In-depth: Digital growing, but TV isn't bowing

The broadcast industry world over is facing a stiff competition from digital platforms such as YouTube and other OTT platforms.

In the US, the digital and TV revenue were almost the same last year and it was evident that digital was growing at the cost of TV.

However, the same isn't the case in India so far, as TV reaches almost 183 million homes and is watched by about 900 million people. India has 248 million households that means TV has a future growth potential of 65 million more households.

Whereas, the digital content is mostly consumed by smartphone users. India has a base of 300 million smartphone users out of the total 650 million mobile phone users. That means the remaining 350 million feature phone users could also move to smartphones in a few years. And with cheaper data, data consumption would keep on rising. With an average one GB per day, users would consume three-four hours of video content a day.

While these facts tell you who owns the maximum potential eyeballs between TV and digital, whether or not one is growing at the cost of the other will remain a mystery until BARC India launches its digital measurement EKAM.

Given this scenario, experts feel that TV viewership in India, for another six-seven years, will be double the digital platforms.

But is digital growing at the cost of TV or is the viewer dividing time between both screens? BARC data says that TV viewership continues to grow.

The answer to this dichotomy is that people are consuming a lot more content as compared to a year or two ago. Now they're not just sitting in front of TV but are also watching their favourite TV shows while on the move, on their mobile screens.

So, is the advertiser moving the spend from TV to digital? Experts say till the time TV continues to grow, advertisers won't ditch the medium. But with exponential growth of digital, some niche advertising is moving to digital.

"Digital is getting a lot of start ups to advertise that wouldn't have afforded TV. Say an Ustra shaving brand or Bombay shirt company wouldn't have advertised on TV given its high cost. But they're using the likes of TVF as their medium, as it provides them targeted and cost effective reach," the expert said.

But what about mass brands? Experts feel they've diverted some of their TV ad spend to digital but it isn't at a worrying rate.

For some time now, the industry folks have felt intrigued with the disruption that increasing digital video consumption is causing. While the broadcasters are considering it as a threat and gearing up with their own digital platforms, media agencies are getting the best hands on digital to plan for their clients. The advertisers, in the meanwhile, are trying to adjust digital in their previously set marketing plans.

BestMediaInfo analysis the future of TV and digital video content and how the two mediums will co-exist in terms of viewership and revenue.

Shift in Viewers

As world progresses and people get their hands on newer, easier and more convenient technology, they are bound to use it and hang on to it, if they like the experience. While 2014 onwards, Indians were busy using and experiencing video content on digital, it was in 2017 that possibly people decided to hang on to it. Much of the credit (or blame, as some broadcasters laughingly say) for this lies with Jio because digital in India is essentially mobile phones. As Azim Lalani, Business Head, Firstpost, in an earlier interview had pointed out, “A lot of people have migrated from a feature phone to a smartphone, bypassing the ‘desktop’ level of connectivity.”

A lot of this growth has come on the back of Jio who has worked as a disruptor in terms of data prices and Vodafone who has then taken a lead with its offers.

Siddharth Banerjee

“Today, consumers are consuming content on more than one screen. In 1990s, there was just TV, and now, there is TV, iPad, phones, laptops and many options. In this multi screen world, consumers might be consuming the same content on different screens. The role of mobile phones and hence, role of connectivity providers - like Vodafone - becomes very important. We have, therefore, suddenly come at the centre of this digital wave,” said Siddharth Banerjee, CMO, Vodafone.

Digital has changed the way media was consumed in the country, be it, at the cost of other media platforms or over and above that. The logic is simple - A person who was consuming media (TV and Print) for about four hours (assumption) a day is now probably consuming media for about 10 hours a day (or more) through mobile phones. This six extra hours have all gone to digital, not necessarily from the existing four hours. But a small segment of the existing audience who would have watched television at a certain point in time, have now moved on to digital.

