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Tag: advertising revenue

  • Our branded content business has grown three-fold: Discovery’s Shaun Nanjappa Chendira

    Our branded content business has grown three-fold: Discovery’s Shaun Nanjappa Chendira

    Mumbai: The ‘great reset of 2020’ had the media and entertainment industry witnessing one of the most peculiar anomalies ever in history where the burgeoning demand and consumption of content was accompanied by an unprecedented fall in advertising revenues.

    While the English infotainment genre also benefited by the overall growth in viewership, Discovery India registered a near 50 per cent dip in advertising in AMJ 2020 owing to the slump in both ad volumes and ad rates, which, according to Discovery Inc, head of advertising, sales, South Asia, Shaun Nanjappa Chendira “reduced to a trickle” in that period. However, with the picking up of the economy around August-September 2020, the scenario began to ease out. Despite the second wave earlier this year, the entertainment brand has reached a near normalisation of business riding on the back of two strategy pillars – branded content and the hybrid business model.

    Spotting Early Revival Trends – Branded Content & the Hybrid Business Model

    Shaun Nanjappa Chendira was promoted as the head of advertising, sales, South Asia, Discovery Inc in October 2020. That was the time when industries across the board, M&E included, were showing signs of recovery and the opportunities opened up by the pandemic had taken precedence over the challenges posed by it. As the economy began to revive, people resorted to revenge buying giving a much-needed fillip to business across categories. While the spurt in FMCG was expected, two-wheelers and other auto brands were also able to drive sales despite the pandemic. Segments such as telecom and handsets assumed greater relevance.

    “The difference this time around was that brands weren’t looking for visibility alone; they wanted better engagement with the consumers. Because branded content works wonderfully well in that space, we saw our branded solutions business grow by leaps and bounds. Clocking in a three-fold growth since 2019, today it contributes 25-30% of Discovery’s overall revenue,” stated Chendira.

    Commenting further on whether there were new advertisers coming in after the pandemic, he added, “Our client base undergoes a change every year with new categories coming onboard. Recently edtech, pharma and BFSI brands have been quite active on our OTT as well as linear platforms. Another trend we witnessed was that of deeper penetration happening in each category. If there were one or two mobile handset brands advertising earlier, today there are three or four of them.”

    Discovery has created branded content with a number of start-ups, one of the most noteworthy examples being ‘Discovery School Super League with BYJU’S’. It has also undertaken similar projects with Mi India (Feelin Alive Season 2), Oppo (Life Unscene), Hyundai (Emission Impossible) and more.

    The demand for high-impact formats and India-centric content, led Discovery to bringing one of its largest IPs ‘Into The Wild With Bear Grylls” into play during the pandemic. The new episode with Akshay Kumar helped the channel in “getting five or six new clients from across categories on board, thus scaling ad revenues.” Chendira shared that ‘Into the Wild’ has consistently helped Discovery in growing its advertising base.

    Also coming in handy for the media brand was the timely launch of its OTT platform. “We launched discovery+ in March, just before the pandemic hit. From a business perspective, it gave us an opportunity to offer linear plus digital solutions to marketers, bundled as one. The success of this hybrid model has made it a norm for us today and we will continue to push forward in this direction,” asserted Chendira. “However, we do believe that TV is still irreplaceable as the only way of catching a mass audience in the shortest period of time. The large-screen family viewing experience cannot be replicated on digital, which is more about solo viewership, catch-up TV and watching anywhere.”

    The Road Ahead – Recovery and Growth

    Chendira is hopeful of achieving pre-pandemic revenue levels by the end of 2021. By September, Discovery Inc had started seeing a growth trajectory of 5 per cent which soon jumped to 10 per cent, and the channel was able to recoup a lot of the actual pandemic-hit very fast, driven by the market recovery as well as its product and business propositions.

    “A combination of these helped us in stabilising revenues. The trend carried on until March end, when the second wave and lockdowns came into force. However, with consumers and marketers having learnt to innovate and adopt in response to the challenge, this time the recovery has been fairly quick. There was marked improvement in June and July, and we are expecting things to further normalise in August,” he said, while taking a look at the recovery so far.

