The Indian media and entertainment industry is expected to grow at a CAGR of 8.8 per cent and reach Rs 4.30 lakh crore by 2026, according to a report by global consultancy firm PwC.

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The growth would be paced by digital media and advertising through deeper penetration of the internet and mobile devices in the domestic market, along with traditional media, which will hold their steady growth, the report said.

TV advertising is expected to reach over Rs 43,000 crore by 2026. It will make India the fifth-largest TV advertising market globally, after the US, Japan, China and the UK.

The Indian media and entertainment industry is expected to be around Rs 3.14 crore in 2022, registering an overall growth of 11.4 per cent, as per the PwC's Global Entertainment & Media Outlook 2022-2026.

India's OTT Video services are expected to become a Rs 21,031 crore industry in the next four years by 2026, in which Rs 19,973 crore would come from subscription-based services and Rs 1,058 crore from Transactional VOD (video on demand).

"It is subscription services that are driving this rapid growth, accounting for 90.5 per cent of revenue in 2021 and set to account for 95 per cent in 2026," it said.

The population size and widespread use of mobile-led Internet video will underpin rapid growth in the OTT market over the forecast period. In particular, uptake of 5G will permit low-latency services such as OTT video streams, greatly boosting the sector.

"As infrastructure improves in the long term, the scale and diversity of the population will lend itself to a wide range of platforms," the report added.

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TV advertising would grow up to Rs 43,568 crore in 2026 from Rs 35,270 crore in 2022, registering a growth of 23.52 per cent.

"After several years of rapid expansion, India's TV advertising market was hit by the COVID-19 recession in 2020, causing a 10.8 per cent decline over the 2019 levels. This proved to be a temporary setback. With the country's return to economic growth in 2021, this segment grew by 16.9 per cent to Rs 32,374 crore," it said.

India's internet advertising market is set to increase at a 12.1 per cent CAGR to reach Rs 28,234 crore by 2026.

"Given India's mobile-first Internet access market, the mobile sector dominates the country's Internet advertising market, accounting for 60.1 per cent of total revenue in 2021, rising to 69.3 per cent by 2026," the report said, adding that "display advertising dominates the mobile sector, accounting for 90.7 per cent of revenue in 2021 though its share will fall to 88.9 per cent of the total in 2026".

The 'Music, Radio & Podcast' segment grew by 18 per cent in 2021 to Rs 7,216 crore and is set to rise 9.8 per cent CAGR to reach Rs 11,536 crore by 2026.

"India's Recorded Music industry (which is a key sub-segment) is making steady progress at a CAGR of 13.6 per cent, thanks to streaming models," it said.

India's Video games and esports revenue is estimated to reach Rs 37,535 crore by 2026, increasing at an 18.3 per cent CAGR.

"While still a fairly small market for the country's size and population, India is the third fastest-growing video games market in the world, after Turkey and Pakistan. India's video games market is predominantly geared towards social/casual gaming. With revenue of Rs 13,244 crore, social/casual gaming made up 83.9 per cent of India's total video games and esports revenue in 2021," the PwC report said.

The Indian cinema industry is expected to garner a revenue of around Rs 16,198 crore by 2026, of which Rs 15,849 would be Box office revenue and the rest Rs 349 crore from advertising, the report added.

"India is the third-biggest market globally in terms of admissions after China and the US in 2021 and is set to grow at the highest growth rate amongst all the segments at a staggering 38.3 per cent CAGR in the forecast period to reach Rs 16,198 crore by 2026.

"In 2021, more than 379 million cinema tickets were sold in India, a healthy increase year-on-year on the 278 million admissions in 2020 (and higher than the 226 million admissions in the US in 2020) though that had been a huge (85.4 per cent) drop compared to the 1.9 billion tickets sold pre-pandemic," it said.

India will see an increase in total newspaper revenue at a 2.7 per cent CAGR from Rs 26,378 crore in 2021 to Rs 29,945 crore in 2026.

"India, which will leapfrog both France and the UK to become the fifth-biggest newspaper market by 2026, will also be the only country to grow total newspaper print revenue consistently across the five-year forecast period. India will also be the only country in the world to grow daily print newspaper copy sales (by volume) during the forecast period," the PwC report said.

The increase at a 1.3 per CAGR - to an average of 139 million daily average print newspaper sales in 2026, one-third of the global daily total? will mean that India will overtake China as the biggest world market for print edition readership in 2025.

PwC India Partner and Leader ? Entertainment & Media - Rajib Basu said the outlook for the industry for the next few years is quite unique.

"There is an exciting pace of growth of digital media and advertising led by the deeper penetration of internet and mobile devices in our market. At the same time, traditional media will hold their steady growth rate over the next few years. We shall see a very different profile of media and entertainment-related businesses and revenue models emerging in the digital space once we have the rollout of 5G," he noted.