Sujata Dwibedy

Sujata Dwibedy, Executive Vice President, Head of Buying and Trading, Amplifi India (the media investment division of Dentsu Aegis Network), opined, “BARC will not show the exact change, because of the universe update. The fact that there is a shift from TV to Digital is something no one can deny. The trend today has actually shifted from “must see TV” to “must experience TV”, highlighting the screen agnostic content viewing. The fastest shifts have happened amidst the youth and the HNIs (high net-worth individuals). FB, YouTube and some other platforms have been driving the growth of digital consumption. Also FB, YouTube and some other platforms are in-built apps in most phones. So that also makes it easier.”

A representative from a medium-sized advertiser, who spends extensively on the two media platforms, said, “Earlier if a certain ‘x’ number of people were watching a certain content on TV, that meant that the rest are not watching that piece of content at all. However, now, the rest of the people might be catching up with the same content in the same format on some other screen at a delayed time.”

Advertisers have agreed and confirmed, based on their respective research and data sets, that viewers in a certain age group (typically 15-24) are walking out of watching TV live. “People are consuming content on digital because of convenience and mobility. The trend has probably started in the slightly higher NCCS, but it will soon spread out across. A lot of people have started investing their travel time in consuming content on phone, replacing the ‘checking emails’ window,” said a major FMCG brand.

Is TV growing?

While digital is growing at a faster pace, television growth isn't slowing down either. While in many parts of the world, print and TV have started dwindling in terms of viewership/ readership, India continues to show a healthy growth, more so for television, where the growth is in double digits despite a huge base.

Since the major push of digital is seen in the affluent audiences, we tried to analyse the genres which are more popular amongst NCCS AB and tried to see the growth.

Comparison between week 8-48 2016 vs 2017:

Another media planner said, “TV will continue to get new audiences owing to the under-penetration of the medium in the country. There is huge room for increment in TV penetration for at least 3-4 years and hence, the growth will continue.”

TV Components that are directly competing with digital

Out of all of TV, there are two components of TV content, which are competing for viewers with digital, almost head on. The high definition (HD) television which stays at 10-12 million subscribers as on date, and the lifestyle channels that have an average viewership of about 15.295 million coverage (NCCS 15-30 All India, Week 8-48).

Multiple sources have confirmed that Hindustan Unilever India has sharply reduced its spends on the HD channels to divert the same monies for advertising on digital. What value must the company have seen in this step?

A senior media observer who wished to be anonymous said, “About 80-85 per cent of the total HD audience is exactly the same people who consume videos online. Now, if I am putting my ad on HD channels, along with YouTube and about three other OTT platforms, the possibility of duplication of audience is huge. The amount of money that is spent on digital is much lesser, while the engagement is more, since it is your personal screen. If one goes on HD, they can’t avoid digital, but the vice-versa is possible and that’s what the company has probably done.”

Looking at the above data from BARC, one can see that after Hindi GEC (which has a huge base), lifestyle channels has shown the least growth.

“When you see the comparison of the viewership data along the various niche genres for affluent audience in particular, the growth is the least in lifestyle genre. This content is easily viewable on the other screens. The shift is happening across other genres too also because of the OTT platforms which have a great viewing experience and good titles to offer,” Dwibedy said.

Co-Existence! Why shift the spends then?

While digital grows, television continues to rule the brands’ marketing spends and the viewership charts. Co-existence is what a lot of people have indicated and it will remain like that for a long time.

“For about 6-7 years, which is a conceivable future, digital and television will have to live with each other. While penetration of TV and viewers is increasing, there are viewers who are moving to digital and there is another set who is co-viewing the two platforms. This means that for a long time from now, India has to live in this hybrid eco-system, at least till the time when both the platforms reach to a penetration level of about 85-90 per cent in the country. Then, is when the loyalties of audience would be seen through data.”

Karan Bajaj

Possibly, this is one reason why broadcasters have already started focusing on digital, alongside TV and are making attempts at creating platform agnostic content. In the most recent announcement, Discovery has announced the launch of four digital platforms in the first half of 2018. In an earlier conversation with BestMediaInfo, Karan Bajaj, Senior Vice President, Discovery Communications India, said, “Digital viewership is mostly incremental. We are playing safe as our content is present on both - TV and digital. An advertiser who wants to target our audience, has an option to go on any of the two mediums through our content.”

