The first half of this financial year saw ad spends being split between TV and digital, thanks to IPL media rights being cut into two. This had a direct impact on television ad revenue, observe industry experts.

The second half is expected to be brighter due to the upcoming festive season and big-ticket properties on TV.

Speaking to exchange4media, Mayank Shah, Senior Category Head, Parle Products, said, “TV ad revenue is down right now due to this year’s IPL as it was split between TV and digital. The major shortfall was in the first quarter,” he said.

Another reason, Shah said was general entertainment channels failing to launch big-ticket shows in the last six months. “In the last few quarters, none of the major properties or shows have done well on TV. The GEC channels even failed to launch big-ticket shows in the last 6 months,” he said.

According to EY’s media and entertainment report 2023, TV advertising revenue collected across India in 2022 stood at Rs 318 billion, just 2% up from 2021.

Similarly, the TAM AdEx report shows that TV ad volumes in Jan-Mar’23 declined 4% over Jan-Mar’21 and by 3% over Jan-Mar '22.

Shashank Srivastava, Senior Executive Director, Marketing and Sales, Maruti Suzuki, too said that advertisers’ money was split due to aggressive pricing during the IPL season and that might have strained the revenue.

According to Karan Taurani, Senior Vice President, Elara Capital, one of the many reasons for the degrowth in TV ad revenue was most channels shifting from free-to-air to the paid format.

Experts also observed that inflationary pressures on various advertising categories and cutting down on ad spends by start-ups or new-age companies and the telecom sector have been some of the other reasons for a decline in TV ad revenue.

“In FY 2023 many TV channels moved to pay from FTA, which is a huge ad revenue driver.”

Taurani further said, “A number of new-age companies also cut ad spending because of the macro environment. They contribute close to 25% of the ad spends for tv players. If you look at the industry as a whole it is around 20-25%, and if you look at commerce and new-age companies for TV the number is somewhere similar. The third big reason is inflationary pressures. FY 2023 was a year where there was a lot of inflationary pressure on various categories like FMCG, which is a very big vertical contributing to 45% of ad spends on TV.”

There was pressure on the auto sector and its verticals too, leading to many companies cutting ad spends, he added.

According to Elara Diet Report, Sony India’s advertisement revenue declined 5% YoY in FY23 to Rs 33 billion, while Zee Entertainment’s ad revenue too fell by 4% YoY to Rs 41 billion on the back of inflationary pressures and a cut in ad spends by new age and commerce verticals.

The Pitch Madison Advertising Report 2023 says TV has also seen an 8% decline in viewership over the last year, and a 13% drop compared to pre-Covid year 2019.

The medium has also seen a marginal drop in advertisers from almost 11,000 in 2021 to less than 10,500 in 2022, the report said.

An industry veteran, who did not wish to be named, said “digital was taking the large pie of ad revenue every day”. “With people watching content online, brands are shifting from TV to digital. Markets need to balance between TV and digital,” he said.

Better days ahead?

Experts are pinning hopes from the upcoming festive season and the ICC Men’s Cricket World Cup later this year.

Ashish Sehgal, Chief Growth Officer, Zee, says there was a slight degrowth due to IPL but in the rest of the categories, TV ad revenue seems to be stable. “In the entertainment sector, there is growth in TV ad revenue. Last year it went down due to the Ukraine war. Only the cricket sector has led to TV ad revenue degrowth this year, that too speculatively. It will get even better in the upcoming festive season with the World Cup this year,” he noted.

According to Taurani, “The situation will improve in the second half of the festive season. Inflation seems to be cooling off and so there will be a lot of ad spends coming back in H2. New launches had been delayed because of inflationary pressure. However, there will be no respite from new age and e-commerce companies this year,” he said.

Parle’s Shah too expressed hope that the big cricket events lined up later this year would be great in terms of TV ad revenue.