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#OpinionsThatCount: Can elections neutralise the impact of demonetisation on news channels?

As assembly elections near and viewership is expected to increase, news channels hope to make up for the loss in advertising revenue occurred due to demonetisation. Best Media Info spoke to brands and players in the news genre to find if the coming weeks have good news in store for them

BestMediaInfo Bureau | Mumbai | January 17, 2017

assembly-elections-2017Demonetisation hurt the advertising industry across platforms but television was one of the worst hit in terms of advertising business. The news genre has had quite a high time in terms of viewership ever since the Uri attacks on September 18, followed by the surgical strikes, demonetisation, demise of Tamil Nadu CM Jayalalitha and other events. The coming assembly elections in five states are other strong events waiting to be monetised.

It is true that brands do spend more monies on the news genre during happy high points such as elections. One of the main reasons is that in normal circumstances people consume news channels more like a radio but the attention span is much more during elections. So the otherwise passive viewing is converted to active and involved viewing on the genre. All and all, the news channels are expected to negate partial losses incurred by demonetisation.

The demand for news channels increases to such a level during elections that they charge 40 per cent to 150 per cent more than the regular rates and press on advance payments. It is majorly because the elections and budgets are the only events that can be planned on the genre. Otherwise, most viewership attracting events are unforeseen (read calamities, accidents, celebrity demises and cricket performance, among others).

For the top three to four national players, the ad rates also go as high as Rs 1 lakh per 10-second on counting day.

Best Media Info spoke to brands and players in the news genre to find if they feel the channels will be able to attract some extra revenue in the run-up to the elections.

Broadcasters speak:

MK Anand MK Anand

MK Anand, MD and CEO, Times Network

Elections are something we are happy about. As an industry, as a genre, we should be able to recover about 20-30 per cent of the losses that we suffered during the demonetisation. The instances that have just gone by, including the Uri attack or surgical strike, demonetisation or other such events, have affected us adversely. Good times for news broadcasters (in terms of viewership) is only when there are real bad times; and bad times are never good for business, including news channels. I would rather have lower news GRPs and normal business than high GRPs and lower business. Because bad news always slows down the economy, be it natural calamity, war or demise of a famous leader. When these calamities (and viewership) start subsiding, business, economy and our revenues start coming back to normal.

Joy Chakraborthy Joy Chakraborthy

Joy Chakraborthy, President, Revenues, TV18 and CEO, Forbes India

Yes. The budget should give a lift to the business channels for sure; elections, however, are more important for the regional and Hindi channels. The elections will give a revenue lift (to all the players in the genre). But important is what happens after elections. Budget is more important for us as a network from the CNBC TV18, CNBC Awaaz and CNBC Bazaar point of view. We have signed a lot of good advertisers for budget programming.

UP, Punjab, Manipur and Uttarakhand are not really English-speaking markets but we are witnessing a good revenue lift coming from ETV network and the Hindi channel News18 India. Also, a lot of political parties will advertise. We (the news genre) are in talks with the parties. The response is looking good. One has to understand how election programming is very expensive and investments shoot up to a large extent compared to a normal programming. We opt for differentiated elections day programming and hence we price our sale at that.

Avinash Pandey Avinash Pandey

Avinash Pandey, COO, ABP News Network

That's a given that the elections will help in upping the advertising. I am quite sure that all political parties will build their campaign on television, since that's the only medium by which they will reach all their audiences in the UP, Punjab, Uttarakhand markets. Political parties and advertisers will have lot of interest in the medium. Advertising content is also curated around the political environment a lot of times. The news genre attracts lot more eyeballs during elections and hence the demand is very high. Hence, the other advertisers (other than the annual deals) who are negotiating now will have to pay some premium to accommodate themselves in the limited space (read airtime) that the news channels have. There’s not a large inventory that the news channels run at this time because there is a lot of programming happening -- rallies, speech by the PM, opinion polls, exit polls, press conferences, election commission, polling day and counting day coverages. At this point, people are interested in knowing what is happening to their political leaders. Hence, there ought to be a major jump in the revenues. The losses incurred due to demonetisation are permanent and no recovery should be expected, and for no news channel is this a compensation (for the losses) for the balance sheets. However, it is true that the Q4 of 2017 fiscal will witness 15-20 percent higher revenues, compared to Q4 of 2016 fiscal. Coverage of elections is a very expensive item. All this was planned in advance.

Brands speak:

Rajiv Dubey Rajiv Dubey

Rajiv Dubey, General Manager-Media, Dabur

News channels always draw significant attention whenever there’s a political activity. This time, the political activity is just a few weeks away since the Punjab and Goa elections are scheduled for February 4. People start getting interested in what’s going on in these markets. We as advertiser chase the viewers wherever they are going, be it general entertainment channel (GEC), sports or news. Whenever there are elections, budget or anything that attract viewers to news, the focus is on the channels at that time. One would like to get viewers on these days. One wants to grab light viewers (viewers that come onto news on these occasions) and new viewers. So will there be upsurge in advertising? Yes. There will be. Will there be premium on advertising rates? Not for all channels. Very few news channels attract premium advertising rates, rest are not strong or established enough. It also depends on demand-supply balance. After demonetisation and the ongoing (digital addressable system) DAS implementation, the rates would have been fallen by now.

Karthik Lakshminarayan Karthik Lakshminarayan

Karthik Lakshminarayan, VP Media Planning and Strategy, Vibrant for Reliance Jio

While news will be in consideration across all plans and will gain some lost ground, I am not sure if they can entirely make up the loss during this period. It will require a good strategy and some really hard selling to make up for this loss. There is a certain fixed premium that one pays on special days and this should remain constant in my reckoning. This varies by client and category.

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