Expectations are rising across all businesses as Budget 2025 draws near, and the media and entertainment (M&E) sector is no different. Leaders in the industry are urging drastic changes to spur expansion in a field with enormous promise but difficulties following the outbreak. Stakeholders are calling on Finance Minister Nirmala Sitharaman to enact policies that can open the door to a better future, such as lowering GST rates and providing incentives for the creation of indigenous content.
Credits: The Economic Times
Reviving Cinema: GST Cuts and Screen Expansion
Cinema halls, a cornerstone of the Indian entertainment industry, continue to struggle with low footfalls, far below pre-COVID levels. Devang Sampat, Managing Director of Cinepolis India, emphasizes the need for rationalizing GST on movie tickets, currently taxed at 18%, to make cinema outings more affordable for the masses.
In addition to tax relief, financial incentives for building multiplexes are being sought to address India’s low screen density. With approximately 9,500 cinema screens across the country, there’s significant untapped potential, with experts estimating room for up to 7,500 additional screens.
Sampat also advocates for streamlining licensing procedures through a single-window clearance system, which would reduce operational challenges and accelerate expansion, particularly in underserved regions.
Domestic Content Production: A Boost for Regional Stories
Arghya Chakravarty, COO of Shemaroo Entertainment, highlights that while India is on track to become the third-largest M&E market globally, the sector’s contribution to GDP remains under 1%. In contrast, developed nations like the US and UK see contributions between 3% and 4%.
Chakravarty and other industry leaders suggest tax incentives for investments in domestic content production, particularly regional storytelling. This could spur creativity, promote local cultures, and create employment opportunities in smaller markets.
Mautik Tolia, MD of Bodhitree Multimedia, recommends increasing funds allocated for international production subsidies, which could attract global movie and TV show productions to India, boosting local economies and global collaboration opportunities.
OTT Platforms and Advertising: Opportunities in Digital
With the rise of OTT platforms and digital media consumption, the sector is urging reforms to make content more accessible and affordable. Yasin Hamidani, Director at Media Care Brand Solutions, suggests reducing GST on OTT subscriptions and broadcasting services, which are currently taxed at 18%.
In the advertising space, experts are looking for measures to spur ad spend growth, especially as 2024 saw subdued spending due to inflation and reduced FMCG budgets. Kunal Lakhra, CFO of Pocket Aces, believes government-backed digital campaigns in healthcare, education, and digital skills could create demand for advertising services while also fostering job creation.
The Road to Technological Innovation
For the advertising industry to innovate, there’s a growing call for programs supporting AI-driven ad optimization and creative technologies. Rishabh Mahendru, VP at AdLift, points out that skill development initiatives in advanced technologies could empower agencies to adapt faster and thrive in a competitive market.
Furthermore, stakeholders are advocating for grants and subsidies for businesses leveraging technology to grow. This could provide relief for companies investing in next-generation tools and drive sustained growth.
Challenges and Optimism in 2025
While the M&E industry recorded a 10.2% growth in 2024, higher than the projected 9.5%, challenges like subdued consumption and weak global economic cues persist. Advertising spend on traditional platforms remains particularly affected, as noted by Chakravarty.
However, industry leaders remain optimistic. Relief in taxes, streamlined policies, and forward-looking initiatives could act as catalysts, helping the sector recover and thrive. For instance, boosting public awareness campaigns and timely payments to private agencies could ensure smoother operations and higher trust among stakeholders.
Credits: Money Control
A Future-Ready Media Ecosystem
India’s media and entertainment industry is at a critical juncture. As Budget 2025 unfolds, it has the potential to unlock accelerated growth for a sector that not only entertains millions but also contributes significantly to the economy and employment. By addressing key challenges and fostering innovation, the government can help the M&E sector shine brighter on the global stage.
The curtain is set to rise—will the industry find the spotlight it deserves? February 1 will tell.
