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Source-This post on Digital Media-Opportunities & Risks has been created based on the article “Medium of exchange- Digital media presents both opportunities and risks” published in “Business Standards” on 8 March 2024.
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News-The article discusses the opportunities and risks associated with the rise of the Digital media industry.
Background– The Federation of Indian Chambers of Commerce and Industry and EY have recently released a report on the media and entertainment sector. The report has made some interesting observations, datapoints, and trends that can help businesses in this segment adapt or reinvent themselves to remain relevant.
What are some important findings of the latest report on the media and entertainment sector?
1) Size of the industry-The has a growth rate of over 8 per cent. The size of the television, print, and radio segments was lower as compared to segments like digital media, online gaming, and filmed entertainment.
The projections (2023-26) also suggest segments like online gaming, digital media, animation, and music will drive revenue for the industry.
2) Internet Penetration-It has increased by 8 per cent to 938 million subscriptions in December 2023.
3) Time consumption– In 2023, Indians have spent around 4.8 hours daily on their phones. About 50 per cent of the time spent was on social media, while 28 per cent was on entertainment and news.
4) Online gaming– Online gaming expanded by 22 per cent in 2023 and overtook filmed entertainment to become the fourth-largest segment in the industry.
The number of online gamers is 450 million and 83 per cent of the revenue in this segment came from real money gaming.
5) Low advertising revenue-Advertising revenue is estimated at 0.33 % of gross domestic product in India, compared to 0.6 to1 % in large developed markets.
Read more- Social and Digital media regulations in India
What are the opportunities presented by the Digital media industry?
1) Democratizing digital market advertisement- Around a million small-scale businesses have spent about ~20,000 crore on digital advertising in 2023.This has allowed small businesses to reach their target audience.
2) Immense growth potential-It is estimated that by 2026 digital media space will be over three times print media size and have also overtaken television.
What are the challenges or risks associated with the rising digital media industry?
1) Domination of large firms-The large technology firms may corner incremental revenue in the advertising industry. This may marginalize small firms.
2) Abuse by social media giants– They may abuse their dominant position by exploiting vulnerabilities and biases of users to push content and advertisement.
3) Social disorder-The advertisements and content created by digital media can be used by vested groups to polarize society and sow the seed of social disharmony.
Question for practice
Critically analyze the significance of rise of digital media industry?
