In this episode of The Media Room, Vanita Kohli-Khandekar speaks with Ashish Pherwani, Head of Media & Entertainment at EY, for a deep dive into the latest FICCI-EY report and what it reveals about the state of India’s media and entertainment industry.

Ashish breaks down the key trends shaping the sector, from the industry crossing ₹2.7 trillion to digital media emerging as the first segment to surpass the ₹1 lakh crore mark. He explains how advertising growth, government-led consumption, and the rise of SMEs are driving momentum, while also unpacking the evolving balance between television, digital, and emerging formats.

The conversation also explores shifts in consumer behaviour, the rise of connected TV and short-form content, and the growing importance of live experiences—from cinema to large-scale events. They discuss how monetisation models are evolving across platforms, why innovation in ad formats and content formats is accelerating, and what this means for both legacy and digital-first media companies.

From investments and consolidation trends to India’s potential as a global back-end for media services, Ashish outlines where the next wave of growth could come from—and why content quality remains the industry’s most critical driver in an increasingly crowded, AI-driven landscape.

If you want to understand where India’s media industry is headed, what’s driving growth across segments, and how business models are evolving—this episode is essential viewing.

NOTE: This transcript is done by a machine. Human eyes have gone through the script but there might still be errors in some of the text, so please refer to the audio in case you need to clarify any part. If you want to get in touch regarding any feedback, you can drop us a message on feedback@thecore.in.

TRANSCRIPT

Vanita Kohli-Khandekar: Hello and welcome to The Media Room. Last week the report which the entire media and entertainment industry in India uses as a benchmark to make all sorts of decisions came out. The Ficky Frames and EY report on the Indian media and entertainment industry was released at a function last week and the Indian media industry is now about 2.7 trillion rupees. The more interesting thing is Digital has crossed a trillion rupees, none of the other segments in this business had crossed a trillion rupees so that's a big thing. To speak to me more on this, I have with me the man who's responsible for this report, who puts it together and has been putting it together for nine years. Ashish Perwani is the head of the media and entertainment practise at EY.

Over to Ashish to unpack this whole report for you.

Ashish Pherwani: So Vanita, for you always and anytime because I think we've just known each other too long and we have too much fun together. Thanks for having me here. I think this year the top few messages, if I were to just take a step back and look at it, I think the first one is that finally the media sector grew faster than our nominal per capita GDP did and I think that is something that is a systemic difference from what we've seen over the last two years.

A lot of that had to do with the government's consumption focused budget, the increased capital expenditure of the government, the direct benefit transfers that happened, the GST rate rationalisations, the overall slowness in the interest rates and FDs and other things which got people out there spending and I think that's something that resulted in advertising growing by almost record over the last few years that I can remember at over 13 percent, right?

And crossing one lakh crore, 50,000 crores, that's a big number. So I think that's one of the biggest things that we saw last year. The other interesting thing was on just the sheer scale and size that digital media has reached.

Now on one hand, TV is still the largest segment by which it still covers 745 million Indians but digital media is the first segment which has actually crossed the one lakh crore revenue number. So that was the second highlight of the year for me and a lot of that was due to digital advertising and subscription both grew but the rate at which some segments of advertisers like the small and medium enterprises are spending 30 percent growth in that, fantastic. 50 percent growth in advertisers, advertisement spends on e-commerce platforms.

I think that's where the real power behind the economy came out. That's message two. Message three is experiential and live.

I think if you look at it from both sides whether you're talking cinema which is a great family experience, a great out-of-the-home experience or you're talking events. Events grew 43.5 percent because of course there was a Kumbh Mela last year but even if you take out the impact of the Kumbh, it grew at over 20 percent. So that's the kind of growth that live events are seeing.

A key number there in my mind is the number of concert days, ticketed event days. It is fascinating that in 2024 when we did this analysis the first time, there were 70 days where 10,000 or more tickets were sold in concerts and that went up more than double. It is just the scale at which people are spending is mind-boggling right now and on the film side, you know, 20,000 crores.

