‘AI in media, entertainment sector can increase revenue by 10%’

MUMBAI: As artificial intelligence (AI) revolutionises the media and entertainment industry by automating tasks, personalising content, and enabling new creative possibilities, its use is also expected to make industry more profitable. A report by consulting firm Ernst & Young on the media and entertainment (M&E) industry suggested that AI can not only help increase revenue by ten percent, it could also reduce production costs by 15 per cent. The report was released during the first edition of WAVES 2025, which concluded in Mumbai on Sunday.

Dr L Murugan, union minister of state for information & broadcasting and parliamentary affairs, launched five major knowledge reports that offer an in-depth perspective on India’s fast-growing M&E sector. The reports are aimed at supporting data-backed policymaking and strengthening India’s position as a global creative leader.

The Ernst & Young report, titled ‘A Studio Called India’, said that the global M&E industry was undergoing a dramatic transformation, driven by the proliferation of AI. “From content creation and curation to monetisation and distribution, AI is becoming an integral part of how stories are told and consumed. Our analysis indicates that in the medium term, AI can increase revenues by 10% and reduce costs by 15% for media and entertainment companies,” it analysed.

The report observed that India, already a powerhouse in content production and IT services, is uniquely poised to lead this transformation. The convergence of its deep talent pool, rapidly maturing AI ecosystem, and proven capabilities in media production positions it as a strategic node in the global AI-M&E value chain.

The report explained that the adoption of AI across media is evolving across two dimensions: technological maturity and use-case readiness. The current landscape features several AI applications that are already being operationalised at scale, while others are still in exploratory or early development phases.

“Indian companies are leveraging GenAI tools not only for creative purposes but also for campaign optimisation, content performance improvement and audience engagement. The key areas include: content generation, post production and VFX,” the report pointed out.

It added that AI now had the default technology used for rendering workflows, de-aging/ re-aging effects, rotoscoping and 2D-to-3D conversion. “AI adoption has allowed Indian post-houses to reduce rendering and editing timelines, especially for short-format and episodic content. As more Indian platforms demand a quick turnaround for regional, language and mobile-first versions, such automation has become a way of life,” the report said.

The 124-page report further revealed that 89% of Indian M&E companies surveyed had implemented GenAI POCs (proof of concept), which offers a practical, low-risk way to explore GenAI now, allowing the business to act on insights quickly and effectively while minimising the risks of falling behind in the GenAI race.

It further pointed out that OTT (Over The Top) platforms have started using AI to offer hyper targeted content recommendations based on regional preferences, affluence, geo-targeting and consumption patterns, which is also an effective way to improve viewership. “On the monetisation front, AI is driving dynamic (and customised) ad insertions and optimising pricing strategies through real-time viewer analytics,” it said, adding, “AI is also being used in predictive content performance—OTT platforms use AI to model trailer effectiveness and anticipate drop-off rates. Further, broadcasters are experimenting with AI-driven dynamic creative optimisation (DCO) to vary ads and promos in real-time depending on the viewer persona and profile/ lookalike.”

India offers a 40% to 60% cost advantage in animation and VFX services, supported by a large, skilled workforce. The report also pointed out the increasing international appeal of Indian storytelling, with up to 25% of views on Indian OTT content now originating from overseas audiences. “This phenomenon is not merely commercial—it represents a moment of cultural diplomacy, wherein India’s stories are forging emotional and cultural connections across continents,” it noted.