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Tag: GST

  • Finance Minister meets News Broadcasters Federation, NBF seeks parity in GST with the print industry

    Finance Minister meets News Broadcasters Federation, NBF seeks parity in GST with the print industry

    MUMBAI: On 17thJanuary, 2020 Finance Minister, Nirmala Sitharaman met the members of the executive body of News Broadcasters Federation (NBF). In the meeting, the NBF has proposed a recommendation requesting the Government to treat TV News channels at par with the print industry under GST.  In the current scenario, the GST applicable on the print media stands at 5% whereas the news broadcasters are charged 18% GST.

    In the meeting the President of NBF Mr. Arnab Goswami, President of NBF Board, highlighted the need for parity given the similarity in the business model and the importance of TV news broadcasting in the country.

    The Finance Minister accepted a copy of the recommendation of NBF and assured the members that she would investigate the matter.

    The NBF was represented in the meeting by the President Mr Arnab Goswami, the Vice Presidents Ms.Jagi M. Panda and Mr.SanjiveNarain, and the Secretary-General, Mr R. Jai Krishna.
     

  • “OTT, TV and cinema complement each other”: UFO Moviez’ CEO Rajesh Mishra

    “OTT, TV and cinema complement each other”: UFO Moviez’ CEO Rajesh Mishra

    The movie-exhibition business in India is stuck in contradictions. On the one hand, the country produces the highest number of movies in the world, on the other, its screen-density remains one of the lowest. Various state governments provide subsidies to promote shooting in their states, yet GST rate on movie tickets in multiplexes was 28 per cent initially and has been reduced to 18 per cent only recently. And while OTT platforms stream originals directly to homes without any certification or pre-screening, movie-exhibitors need government approvals for every advertisement.

    All this leaves the film folks in a sticky situation. While there is a huge untapped potential for expansion of cinema-networks in tier-II, tier-III cities, entrepreneurs and movie-enthusiasts are often hesitant to invest for fear of getting entangled in endless government regulations.

    UFO Moviez, India’s largest digital cinema distribution network and in-cinema advertising platform, has been successfully navigating these contradictions for over a decade now. Not only has the company digitised over 5,000 screens and revolutionised movie-distribution in India, in order to salvage community movie-viewing in tier-II, tire-III cities, the company has also launched a sub-brand Nova Cinemaz under a franchise model, along with Caravan Talkies, a novel movie-on-wheels concept, wherein non-ticketed shows are played at media-dark villages at sundown for rural folks who would otherwise have been deprived of this entertainment.

    “At the heart of all our efforts,” says UFO Moviez CEO Rajesh Mishra, “is an attempt to add value to all stakeholders in the movie value chain, spanning movie producers, distributors, exhibitors and the cinema-going audience.”

    Indiantelevision.com’s Sumit Ahlawat spoke to Mishra on a range of issues involving expansion in smaller cities, how to improve ease of doing business in the movie-exhibition sector, the need for an overhaul of the regulatory framework, the benefits of adopting transparent, computerised ticketing systems, the revenue-sharing model between movie producers, exhibitors and distributors and on the future of in-cinema advertising. Edited Excerpts:

    On FY19 for UFO Moviez.

    Overall 2019 has been a stable year for us.  The digitisation part of our business is working very well. We had completed the digitisation phase broadly by 2013. Currently, we are in the maintenance and growth phase.

    On the in-cinema advertising revenue decline in FY19.

    We did see a small decline in revenue generation, owing largely to the decline in in-cinema government-sponsored advertising because of the 2019 general elections and the Model Code of Conduct that was in place during the first two quarters. We were expecting this decline and were prepared for that. Advertising revenue from private players, however, has increased by 11 per cent, partly assuaging this shortfall. Going forward in 2020, we are confident about government advertising picking up once again.

    Has India’s falling GDP also impacted in-cinema advertising revenues?

    On the contrary, advertising by private players has increased by 11 per cent. India’s growth has, indeed, seen a modest decline owing largely to global factors. But this has not impacted the movie-exhibition business in India as demonstrated by the FICCI Frames report 2019 which estimated that while in-cinema advertising revenues have increased from Rs 7.5 billion in 2018 to Rs 9 billion in 2019, domestic theatrical revenues have also increased from Rs 102 billion in 2018 to Rs 110 billion in 2019.