    Going ahead, India-centric content, sports, and regional will be the added focus for Discovery India. On the business front, the efforts will be directed towards ‘working more closely with clients and not just agencies’, said Chendira.

    “Discovery’s strength has been in the direct-relationship it has nurtured with brands which has resulted in building credibility and mutual respect over a period of time. This played out to our advantage during the tough times. When marketers started to advertise, we were able to leverage this relationship and thus we could bounce back almost instantly. Our proposition to our partners will continue to evolve in accordance with the market trends,” Chendira signed off.

  • TV segment ad revenue decline to be in range of 20-25% at end of FY21, report estimates

    TV segment ad revenue decline to be in range of 20-25% at end of FY21, report estimates

    KOLKATA: The broadcasters have had rockier than the usual first half of the year due to ongoing crisis as the advertising spends fell drastically. While the market is slowly recovering, ad decline could be in the range of 20-25 per cent at the end of FY21. The report published by Elara Capital also predicts that Zee Entertainment Enterprises Limited (Zeel) and TV Today Network (TV Today) will outperform other broadcasters in terms of ad revenue.

    Zeel’s growth will be driven by Zee Anmol moving back towards FTA and strong gains in the south based regional genre, as per the report. It further adds that TV Today will have an advantage of the shift in the news genre due to sharp viewership gains compared to other genres, which has tapered off post the unlock. However, it still remains high compared to pre-Covid levels. Aaj Tak being the leader in the news genre in the first half of FY21, the traction for ad spends in the festive season is expected to remain healthy along with some benefits during Bihar elections, thanks to strong market share for election poll viewership.

    It re-emphasises that the re-conversion of channels like Zee Anmol, STAR Utsav from paid to FTA will continue to benefit the listed broadcasters like Zeel positively as they have been gaining significant market share within the GEC genre attracting ad revenues. Hence, the report predicts the ad revenues from these channels to move back to pre-NTO levels, which had plummeted after their conversion to paid channels post NTO 1.0 implementation.

    Genre-wise, Hindi and regional GEC will outperform TV ad spends, while other genres like English, music, infotainment etc. will underperform given the continued weakness witnessed in the English entertainment genre and struggle of music, infotainment in attracting ad spends.

    The report says that the pricing of GEC genre has seen a sharp recovery and down by merely 25-30 per cent narrowing the gap from 60-65 per cent in April-May. However further recovery for pricing in the GEC genre is expected only after the Indian Premier League (IPL) i.e. November onwards, as the latter has extracted a huge chunk of ad budgets. It also says that the festive uptick coupled with the resumption in GEC ad spends post the IPL season to bode well for the broadcasters, during the first half of the third quarter leading to 15 per cent growth year-on-year.

    Nonetheless, the report mentions that broadcasters would not be able to close the quarter with the festive gains due to some drop towards December. Hence, they will end overall Q3 at a 7-8 per cent growth excluding IPL. During the fourth quarter, broadcasters are expected to report a growth of 10-12 per cent given the low base of FY20 impacted by Covid2019. Based on these expectations, FY21E ad decline translates to average 17- 19 per cent (ex-IPL).

  • ZEEL Q2: Ad revenue recovers, ZEE5 drives subscription revenue growth

    ZEEL Q2: Ad revenue recovers, ZEE5 drives subscription revenue growth

    KOLKATA: Zee Entertainment Enterprise Ltd (ZEEL) has reported operating revenue of Rs 1,727.7 crore for Q2 FY21. The broadcaster’s advertising revenue stood at Rs 902.8 crore and domestic revenue has grown by 10.6 per cent to Rs 800.3 crore.

    The company has witnessed a massive decline of 77.2 per cent in profit after tax to Rs 94 crore from Rs 413.2 crore compared to corresponding quarter last year.

    While the domestic subscription revenue has grown by 2.3 per cent year-on-year, it has been primarily driven by an uptick in ZEE5 subscription revenues. Advertising revenue has started recovering, as the number declined by 26 per cent compared to 66 per cent in Q1.

    The network which commands 19 per cent of all India entertainment share in Q2 claims to have made a strong rebound in ratings across the markets with the resumption of original content.

    Its digital arm ZEE5’s global MAUs and DAUs stood at 54.7 million and 5.2 million respectively in September. ZEE5 users spent an average of 152 minutes per month on the platform, which has grown by 36 per cent quarter-on-quarter.

