PMMAO 2008 Review TV : Holding the ground

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Overall, 2007 has been a very good year for the electronics media as its advertising revenues clocked a full 19 percent growth rate to cross the Rs 7,000-crore mark for the first time. According to the fifth edition of the Pitch-Madison Media Advertising Outlook Survey, the ad revenue of the television media touched Rs 7,110 crore, thereby retaining its second dominant position in the overall share of the advertising sweepstake at 40.2 percent after the print media’s 47.9 percent. Though this is a marginal drop from 40.8 percent it had during the previous reporting period. This dip is understandable, as even though this media has been growing fast, other media formats like the print, the Internet, and radio have been growing even faster.

However, in general it has to be noted that going by the numbers, both in terms of viewership and the free commercial time (FCT) shares, the  medium has been able to maintain its positions as in the past year.

Viewership Trends
When it comes to genre-wise viewership trends, it is clear that the mass entertainment channels continue to dominate the Hindi viewership at a high 15.4 percent, followed by Hindi movie channels at ten percent. This is despite a decline in the former’s overall viewership during the reporting period in comparison to the previous year, when its share stood at 16.7 percent, primarily due to the fragmentation in the sector. Another major development is that the news genre remains the most advertised genre and has been able to almost maintain its viewership steady at the previous year’s level, which currently is 6.3 percent. Significantly, the second-line mass channels have gained in their viewership with their overall share increasing to 4.3 percent from the previous 4.1 percent.

The kids genre has done commendably well during the period with its viewership share increasing to 4.8 percent, from the last year’s 4.3 percent. Similarly, DD National too has reported higher viewership during the period at 2.2 per cent from previous year’s 1.9 percent. However, the Southern regional channels, which together is the most advertised genre, have seen a minor slide in their viewership, but still remain the most watched television segment with overall viewership share remaining the highest at 25.7 percent, though it is down from the 27.1 percentage point it held in the previous reporting year.

Another major finding is the dramatic fall in the viewership of Hindi movie channels which have seen their viewership nose-diving from 20.1 percent in 2006 to a low 10.9 percent during the reporting year. However, the viewership of English movies genre remained flat at one percent during the year. Similar is the case with the infotainment genre. Despite a comparatively successful cricket year, the sports channels as a whole have seen some dip in their viewership from 3.8 percent in 2006 to 3.1 percent during the reporting period.

Advertising Volume Trends
Though lower in overall viewership, the news genre has continued its leadership position when it comes to cornering the advertising volumes. This year too, the Survey finds that the news genre has been the most advertised slot, followed by the music genre. While news channels together have only 6.3 percent viewership, its share in the advertising pie is a high 22 percent. Similarly, while music channels as a genre has a limited viewership share, this is the second most advertised genre with 12.4 percent of the total television advertising going to this genre.

However, the survey finds that there have been some slippages in the relative advertising volume share in the kids and mass entertainment genres, despite their viewership shares going upwards during the period. While the kids genre has seen its viewership increasing by 0.5 per cent to 4.8 percent from 4.3 percent in the previous year, there has not been a cumulative increase in the FCT share of this genre as its advertising share has declined to 4.6 per cent from 5.4 percent in 2006. Though the  mass entertainment genre has almost retained its viewership share at 15.4 percent during the reporting period, there has been a major dip in its advertising volume with a 2.4 percentage points drop from 5.4 in 2006 to three percent in the under assessment year.

Pitch spoke to leading broadcasters for their views on 2007. Overall, these industry leaders have rated 2007 as a great year as this  media rode on the booming economy.

2007 Was a ‘Landmark Year’
When contacted to know how 2007 has been for his channels, Star India chief executive Uday Shankar described it as a very good year. “It has commercially been very good year for us, though in the early part, we had some setbacks. However, we have taken a series of measures to insure growth,” he says.

Similar is the response from Sony Entertainment too, with its president for network sales Rohit Gupta terming the year as “great.” “We have doubled our growth at around 35 per cent, which is highly above the industry average,” he says. Turner International vice-president for advertising sales and networks for India and South Asia Monica Tata rates the year as “fantastic” as her channels could hit all targets. According to HBO India country manager Shruti Bajpai, her channel could also live up to the promises, as their mantra was ‘Big, new, most.’ “We are now in the eighth year and we are only getting better each year. We have been consistently clocking double digit growth with around 15-20 percent growth in 2007.”  TV Today chief executive officer G Krishnan also describes the year as a great year with revenues recording a growth of around 30 percent in the first nine months of 2007.

