Rs 4,000 crore in ad sales: Is FTA the dark horse of broadcasting arena?

The television landscape is in a state of constant transformation, shaped by shifting viewer preferences and evolving industry trends. While Pay TV and Connected TV continue to adapt, it is Free TV that recently emerged as the dark horse of the broadcasting world. Once seen as a space for niche players, Free TV is now witnessing a resurgence, with major broadcasters making a return to DD FreeDish and existing FTA (free-to-air) networks raking in impressive revenues.

As per insights gathered by exchange4media, the FTA industry is experiencing a golden era, generating a staggering Rs 4,000 crore in ad sales revenue. From legacy players to new-age content houses, broadcasters are tapping into the immense reach of Free TV, proving that in an industry driven by innovation, accessibility remains a powerful force.

The financial boom

According to industry sources, the financial performance of FTA channels has been remarkable. Dangal TV’s annual revenue stands between Rs 600 and Rs 650 crore, while Goldmine Telefilms, which runs the FTA channel Dhinchaak, earns approximately Rs 350-400 crore. B4U, with its FTA channels B4U Movies and B4U Music, is generating Rs 200-250 crore. Shemaroo Entertainment, which operates four FTA channels (Chumbak TV, Shemaroo Umang, Shemaroo TV, and Shemaroo MarathiBana), earns somewhere around Rs 200-250 crore annually, whereas Manoranjan TV is making Rs 100-120 crore per year. These numbers highlight the substantial profitability of FTA platforms, which continue to attract advertisers looking to maximize their reach at cost-effective rates.

According to Telecom Regulatory Authority of India (TRAI), as on November 30, 2024, there were 540 FTA channels permitted by the Ministry of Information and Broadcasting (as available on Broadcast Seva). 

The driving factors

According to Kailash Adhikari, Business Head, Shri Adhikari Brothers, the FTA resurgence in India began close to a decade ago, and a certain number of advertisers, who are focusing on the Bharat audiences, naturally have their entire expense allocated towards that.

“So, this is something which is now a very integral part of our television advertising. I don't know the exact figure; it could be approximately Rs 4000 crores because without the four broadcasters which are coming in this year, the GEC FTA market was around Rs 1000 crores.

“But the movies and everything put together could be around Rs 2500 crore to Rs 3000 crores. And now it will grow because of the fact that when these four top four broadcasters are bringing in their FTA GECs,” he said, adding that this phenomenon is strong and it is here to survive.

Rajiv Khattar, a broadcast expert, attributes the success of FTA broadcasters to their ability to tap into regional markets with cost-effective advertising models. “FTA broadcasters generate significant revenue because many of them are regional players with very low rates for advertisers. Additionally, they receive a large number of government advertisements in regional languages. This is why FTA channels are garnering substantial advertisement revenue,” he explains.

The widespread reach of DD FreeDish plays a crucial role in this growth. “FTA broadcasters rely on DD FreeDish due to its extensive reach, allowing them to attract viewership in remote areas where pay platforms do not reach. This, in turn, helps them secure more advertisements. For smaller channels, government ads serve as a major source of revenue, while for bigger networks like Sony, Zee, Star, and Colors, it provides revenue at virtually no programming cost. Smaller channels particularly benefit from a high volume of regional government advertisements due to DD FreeDish’s reach,” Khattar adds.

According to another expert, when it comes to pay channels from big networks that are also available on DD Free Dish, regulations require them to transition to FTA. As per TRAI recommendations, broadcasters on DD FreeDish are also required to make those channels free on pay TV.

“MSOs and DTH operators are also pushing for this change. While it will take some time to settle, these channels will eventually go FTA, as the advertisement revenue from the platform is too significant to lose,” he notes.

Experts believe that FTA channels will continue to flourish, driven by the strong presence of DD FreeDish as a key distribution platform.

Additionally, free channels remain part of the basic tier on pay platforms like MSOs and DTH, ensuring sustained visibility and advertising revenue. While these channels operate on minimal EBITDA, they are expected to persist in the market.

The digital shift and Pay TV reach

An industry veteran highlights the declining influence of pay channels in contrast to the rise of FTA. “The reach of Pay channels has been declining over the past couple of years. Across the board—whether big or small—all channels are experiencing a drop in numbers, ratings, reach, and time spent. Clearly, the dependence is now only on a few flagship shows and older programs that are sustaining momentum for the time being. None of the new launches are performing beyond a certain point,” he points out.

A major factor leading this decline is the shift in advertising budgets toward digital platforms.

“Advertising money is drying up, with significant portions shifting to digital platforms such as YouTube, Facebook, and influencer marketing and quick commerce, which is also slated to double their advertising number this year, making the situation even more challenging.

"As a consequence, FTA channels appear to be the only segment still witnessing some growth, largely due to the presence of many TV-dark homes. This potential for expansion is prompting networks to offset their losses by strengthening their presence in that market,” the industry veteran adds.

While the FTA model appears to be thriving, it is not without its challenges. Experts note that this growth brings with it an overabundance of ad inventory.

They said that excess inventory will now be available across the FTA space (approximately 4 lakh seconds per month per channel) with so many new entrants of large networks joining the fray in FTA.

“As a result, there is likely to be a significant rate war, leading to price drops in an effort to fill up inventory. This comes at a time when fill levels were already a challenge for existing channels. FTA channels are also commonly used to deflate high CPRPs in deals, which will indirectly impact the trading levels of pay channels.

“While this move may have an immediate revenue benefit over the next quarter or two, it will have a lasting effect on the overall trading levels of both FTA and pay channels,” an industry veteran said.

The road ahead

The current surge in FTA growth raises an important question: Is this just a temporary trend, or are we witnessing a lasting market shift?

Given the increasing financial viability of FTA channels, the ongoing decline of Pay TV, and the strategic advertising shift to digital, the future of television could be leaning more towards a hybrid model.

Broadcasters may continue to leverage the accessibility of FTA while simultaneously investing in digital platforms for additional revenue streams.

While challenges like rate wars and excess inventory exist, the sheer reach of FTA channels ensures that they remain a lucrative choice for advertisers, particularly those targeting rural and semi-urban audiences.

In conclusion, while market dynamics continue to evolve, FTA television is proving that accessibility, affordability, and mass reach remain powerful drivers in India’s media landscape. Whether this growth sustains long-term will depend on how broadcasters, advertisers, and regulatory bodies navigate the shifting sands of the television industry.