  • ZEEL’s Punit Goenka expects advertising growth to be back in H2, moderate sub growth for FY 21

    ZEEL’s Punit Goenka expects advertising growth to be back in H2, moderate sub growth for FY 21

    KOLKATA: The unprecedented Covid2019 crisis has had a major impact on media and entertainment business, the leading player Zee Entertainment Enterprises Limited (ZEEL) reported a revenue decline of 34.7 per cent YoY in the first quarter (Q1) of the financial year (FY) 21, led by the sharp decline in ad revenues. As the economy has started showing signs of slow recovery, ZEEL MD and CEO Punit Goenka expect the growth of the advertising to be back in the second half of the year.

    “On the advertising side, our outlook is quite positive. We do expect the growth to be back in the second half of the year. We are targeting growth from the third quarter itself. We have factored in IPL into the same number. I don’t want to comment on what IPL is going to do, what is the industry going to do. It’s a very normal feature now,” Goenka stated in an investors call after declaring Q1 results.

    The company executives stated that the recovery has already begun and the advertisers are coming back as consumer spending has started again. ZEEL is seeing improvement in ad revenue on a month-on-month basis. 

    Goenka also mentioned that FMCG is the largest sector of advertisement that ZEEL gets. Hence, this sector is the first one to start moving for the broadcaster to have any semblance of growth coming back. 

    “If we look at the initial days, almost all discretionary companies completely stopped advertising and advertising was primarily dominated by FMCGs in the month of April. So, as things have progressed, FMCGs have been scaling up their investments. On top of that, we are seeing discretionary categories like Auto, Handset all are coming back. But primarily, it is FMCG where the rebound is strong. As festive seasons kicks in we will expect other categories like telecom, consumer durables, e-commerce to scale up their investment. And on the basis of that, we are projecting that we will see acceleration starting September,” ZEEL corporate strategy and investor relations head Bijal Shah said.

    ZEEL does not predict any major enhancement in CAPEX for the FY. Although it will be better positioned to guide the EBIDTA margin at the end of Q2 given the persisting uncertainties, it emphasizes that there will be an improvement compared to Q1. ZEEL expects the margin to improve sequentially every quarter, gradually inching back to 30 per cent. If everything is normal, it expects the margin to be at 30 per cent or above at FY 22. 

    The broadcaster will go back to its normal run rate on content cost in q2 itself because all channels have started going back to normal production level which was before pre-COVID. However, the content cost-revenue ratio may go up for this FY given the drop in advertising revenue. 

    “We have been really working on collections. While the receivables went up last year, we will see our receivables coming up as things settle down. In the coming quarters of FY 21, our receivables should be in line with what there were in earlier years,” ZEEL CFO Rohit Gupta said.

    “ In terms of domestic subscription revenue, we have factored in several price increases in channels and bouquets. Since a stay has been put on NTO 2.0, we have not been able to take those hikes. We do expect the domestic subscription growth will be moderated for the current year. NTO 2.0, whenever implemented, will have very short term impact as we do believe our content has the ability for consumption pull. Our ZEE5 subscription growth will also aid the growth,” Goenka commented. 

  • Facebook sees dip in ad demand in last 3 weeks of Q1

    Facebook sees dip in ad demand in last 3 weeks of Q1

    MUMBAI: Despite increased engagement due to shelter-in-place directives in many countries, Facebook experienced a significant reduction in the demand for advertising. After the initial steep decrease in advertising revenue in March, Facebook has seen signs of stability reflected in the first three weeks of April.

    However, the social media giant has reported $17.74 billion, slightly beating analysts’ expectations for the quarter up by 18 per cent, and net income of $4.9 billion (or earnings per share of $1.71). Advertising revenue stood at $17.44 bn.

    Daily active users (DAUs) on the social media platform were 1.73 billion on average for March 2020, an increase of 11 per cent year-over-year. And monthly active users (MAUs) reached 2.60 billion as of March 31, 2020, an increase of 10 per cent year-over-year.

