Upcoming assembly elections, especially in the state of Uttar Pradesh, have come in as a shot in the arm for the news channels in a financial year that began with the second wave of Covid-19.
Besides the increased advertising from regular brands, news channels will aim for significant revenues from political advertising. The question is whether the political ads will be able to compensate the revenue losses during the first quarter due to Covid-19.
“Uttar Pradesh elections are no less than national elections for Hindi news channels whether national or regional channels with a stronghold in the state. Uttar Pradesh has traditionally been our strongest market and this gives us the confidence that we will outperform the genre when it comes to political advertising,” said Sudipto Chowdhuri, Chief Revenue Officer, India TV.
The political ads usually begin after the code of conduct comes into the effect. However, it only intensifies closer to the voting. Longer elections ensure a longer period of political advertising.
“The first question is whether a channel will be picked up by a political party for advertising or not. And then comes the volume - which party will give how much advertising to a channel. Political parties usually pick most of the channels relevant in a particular state. The last is ad rate,” said Wajid Khan, Executive Vice-President, News24.
“Viewership is one factor in deciding rates of political ads, but it largely depends on which channel holds more influence in the given state. Moreover, the internal feedback from the party about “particular shows” and “anchors” of channels play a big role,” Khan added.
Both Chowdhury and Khan refrained from speaking about the incremental revenues they are expecting from the political ads.
However, industry observers told BestMediaInfo.com that the political ads add anywhere between Rs 1 to 10 crore for a channel depending on the popularity and influence of the channel.
“Rates for a 10-second ad slot for political parties on a news channel is usually 3-5 times more than the regular ad rates. For the top tier channels (top 5 channels), the rates are usually 3 times higher whereas it is 4-5 times in the case of tier 2 channels,” said an industry observer.
Channels like Aaj Tak, India TV and ABP News command a rate of Rs 10,000-15,000 per 10-second while the ad rates for tier-2 channels and regional channels remain in the range of Rs 5,000 to 8,000 per 10-second.
However, the news channels are already making a decent sum from the increased government spending on advertisements from the states of Uttar Pradesh, Uttarakhand and Punjab.
Other than the plain vanilla advertising around the government schemes, the respective state governments have stitched special deals with the top broadcasters.
As per sources, these deals run into the range of Rs 10-15 crore.
"States such as Uttar Pradesh have had six monthly deals with broadcasters. The advertising deals include special bulletins focusing on various aspects of governance. These deals have ensured that all top news channels take home at least Rs 10 crore for the entire duration of the campaign. This advertising will catch pace before the dates of elections are announced and the code of conduct comes into effect. After the Election Commission notifies the elections, state governments won't be able to advertise and political advertising will take precedence," said a media planner.
The news broadcasting industry has had a tough time dealing with the impact of Covid-19 pandemic that led to the lowering of ad spends from the key categories such as auto and real estate.
A sizeable push is expected in revenues from the upcoming assembly polls.