GOA: With the advent of OTT platforms, technological disruptions and change in content consumption trends, traditional linear TV has been facing a difficult time. Moreover, demonetisation and inclusion of GST also came as additional challenges in the recent past, with effects that lingered for long, while the biggest disruption – the new tariff order – is on the way. Due to the rapid changes, traditional players in the ecosystem are changing their strategy to stay profitable.
In this scenario, Video and Broadband Summit 2018 held a session on monetising TV in times of transition. Zee Entertainment Enterprises Ltd (ZEEL) chief growth officer Ashish Sehgal, TAM India CEO LV Krishnan, KPMG India media and entertainment partner, deal advisory and head, Girish Menon took part in the session which was moderated by Indiantelevision.com founder and CEO Anil Wanvari.
Wanvari kick-started the session asking what the monetisation trend in TV industry was in the last nine months. Menon, whose organisation KPMG published a report two months ago on the entire ecosystem, spoke about the increasing interest levels, contribution and demand from rural and regional markets on the advertising side which ensures that there is a growing deeper demand. He added that if someone is able to optimally monetise those options, the opportunities fairly exist for ad growth. He also added that a fair amount of traction in the FTA market is attracting brands there. On the subscription side, Menon said there’s enough headroom for growth as till now only 65-66 per cent households are penetrated by TV in India.
ZEEL's Sehgal also endorsed Menon’s view on the growth opportunities for TV. “Across the industry, there has been a healthy double-digit growth which is happening. Even if you talk about the demonetisation and GST period, which stunted growth, even then the industry grew in single digit. It’s not like it had gone back to a certain level and then grew back,” Sehgal commented on the growth of the TV industry.
Asked about tariff order, he said they still need to see how it’s going to pan out. But he mentioned that broadcasters like Zee and Star have come out with consumer-friendly packages which will help in ARPU growth. While he was asked whether users will start cutting cords if the price of subscription packages goes up too much, he answered that there’s no other better option available. According to him, to get the amount of content available on cable or DTH, users need to subscribe to ten other platforms.
TAM India CEO Krishnan also agreed with Sehgal on the growth side of TV. He said that in the first 9 months of this year, TV showed around 11 per cent growth. Owing to the assembly elections, the growth may reach up to 12-13 per cent at the end of the year. Moreover, he added, it is the real revenue growth, not only volume growth.
While the moderator asked if TV has got its real value, Krishnan said it definitely has brought in value itself from advertising and subscription. He also spoke about opportunities in hyperlocal advertising which is very much prevalent in print. There were 130,000 new advertisers just in the last 9 months compared to 2017 on the print medium which is coming from hyper-local editions of newspapers. But when that is being monitored in the adex data, those advertisers are still not translated into advertising on television or radio or digital yet.
“On the other hand if I look at exclusive advertisers happening on digital and on TV it’s very comparable. There are around close to 16,000 advertisers uniquely positioned only on TV and around 12,000 unique advertisers on the digital adex. Now they are just 10 per cent of the overall volume that’s coming into print. If that translates slowly into regional television or digital OTT platforms for advertising, imagine the growth that TV and OTT can get,” he added.
Sehgal believes that certain TV genres aren't getting a fair deal. “Average price across the genres are increasing. Yes, I would say there are certain genres which are still underpriced. For example, south channels are 90 per cent penetrated in terms of television. They are still underpriced. This pricing needs to be corrected. Kids' channels segment is underpriced. Hindi movie genre is highly underpriced while the value input behind purchasing movies is high, from advertising as well as subscriptions you are still not getting the value back,” he said.
Where all the experts agreed was that sports content and TV premieres get higher value but when it was asked if it’s enough compared to other countries they said it’s linked to the purchasing power of the country. Moreover, they also said the growth rate in India is much higher than the US or China. It was also said that the pay-TV ecosystem in most of the developed markets are subscription led not ad led. India is always going to be a market where the rates of advertisement will be low but the fact is given the level of demand there is in the country from a consumption perspective, the growth will also be much higher than what can be seen globally.
While most of the players work on volume rather than value, Sehgal said ZEE is working on the mix. “We have to start working with the real mix – how to get value and volume both together. Today, we are going 2X with the market only because we are not only getting the volume but also value. My price point from what it was last year to this year has increased in every channel. Now somewhere it has increased more and somewhere it has not increased more,” Sehgal said.
On the question of how TV, cable or DTH can be monetised better, the experts think they should not shy away from the competition coming from digital. They think investment in technology, going back to advertisers with more value proposition is important. Though TV cannot engage like digital, they think brand building on TV is easiest. Unless a brand advertises on TV, building awareness becomes difficult.