    “Our community metrics, including Facebook DAUs and MAUs and Family MAP and DAP, reflect increased engagement as people around the world sheltered in place and used our products to connect with the people and organizations they care about. We expect that we will lose at least some of this increased engagement when various shelter-in-place restrictions are relaxed in the future,” the company stated in a statement.

    Facebook also witnessed a related decline in the pricing of its ads, over the last three weeks of the first quarter of 2020. However, due to the increasing uncertainty in its business outlook, Facebook has not provided any specific revenue guidance for the second quarter or full-year 2020.

    “After the initial steep decrease in advertising revenue in March, we have seen signs of stability reflected in the first three weeks of April, where advertising revenue has been approximately flat compared to the same period a year ago, down from the 17 per cent year-over-year growth in the first quarter of 2020. The April trends reflect weakness across all of our user geographies as most of our major countries have had some sort of shelter-in-place guidelines in effect,” it added.

    It expects to realize operational expense savings in certain areas such as travel, events, and marketing as well as from slower headcount growth in the business functions. But it also mentioned that the company plans to continue to invest in product development and to recruit technical talent.

    “We plan to continue to grow our capex investments to enhance and expand our global infrastructure footprint over the long term. In 2020, we expect capital expenditures to be approximately $14-16 billion, down from the prior range of $17-19 billion. This reduction reflects a significant decrease in our construction efforts globally related to shelter-in-place orders,” it added.

  • MIB addresses Congress MP Manish Tewari’s query on govt’s ad spends

    MIB addresses Congress MP Manish Tewari’s query on govt’s ad spends

    MUMBAI: Congress MP Manish Tewari, asked the Ministry of Information and Broadcasting (MIB) to reveal details about the yearly amount spent by the Government of India (GOI) on print, broadcasting, social media and outdoor advertisements between 26 May 2014 and 30 September 2019 on 29 November. He also has asked for details about the amount spent on ads in foreign media.

    Tewari inquired about the Government’s advertising share in the revenue streams of the top 20 Indian media firms between 04 April 2014 and 09 September 2014.

    MIB minister Prakash Javadekar replied “The Bureau of Outreach and Communication (BOC) releases notices, tenders, auctions, recruitments, etc. and also undertakes awareness campaigns and dissemination of information about the government schemes and programmes through various media.”

    Javadekar wrote in his reply that the details about the release of advertisements on various media between the said dates are available on BOC’s website.

    He explained that the revelation of per sq cm rate of ads in print media has increased from Rs. 42.31 to Rs. 62.13, but the average per year print media space of advertisements given by the BOC between FY 2014-15 and 2018-19 has reduced during NDA’s rule from Rs. 11.88 crore sq cm to Rs. 10.95 crore sq cm in UPA II rule between FY 2009-10 and 2013-14.

    Javadekar lastly said that GOI does not maintain details about the Indian media companies. He also emphasised that the Ministry does not issue advertisements in foreign newspapers and TV channels.

  • Facebook’s revenue rises by 28% to $16.9 billion in Q2 earnings

    Facebook’s revenue rises by 28% to $16.9 billion in Q2 earnings

    MUMBAI: Facebook beat analysts’ expectations in the second quarter, posting $16.9 billion in revenue with money from advertising pegged at $16.62 billion. The result came after hours aftee Facebook struck a $5 billion settlement with the Federal Trade Commission following the 2018 Cambridge Analytica scandal. The social media giant recorded a $2 billion charge in the quarter tied to the FTC settlement while it previously set aside $3 billion.

    The social media giant’s earnings per share rose to $1.99 cents in the quarter and monthly active users across its family of services, which includes Instagram and Whatsapp, were 2.41 billion as of 30 June 2019, an 8 per cent increase year-on-year. Moreover, daily active users also saw an increase of 8 per cent reaching 1.59 billion on average for June 2019.

    In addition, the company estimates that more than 2.1 billion people now use Facebook, Instagram, WhatsApp, or Messenger every day on average and more than 2.7 billion people use at least one of the company’s family of services each month.

    “In July 2019, we entered into a settlement and modified consent order to resolve the inquiry of the FTC into our platform and user data practices. Among other matters, our settlement with the FTC requires us to pay a penalty of $5 billion and to significantly enhance our practices and processes for privacy compliance and oversight,” the company highlighted.

