The media and entertainment sector offers a $60 billion opportunity for global IT companies

Amid gloomy analyst and industry reports predicting limited growth for India’s IT services industry in fiscal year 2016-2017, a ray of sunshine in the form of a multi-billion dollar opportunity dollars in the global media and entertainment industry has emerged for Indian IT service providers. faucet.

Market size

According to management consultancy Zinnov, the $1.4 trillion media and entertainment (M&E) industry, which is expected to reach $1.9 trillion by 2020, offers a total addressable market opportunity of $60 billion across eight segments including New Media, Education, Entertainment, Gaming, Marketing and Advertising, Broadcasting, Information Services and Publishing.

On the $60 billion opportunity, global and Indian IT service providers process $6.5 billion in EPS (product engineering services) and outsourced IT services, with North American companies accounting for more than 60 % of outsourcing market.

Indian IT companies such as HCL, Wipro and TCS currently manage 42% of the $6.5 billion in outsourced EPS and IT spend by M&E firms; 47% is served by global IT service providers such as IBM, Accenture and ATOS, and the rest by niche regional providers such as MPS and SPi Global.

Expected growth

Highlighting the opportunity for Indian IT services companies, Sidhant Rastogi, Partner and Practice Leader, Zinnov said, “The current $6.5 billion addressed market is expected to grow at a CAGR of 14-16% over the the next four years, by the time the M&E industry outsourcing will exceed $10 billion.

“This growth is faster than the entire M&E industry, which will grow at a CAGR of 8.7% to reach $92 billion by 2020; with growth driven by the New Media and Broadcast segments. These include key players like Facebook, Twitter, Linkedin, Yahoo, Baidu and Huffington Post in new media; and Comcast, Disney Networks, Turner, BBC, Sky and Fox Networks in broadcasting.

Stating that global media companies are looking to APAC and emerging markets to drive future growth and are working with service providers to bring their products to market faster, Rastogi stressed that service providers are building end-to-end capabilities. bout across the media value chain by acquiring niche digital businesses or partnering with start-ups.

Recently, Wipro partnered with Finland based multi-screen solution provider Maxicaster to deliver OTT video services to broadcast and media; IBM acquired American Ustream to power cloud-based video services across industries, and Cognizant acquired American digital video solutions firm Itaas to enter the cable industry.

Importance of applications

“Technology and market disruptions are driving significant spending on product engineering/development, IT and support services by the global M&E industry, which is good news for Indian IT service providers,” Rastogi said.

The rapid proliferation of smartphones and the Internet is changing the way users consume content. Mobile apps are growing faster than web apps, driving M&E companies to invest in interactive mobile content, virtual reality to deliver premium user experiences, and personalized content and advertising.