India’s television broadcasting industry had to compromise in advertising spends and focus on consumer preference for digital platforms in 2019, even as some areas of the business witnessed consolidation that might continue. Reliance Industries was at the vanguard of the cable-industry consolidation through the acquisition of two of the largest cable companies – Den and Hathway Cable & Datacom.
MK Anand, MD and CEO of Times Network, said that “consolidation in the media and entertainment sector will continue in 2020. This will have a positive impact on cost efficiencies and overall competitiveness of the broadcast industry,”. In 2019, Subhash Chandra, promoter of India’s largest listed media company Zee Entertainment Enterprises stepped down as its chairman after a yearlong debt at the promoter level.
The first quarter of 2019 kept broadcasters busy with implementation of the new tariff order (NTO) and broadcasting framework mandated by the Telecom Regulatory Authority of India. NTO was one of the biggest changes in the history of satellite television in India, allowing consumers to select and pay only for the channels they wanted to watch.
Then there was a brief period of channel blackouts before normality returned. “It was a year of both opportunities and challenges. While the opportunities gave a fillip to our growth trajectory, the challenges offered their own set of learnings, leading to many changes,” said Punit Misra, CEO of domestic broadcast business at Zee.
“Almost everybody overestimated the growth in 2019 because we were coming from a very high growth phase. We were relatively conservative and we had considered around 11% growth. I think the year will probably end at about 9% or 10% ad growth,” said Ashish Bhasin, CEO – APAC at Dentsu Aegis Network.
Data from various reports showed that it was the first year when almost all the categories – auto, FMCG, services, telecom and BFSI – reduced ad spends. “This is like a vicious circle,” said the chief executive at a large media network. “While there was some gain from NTO in terms of distribution revenues, it has not offset the drop in ad revenue. If things continue like this, by the end of the fiscal, we will have to look at closing down some nonperforming channels” the expert added.
“The paradigm shift witnessed in the entertainment consumption patterns indicates a larger need to deeply study the consumer preferences, instead of speculating the supremacy of one platform over the other,” he added. “India is a market where both traditional linear TV and digital platforms will continue to grow and coexist.”
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