    On the need to look beyond metro cities.

    As far as the metro cities are concerned, we are reaching a saturation point. Most metro cities in India have 100 plus screens. Even Surat has nearly 70 screens. And smaller cities having a population of 200,000-300,000 are managing with just one-screen cinemas. This imbalance needs to be addressed. India has a multi-layered economy and for the growth of all stakeholders in the movie value chain, from movie producers, distributors, exhibitors to the cinema-going audience, expansion in smaller cities is a must. We believe the next phase of growth in the Indian movie business will come from these smaller cities.

    Cinema growth potential in tier-II, tier-III cities.

    We have seen single-screen cinemas in tier-II cities struggling for survival. On the one side, they have limited options of movie display due to limited screens. In addition, they have limited in-cinema advertising revenues. These single-screen cinemas can be converted into two to three screen multiplexes. Entrepreneurs in small towns also have disposable income and they are keen to enter the movie-exhibition business. But over-regulation in the cinema sector puts them off. Licensing is a huge obstacle. In some states, one has to get clearances from over 50 nodal authorities before starting a multiplex business.

    That’s why we started Nova Cinemaz. To support entrepreneurs in the small cities who are eager to get in but lack the required expertise and know-how. Under a Nova  Cinemaz franchise, we partner with entrepreneurs at the local level. We not only take care of their content booking but put standard operating procedures (SOPs) in place, provide our years of technical expertise in computerised ticketing systems, market research, as well as provide clients for in-cinema advertisements.

    Currently, we have around 47 screens operating under Nova Cinemaz and another 75 are under discussion.

    On Caravan Talkies.

    We have a two-pronged strategy for Caravan Talkies. It’s a non-ticketing platform and works totally on advertising. The idea was to take movies in media dark areas at the bottom of the pyramid. This provides potential for advertisers to reach an audience where no other media reaches. It also provides an outreach opportunity for government agencies. Whether it's public health messages, or the Swacch Bharat campaign, or the crop insurance scheme, Caravan Talkies is a great platform for government outreach campaigns. This medium excites us and we will continue to invest our resources in it.

    On computerised ticketing systems.

    Single-screen cinemas are also struggling on account of lack of transparency and their refusal to join a transparent computerised ticketing system. They suffer because they have to furnish huge minimum guarantees (MGs) for a movie even before its release. Multiplexes work on a revenue-sharing model but single-screen cinemas in smaller cities, which are the most vulnerable, have to shell out MGs. So, I believe, computerised ticketing should be made mandatory across the board (currently it’s mandatory only for multiplexes). It’s vital for the survival of cinemas.

    On revenue sharing.

    Historically speaking, only 10 per cent movies are a hit, another 10 per cent do average business, while the rest lose money. Given that for movie producers, cinema is the only touch-point with the audience, their survival is a must. And, thus, it’s vital for movie producers to move towards a revenue-sharing model and not insist on MGs.

    On Regulation.

    Today, the greatest bane for the movie-exhibition business is over-regulation. Over-regulation of content, over-regulation of licenses and high GST rates. A movie ticket below Rs 100 is taxed differently than a multiplex ticket. This Robin Hood-attitude must go. Cinema remains one of the most regulated sectors in the entertainment space. Print, TV, OTT, nothing is as regulated as cinema. The reason China could add 10,000 screens in one year, more than we have been able to add in the last 70 years, is because movie exhibition remains one of the most heavily regulated sectors in India. A complete overhaul of licensing and regulation is a must to realise the full growth potential of the cinema business in India.

    On single-window clearances.

    The ease of doing business should translate in the movie-exhibition business as well. Single-window clearance for cinemas is the need of the hour. This will help the cinema business tremendously.

    On the OTT challenge.

    I do not see OTT as a challenge. Rather, I believe that OTT, TV and cinema can all complement each other and help build an ecosystem conducive for the growth of quality content. However, OTT, which streams original content directly into people’s houses does not have to deal with censorship for these whereas, we have to take approvals even for advertisements. While we do not envy the freedom on OTT, we definitely believe that there should be less censorship on cinema well. There should not be a disparity between OTT and cinema.

