Home >Industry >Advertising dollars have not shifted from linear TV to digital: BCG’s John Rose
John Rose, partner and managing director of the Boston Consulting Group (BCG). File photo: Pradeep Gaur/Mint
John Rose, partner and managing director of the Boston Consulting Group (BCG). File photo: Pradeep Gaur/Mint

Advertising dollars have not shifted from linear TV to digital: BCG’s John Rose

In an interview, John Rose, partner and MD of BCG, speaks about the future of newspapers, declining viewership on linear TV (traditional television) and the rise of regional content in India

New Delhi: John Rose, partner and managing director of the Boston Consulting Group (BCG) is bullish on Indian media market. Rose, who has more than 30 years of experience in media, was earlier global leader of technology, media and telecommunications practice at BCG and became a BCG Fellow in 2014.

Rose was in Delhi recently for the Big Picture Summit 2017, organized by lobby group Confederation of Indian Industry (CII). In an interview on the sidelines of the summit, Rose spoke about the future of newspapers, declining viewership on linear TV (traditional television) and the rise of regional content in India which he calls ‘a renaissance fair.’ Edited excerpts:

What potential do you see in Indian media and entertainment market?

I, personally, am very bullish on the notion of significant growth in the India media market from an economic perspective because it is tied to the increase in distribution pathways and access to content.

Indian media market is poised to be a very attractive growth driver. India has the advantage, relative to China, of being a much more accessible market. It has potential, in size and scale, to create significant opportunity for international corporations. There are a lot of international companies which have presence and commitments in India, which we don’t see in other emerging markets.

Where is the future digital media, in advertising or behind a paywall ?

We are in a period where advertising is unpopular and subscription models are popular. I think that’s an over-corrected and inaccurate view of the world. There are hundreds of billions of dollars being spent on advertising every year, which can’t go down to zero. Secondly, there is not enough consumer money to support all of the media content that people want to watch.

There is not going to be one model over the other. The future is hybrid models--- in which some content is free and some is paid. There are bunch of players who are purely based on subscription models with no advertising. Without naming anyone specifically, there are players who have sworn that they are never going to go into advertising. I will be stunned if you don’t see them developing ad-related models at some point in the future.

Is linear TV viewership and hence, advertising declining?

Viewership is declining in linear TV in most of the countries around the world. There are some countries with the exception, of course.

There has been a shift from linear to non-linear TV. However, a significant portion of the viewers is still watching the same content, just not on linear TV anymore. What has not happened is that advertising dollars that support linear TV have not shifted to digital platforms.

Why so?

In some cases, consumers are hooked onto the platforms that don’t have advertising. Secondly, to make advertising market viable, you need a standard measurement system. You need metrics and mechanism that allow you to make a trade-off between linear and non-linear universe, something which is not in place yet.

It took a decade for advertising dollars to shift from free-to-air to pay television universe. We are going through the same evolution; digital ad ecosystem is not quite there yet.

In all this, where is the future of newspapers?

The future of news is really bright. The newspapers that don’t have alternative digital models attached are facing a structural change. The percentage of the population that is interested in accessing news through newspapers on a non-real time basis is declining. Around the world, newspapers have been facing a year-on-year gradual decline in readership.

India is little bit different because India is seeing a significant rise in advertising demand that is countervailing the dynamic.

What is your view about the popularity of regional content in India?

India is a very large country that has not exploited the regional content in ways that it should have and it could have. Globally, the geographies which have a similar size and similar diversity of population have a much larger range of content. Having said that, India may have created such content ten years ago but it couldn’t have gotten it to people easily. With smartphone devices, the content can be distributed easily and accessed at cheaper rates.

The barriers of distribution are being removed and the number of devices is exponentially increasing. So, you ought to expect almost a golden renaissance in the creation of regional video entertainment content, relative to five or six years ago.

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