/socialsamosa/media/media_files/2025/04/02/Nd3RMSP5dt59G7w4HPCM.png)
The digital media landscape is undergoing a major transformation, with subscription-based models gaining traction and artificial intelligence (AI) playing an increasingly pivotal role in content curation. According to the latest report by Elara capital, over 65% of digital media consumers now prefer paid subscription services over ad-supported content, marking a significant shift in consumption habits.
Streaming platforms and online news providers have witnessed a 20% rise in subscription revenues over the past year, driven by growing concerns over privacy, ad fatigue, and the demand for high-quality, uninterrupted content. Meanwhile, AI-powered algorithms are reshaping the digital experience, influencing over 75% of content recommendations on major platforms.
Karan Taurani, VP, Elara capital stated, "All these indicate a newer ad regime, dominated by digital media, This is intensifying the pressure on traditional mediums, thus, lacking any meaningful revival in ad players (Zee Entertainment Enterprises and Sun TV). The loss of share to digital is the new normal. We view the rising digital ads salience and e-commerce platforms as structurally positive for Affle and Zomato/Nykaa."
Quick commerce fuels E-commerce ad revenue growth
CY24 proved to be a game-changer for e-commerce ad revenues, which saw a 500bps YoY increase to 21% of digital ad spending. The segment recorded a 65% YoY jump in ad revenue, reaching INR 147 billion, with quick commerce platforms playing a key role. Quick commerce likely accounts for 20-23% of e-commerce ad spending, contributing INR 30-35 billion in annual revenue. Rapid user growth, driven by geographical expansion, is strengthening quick commerce’s position in digital advertising. Currently, the active monthly user base for quick commerce (10-12 million) remains just 3-4% of Amazon’s and Flipkart’s combined user base (357 million and 298 million, respectively, per EY FICCI). By CY27E, e-commerce’s overall share of digital ad spending is projected to reach 23%.
Following eyeballs – A key trend in advertising
Indians are now spending approximately five hours a day on mobile devices, which accounts for 29% of their daily routine, excluding sleep. This significant and structural shift in consumer attention explains the declining fortunes of traditional advertising mediums. The impact of digital ads is particularly strong, with 69% of mobile usage time dedicated to media consumption, including entertainment and social platforms. Brands are actively tracking this trend, with 67% of digital ad revenue stemming from search and social media. The primary function of mobile devices, communication, now accounts for only 22% of total usage time. This shift is seen as a positive trend for programmatic ad-focused players such as Affle.
Digital media overtakes television
In CY24, digital media outpaced television, capturing 32% of India’s total media revenues, reaching INR 802 billion, up from just 16% in CY19. This transition was largely driven by digital advertising, which accounted for INR 700 billion in revenue. Key growth drivers included a 65% YoY rise in e-commerce advertising, amounting to INR 147 billion, and increasing viewership for regional OTT content. AI-driven localisation has played a crucial role in reducing costs by 25-35% and enabling rapid scaling. Digital media revenue is projected to reach INR 1.1 trillion by CY27E, growing at a CAGR of 11.2%, fueled by rising internet penetration, the expansion of active CTV networks, and hyperlocal advertising strategies.
Connected TV gaining pace
In CY24, Connected TV (CTV) reached 50 million monthly active devices in India, with weekly active devices standing at 30 million, marking a robust 33% YoY growth. This expansion has been driven by the increasing reach of broadband services, with wired broadband connections expanding to 46 million homes. YouTube’s CTV viewership has quadrupled over the past three years, while AVOD (advertising-based video on demand) platforms now account for 82% of total streaming hours. By CY30E, CTV is expected to double its screen share, reaching 76 million devices, or 35% of total TV screens. As a result, advertisers are increasingly bundling linear TV and CTV ad inventories to maximize reach, which in turn is putting further strain on traditional TV ad revenues.
Traditional TV channels face persistent challenges
Pressure on traditional TV advertising is not expected to ease significantly in the medium term, as structural shifts continue to reshape the market. The dependency on the top 10 advertisers has increased, with these companies now accounting for 48% of total TV advertising expenditure, compared to 38% in CY18. Within this segment, the share of FMCG companies has declined to 46% in CY24 from 50% in CY18. CTV is further fragmenting traditional TV viewership, with YouTube’s CTV audience increasing fourfold in the past three years. According to Pitch Madison, CY24 marked a major turning point, as the number of active TV advertisers shrank by 22% YoY, dropping to 8,653 from a steady range of 11,000-12,000 in CY18-23. Over the past two years, television’s share of total advertising revenue has fallen significantly to 49%, down from 59% in CY22, while digital advertising’s share has risen by 10 percentage points, now commanding 51% of the market.