If there is co-existence, why are the advertisers pulling a certain share of spends out of television to accommodate digital? Why is there not a separate budget being planned for digital?

It has time and again been proven that even the millennial minded marketers need TV for their core TG. At any given point in time, the number of youth moving from TV to digital is always a smaller number, compared to new youth coming on to TV.

The data (above) shows the premium audience that marketers want to attract. If that is growing, then whether some of the potential audience moves on from TV, whether this growth could have been more than this or not, how does all of this matter?

Dwibedy explained, “While planning the advertising budgets, there are two factors that influence the decision. Cost efficiencies -if better on Digital for an audience, advertisers are ready to shift a certain part of their spends from TV. Secondly, the one-to-one engagement is much higher on Digital. You may do 100 other things while TV is on, but when a video is playing on your phone, it has all your attention. Advertising communication gets across more easily.”

This, while Banerjee clearly says that both platforms are equally important to Vodafone as a brand. Banerjee said, “There is no either-or, which means that now marketers need to know their audience’s watching habits and consumption habits even more finely and deeply. Depending upon which audience I am trying to speak to, I will tweak my media choices accordingly. If there are TV light viewers who can be better addressed on different screens, we will plan media accordingly. Similarly, if there are people who don't consume TV at all and are only on mobile phones then we will plan our media spends accordingly. Our spend on TV and digital keeps changing every year, because we constantly keep adapting basis how our consumers are moving.”

Since TV viewership is not declining, rather it is growing as per BARC data, then digital viewers are incremental. So, why not incremental revenues?

Banerjee further added, “Viewers are incremental, because there is duplication because of multi-screening. TV remains the most cost-effective high-reach medium in India and it continues to stay. Hence, if I have to appeal at certain reach and frequency, depending on that audience I will take a mix of television and digital. For us, most of our marketing monies are spent on TV and digital put together, considering our target audience profile. As an advertiser, there are choices available in this multi screen world and we will have to pick and choose since resources are finite. In a multi screen world, where attention is divided, we'll be making choices and we have to be prudent in where we put in our monies.”

Another major advertiser agreed that the company has increased its focus on digital though TV still remains an important medium. “Compared to last year, my digital spends have doubled, even if it was on a smaller base. My budget has not increased or we have not allocated any special monies for digital. We have taken out some monies out of TV to accommodate it in digital. We started with mandating the brand teams that every media plan should have a specific component for digital.”

He further added, “Most projections put up for the adex - Madison, GroupM estimates, by 2020, ad pie will be in the range of about 58,000 crore, TV and print will sit in the range of 17,000-18,000 crore, digital will touch about 10,000 crore. It might fall short by about a 100 crore, is my estimation, but that’s a correction. This is also an indication of the growth of digital on the back of TV.”

Measurement and Measurability

Measurement on both the platforms has its own pros and cons. While on TV, BARC has built a strong trust amongst the stakeholders - agencies, broadcasters and advertisers. But by nature of TV viewership measurement, extrapolation plays a huge role and also BARC India is expanding its sample base slowly.

On the other hand, digital has a more specific, profile centric, real time data which gives you absolute number of viewers or users on your content. But, there are elements like ad frauds, incorrect placement of ads, bots and many other highly technical flaws that deceive the data users. So, ultimately if an online video is said to be liked by 20 million people, it’s very much possible that 5-7 million of these are bots. It is also possible that the ads are placed besides content or on pages which are linked to anti-social or anti-brand philosophies. Large platforms like Google and Facebook too are trying to resolve ad-fraud cases.

While on television, the advertiser can chose the specificity of being on a certain time band, channel, and even choose to become the first ad after the ad break is announced.

Concluding the topic with the possible trends that would emerge on the video platforms, Dwibedy added, “These trends on the video platforms that would emerge are ‘being on omniplatform’, ‘screen agnostic planning’, ‘measurement and personalisation’ and ‘innovation and technology.’”

Info@BestMediaInfo.com