  • Regulation of GST on consumer durables – a need of the hour

    Regulation of GST on consumer durables – a need of the hour

    The implementation of the Goods and Services Tax by the Indian government has been one of the most transformational legislations in the history of the country’s economy. Publicised as the “one nation one tax”, it completely replaced the multi-tax structure previously prevalent in India, helping enhance transparency and streamline the taxing system, significantly. In addition, it also helped bring about improved free flow of credits, a decrease in the prices of goods and services, and facilitate barrier-free movement of goods across the country. However, for the consumer durable industry, especially consumer electronics, several challenges still remain, which the GST council must address at the earliest.

    During the initial stages of implementation, almost all major consumer electronics were categorised under the 28 per cent GST rate, including ACs, refrigerators, TVs, and washing machines, to name a few. However, industry representation and growing consumption patterns soon led to the GST Council rationalising the tax rate on several consumer electronics products, including refrigerators and washing machines. Eventually, the number of goods categorised under the 28 per cent tax bracket fell from over 200 products to close to only 35 goods.

    Following the initial announcement, the rates were further revised by the Council, and currently, TV sets with a screen size of over 32 inches are subject to 28 per cent GST, while those with a screen size of 32 inches and below, are subject to 18 per cent GST.

    Before the announcement of the Union Budget 2019-20, the industry had been hopeful that the GST rate on appliances like large-screen televisions, air-conditioners, and refrigerators, would be lowered to 12 per cent by the Government. However, this urgent need still remains to be addressed, especially in light of the fact that these products are today considered household necessities, and no longer fall under the category of luxury goods.

    There is, thus, an alarming need for demand in the consumer appliances sector to be enhanced significantly, and the lowering of taxes will play a key role in the same, as manufacturers would be able to pass on the benefits to the buyers. Hence, the lowering of GST rates for TVs above 32 inches, to 18 per cent, will not only help boost the industry, but also benefit the end-consumers, as well.

    Furthermore, the lowering of GST rates and exemption of import duty on open cell television panels can also help boost sales. According to the Consumer Electronics and Appliances Manufacturers Association (CEAMA), manufacturers are stating that the fall in demand is because of low consumer sentiments, since the sales of other home appliances like washing machines and refrigerators have also experienced flat growth in the month of July.

    The industry expects significant upkeep during the ongoing festive season sales, which started on August 15, but continues to be wary of the impact of the adverse situations in the country, especially like the floods, on the industry. In adherence to the global standards, the Indian GST Council should now look at further rationalising the rate of tax on such products, to help boost their consumption and penetration in the Indian market.

    (The author is Director, Westway Electronics. The views expressed are his own and Indiantelevision.com may not subscribe to them.)

  • GST council brings down TV set price to 18% slab

    GST council brings down TV set price to 18% slab

    MUMBAI: At the 31st Goods and Service Tax (GST) council meeting, GST rates on several items have been decided to be brought down from the top 28 per cent slab. Among the items that have been brought down from the 28 per cent slab to 18 per cent include monitors and television up to screen size of 32 inches.
     
    Monitors and television screens along with other items have been brought down from 28 per cent to 18 per cent slab. Now, only the lmuxury and sins goods items will remain in the 28 per cent slab.

    Along with the TV industry, this GST council has brought good news for the film industry too. As per the decision of today’s meet, cinema tickets upto Rs 100 will be brought down to 12 per cent slab from 18 per cent slab and above Rs 100 has been brought down to 18 per cent from 28 per cent.

    According to media reports, Union Finance Minister Arun Jaitley said the new GST rates will be effective from 1 January 2019. He also added that new GST return filing system will come into effect from 1 July next year.

  • Living Foodz sees 25% growth in advertiser response

    Living Foodz sees 25% growth in advertiser response

    MUMBAI: After Aparna Bhosle’s elevation in the Zee Entertainment Enterprise Ltd (Zeel) from the premium English cluster head to now being the business head of Zee TV’s Hindi GEC channel, Shaurya Mehta along with handling the lifestyle genre, Living Foodz (LF), is also given the additional responsibility of donning the hat of the premium English cluster– Zee Cafe, &flix and &prive.

    Talking about the lifestyle channel that launched in 2015, LF COO Shaurya Mehta said that since the start, the channel’s only focus was to offer original content to the Indian audiences and being true to its factor, it has been the cornerstone to its success.

