Companies such as Saregama India, Tips India, and Signpost India – which earn bulk of their revenues from digital platforms – saw their shares drop less than 20%. In contrast, firms highly reliant on traditional media such as PVR Inox, UFO Moviez, Dish TV, Pritish Nandy Communications, Den Networks, Zee Entertainment Enterprises, and Shemaroo Entertainment, experienced 30% to 60% drop in stock prices. These firms – focused on film, TV, and theatrical exhibitions – have been hit harder since the market’s bearish phase began in late September 2024.
The Nifty 50 index has fallen 13.8% since the last week of September.
Beyond the broader market’s pessimism, industry-specific challenges have also played a role in deepening the decline in entertainment stocks. Changing content consumption patterns such as the shift to streaming and digital platforms, poor box-office performance, muted advertising growth, and cord-cutting have all impacted revenue growth. These trends spurred investors to favour companies with a stronger digital presence.Vaibhav Muley, lead analyst for the media and entertainment sector at Yes Securities, said, “Structurally, the entire consumption pattern in India’s media and entertainment sector is shifting toward the digital landscape. Revenue growth in digital advertising and subscriptions is increasing.”
“I see fundamentals favouring the digital landscape across segments. Consequently, investors have shown a clear preference for stocks of entertainment companies with a strong presence in digital media. A case in point is music companies,” he said.
Digital revenues and subscribers across the industry are expected to grow significantly over the next two years.
According to the Ficci-EY 2024 Media and Entertainment sector report, revenues from digital advertising are projected to clock a compound annual growth rate (CAGR) of 13.6% between 2024 and 2026, reaching ₹84,200 crore. This will boost the share of digital advertising in total advertising revenue to 57% in 2026, from 51% in 2023.
According to Ormax Media’s OTT Audience report, India’s digital video universe grew by 13.8% between 2023 and 2024, reaching 547.3 million users. The number of paid subscribers for music streaming platforms is estimated to grow from 7-8 million in 2024 to 15 million in 2026.
Given these favourable fundamentals, investor interest has been intensifying in stocks of companies with a higher degree of digital presence.
