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Colors CEO Raj Nayak bullish on ad growth, rues escalating movie acquisition price
MUMBAI: Colors, Rishtey and Rishtey Cineplex CEO Raj Nayak is bullish on the TV ad market despite media agency Madison Media revising downwards its forecast for 2016 from 20% to 11%.
Nayak’s bullishness stems from the fact that the sponsorship for ‘Bigg Boss 10’, which is Colors’ flagship non-fiction property, has been sold out much before the show goes on air in October around the festive season.
Nayak expects growth to be at 15% in 2016 despite e-commerce companies trimming their ad expenditure.
The Madison report had mentioned that the ad growth in general and TV ad growth in particular softened due to reduction in ad spends by e-commerce players, who had become one of the top ad spenders in the country.
“I believe that we will still grow at a 15% growth rate especially with monsoons being good this year and the GST being passed by Parliament, due to which a lot of positive sentiment has been built around in the industry. There is a lot of positive sentiment in the marketplace. I genuinely believe that advertising will see an upward trend in the next few months. I hope that by the end of the year we will grow at 15%,” Nayak asserted.
Nayak is unperturbed by the fact that the e-commerce’s contribution to the total ad spends has come down, for he believes that another category will fill in the gap created by e-commerce.
A case in point, Nayak says, is ‘Bigg Boss’, which has a new presenting sponsor in the form of Parle Agro’s apple juice drink Appy Fizz. E-commerce major Snapdeal was the presenting sponsor of the popular show in the previous year.
“If one category stops spending, another category comes in. Who would have thought one year back that a client like Appy Fizz will be presenting ‘Bigg Boss’? Our ‘Bigg Boss’ sponsorship has been sold out now without the show even starting,” Nayak stated.
Queried if Appy Fizz is putting in the same amount as Snapdeal for ‘Bigg Boss’ sponsorship, Nayak replied, “We are very greedy people. If the 15% growth has to come, that growth has to come organically from somewhere. Anything and everything that we do is for more money. We don’t do anything for less.”
He believes that mobile handsets, FMCG and automobile are some of the categories that will continue to fuel TV ad growth.
“Mobile is growing in a huge way. The FMCG sector will continue to spend and will have to spend more due to competition. There is a new player in Patanjali. Automobile is launching new products,” he noted.
Movie acquisition on hold
After having lapped up a wide range of movies for its full-fledged Hindi movie channel Rishtey Cineplex, Viacom18 has decided to go slow on acquiring movies due to prohibitive pricing of satellite rights.
“We have put a hold on movie buying at this stage, because it’s too expensive and it doesn’t justify the ROI. We will be going slow on buying movies. We have enough movies in our library to run a channel. We will acquire library, but we will go very slow on buying new movies,” Nayak revealed.
While Colors has reduced movie airings, new movies will continue to premiere on the channel to ensure better monetisation.
“We have a very limited channel to expose movies and on Colors we have hardly done any movie airing. We hardly air movies on Colors; however, we may still premiere movies on this channel because we have to ensure monetisation,” he noted.
Nayak said that Risthey Cineplex is being built slowly. The next task is to get wider reach by launching it on Tata Sky and Videocon d2h. “We still have to launch it on Tata Sky and Videocon d2h. But the feedback we have got is very good. We have already crossed 100 GVTs,” he said.