    Despite the disruptive elements that the lifestyle genre witnessed in the form of demonetisation and GST, it didn’t affect LF which took two years to break even. “We broke even a while back. It took less than two years to break even,” he said. According to him, the genre within these 2-3 years has grown 10-15 per cent y-o-y and the channel claims to have grown in excess to the growth of the overall space.

    Not only this, as far as advertisers’ response on the channel is concerned, it claims to have witnessed a healthy growth rate in excess of 25 per cent y-o-y. Also, whether or not the ad rates of the genre increased, Mehta said that the channel has already increased its ad rates. “The ad rates have already increased and over these past three years, we have consistently seen our ERs growing. LF is more on the premium side now from a viewer and advertisers perspective and we enjoy a much healthy ERs than our competition.”

    When it comes to adex that declined in FY18, according to the KPMG report 2018, the lifestyle genre observed 1.3 per cent adex in FY17 and 1.2 per cent in FY18. “We at LF have seen great growth within these 2-3 years. The genre stayed a little stagnant from the ad sales perspective and going forward this would improve and there will be relatively steadier phase over the coming years.”

    Considering the BARC data, LF has been ruling the charts. Mehta said that the channel continues to lead the market share in terms of viewership with a healthy margin in a genre which is already cluttered. “With the channels that have been around for almost a decade especially some leaders in the market like Discovery and others and to go up against them and draw us a span of viewership shares is quite a big thing.”

    The network has plans to launch 6-8 shows this month and many more in the coming month with a mix of both original and acquired shows. The channel garners most of the viewership during the daytime, between 1-7 pm depending on the shows that could vary. Several shows were launched on 3 October, slotted for the typical prime time of 9 pm.   

    LF provides just local content for the viewers buy other players offer a mix of syndicated and local content. Mehta said, “We have seen much of our competitors also adopting our strategy where instead of airing syndicated content, they are also airing a mix of original shows. So as the overall content strategy, competition will have a mix of both syndicated and original content and in case of LF, original shows remain our main pillar.”

    He added that as per the consumers’ choices, there is an appetite for syndicated content as well. There is a room for both local and syndicated content where there are people in the market who want to consume the content from all around the world.

    Mehta said that considering the infotainment and lifestyle genres together, lifestyle has seen growth from the perspective of the accretion value of the viewers that is known in India. According to him the outlook remains positive and the viewership base will continue to grow. “We have seen digital as a medium growing tremendously in this genre and competing with TV viewership. So from that perspective as well, LF has a strong strategy for our digital footprint also playing an important role for growth in the group and LF as a brand. We have been investing our digital platform as well since last year and we continue to do so. We bring the shows that are available on TV and we also do some originals to publish on our livingfoodz.com. We do realise that in order to build the story over the next 5 years, our digital footprint will also play an important role,” he said.

    A Tamil feed was also to be added this year for which he said, “The Tamil feed is still in progress. We want to ensure when we are completely ready to announce. We are looking at all the possibilities.”

  • One year of GST: BTVI analyses the impact of the biggest indirect tax reform in India’s history

    One year of GST: BTVI analyses the impact of the biggest indirect tax reform in India’s history

    MUMBAI: History was created when the country witnessed the biggest and most important indirect tax reform-the goods and services tax (GST). The reform that took nearly 17 years of intense debate was finally implemented subsuming most indirect taxes at the central and state levels.

    With the first anniversary of this landmark reform approaching, BTVI brings to you a special series “GST @ 1” where BTVI is talking to prominent people from industry, government officials and tax experts to analyse the impact and whether the first year has delivered what was promised.

    BTVI, Executive Editor, Mr Siddharth Zarabi said “It was a bold movement by the government to pass GST and there was a lot of teething trouble initially. However, things are better now and companies say that any GST led disruption is behind them. The GST has delivered on the ‘One nation, One tax’ aim, but several more improvements are needed for it to truly be a good and simple tax”.

    “In this series we pose key questions including whether GST has helped in the formalisation of India’s economy”, Zarabi added.

    Catch the special series “GST @ 1” this week (started Monday, June 25) at 8:30 PM only on Business Television India (BTVI).