It's a benchmark for the film industry in terms of how much that film industry has really done and most importantly, it is on the back of theatrical this time and not bloated digital rights or satellite rights but the way that you know the theatre has bounced back in terms of footfalls actually growing though it's just one or two percent growth but it is still growth in footfalls. People are willing to pay for that spectacular experience. So I think if you take a step back, I think you look at some of these trends.

These are first time trends for me and it's the ninth year I'm doing the report. So very interesting year to have you know to release a report like this. I'm looking at the data when I'm preparing the report and saying hey is this right?

Can this be right? You know and then I'm going and calling other people and saying this is what the numbers are showing. What's your take on it?

You know I'm just so interested this year in you know how the changes are panning out so fast. So it's been a wonderful experience this year you know putting the report together.

Vanita Kohli-Khandekar: Okay, it's always I enjoy covering this area. So I enjoy everything about it even the downturns. I take them personally and carefully you know but just to get into the detailing here a bit.

You mentioned footfalls for theatres have gone up but the Ormax data says footfalls have actually gone down from 880 to 834 or some marginally not very high. So there's a difference between your numbers and Ormax numbers here?

Ashish Pherwani: There are three info sources and all three have different numbers. From a point of consistency we use comscore data because we started using that from a long period of time and based on that it's a two percent growth. But I think what we should keep in mind also and this is data from another source which is the fourth source we use which is UFO, the screen count actually grew this year.

So the net screen count after many years has crossed 10,000.

Vanita Kohli-Khandekar: Really?

Ashish Pherwani: It's still very low, it's still very low but you know we've been at in the nine thousands for the last five years, six years.

Vanita Kohli-Khandekar: Ages, for ages and ages. I'm so tired of this number you know and when I started writing it was 12,000 screen, no not when I started, when I started writing it was 12,000. So that's the number I grew up with.

But okay, now to get back to into the little bit more of the detailing. Oh you didn't touch upon print before I get into you didn't touch upon print. Print has shown resilience and I'm sorry I have to bring it up, I'm a print writer.

Print has shown resilience again last year three percent growth, this year one percent. What's happening there? Is it news print price effect?

Because advertising is, especially premium advertising, yes I know it goes to print a lot but what what is the effect at work here?

Ashish Pherwani: See, I think there it's not really the newsprint prices. I think what's happened is very simply the way print has done two things over the last four, five years. I think is a case study in itself.

The first is that print positioned itself as a doorway to premium audiences, to affluent audiences. We are giving you not just in metros but also non-metros. We are giving you rich guys who are educated, all right.

I don't think it's possible to launch a premium product today without a print jacket. It has just become the default media plan for any premium product. The second thing that print did very interesting over the last two, three years is they've literally become top of funnel for e-commerce platforms.

You will see every e-commerce platform going out there and saying this is my big billion day or this is my prime day or this is my special discount and big basket and this is independence day sale. Print has played a fantastic role of getting that their act together. In fact, I was talking to LV the other day at TAM and he gave me some fantastic statistics.

He said one in three print ads now has a call to action, it has a discount, it has an offer, it is becoming almost a performance medium in itself. So the way print has repackaged itself if I may say that, I think these two things are just masterstroke that the industry has done and that's why when you meet all the print CEOs, they're young, they're so passionate about what they do. I'm not surprised the industry is growing.

Vanita Kohli-Khandekar: One whole generation has changed there, so that also makes a huge difference. You have Anand Express or in the Lokmat group or many of these groups.

Ashish Pherwani: All of them are fantastic.

Vanita Kohli-Khandekar: Absolutely, you see the younger guys. Okay, to come back to TV again, pay TV is shrinking but somehow TV reach is increasing. I know, I understand connected TV is there but if I look at pay TV itself, 140 million which is the homes that your report says and I take that factor of 4.8 which Bach normally takes per home, I still get about 670 odd million. I didn't understand the 740, so I was like and I am very suspicious now because Bach's establishment survey hasn't been done. So I feel that this flogging of old reach numbers is getting counterproductive now because marketers don't trust this. I just did a large piece of work on TV, so that's where I'm coming from.

