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2014: TV saw tremendous growth in rural markets
By Rohit Gupta
Two things struck me in 2014—the lacklustre but challenging first quarter from January to March and the historic general elections that made everybody happy in the second quarter.
In fact, the elections fetched the networks a lot of money and paved the way for more goodies in the subsequent months.
The Diwali season was something of a dampener last year, especially from an advertising point of view. But this year the Diwali mood was back to what it was a few years ago. Things are better and buoyant now. Brands that had held on to their budgets are entering the market and people, too, are opening their purse strings.
My estimate is that in 2014 TV ad spend grew by 10–12 per cent. Bolstered by a positive mood and a steady government, it might grow by 12–15 per cent next year.
In 2014 television saw tremendous growth in rural markets with the expansion of C&S and DTH. I see it continuing to drive ad revenue for the next five years as well. No other medium can deliver the reach that TV gives.
The old faithful FMCG category continues to do well. The new biggie that has emerged and is making a lot of ripples is e-commerce. I think it started with Amazon India using the Indian Premier League (IPL) as a platform to launch its campaign. Thereafter, all the big broadcasters started having an e-commerce player on board, whether it was Amazon, Flipkart or Snapdeal.
I think the other big category was the very competitive mobile handset category. The automobile category is also doing well, with new launches in the two-wheeler and four-wheeler segments. We also saw a resurrection in the consumer durables category after two years.
Digitisation still remains to be fully monetised, but people can access more channels these days. Niche channels also got a push.
With regard to the ad cap, the Hindi movie genre missed out a bit and so did the news genre. Both genres took to airing 20 minutes of ads. In the music genre we did well being a top two player. Obviously, those who did not fare well were not following the ad cap.
We have been following the ad cap even before the regulation came into effect. Channels in the English movie genre also have been following the ad cap even before regulation came in. However, I think there should be separate broadcast guidelines for sports channels. This is because some sports channels have a lot of breaks while others are break free for a long period. Insofar as the guidelines enhance the viewer experience, all is well.
For us rates have increased year on year regardless of the ad cap. Some broadcasters managed to get a rate hike to compensate for the ad cap, while some did not. I don’t believe that the ad cap necessitated more focus on sponsorships. We have always focused on getting sponsors for properties like ‘Kaun Banega Crorepati’ (KBC) and this has not changed. That being said, there is a limit to the number of sponsors a broadcaster can get for a property.
You cannot have 20 sponsors overnight. There is only so much available inventory to show ads. For us only Sony was a challenge in terms of the ratings. But if you look at it, our dependence on Sony has come down over the past four years. Other channels and their properties have stepped up. Now the IPL is a huge revenue earner. SAB too is a big brand, while Pix has been growing at the rate of 35 per cent CAGR.
AXN has been growing by 15–20 per cent. The inventory we sell on our channels has remained unchanged over the years. The fact that revenue growth has been steady is proof that we have consistently managed to raise rates.
Nonetheless, there is still a lot of concern over the ratings system. The panel is far from stable and the fluctuations have made things challenging for both broadcasters and advertisers. Media buyers look at things such as perception. It is much more than a number game.
Let’s hope that BARC makes a difference. All we need is a stable panel for various segments and genres. It needs to have equal representation between rural and urban India, between SECs, age groups, etc.
Though we have intensified ad sales on digital platforms like Sony Liv, I don’t think digital is a threat to TV. Going forward, there will be a greater synergy between the two mediums. As I said earlier, no other medium can deliver the reach that TV does for advertisers. Digital can meet a brand’s changing requirements, but this will not be at the cost of TV.
(The author is MSM president, network sales, licensing and telephony)