  • CNBC-TV18 and PwC India present ‘GST Decoded – 1 Year On’

    CNBC-TV18 and PwC India present ‘GST Decoded – 1 Year On’

    MUMBAI: The introduction of GST regime has been India’s boldest tax reform since Independence. To mark the completion of the first year under this act, CNBC-TV18, the country’s foremost business news brand, in association with PwC India has announced a unique initiative called “GST Decoded – 1 Year On.” This first-of-its-kind conclave is being planned with an intent to analyse and review the critical journey of the implementation of GST over the last year as well as explore the opportunities and challenges that lay ahead. The prestigious event will be held on June 28, 2018 at Hotel Taj Diplomatic Enclave in New Delhi.

    The conclave will welcome notable delegates bringing together decision-makers & policy architects from the centre, states, leading CEOs, CFOs, top tax consultants, economists and other corporate dignitaries under one roof for a discourse around GST, sharing their in-depth experience, insights and varied perspectives.

    On the policy front, the States viewpoint will be articulated in a special panel with representation from some of the key State finance Ministers & members of the GST Council such as Thomas Isaac, Minister of Finance – Govt. of Kerala, Manpreet Singh Badal, Minister of Finance – Govt. of Punjab, Mauvin Godinho, Panchayat Minister – Govt. of Goa. Dr. Hasmukh Adhia, Union Finance Secretary will be sharing the perspective of the Union government on the GST achievements in the past year and the anticipated challenges during the current financial calendar in a special Townhall session.

    India Inc will be represented by leading corporate voices including Kabir Ahmed Shakir, CFO – Microsoft, Niranjan Gupta, CFO – Hero MotoCorp , Ashok Tyagi, Whole-time Director & Board Member – DLF, Nitin Saluja, Founder – Chaayos, Rohan Shah, leading Lawyer & Tax Expert and Shyamal Mukherjee, Chairman – PwC India. These luminaries will be participating in a thought-provoking panel discussion, addressing how the corporate world, including sectors like software enterprises, automotive real-estate, and hospitality amongst many others has been impacted since the introduction of GST in India. The panellists will also highlight the advantages along with key challenges faced by the industry professionals during the first year of implementation of GST in the country. 

    The informative and riveting discussion will be followed by the launch of a special report from PwC India titled ‘365 days of GST: A Historic Journey’ and an address by PwC Indirect Tax Leader, Pratik Jain.

    TV18, CEO Forbes India & President – Revenue, Joy Chakraborthy said, “As the undisputed leaders in the Business News space, we at CNBC-TV18 constantly keep our finger on the pulse of the economic policy environment & India Inc’s reactions to it. ‘GST Decoded – 1 Year On’ is one such unique initiative focused on gauging the impact of GST rollout – one of the most ambitious fiscal reforms in the recent history of our country. It will be great to understand the effects of this tax regime from such an august gathering.”

    CNBC-TV18, Managing Editor, Shereen Bhan said, “The Channel has been the forefront of educating viewers about the GST. We launched the GST Helpline ahead of the July 1 rollout to help India Inc make the transition. Over the past year, through our GST Town halls and Ground reports, we have engaged with key stakeholders with an aim to assess and evaluate the implementation of this much-awaited reform. We have also put the spotlight on the changes needed to make the execution and administration more effective. As we start the journey into year two, we intend to continue our efforts to inform, engage and empower.”

    PwC, Partner and Leader Indirect Tax, Pratik Jain said, “Completion of one year of GST is a good time to reflect what has worked for India Inc and what not.  More importantly, it’s time to understand how businesses are changing on the ground and what Industry now expects the Government to do so that we are able to realize the real benefits that GST can potentially offer.  Having worked with hundreds of leading corporates in GST transition and now technology led compliance management, we at PwC are excited to be part of this momentous reform. Through this event, we look forward to continue playing a constructive role in consultations between the industry and policymaker.”

  • Sorrell pats Mukesh Ambani’s back for telecom explosion

    Sorrell pats Mukesh Ambani’s back for telecom explosion

    MUMBAI: Though the announcement of ad guru and former WPP CEO Sir Martin Sorrell’s comeback strategy was announced yesterday in faraway London — a London Stock Exchange notification on Derriston Capital said so — the excitement was running equally high here at the venue where Zee Melt event was being held. And, why not? Sorrell was scheduled for a live video interaction with delegates at the event in the evening.

    But true to his style, Sorrell did not give out any juice to the media and refrained from answering anything particular about his new venture, S4. However, he did have a lot to say about the industry, in general, and India. 

