The market
The emergence of cricket as televised entertainment courtesy the IPL and successful launch, and the quick and sustained rise to ascendancy of the general entertainment channel, or GEC, Colors, were the biggest events in the television media in 2008.
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Unprecedented high advertising rates set a benchmark in IPL 2008 and are set to go up further this year. On the other hand, soaps that had been running for a long time and a new season of imported reality/talent shows on mass channels floundered. Advertisers stalled at huge premiums demanded to offset big production budgets.
The players
The evolving viewer interests and the inability of leading channels to satisfy these took its toll on GEC shares, which saw an 8% decline over the last two years, despite a doubling of the number of channels in the genre. However, the latest entrant Viacom 18 Media Pvt. Ltd-owned Colors, had a dream launch.
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The audience
The number of cable and satellite households in India grew by 9% in 2008 (according to syndicated surveys). The direct-to-home, or DTH, digital market is rapidly expanding in India and is currently estimated at 10 million homes. Once the DTH universe achieves critical mass, niche broadcasters will be in a better position to monetize the hard-to-reach upmarket viewers through better-addressed promotions and advertising.
The future
Advertising spending on television is expected to grow by 7% this year. The key drivers will be:
• Fast moving consumer goods, or FMCG, telecom and education categories
• Advertising rate increases and audience fragmentation in key genres resulting in higher cost per contact
• Increased time spent at home, resulting in higher viewership
• Increased hours of cricket telecast: potentially 33% more days this year compared to 2008
• Regional and news channels’ growth on the back of the increasing regional focus of advertisers and elections, resulting in an increase in advertising rates
Although we have seen the launch of Real, a new Hindi GEC, early this year, the rest of the year is unlikely to see any major channel launches owing to the adverse economic conditions and ever-increasing entry and distribution costs.
Accountability, network-wide deals and greater flexibility in offering tailored deals will set successful broadcasters apart from the rest. GECs will grow on the back of better advertising yields, while erstwhile big-ticket, money-spinning properties will face pressure.
Graphics by Ahmed Raza Khan/Mint
METHODOLOGY
The report is based on spending data of marketeers. The data has been analysed by GroupM software METIS that uses ad volume data and then factors in rate discounts based on internal estimates. Live data from group agencies is pooled to arrive at estimates of the actual values realized by media brands.