Ashish Pherwani: I think what you're missing in the picture is the free TV homes, 140 is the pay universe.

Vanita Kohli-Khandekar: Yeah, I don't feel that, I have a question on that.

Ashish Pherwani: Yeah, and I think when you add both and then do the multiplication, it's actually a beautiful number. It's actually, if you look at it, it is the largest medium still in the country right now. Yeah, pay TV homes coming down, free TV homes going up, also connected TV homes going up.

I think when you look at the overall picture and we had a lot of discussion this year with Bach on that specific topic is that the pipe is changing, sure, but what's the future of large screen TVs in the house? I think that's pretty secure. In fact, we are seeing that that number will keep growing across 200 million in a few years.

So overall, I don't think the large screen is going anywhere. I think the mobile has a certain set of use cases. I think the large screen also has a certain set of use cases.

In fact, yesterday when we were at the frames event, there was a very interesting session on micro dramas. And I love what Karan said, you know, from MX, he's saying there's a use case for someone in an elevator, there's a use case for someone who has seven minutes to spare, there's a use case for someone who has 15 minutes to spare. And when you actually look at it, it makes so much sense because you have everything from a one minute escapism, a one minute give me news quickly in the headlines, all the way to a movie.

And, you know, each screen has its own USPs. And therefore, I think the bigger screen is leading to serious increase in watch time. Also in the report this time, we have a very interesting thing from Samsung ads on connected TV.

And the kind of watch time they're talking about, the growth in watch time from last year is almost double as per their estimates on their environment. On fast, on AWOD, on SWOD, whatever you look at the amount of growth on CTV watch time is literally almost 2x of what it was in just one year. And that itself is showing that as CTV is growing, people are coming back to the medium and spending more time on it.

And that's very healthy for TV overall.

Vanita Kohli-Khandekar: Superb. I was very happy to see those. But one thing, which hit me is free to home seems to have stabilised at that 50 odd million sort of number because for two, three years, I would have thought it would have grown more given that cable penetration and pay DTH penetration in North India.

Free TV is a North Indian phenomena. We haven't seen more of that. I'm very curious why it's we're not seeing more.

Ashish Pherwani: So I look at free TV like a pipe. Every year people come in, but people also graduate out. They either go to pay or they go to connected.

The interesting thing is that we're seeing a lot of homes which have both a free TV connection and a pay TV connection.

Vanita Kohli-Khandekar: All right.

Ashish Pherwani: And when there is so they have both. Yes. And when there is an IPL or a cricket season, they will go pay.

You know, when there is a new season of Nagin or the relaunch of QK Saas, right? You can't not have that in the house. So you will go pay for that.

So again, it all comes out of where the fundamental basic thing in my mind, it's going to be quality of content that matters on the large screen, whether you do it free, pay, connected or DTH or cable really, it's just semantics. It's about content quality.

Vanita Kohli-Khandekar: OK, now I'm going to come to your favourite part of the report, which is digital. OK, because 63 percent of all advertising revenues and this 13 percent, 13.5 percent growth in advertising is what is it twice the average that we've seen, six, seven percent, I think.

Ashish Pherwani: We've had a very tough last few years on advertising because, you know, a lot of global uncertainty, supply chain issues. I mean, there's been wars, there's been everything that's hit this country. The amount of resilience we have sometimes when I see those IMF estimates of where India stands versus the rest of the world.

I mean, hats off to just how we've survived the last few years. I won't mock those single low, single digit ad growth numbers of the last few years. I'd say very well done.

But this year, the growth is entirely in my mind due to the consumption budget, the consumption, the spend of the government and overall positive sentiment that's there. GST rates getting rationalised and the government really took some very positive steps to grow the economy. Yeah.

