich media ads during the first half of the year. An up by 20% which was more than they did during the first half of 2018.

That said, it draws us to one question, is it true that the bigger the investments, the higher the returns?

Musicplus Whatsapp

878total visits

Aakanksha Sharma

Author: Aakanksha Sharma

Leave a Reply

Your email address will not be published. Required fields are marked *

Top

Get Music Plus’s top stories, interviews
and gig updates delivered to your inbox.

We won’t spam you. Promise!