The Indian media story is headed towards a crucial point this year. After two years of near 20% growth, the media market slowed in 2008 as the downturn in the economic environment led to a steep decline in advertising expenditure by most advertisers.
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With companies still wary of loosening their purse strings, this year may be much more challenging for most media companies, says the annual media report put together by GroupM, the media buying arm of the UK-based marketing communications conglomerate WPP Group Plc.
The report predicts that the Indian media market will grow only 4.7% year-on-year in 2009, compared with 14.7% in 2008. The study, This Year, Next Year: India Media Forecasts, says that advertising revenues of newspapers, the biggest segment within the media industry, will actually see a fall (-2%), while television—the second biggest category—will grow at a much slower rate of 7%. “Given that TV is the medium of choice for the categories that are continuing to spend well, it faces a less risky future,” the report says. Digital media and radio are expected to be the front-runners this year, growing at 25% and 15%, respectively, thus enabling the media market to expand to Rs23,755 crore by this year’s close.
Industry players are keeping their fingers crossed. “This will be a year of stress for all sectors,” says Radio Mirchi CEO Prashant Panday. The general election and the Indian Premier League, or IPL, both currently under way, are the only bright spots in an otherwise dismal scene. They have the capacity to perk up ad revenues and their impact is likely to be seen in the second quarter of the current year.
The report divides the Indian media market into eight sectors—newspapers, magazines, television, radio, digital, outdoor, retail media and cinema—and examines the various factors at play, as well as the sectoral trends in 2008 and 2009. Edited excerpts from the report:
Print Media | Card rates are no longer sacrosanct
• Of the top 10 newspapers, (ad revenues of) six grew less than 10% in 2008. Of the top 20, only two grew more than 15%.
• The only newspaper showing really substantial growth in 2008 was the Mumbai edition of Daily News and Analysis, or DNA, with 49%. (read more...)
Sanjay Gupta | Slowdown sentiment a bit exaggerated
On the biggest challenge for the newspaper industry in the current scenario:
Managing costs will be the biggest challenge and newsprint is the biggest cost factor. Newsprint prices have come down in the past three months and they are likely to remain easy till June or so. After that, however, the situation may again become a little tight. (read more...)
Television | No new launch likely this year
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. (read more...)
Rajesh Kamat | Digitization will be the new theme for TV
• If the business model is sound, then stay your course without knee-jerk reactions (read more...)
Radio | Ad revenues to grow 15%
Advertising spending on radio grew by a whopping 49%, from Rs590 crore in 2007 to Rs880 crore in 2008, and radio’s contribution to the overall advertising expenditure rose from 3% in 2007 to 4% in 2008. The opening of several new markets in 2008 resulted in a growth of 62% for private FM, or frequency modulation, players who contributed Rs590 crore. The resultant increase in reach prompted advertisers to spend more on the medium. (read more...)
Prashant Panday | Needed: more ads, a level-playing field
On growth trends for 2009:
The overall growth in the radio industry for 2009 will be between 10-15% compared to last year, where growth was in excess of 55%. There are about 250 private FM channels in 75-80 towns and this number is not likely to increase until phase 3 is approved, which depends to a large extent on the new government. (read more...)
Digital Media | 3G will change the dynamics
The digital media, comprising Internet and mobile phones, continues to be the fastest growing medium in the country, albeit a small contributor to the overall ad expenditure. In 2008, this medium grew by 74% to Rs680 crore. Digital media will be much less affected by the economic slowdown than other media. (read more...)
Shailesh Rao | Slowdown spurred strategic use of Net
On forecasts for 2009:
India is in a phase that has already seen a significant growth in Internet usage and this is likely to continue. (read more...)
Other Media | Poll boost for outdoor media
The out-of-home, or OOH, market grew by only 4% in 2008 and closed at Rs1,448 crore, much lower than the Rs1,698 crore forecast. The economic meltdown severely affected key OOH markets (which contribute at least 80% of ad expenditure) in the fourth quarter, resulting in heavily reduced spending. (read more...)
Graphics by Ahmed Raza Khan/Mint
Illustrations by Raajan/Mint
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.