Another interesting thing, one more, I think this keeps getting missed out, but we have SME advertisers. You mentioned this, I remember. And it's fascinating, you know, in December 25, India's reached a stage where it was the highest ever credit given to SMEs in the history of this country.

It was 33% of total institutional lending went to SMEs. And look at the impact that has had on advertising. They're getting the funding, they're producing stuff, they will invest in advertising, they will see the benefit.

So I think it's just about expanding credit. And the advertising industry also, you know, grows proportionately. So it was a very interesting analysis that my economist did.

Vanita Kohli-Khandekar: Okay, I find that I'm so glad that somebody is looking at macroeconomic data and then looking at the percolation effect on our business, because otherwise, we are constantly stuck in that it's less than half percent of GDP. And this time you show 0.8% of GDP, media and entertainment. So that's a very nice number to look at after like 20 years of covering the sector.

So I have some respectability at last. But on digital, Ashish, one of the things is, I saw that and it's something I've written about it also, smartphone penetrations, roughly same level to three years, you look at reach numbers, time spent roughly same number. And I think that's a function of the smartphone price is not dropping significantly enough for replacement market, or for people in those feature phone market to move up to smartphone.

And this I analysed it a year back or something, I haven't looked at the numbers closely now. But your report seems to suggest we're still stuck at that same spot. What's happening there to reach and time spent?

Why is are we looking at a static number?

Ashish Pherwani: So I think very good observation from your side, Vanita. There are two, three factors at play. One is, are we growing a smartphone country?

Yes, we are. We're going 15-20 million a year. Last two, three years, we've been at a 15-20 million, far cry from the 35-40 million growth that we used to see in the earlier years.

I think the main reason for that is pricing. It's just the prices are just going higher and higher because of, you know, global geopolitical factors, supply chain issues, whatever, RAM costs, all of that is increasing the price, the dollar keeps rising against the rupee that has its own impact, etc. So it's always going to be tougher to grow the market as you go down the affluence curve.

And therefore, you know, we've kind of steadied down at a 10-15 million. I think if someone can crack the pricing, there's no reason why this can't go a lot bigger. That's one aspect.

The second aspect to it also is that, you know, we've seen various monetization models over the past three, four years. There's been fast, which has grown on the mobile phone, tonnes and tonnes of award that's happening. A lot of experimentation with S-Ward.

In fact, one of the most amazing years or last two years, the amount of S-Ward experimentation has been phenomenal, both in terms of length of packs, type of packs that are coming out, only regional, choose one, any x number of OTT platforms, the telco bundling angles behind all of it. I think there's been a lot of trial and error, a lot of beautiful experimentation over the last two years. But I think when you just take a step back, the telco bundling is just the most amazing thing that's happened to Indian OTT.

And I think that's where Mojo will lie. I think we are seeing a phase right now that as the telco penetration continues to grow, we've crossed a, you know, a billion broadband subscriptions in this country in 2025. Mobile, wired and wireless put together, all put together is over a billion subscriptions now.

I think it's just a matter of time that the conversion will just keep happening. And you should see a lot more video consumers going up. So actually, if you look at our report, we differentiate between smartphones and video consumers.

And video consumers are actually a subset of the smartphone, there's a few percentage points, everyone doesn't still see video. I think that's going to keep growing. I don't see that as a problem, you should see a sustained four to 5% growth minimum on that.

In fact, we're saying by 2030, we will be close to 950 million screens in this country, out of which almost 800 million will be smartphone screens. So we will be after China, the largest smartphone market, we already are after China, the second market in the world. But at 745-800 million screens by 2030, that's going to make sure that short form content, social media, micro dramas, vertical video, all of that stuff is going to just be so much more important over the next few years.

Vanita Kohli-Khandekar: Okay, so that's point two, you talked about pricing.

Ashish Pherwani: Yeah, and the final point is, I think, it's just about understanding the psyche of the consumer. So one is you bundle data with content. I think that's very simple, very cool.