    “In particular, we have agreed to implement a comprehensive expansion of our privacy program, including substantial management and board of directors oversight, stringent operational requirements and reporting obligations, and a process to regularly certify our compliance with the privacy program to the FTC. In the second quarter of 2019, we recorded an additional $2 billion accrual in connection with our settlement with the FTC, which is included in accrued expenses and other current liabilities on our condensed consolidated balance sheet,” it added.

    Facebook mentioned that the company was informed by the FTC in June that it had opened an antitrust investigation of its company. It also noted that the online technology industry and the company have received increased regulatory scrutiny in the past quarter. Moreover, the Department of Justice announced in July that it will begin an antitrust review of the market-leading online platform.

  • Paying OTT subs to reach 30-35 mn by 2021, only 2x growth in ad revenue

    Paying OTT subs to reach 30-35 mn by 2021, only 2x growth in ad revenue

    MUMBAI: Digital media is set to overtake filmed entertainment in India this year in terms of revenue. While TV will retain its pole position as the largest segment, digital will also overtake print by 2021 to reach $5.1 billion, according to a report from FICCI and EY report on ‘How a billion screens can turn India into a media and entertainment powerhouse’.

    In this overwhelming growth of digital media, telecom operators will be the future MSOs. As per the report, while 60 per cent of total consumption today is through telco bundles, it is estimated to grow to over 75 per cent by 2021 and cater to over 375 million subscribers. Smartphone penetration is just 36 per cent in 2018, leaving massive room for growth. 30 per cent of phone time is dedicated to entertainment.

    “While watch time could grow 3 to 3.5x over the next five years, resulting in a massive inventory growth, advertising revenues will grow only around 2x. CPMs will correspondingly fall during the period for non-premium inventory,” the report added.

    Along with growth in advertising revenues, subscription revenue is also projected to grow. The report predicts 30-35 million paying OTT video subscribers and 6-7 million paying audio subscribers by 2021.

    “Digital segment will benefit from the growing popularity of e-sports, AR/VR technologies, online gaming and fantasy sports, all of which are “Generation Z” products,” it added. “With its massive base of internet users, India’s digital media market is attractive to global streaming platforms looking to capitalise on the country’s fast-growing digital consumption. This is especially true as competitively priced 4G services become more widely available.”

    The report went on to mention that despite the growth in digital media consumption, piracy threat is
    “likely to restrict full monetisation of content as well as large-scale acceptance of SVoD in India”. It mentioned, “Indian market is highly price-sensitive and is driven majorly by advertising revenues. Several sectors such as print, digital, television and radio derive major share of their revenues from advertising.”

    The report highlighted that consolidation will be needed for platform profitability as contest costs will remain high as each platform produces or acquires content to meet its needs. It also added that post the new tariff order regime, OTT platforms are sure to benefit due to increased parity between television and OTT content choice and costs.

  • India among top 10 contributors to ad spend growth: Zenith Ad-Ex Forecast

    India among top 10 contributors to ad spend growth: Zenith Ad-Ex Forecast

    MUMBAI: Publicis Media Company Zenith has just released its new Advertising Expenditure Forecasts in which it predicts that global ad expenditure will grow 4.4 per cent in both 2016 and 2017, reaching USD 566 billion by the end of 2017. Zenith predicts that ad expenditure growth for India in 2017 stands at Rs. 54,344 crore (Rs 543.4 billion or USD 8 billion), up by 11.2 per cent over 2016.

    Digital remains one of the fastest growing mediums in India registering a 30 per cent growth rate. Television will register an 11 per cent growth rate in 2017, print (newspapers) will grow at 7.6 per cent and all other media between 7-12 per cent.

    Zenith India group CEO Tanmay Mohanty added, “India remains one of the few bright spot economies in the world. Ad spending in India is on a steady growth curve and likely to stay that way in 2017, buoyed by the State Elections in Uttar Pradesh and Punjab, the upcoming Champions Trophy and continued expansion and growth of regional newspapers and television. In November, the central government introduced reform in the form of Demonetisation which is leading to some contraction in ad spends. We expect the demand for goods and services to pick up and this shortfall to be temporary. Demonetisation is expected to augur well for the economy long-term. In fact, we expect 2017 to see increased ad spending by categories such as Mobile Wallets, Telecom 4G, BFSI, Mobile Handsets, Fast Moving Consumer Goods and Consumer Durables.”

