Will advertising back growth in TV viewership?
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Last week, television viewership monitoring agency Broadcast Audience Research Council (Barc) India threw up some interesting numbers from its latest Broadcast India Survey. The universe estimation study commissioned to research firm Nielsen showed a significant jump in TV penetration—from 54% in 2013 to 64% now. The TV-viewing universe also expanded in terms of the total number of viewers: the country has 780 million TV viewers today, compared with 675 million in 2013.
There was other data too. TV-owning homes in India have gone up from 153.5 million to 183 million. In addition to that, rural India has 17% more TV-owning households than urban India. The latest figures point to 84 million TV households in urban India compared to 99 million TV-owning homes in rural India. The fieldwork for the survey was conducted between November 2015 and February 2016, covering 300,000 homes.
The numbers clearly reflect strong growth in the TV universe. The important question is, will advertising follow in equal measure given the challenges the medium may be facing?
To be sure, the latest advertising forecast report by GroupM titled This Year Next Year says that while total ad expenditure grew 12% in 2016, it will grow at a lower 10% in 2017. TV is slated to grow at 8% in 2017 over 2016, which is again lower than its 10% rate of growth last year. Another report jointly published by media agency Madison and advertising magazine Pitch, however, projected TV to grow at a higher 13% in 2017. This comes after a poorer 9% growth rate of TV in 2016 as a result of a 21% decline in the medium in November-December when it lost Rs850 crore in advertising revenue in the aftermath of demonetization. According to the Pitch-Madison report, among all media, TV still enjoys the largest share of the advertising pie at 38%.
According to Karan Gupta, director at Aidem Ventures, an independent ad sales firm, the total number of TV viewers has gone up for several reasons, apart from natural growth in the population. “Earlier, viewership was reported for viewers from the age of four-plus. It is now being reported for children as young as two years-plus. The other reason could be the government’s drive to electrify the areas which were dark so far. This would also add to the viewership numbers,” he says.
Clearly, an increase in rural viewership will mean more advertisers opting for television as a medium to reach rural audiences. “We might see change in content also, focusing either only on urban or only on rural India,” he adds. Since free-to-air (FTA) channels are popular in rural markets, any jump in rural TV homes will boost advertising on FTA and regional language channels. According to Gupta, FTA channels have already started getting better rates and more advertising since Barc started reporting rural viewership. “The new data will add more muscle to FTA,” he says.
Mallikarjun Das, group chief executive of Starcom India, feels since there’s a substantial growth in TV penetration and the total number of viewers, advertising will follow. In his view, rural India has grown owing to overall TV penetration and the Free Dish revolution. Free Dish, which has 22 million subscribers, is the FTA direct-to-home platform of Doordarshan which shows approximately 80 channels and plans to add 24 this year. Das expects a fair bit of advertising growth in rural markets thanks to the packaged goods and consumer durables segments. “At this point, TV is in a fairly strong position. The advertising cost on digital does not match up to the cost efficiency of TV and with increasing penetration, TV’s cost efficiency will only increase,” he says.
To be sure, some of the challenges that television is facing may be internal. While news television may be facing a credibility crisis, the entertainment genre finds it tough to hold on to its viewers and generate stickiness. But the medium has stiffer external challenges too. For starters, digital platforms and mobile are the biggest challenge to TV viewership. One can access news, sports and entertainment on the move. “With tremendous growth in smartphone penetration and amidst disruptive technology, mobile is going to be the biggest traction driver,” says Anita Nayyar, chief executive at Havas Group.
Needless to say, viewers at the top of the pyramid as well as the young digital consumers may be deserting the medium in favour of online options. “In such a scenario, TV must ensure audience engagement and stay relevant for them. Some broadcasters have done that by launching their own over-the-top video streaming services,” says Das of Starcom India.
Experts point to other advantages of TV, primary among them being its ability to reach the masses and build instant connect with strong impact. TV is still king, they say.
Shuchi Bansal is Mint’s media, marketing and advertising editor. Ordinary Post will look at pressing issues related to all three. Or just fun stuff.