    Sorrell thinks that advertising and marketing industry is in a state of flux today and will only bring opportunities for agencies and brands alike. “The discussion is whether the flux is strategic or structural. But, it is clearly a mixture of both. The A&M [advertising and marketing] industry is worth a trillion dollars with $500 billion in traditional media and traditional communication services, and $500 billion in new media,” Sorrell said speaking to the Zee Melt delegates live via CNBC’s London studio.

    “There is a clear significant change, whether it is because of Google, Facebook, Accenture, IBM or Deloitte. And this flux will bring opportunities. If you look at the $20 billion in WPP, there are parts of it that are growing and there are parts of it that are flat and parts of it that are declining. It is all about identifying those growth opportunities,” he emphasised, giving a hint at what people may expect from him in future with his new venture, which experts say could be a repeat of the WPP story with a modern-day twist.

    For the records, Sorrell is investing $53 million from his own pocket into London Stock Exchange-listed Derriston Capital, a company which will now be remade into S4 Capital, a reference to four generations of Sorrell’s family. While he will become executive chairman in the business that could explore opportunities in technology, data and content, media reports stated institutional investors have pledged 150 million pounds to buy marketing companies — a way Sorrell-founded WPP grew into a global behemoth with presence in 112 countries.

    Coming back to Sorrell-speak for the Mumbai event, the former WPP CEO, ousted on allegations of misconducts about six weeks back, hailed India as being pivotal to WPP growth with 14,000 “talented people”. He noted that India is growing fast in terms of GDP, population and potential.

    Pointing out that India, in the near future, will become the most populous country in the world with the youngest profiles, Sir Martin felt that, from a technological point of view, India has leapfrogged a lot of technologies —such as migrating directly from desktop and normal phones to smartphones. The country has seen huge distribution changes too with and Alibaba entering the market.

    On the distribution side, according to him, Mukesh Ambani’s significant investment in telecommunications and technology in Jio mobiles and SIM card has put India on the global map. In short, India represents opportunities and growth in terms of economy and technology. 

    Year 2017 saw a lot of shakeup and disruption in the industry. Of these, two iconic events that signaled disruption and structural changes for Sorrell and the industry were Unilever’s hostile takeover bid by Kraft Heinz, proving no company is safe today, and when Rupert Murdoch signaled he would negotiate 21st Century Fox business with The Walt Disney Company. What made this 21CF-Disney deal “more complicated” was the involvement of Comcast.

    Holding forth on large agencies and groups owning them, Sorrell felt that that such corporate houses have a “legacy associated with them” and come with a lot of backlog and challenges. When you have a legacy company, the business becomes more of a challenge with time as compared to when you start with a clean sheet, he said. Probably, his new venture S4 will give him and the company an opportunity to build afresh taking into account the changes taking place at client’s end and new structures and approaches that clients want.

    According to Sorrell, a major shakeup in the media industry today has been the General Data Protection Regulation (GDPR), an EU-mandated law on data protection and privacy for all individuals within the European Union (EU) and the European Economic Area (EEA). It also addressed the export of personal data outside the EU and EEA.

    The GDPR primarily aims at giving control to citizens and residents over their personal data and simplify the regulatory environment for international business by unifying the norms within the EU. Sorrell thinks these were early days to assess the impact of GDPR, but from what he’s heard Facebook’s ad sales revenue has remained un-impacted even after the news of Cambridge Analytica. He is also of the opinion that GDPR in early stages seems to favour technology giants as “we have seen smaller or media tech companies withdraw from European market rather than compete”. 

    He ended the session by applauding the Indian government and Prime Minister Narendra Modi for making a significant impact on the Indian economy, although the momentum has slowed down due to GST rollout and after-effects of demonetisation along with other factors. Pointing out that India’s economy will continue to grow and will continue to attract big brands and agencies to put their money in the country, Sorrell concluded, “I continue to be an unashamed, raging India bull and confident that the Indian economy will regain momentum soon.”

    Meanwhile, reporting on Sorrell’s new venture in detail Reuters said Derriston Capital is a little-known two-year-old listed shell company set up to invest in medical technology.

