Presentation: Indian digital music industry to cross Rs. 31 billion by FY20 - Deloitte India

The report predicts that marketers are expected to shift 36 per cent of their ad spends towards digital.

According to a report titled 'Digital Media: Rise of On-Demand Content' by Deloitte India, the number of online music users in India are expected to touch 273 million and the digital music industry revenues are expected to cross INR 31 billion by FY20.

The report also mentions that the digital video subscription market alone is estimated to reach around INR 35-40 billion by 2020 (excluding advertising). The report has been prepared to analyse how the on-demand content ecosystem is evolving in India and what the future looks like.

Rajat Banerji, senior director, Deloitte India, says, "Increasing internet and smartphone penetration, along with rising spends on entertainment by Indian youth, will drive the on-demand digital content industry. Digital media consumption pattern has drastically changed since a decade ago when ringtones were expected to boost the music industry's revenues. With remarkable improvement in mobile devices technology and internet connectivity, marketers are shifting their business models in tune with the shift of viewer preference towards digital media from traditional media."

Internet traffic originating from mobile devices has already surpassed the desktop internet traffic. The report also highlights the growing internet traffic in India with the total internet users crossing 254 million in September 2014, out of which 235 million users accessed internet through mobile devices. The growth in internet users was seen both in rural and urban parts of India. It also mentions that the number of internet users in rural India is expected to reach 138 million by June 2015; while there'll be 216 million internet users in urban India by then.

It further analyses that the internet user base in India is growing at a rapid rate - most of these users (75 per cent) belong to the age group of less than 35 years. More than half of the app users in India are between 18 and 24 years, and a further 29 per cent between 25 and 35. Social media and entertainment (Music & Video) are the two activities on which the Indian mobile internet users spend their time the most, followed by games, general search and emails. Out of the total time spent on digital media by youth, about 21 per cent is spent on audio and video entertainment.

Marketers are also shifting their advertising spends towards digital media and about 36 per cent of their ad spends is expected to go in to the digital space.

Read the entire report below: