The two areas that offer encouragement are the continued economic growth of India and the universal acceleration of digital adoption among users across geographies, he said.
"As per our revised estimates, India could be home to a billion digital users by 2028 rather than the earlier projected 2030 timeline," he added.
Menon added that there have been several structural changes to digital behaviour on account of the experience of the lockdown resulting in a new homogeneity among users. "It is our belief that many of these changes will translate into a more democratic and sophisticated digital citizen within the country."
According to the report, the overall revenue of the sector during 2019-20 stood at Rs 1,75,100 crore that is expected to contract to Rs 1,40,200 crore during the current financial year and recover to Rs 1,86,600 crore in 2021-22.
There will be a deeper integration of digital technology across the M&E value chain from content production to distribution. Technology adoption could, however, face some challenges in terms of skill development and the shift to a digital-first mindset but will result in operational cost savings and potentially lower lead times over the longer term, Menon said.
India was already experiencing a slowdown in economic activity even prior to the outbreak of COVID-19 in March, and the onset of the global pandemic and ensuing lockdown dealt a severe blow to the Indian economy, the report said.
The M&E sector has been affected but to varying degrees like the outdoor entertainment formats (films and events), and traditional media (print and TV to some extent) have been badly impacted as people stayed indoors and advertising spends dried up, it said.
Digital advertising, over-the-top (OTT) and gaming fared much better, with massive spikes in digital consumption during the lockdown across geographies and socio-economic classes, it said.
The digital advertising spends are now set to overtake those on TV by 2020-21, which is an important milestone and turning point in the evolution of media and entertainment in India, the report said.
"The distinction among segments of M&E has become more pronounced with the lockdown. Marketing spend has moved perceptibly towards digital media and away from traditional segments like print, radio and to some extent TV," KPMG in IndiaPartner and Head (Technology, Media and Telecom) Satya Easwaran added.
Easwaran added that a greater reliance on subscription and other paid options as well as the development of a credible digital business model are going to be inevitable for these traditional media segments.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.