The year 2023 saw digital taking away a large chunk of the advertising pie from the television industry.

According to the recently released FICCI-EY Report, TV ad revenue saw a Rs 21-billion drop (down by 6.5%) compared to 2022.

While digital is growing fast, will the television industry keep losing more of its ad share to digital or recover from it soon?

To dive deep into it, exchange4media spoke to industry experts who said that television won’t be able to beat digital in terms of ad spends and revenues but the worst is over as the main reason for the ad revenue drop in TV was the big shift of sports medium to digital. Most big brands that the television ad industry thrived on, were taken away by the digital platforms.

“One of the reasons for the decline in TV ad revenues is that sports as a medium saw a big shift towards digital and pay TV revenues on sports as a proposition declined. That is why the numbers of ad revenue transitioned to digital.

“I think sports lost somewhere close to about Rs 1500-2000 crore of TV advertising revenue this year (2023), which is somewhere close to about 3-4% of the overall TV ad spend pie,” said Karan Taurani, Senior VP, Elara Capital.

According to the FICCI EY Media and Entertainment Report, the advertising revenue in the television industry declined due to a slowdown in spending by gaming and D2C brands, which impacted revenues for premium properties.

According to the report, from Rs 318 billion in 2022, the advertising revenue for TV reduced to Rs 297 billion in 2023. It stood at Rs 320 billion in 2019, falling to Rs 251 billion in 2020 and showing a rising trend in 2021 and 2022 at Rs 313 billion and Rs 318 billion respectively.

The report said that digital media comprised 51% of total ad spends, up from 31% pre-pandemic, and contributed the highest share of advertising in India. TV comprised 26% of ad revenues in 2023, down from 36% in 2019. As per the report, it is estimated to go down to 25% in 2024.

According to Mayank Shah, Vice President, Parle Products, television is losing out to digital due to the latter’s better measurability and micro-targeting.

“Digital is gaining ground because of its measurability and micro-targeting capabilities. TV's loss is Digital's gain. We expect more money to move from TV to Digital. A major impact is coming from a flight of investment from TV to Digital on big-ticket events like IPL and the World Cup.

“Both events went under-monetised last year on TV. It was because of two reasons – First, high ad rates, which TV channels refused to reduce as they are either not able to see the reality or they refuse to acknowledge it. Second, better measurability on digital and better capabilities it provides to micro targets,” Shah said.

According to Taurani, a lot of the new-age companies, such as e-commerce, have reduced ad spends in TV which has also impacted the broader TV ad spends in 2023.

“And it's not only TV, but they reduced budgets overall in terms of advertising and propelled a lot of the premium pricing on TV. That also kind of impacted the broader TV ad spend this year,” he said.

However, experts also believe that the worst is over and the year 2024 could revive the TV ad industry with several big events lined up: general elections, T20 World Cup and IPL.

“I don't think that they'll see a decline beyond this because, sports, where the worst is over, in terms of IPL spends, we don't see a further fall. We see growth over there because the free proposition base impact is very much there in the CY23 base.

“Sports will see good, reasonable growth this year versus last year because of the T20 World Cup again and also because of IPL growing at a lower base. Elections will be a very big trigger. I think elections will drive advertising growth for TV and specifically for news. Putting all these things into perspective, potentially TV advertising can grow mid to high single digit in CY24,” Taurani said.