    Over 30 years ago Sorrell built WPP into a company with 200,000 staff in 112 countries by adding market research groups, media buyers, and public relations firms such as Finsbury. Worth 16 billion pounds, WPP returned millions to shareholders, including its CEO, and dominated the industry for decades. According to Thomson Reuters data, Sorrell is still the eighth biggest investor in WPP, with a 1.4 percent stake.

    The Reuters story further stated that Sorrell had vowed to break down the barriers at WPP to make it easier for clients to get all the services they needed from a small team, rather than from a range of people among the more than 400 agencies it owned. WPP competes with US groups Omnicom and IPG, France’s Publicis and Japan’s Dentsu, while thousands of small independent companies provide everything from ads for mobile phones to creative work and data analytics.

    Also Read :

    WPP board begins investigation of its CEO Sir Martin Sorrel, says WSJ

    Sir Martin Sorrell says ta-ta to WPP, Roberto Quarta becomes exec chairman

    Martin Sorrell bullish on India

    TAM or BARC, the market has to decide: Sir Martin Sorrell

  • Pitch Madison report forecasts 2018 digital adex growth at 25%

    Pitch Madison report forecasts 2018 digital adex growth at 25%

    MUMBAI: According to the findings of the 16th Pitch Madison Advertising Report (PMAR) 2018, the advertising market slowed down to 7.4 per cent (Rs 53,138 crore) in 2017. The report also predicts the advertising growth in 2018 to be around 12.03 per cent thereby adding Rs 6,392 crore to adex to reach a total size of Rs 59,530 crore.

    “We are optimistic about 2018 because you can’t keep the Indian economy down for too long,” said Sam Balsara as he presented the report. He added that the forecast is tempered by the possibility of the government’s reforms that may destabilise the economy in the short term.

    In 2017, the report had predicted growth for 2017 to be around 13.5 per cent; however, the industry could not keep up its pace because of the government’s structural reforms.

    Following the repercussions of demonetisation, 2017 had a bad start. “Adex was slow to recover from the impact of demonetisation and the first quarter of 2017 saw de-growth of 2 per cent and growth of a mere 2 per cent in the second quarter on the back of the IPL. Just when we expected adex to gather steam, the Goods and Services Tax (GST) Bill came into effect in July and the market saw a drop of close to 20 per cent in traditional media over June 2017, and a drop of 5 per cent as compared to July 2016,” the report notes. “Mercifully, the festive period brought cheer to adex, and it grew from August 2017 to December 2017 by 13 per cent.”

    Hindustan Unilever Ltd, Amazon Online India, Procter & Gamble, and Reckitt Benckiser topped the list once again. The newest entrant in the top five for 2017 was Patanjali Ayurved Ltd, which climbed from No 15 to No 5 on the list. Patanjali Ayurved is predicted to have nearly doubled its ad spend from Rs 300-400 crore to Rs 500-600 crore per annum.

    According to the report, in 2017, traditional media grew by only 4 per cent, the slowest in half a decade. Television, which continues to be the largest contributor to adex with 37 per cent share, grew by just 4.3 per cent and reached Rs 19,650 crore; this is the lowest growth television has witnessed in the last five years. TV that is closely followed by print at 35 per cent share had even lower growth of 2.7 per cent to reach Rs 18,640 crore.

    In 2018, television adex is expected to grow 13 per cent to reach Rs 22,205 crore while print adex is expected to grow by 5 per cent in 2018, taking the print market close to Rs 20,000 crore.

    “It is thanks to digital media, which continued its onward march and grew by 27.2 per cent in 2017, that we are able to report an overall adex growth of 7.4 per cent,” the report observed. Digital added nearly Rs 2,000 crore to adex, to reach a size of Rs 9,303 crore in 2017. It now contributes a whopping 17.5 per cent to Indian adex, with video gaining huge ground, along with search, display, native and programmatic advertising.

    Digital advertising is projected to grow by about 25 per cent to cross the Rs 10,000 crore mark and grow to Rs 11,629 crore in 2018. Digital is expected to continue its growth trajectory and growth at a rate of 25 per cent, taking the digital adex up to Rs 11,629 crore in 2018. FMCG, telecom, BFSI and real estate will continue to be growth drivers for digital while e-commerce will remain the backbone of digital adex.