But I think we have another thing brewing underneath and that's TVOD. I was talking to, you know, Gaurav Gandhi of Amazon, and he made some, you know, wonderful insights he was giving me. He's saying that the TVOD business, and they are one of the largest, if not the largest in TVOD in the country today, you know, comes from over 90% of the pin codes in the country.

And the other thing he said is that over 90% of their entire library, which is thousands and thousands of titles, gets rented at least once a month. So when you look at that, it's a kind of another psyche playing saying, okay, do I need a subscription this month? Or can I live off TVOD and just buy one or two movies, which is what I need, the rest are for TVOD.

Or I've got one or two subscriptions, but hey, this movie is missing, let me go and take this one film on TVOD. I think there's a reduction there, we're going to see a lot more growth out there as well. So when you put it all together, pricing of mobile phones and smartphones, I think there's the growth of shared data, broadband, packaging with telcos and TVOD, you will see a steady growth, even though there are many headwinds in terms of the rupee value, per capita income, etc.

But you should still see a steady level of growth, may not be double digits, but certainly 4, 5, 6% should not be an issue.

Vanita Kohli-Khandekar: Inshallah, we should. You know, you mentioned the subscription is about 216 million, I think, and about 140 odd is for OTC household. Now, so I'm taking out the music.

Have you factored in box office as part of the pay revenues? So when you're talking subscription, because it talks about films, but I was not sure what you're looking at when you're looking at that.

Ashish Pherwani: The film box office comes under the film section. On the digital side, we are talking pure OTT.

Vanita Kohli-Khandekar: So when I look at these subscription, and I look at advertising, advertising is clearly the bigger driver, and I'm assuming that's largely led by YouTube.

Ashish Pherwani: YouTube, Meta, both are very big companies today. And then of course, the whole shavang around e-commerce advertising.

Vanita Kohli-Khandekar: Yeah, Amazon Prime Video and not Amazon, sorry, Amazon, the commerce side. You know, I was so happy to see that 0.8% of GDP number. But the thing is, how are we doing on monetization, Ashish, because this is a topic you and I have also had to chat on, that we are world's largest in everything, but on per capita monetization, or even at firm level monetization and profitability.

Do you see interesting patterns developing there? What is your take on that?

Ashish Pherwani: So, I think monetization is very different, because each of the segments is in a very different growth trajectory, maturity trajectory. If you look at television monetization, I think the single biggest trend of last year was just that impact properties worked beautifully, whether it was a KBC or an Asia Cup or an IPL or a big boss, you know, these were the properties that really raked in the moolah. If you look at digital, it's still an investment mode, to be quite honest.

You will have a lot of investment going in building customer bases, you will still have a lot of investment going in understanding customer bases, trying out different algorithms, all of that investment is still being made and made at scale right now. I mean, you know, forget Meta and Google who are innovation machines in their own right. But look at the kind of innovation started, Jio started around the IPL, you had AR, you had VR, you had so many languages, you had so many camera angles.

It's not inexpensive to do all that. Now, all of that is being done across different people. And it's not just limited to the big guys.

When you look down the line, just the kind of ad formats that are now coming up in ecommerce platforms. The way the news industry is reworking itself completely and enabling transaction. I think monetization is going to be, I think it's never going to stop, the innovation is just going to keep on happening year after year for the next five years, until each of the models tends towards maturity.

Right now, digital is still very, very nascent in large pockets. So keep out search, keep out social, I think there's a standard, people are used to it, there's an army of digital marketeers who are trained in how to do that stuff. But there's so much more innovation happening in new formats.

How will you monetise a micro drama, for example? Nobody knows the answer. You know, is it an A-Ward model?

Is it an S-Ward model? You put ads between episodes, you get them to pay after they watch 10 episodes. All of that is just is work in progress.

So I think it's going to be different and going to stay different.

