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Share of viewership and ad volume of news genre set to grow further in 2020, Ashish Pherwani of EY

The FICCI EY 2020 report says the share of ad volume of Hindi news genre grew by 1% to reach 6% of overall TV advertising volume in 2019

Ashish Pherwani

The FICCI EY 2020 report says television ad spends grew by 5% in 2019. However, the spends reduced towards the end of the year due to the economic slowdown. The Hindi regional news genre saw the highest increase in new advertisers with 121 new advertisers.

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According to the report, national channels witnessed a 6% fall in ad volumes, while regional channels received 13% more advertising compared to national channels. Another interesting insight from the report says viewership of HD channels increased by 56% post NTO. Broadcaster revenue increased by 10-15% in 2019, the report said.

On how the television industry would be affected because of the Covid-19 crisis, Ashish Pherwani, Partner and Media & Entertainment Leader, EY India, said if the lockdown continues for a month or two, the industry will see flat growth. “If this is curtailed within two months you would see a drop of 10-12%; if the curbs continue for three months, you could see a 25% drop,” he added.

He said broadcasters are looking for interesting measures to deal with the situation as the curbs continue. “Interesting insights are coming from broadcasters, some are saying they will weave their content, some are looking at UGC-related solutions. We are also seeing people talk about reweaving nostalgia; interesting insights are coming from GEC channels, and we will see how the impact rolls out,” he added.

Pherwani said news channels will grow in 2020 as the crisis continues. “News channels should grow, even last year with elections and so many events, the share of news viewership went up from 7.3% to almost 9%. This year is turning out to be more different, unfortunately, it's bad news but it’s still news. Therefore you will see the growth,” he said.

The share of ad volume of Hindi news genre grew by 1% to reach 6% of overall TV advertising volume in 2019.

He said the evolving Covid-19 situation would also affect the demographics of television and OTT viewership. “Once the quantum of fresh content moves, you will definitely see a shift in content consumption. With kids being at home and learning from home, you could see a lot more children getting familiar with these kinds of techniques,” he said.

Asked how will the OTT industry be affected, he said the medium will gain as you might see ‘Digi-first’ movie releases. “Films produced by small entities and where they would face cash flow issues may actually end up releasing on streaming platforms first. It’s a good chance to enhance the library online,” he said.

“The coronavirus outbreak will have a significant adverse impact on the sector as the situation is still evolving both in India and many parts of the world. The scale of the impact cannot be estimated immediately,” said Pherwani.

The implementation of the New Tariff Order (NTO) could impact subscription-based revenues, says the FICCI-EY report 2020. The report says there will be degrowth of -4% to -2% in 2020. “If NTO 2.0 is strictly implemented, then you could actually see up to 4% reduction in the end prices the customers paid for their television subscription,” said Pherwani.

He said if broadcasters add channels to the packs and keep a check on prices, it could lead to 1-2% growth in revenues.

The report says the end prices for customers grew by 25% after NTO was implemented in February 2019.

The report also says regional channels were the least affected due to NTO and niche and English language channels were the most impacted. The English viewing audience moved to affordable OTT platforms, suggests the report. According to the report, 85% of subscribers opted for DPO designed packages.

Talking about the impact of NTO 2.0 on regional channels, Pherwani said they won’t be affected.  “I think English specifically got very severely impacted due to the NTO. Almost a 40-50% drop in reach in 2019. Regional on the other hand was the least affected because people love consuming content in their languages. I don’t see a significant impact; in fact, you might see a regular growth happening on the regional side,” he said.

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