    India is among the top ten contributors to ad spend growth, along with others such as USA, China, Indonesia, UK, Philippines, Japan, Germany.

    However the global figures for 2017 forecast is down by 0.1 percentage point from the forecasts published in September after small downgrades in Asia Pacific, which nevertheless remains one of the fastest growing regions for ad expenditure.

    This is a strong performance, given that the unexpected results of the UK’s referendum on EU membership and the US presidential election have increased political uncertainty and raised the risks of restrictions to international trade. 2017 also faces a tough comparison with the quadrennial year of 2016, when spend was buoyed by the US elections, the Summer Olympics, and the European football championships, as it is every four years.

    After 2017 continued steady growth in global ad spend is expected, of another 4.4% growth in 2018 and 4.1 per cent in 2019. Global ad spend growth has been remarkably stable since 2010, growing at between four and five per cent a year, generally at or below the growth rate of global GDP. Before the financial crisis, advertising would typically exaggerate the wider economy, growing faster in times of expansion and shrinking faster during recessions, with frequent changes in year-on-year growth rates. More recently the global ad market appears to have entered a phase of more stable growth.

    Over all, television remains the dominant advertising medium, attracting 36 per cent of total global spends in 2016. The internet is expected to overtake television to become the largest medium in 2017.

  • India among top 10 contributors to ad spend growth: Zenith Ad-Ex Forecast

    India among top 10 contributors to ad spend growth: Zenith Ad-Ex Forecast

    MUMBAI: Publicis Media Company Zenith has just released its new Advertising Expenditure Forecasts in which it predicts that global ad expenditure will grow 4.4 per cent in both 2016 and 2017, reaching USD 566 billion by the end of 2017. Zenith predicts that ad expenditure growth for India in 2017 stands at Rs. 54,344 crore (Rs 543.4 billion or USD 8 billion), up by 11.2 per cent over 2016.

    Digital remains one of the fastest growing mediums in India registering a 30 per cent growth rate. Television will register an 11 per cent growth rate in 2017, print (newspapers) will grow at 7.6 per cent and all other media between 7-12 per cent.

    Zenith India group CEO Tanmay Mohanty added, “India remains one of the few bright spot economies in the world. Ad spending in India is on a steady growth curve and likely to stay that way in 2017, buoyed by the State Elections in Uttar Pradesh and Punjab, the upcoming Champions Trophy and continued expansion and growth of regional newspapers and television. In November, the central government introduced reform in the form of Demonetisation which is leading to some contraction in ad spends. We expect the demand for goods and services to pick up and this shortfall to be temporary. Demonetisation is expected to augur well for the economy long-term. In fact, we expect 2017 to see increased ad spending by categories such as Mobile Wallets, Telecom 4G, BFSI, Mobile Handsets, Fast Moving Consumer Goods and Consumer Durables.”

    India is among the top ten contributors to ad spend growth, along with others such as USA, China, Indonesia, UK, Philippines, Japan, Germany.

    However the global figures for 2017 forecast is down by 0.1 percentage point from the forecasts published in September after small downgrades in Asia Pacific, which nevertheless remains one of the fastest growing regions for ad expenditure.

    This is a strong performance, given that the unexpected results of the UK’s referendum on EU membership and the US presidential election have increased political uncertainty and raised the risks of restrictions to international trade. 2017 also faces a tough comparison with the quadrennial year of 2016, when spend was buoyed by the US elections, the Summer Olympics, and the European football championships, as it is every four years.

    After 2017 continued steady growth in global ad spend is expected, of another 4.4% growth in 2018 and 4.1 per cent in 2019. Global ad spend growth has been remarkably stable since 2010, growing at between four and five per cent a year, generally at or below the growth rate of global GDP. Before the financial crisis, advertising would typically exaggerate the wider economy, growing faster in times of expansion and shrinking faster during recessions, with frequent changes in year-on-year growth rates. More recently the global ad market appears to have entered a phase of more stable growth.

    Over all, television remains the dominant advertising medium, attracting 36 per cent of total global spends in 2016. The internet is expected to overtake television to become the largest medium in 2017.