Vanita Kohli-Khandekar: Ashish, one of the things I keep hearing is that money is tight, capital is tight in the media business. Maybe I'm referring to films, because I just did a lot of film work and money started coming in with, you know, you have the Bhansali and Saregama deal happening or Aadhaar and Karan's deal happening. Baweja Productions did an IPO.

So there's a lot of, but overall in the media and entertainment industry, where are we on investments? Because I'm not sure enough investment is coming in. So I've not looked at that section in the report.

But can you just sort of unpack that bit for us?

Ashish Pherwani: Sure. So I think overall deal volume was pretty healthy. Over 100 deals happened last year.

And if you remove the 2024 mega deal of Jio and Icom, actually deal volume values were up 27%. So actually, it's increasing. And the interesting change this year is about 35% of whatever's available publicly in terms of deal knowledge, 35% of primary markets.

And that's very healthy. That's a new change, the public is investing. The other part that's happening also is there are two or three forces that are leading to deals.

One, of course, as you mentioned, there are music companies investing into content companies in a pretty big way, largely to get the first right of refusal on music rights, the value of which continues to increase disproportionately. The second is just I think consolidation. We're seeing a lot more in terms of consolidation.

Some are deals, some are JV, some are partnerships on the ground. But I think people are realising the importance that scale is required in certain cases. And I think the last part is literally anything Martek, anything AI, anything that will give an efficiency or a revenue advantage, specifically those use cases which can have global implications.

So today, if you're looking at companies that can do dubbing or subtitling or formatting or whatever, you know, at scale and can do it for the global audience of media companies, I think those companies will raise a lot of money and India will boom as a back office doing all this behind the camera work in the future. I think we're going to see an increase in the number of GCCs that have been set up in India. So I think you will see a lot of investment continuing to happen.

You should not see any, I mean, barring unforeseen circumstances, the deal volumes will only go up.

Vanita Kohli-Khandekar: That's very interesting, because what you said about globalising, because one of the things we really need to expand our markets if we have to, if our per unit monetization remains small, then you need to keep expanding your market. And one of the ways of doing it is, I say that for the film business and for the business, but lovely, this is very good.

Ashish Pherwani: Gaming, I mean, Ashish Kulkarni yesterday in Airframes was talking about a plan to grow 800 game studios to 5000 studios over the next few years, because game development is going to get more and more offshore into countries like Mexico, China, Turkey and India. And we will see that growth, you know, really playing out as we start not just developing games, but managing them, managing the marketing, the re-skinning, all of that is game operations is a big part of what can be done out of India. You will see a lot of investment coming in, in various forms over the next few years.

Vanita Kohli-Khandekar: Very interesting. Last question, what will you ask the media industry to take away from this report? And I don't know if you want to answer or something on challenges.

Ashish Pherwani: I do want to answer this question. Actually, it's a beautiful question. I think the most important thing that in the fundamental on which this industry is built, for the news guys, it's credibility.

For the entertainment guys, it's just the emotional connect, the escapism, the quality of content. And I think we are entering an AI era where content is going to start flowing in rivers and big seas and oceans. It's just spawning more content and even more content.

And I think the one thing that I would love to see is for, you know, superb quality content continuing to come out. I think it's just the focus stays on content quality. I think all the models will work.

There's no reason why in an India that we are in right now, with the GDP growing, per capita income growing, with technology advancements that models cannot be made to work, whether it's radio, whether it's TV, whether it's digital or print or events, opportunity seems to be very high. As you rightly keep pointing out 0.8%, we should be well above 1% of our GDP. I don't see a demand shortage.

I think the supply is what is required. But these are companies who have built us. I'm 50 years old.

They've built my content consumption patterns over five decades. They've done a fab job with it as well. I think they just have to keep on at the content quality level.

I think the rest will just work out. Everyone will work.

Vanita Kohli-Khandekar: Fabulous, fabulous. Very nice to hear that. And I hope we make a lot of money and we become 1.2, 1.5% of GDP. Let's see.

Ashish Pherwani:That will be the day. Super.