What’s Driving This Growth?
According to all the major broadcasters, television media is no longer the darling of only the traditional favourite—consumer goods. Several high-growth sectors like telecom, banking and financial services and real estate are creating good hedge for this medium. Sony’s Gupta says his channels have all kinds of advertisers. “Now we are not entirely dependent on consumer goods brands. It contributes only 40-50 percent now, unlike in the past when it contributed 80-90 percent of our ad revenues. Now we have observed categories like telecom, banking and finance have replaced consumer goods brands. Even the auto industry is aggressively contributing to our revenue ad pie.” Agrees Star’s Shankar saying, “all these sectors are growing but the newer ones like telecom, financial sector are growing faster as compared to the traditional consumer goods advertisers.” Ditto for SET Max, whose executive vice-president Sneha Rajani says, “there was new breed of advertisers. Realty developers have become one of the largest spenders suddenly on television in general and cricket in particular.”

However Zee Entertainment Enterprises president for network sales and revenue head Joy Chakravorthy has a different view on this as he says, “consumer goods will always remain our major advertisers. Though the good news is that we are seeing a resurgence of durables on television.”

Is Fragmentation a Big Concern?
Not really, if the industry leaders are to be believed. “Fragmentation has only increased people using television. And if you see, with so many channels entering the scene, the viewership base is only expanding and so is the money. Advertisers and agencies know that television is the cheapest medium and hence the skew towards the same is increasing by the day,” says Zee’s Joy Chakravorthy. Star’s Shankar too agrees: “It is difficult for a single player to capture all the market and all the target audiences with one channel.”

Kids Programmers Buoyant
Kids channels have for long been a promising genre with the advent of new players and especially since the power of kids increasing on buying decisions. And this year has not been different. Turner Internatio- nal’s Tata says, “the percentage share of advertising on kids channels has gone up in 2007.” According to Walt Disney Television India advertising sales head Vijay Subrahma niam, the kids genre continues to be one of the most exciting places to be in, in terms of both audiences and advertisers. “The advent of new players means that in the immediate term there would be an increase in supply of overall available inventory, which no doubt happened. In the medium-term, however, consolidation and business priorities clearly drove the value proposition for the genre as a whole to the marketers, and most definitely for us,” points out Subrahmaniam.
News Genre Makes Headlines

The news genre continues its dominance as the most advertised medium, with as many as 22 percent of the overall advertising share going onto this medium during the reporting year. Similarly, the genre could almost retain its viewership too during the year, at 6.3 percent.

When quizzed about this massive advertising volume compared to viewership numbers, TV Today Network chief executive Krishnan says, “advertisers select different media platforms based on marketing objectives. The impact a brand creates through television advertising is unparallel by any other media platform.” Echoing Kirshnana’s views, Zee News chief executive Barun Das says, “ad revenues of news channels have seen a significant growth in 2007, and hence the overall volume decline in FCT share looks surprising to me. The only possible reason for this could be faster growth of other genres.”

Sporting Times
Though cricket made a good comeback during the year after the initial setback from the humiliating World Cup defeat, this sports genre has failed to make good of it, both in terms of viewership as well as in terms advertising share. While the former has come down to 3.1 from 3.8 percent, the latter has more or less been steady at two percent, which is a tad down from 2.1 percent in 2006. But industry players claim contrary. ESPN Star Sports India managing director RC Venkateish argues that “if you look at the absolute growth numbers, the sports genre has witnessed a selling of around 25,000 minutes of additional inventory in 2007.”

The survey shows that 20:20 matches had almost double TVRs at close to four percent, while ODIs had close to two percent. What is the reason for this massive response to this format? Says Star’s Venkateish, “the T20 is the cricket equivalent for any internationally popular compact sports format like soccer, tennis, baseball, etc, which typically lasts for about three hours or so on an average. With the pace of life ever increasing leading to a paucity of time for television viewing, the Twenty20 cricket has actually managed to package in the excitement and passion of one day cricket in a tighter, more viewer friendly format. And this has naturally worked well with audience world wide.”

Bullish Sentiments
Our study not only projects better growth for the television medium at 22 percent in 2008, but also says that the overall FCT share of this medium will see a minor spurt from 40.2 to 40.7 percent clocking Rs 8,674 crore in revenues. With new players entering the GEC and news genres, the future seems to be bright for the medium. Numerous new channels have been announced both in the general entertainment channels genre and the news space towards the close of 2007. Players like Indrani and Peter Mukherjea’s INX Media, Zee, Star and Sony group, NDTV Media, UTV, the joint venture between Network18 and Viacom group called Viacom18, all offer an impact full year ahead. Nearly 100 applications for news channels are pending with the ministry.

Star’s Shankar is optimistic about the future saying, “the fundamentals of the economy are very strong. So as the economy grows one shall see a relatively equal growth in the industry. We are looking forward to 2008.” SET’s Gupta says, “we are looking forward to 2008 and hope we do equally well as we did last year.” Similar is the opinion of Zee’s Chakravorthy who says, “we are bullish about 2008 as the growth prospects are strong.”

“The ad revenue growth will be very aggressive, varying across channels targeting 25 to 50 percent growth for individual channels. Overall, we’ll be growing higher than the industry average. The overall growth is expected to be fuelled by certain new offerings as well,” concludes Zee News’ Barun Das.

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Neeta Nair

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