    Emerging from one of the darkest years for advertising so far, the industry is keeping its fingers crossed for 2018. There are some key factors that will drive growth in 2018, the report observes. There are signs of return of consumer spending and benefits of GST will start accruing this year boosting growth. Media, in particular print, will also get a fillip from the eight State Assembly elections scheduled during the year.

    Also read:

    Digital takes centre stage on tepid Valentine’s Day for brands

    Industry applauds Sam Balsara as he turns 67

    Pro Wrestling League rallies on North India viewership

     

  • GroupM forecasts India’s 2018 adex to grow by 13%

    GroupM forecasts India’s 2018 adex to grow by 13%

    MUMBAI: WPP’s media investment group Group M has forecast the advertising expenditure (adex) in India to grow by 13 per cent in 2018 year on year. According to GroupM’s futures report ‘This Year, Next Year’ (TYNY) 2018, which was released today, India’s advertising investment will reach an expected Rs 69,346 crore this year. The report also estimated ad spending in 2017 as Rs 61,263 crores, growing at 10 per cent, as predicted by GroupM in February of last year.

    Various industry estimates peg economic growth at 7.3 per cent to 7.8 per cent for 2018 as the benefits of GST-higher productivity and lower cost of goods sold-become apparent. This, combined with key reforms already implemented, such as bank recapitalisation, budget provisioning of non-performing assets and the Bankruptcy Bill approved by law, are likely to facilitate a recovery in consumer demand and private investment.

    GroupM South Asia CEO and WPP India country manager CVL Srinivas said, “As consumer sentiment stabilises and spending increases, we estimate 2018 to be a relatively better year from an ad-spend perspective. Growth in digital media will continue to outstrip other media but, unlike most markets, India continues to see traditional media formats grow. After a couple of sluggish years, rural volumes are expected to pick up this year leading to increased marketing budgets. The structural changes witnessed in the last couple of years could pave the way for a more stable outlook in the coming years. We haven’t yet realised our full potential as an ad market but are headed in the right direction.”

    Continuing urbanisation and rising wages are supporting consumer growth in finance, durables, services and retail. E-commerce is becoming a key channel for FMCG, and ad investment is anticipated to increase in shopper and performance marketing. India is witnessing an increase in spending from rural markets, as sales growth at 1.5-2.5 times of urban sales growth for major FMCG and consumer durable companies.

    Looking at the advertising industry worldwide, GroupM estimates the global advertising expenditure to grow by 4.3 per cent, and APAC is anticipated to grow at 5.4 per cent. GroupM South Asia chief growth officer Lakshmi Narasimhan said, “India remains one of the fastest growing ad markets globally and is among the top-five countries that are expected to drive incremental investment in 2018. Our growth percentage is three times that of the global adex and more than double of the APAC growth percentage.”

    This year, 35 per cent of all incremental ad spends will go towards digital advertising (including mobile). GroupM estimates digital adex to continue to grow by 30 per cent in 2018 to Rs 12,337 crore. Video advertising on digital is estimated to grow at 54 per cent as bandwidth improves and data and mobility device become more economical for the consumer.

    As digital becomes 18 per cent of the overall advertising spends in India, measurement and transparency become paramount. Last year, GroupM globally led the conversation on measurement and transparency in digital media, and released viewability standards that are higher than those stipulated by the Media Rating Council in the US. In India, too, GroupM is working with industry bodies, brands and publishers to adhere to a standard viewability index that would become integral to the digital ecosystem.

    “On the traditional media front, parliamentary elections in H1 2019 will stimulate advertising from the back half of 2018. Print will see a slight uptick in 2018 from the elections, with key markets in demand. The growth rate for newspapers is estimated at 4.2 per cent with English papers growing slightly slower than Hindi and regional languages,” the report stated.

    Television continues to be the largest medium, with its contribution remaining at close to 45 per cent share. This year, the growth rate for TV is 13 per cent, as there is growth in both volume with free-to-air channels as well as value with HD channels. In 2018, the last leg of cable digitization will improve quality of delivery to rural India, also driving viewership.

    This year, radio is expected to grow at 15 per cent which is higher than the last couple of years. This growth is predominantly due to the launch of new radio stations across the country. Other media such as OOH will witness good traction of 15 per cent growth from premium transit sites. Cinema will continue to grow at 20 per cent in 2018, as the infrastructure investment made last year will attract a larger audience to theatres for a blockbuster experience.