Union Budget 2024 Unlikely To Favour M&E But Some Segments To Shine Bright

As one of the most successful economies in the world, India undeniably possesses a vibrant and robust media and marketing ecosystem. Giving credence to the rise in digital adoption, deeper internet penetration and affordable and accessible smartphones, it has positioned the Indian media and entertainment (M&E) sector on a promising pedestal. The narrative of the country's growth story will further see the M&E sector grow and become a key driver to take the economy to $1 trillion. Government initiatives like 100 per cent FDI in teleports, mobile TV, cable and DTH satellite platforms, publishing and film industry status have given the sector further impetus.

Anurag Thakur, Union Information and Broadcasting Minister, also stamped India into becoming the third-largest media and entertainment market in the world in the next five years.

The Broad Strokes

Sadly, the strong emphasis on the sector and its propitious propositions has not been reflected in the Union budget announcements in the past. While industry experts bet big on the overall Indian economy, the M&E sector has not been able to drive big numbers or meaningful conversation as yet. Is the same trend expected to continue this year as well or will 2024's budget write its name in history?

On this, Sam Balsara, Chairman, Madison World comments, ”2024, being an election year, the government has already indicated that the Union Budget will not have any major proposals. So, it is highly unlikely that the budget will have anything significant for the M&E sector." 

However, outside of the budget, the government has been taking several proactive steps to protect the consumer against misleading advertising through DOCA, CCPA and strengthening the hands of ASCI. The Cable TV rule clearly says that no ads that violate the ASCI code can be run on TV and he is confident that a similar provision will be incorporated into the appropriate legislation for digital, print and radio in the months to come. 

"If consumer confidence in advertising is lost, the marketing, advertising and media communities lose the most. If confidence goes up, this industry has a lot to gain," he asserts.

Speaking for the radio industry in particular, Nisha Narayanan, COO & Director, Red FM and Magic FM mentions that beyond the budget recommendations, she is particularly optimistic about the recent TRAI recommendations regarding license fee calculations, infrastructure strengthening and the introduction of new formats in the digital realm will be duly addressed

"The recent impetus given by the Ministry of Information and Broadcasting (MIB) to radio networks through increased ad rates is a welcome step for the industry to flourish further. There has long been a demand from FM radio players for news and live sports broadcasts and government support is anticipated in this regard. Similarly, we are hopeful that the upcoming new station auctions will be made more rational and financially viable, aligning with TRAI recommendations," she adds.

OTT And Gaming Expected To Reap Greater Benefits

With digital at the helm, it has put a stronger spotlight on sections like OTT, gaming, VFX and animation. Indian OTT's scaling prospects as well as the rise in its subscribers and investments signal its thick role in advancing the M&E sector. Additionally, mobile gaming, driven by influencers and live streaming, is gaining popularity, with online gaming valued at $1.2 billion in 2021 and expected to reach $1.9 billion by 2024, reports Invest India. And animation and VFX, with their immersive visual experiences, play pivotal roles in creating captivating content across various mediums.

"On the positive side, OTT platforms stand to benefit from expectations of light-touch regulation, fostering growth in newer areas. The potential GST rationalisation for the radio sector could offer a boost, aiding audience expansion and technological integration. Additionally, clarity in taxation models and regulatory aspects is anticipated to create a conducive environment for the online gaming industry, promoting further growth," comments Vineet Bajpai, Founder & CEO, Magnon Group. 

While the primary market share is held by TV, print, OOH and activations, the new-age mediums are expected to grow faster and more aggressively. In the era of performance metrics, the new media is believed to deliver superior ROIs to investors.

Even Mohanraj Jagannivasan, CEO- Consumer Business, Duroflex, feels that the channels that will benefit the most from this are OTT, CTV and online audio and video streaming platforms because of the availability of on-demand content and regionalisation. "The first quarter will see a huge influx of investment into media and advertising due to IPL and then good content is what will keep the bandwagon going," he says.

As a result, these segments are not just trends; they are powerful drivers of audience engagement and revenue. The evolving preferences of consumers and the innovative capabilities of these sectors position them as key contributors to the overall success and growth of the M&E industry. 

The Winning Wishlist

As we approach the upcoming budget, there are many expectations and needs for strategic investment to align with the evolving advertising landscape shaped by increasing internet penetration and digital transformation. "The major aspect is the call for increased investment in digitalisation and infrastructure development to fuel the growth of digital and physical advertising opportunities. The government should focus on increasing digital adoption among audiences other than youth, making it easier for advertisers and brands to reach a large audience. Also, it is expected that the government facilitates the entry of new businesses into the market that foster innovation and expand the range of services available to citizens," points Shradha Agarwal, Founder and CEO, Grapes.

With the budget for 2024, consumption in the country is expected to rise with the growth in e-commerce, resulting in more opportunities for brands and advertisers to capitalise on.

Narayanan agrees that traditional and new media must coexist, creating a space for each other to thrive. "We are hopeful that the government will address the need for uniform taxation and benefits for the traditional media. We expect the government to adopt a cautious and rational approach, striving for a balanced budget that fosters the prosperity and growth of both traditional and digital media," she says.

Bajpai also emphasises that strategic investments in cutting-edge technologies like AI and AR, are not merely luxuries but essential tools to propel our industry forward. "It's time to gear tax incentives towards fostering creativity and talent development. Also, recognising the pivotal role of high-speed internet in the digital age, I recommend substantial investments in upgrading digital infrastructure. Finally, prioritising the expansion of the M&E industry in the global market is not just about growth; it's a strategic imperative. Facilitating international collaborations and easing regulatory constraints will not only open new avenues for growth but also position our industry as a global force," he sums up.

This industry wishlist isn't just about the present, but a blueprint for a resilient, innovative and globally competitive future for our industry. It's time for the budget to reflect the transformative potential of this sector.

On the other side, navigating this landscape will require industry players to stay agile, adapt swiftly to potential changes and maintain flexibility in response to the evolving economic and regulatory environment.