Regional, Rural and FTA now key growth drivers for TV consumption: KPMG Report
The market size consisted of advertising revenues of Rs 22,400 crore and subscription revenue of Rs 42,800 crore in FY18
Despite the increasing consumption of TV content on digital platform, television still remains the dominant mode of media consumption in India.
According to KPMG's recent report, Media Ecosystem: The walls fall down, the television industry in India is estimated at Rs 65,200 crore in FY18, a growth of 9.5 percent from FY17, having grown at a CAGR of 10.7 per cent between FY14-18. The market size consists of advertising revenues of Rs 22,400 crore and subscription revenue of Rs 42,800 crore in FY18.
The television industry had a relatively subdued year in FY18, with advertisement revenues facing headwinds due to the implementation of GST and moderate growth in the overall economy. At the same time, subscription revenue growth was lower than expected as the DD FreeDish subscriber base soared to 30 million and Direct To Home (DTH) ARPUs declined with an increase in competitive intensity.
Speaking about the key trends in the television industry, Girish Menon, Partner and Head, Media and Entertainment, KPMG India, believes that going forward, regional market will drive growth. The launch of new channels and a wave of popular reality shows being adapted for regional audience led to a 32 percent increase in languages viewership in 2017. The Free To Air (FTA) genre, that contributed 31 percent to TV viewership in 2017, helped DD FreeDish become one of the largest DTH players in India. He says, “The building blocks of the future has been set up in the last two years. You had rural and regional demand growing. Regional is growing, particularly BARC started covering rural and regional in a far deeper manner. FTA market and regional market are becoming more and more important for broadcaster and distributors. With Free Dish, which is close to 30 million subscribers, offering a very low-cost product for the consumer to pick up, covering all the major content that is out there, is helping TV consumption to grow.”
While the launch of new channels in the regional space proves that it's a growing space, the ad rates also increased along with consumption. Menon explains, “There was no need historically for the advertisers demand to be focused on the regional market directly. Advertisers, particularly on traditional media, focus on the reach and it was the Hindi content that gives the maximum reach. With measurement metrics changing and becoming deeper now the situation is where rural and regional viewers are getting captured more on television. Suddenly advertisers started realising that there is a market where they haven’t spent enough. In the next two-four years, as demand increases, the ad rates will go up (even more).”
Even in the FTA genre, the ad rates are going up, Menon says, “With FTA, because it is run by Doordarshan, it's not necessary that it follows the normal demand curve. The bidding on FTA channels has been stopped and now we have to see how it pans out. I am assuming that Doordarshan will continue to allow third party channels but potentially at a higher price point. Once it happens, you will see more ad spends continuing to happen.”
The number of TV households increased to 188 million in FY18 with the Cable & Satellite (C&S) subscriber base reaching 183 million. While cable and DTH aggregated 91 million and 62 million households respectively, FreeDish has gained a substantial user base and emerged as an alternative entertainment platform, especially in the DAS Phase III and IV markets.
“The operationalisation of digitisation continues to be slow while seeding of boxes has reached where it can. The conversion of packaging the offerings has not yet started to happen. Coming to TRAI Tariff regulation, December end is when they will start operationalising. Our sense is that after the hearing it will bring in transparency across the value chain.”
The TV industry is expected to grow at a CAGR of 12.6 per cent on the back of increased penetration and strong advertising demand due to healthy domestic consumption and major events (two cricket World Cups and General Elections being among them); better distribution realisation due to TV digitisation is likely to result in strong growth in the years to come. Lastly, while consumption of TV content on the digital platform is expected to grow further, television is likely to remain the dominant mode of media consumption in India.
According to KPMG's recent report, Media Ecosystem: The walls fall down, the television industry in India is estimated at Rs 65,200 crore in FY18, a growth of 9.5 percent from FY17, having grown at a CAGR of 10.7 per cent between FY14-18. The market size consists of advertising revenues of Rs 22,400 crore and subscription revenue of Rs 42,800 crore in FY18.
The television industry had a relatively subdued year in FY18, with advertisement revenues facing headwinds due to the implementation of GST and moderate growth in the overall economy. At the same time, subscription revenue growth was lower than expected as the DD FreeDish subscriber base soared to 30 million and Direct To Home (DTH) ARPUs declined with an increase in competitive intensity.
Speaking about the key trends in the television industry, Girish Menon, Partner and Head, Media and Entertainment, KPMG India, believes that going forward, regional market will drive growth. The launch of new channels and a wave of popular reality shows being adapted for regional audience led to a 32 percent increase in languages viewership in 2017. The Free To Air (FTA) genre, that contributed 31 percent to TV viewership in 2017, helped DD FreeDish become one of the largest DTH players in India. He says, “The building blocks of the future has been set up in the last two years. You had rural and regional demand growing. Regional is growing, particularly BARC started covering rural and regional in a far deeper manner. FTA market and regional market are becoming more and more important for broadcaster and distributors. With Free Dish, which is close to 30 million subscribers, offering a very low-cost product for the consumer to pick up, covering all the major content that is out there, is helping TV consumption to grow.”
While the launch of new channels in the regional space proves that it's a growing space, the ad rates also increased along with consumption. Menon explains, “There was no need historically for the advertisers demand to be focused on the regional market directly. Advertisers, particularly on traditional media, focus on the reach and it was the Hindi content that gives the maximum reach. With measurement metrics changing and becoming deeper now the situation is where rural and regional viewers are getting captured more on television. Suddenly advertisers started realising that there is a market where they haven’t spent enough. In the next two-four years, as demand increases, the ad rates will go up (even more).”
Even in the FTA genre, the ad rates are going up, Menon says, “With FTA, because it is run by Doordarshan, it's not necessary that it follows the normal demand curve. The bidding on FTA channels has been stopped and now we have to see how it pans out. I am assuming that Doordarshan will continue to allow third party channels but potentially at a higher price point. Once it happens, you will see more ad spends continuing to happen.”
The number of TV households increased to 188 million in FY18 with the Cable & Satellite (C&S) subscriber base reaching 183 million. While cable and DTH aggregated 91 million and 62 million households respectively, FreeDish has gained a substantial user base and emerged as an alternative entertainment platform, especially in the DAS Phase III and IV markets.
“The operationalisation of digitisation continues to be slow while seeding of boxes has reached where it can. The conversion of packaging the offerings has not yet started to happen. Coming to TRAI Tariff regulation, December end is when they will start operationalising. Our sense is that after the hearing it will bring in transparency across the value chain.”
The TV industry is expected to grow at a CAGR of 12.6 per cent on the back of increased penetration and strong advertising demand due to healthy domestic consumption and major events (two cricket World Cups and General Elections being among them); better distribution realisation due to TV digitisation is likely to result in strong growth in the years to come. Lastly, while consumption of TV content on the digital platform is expected to grow further, television is likely to remain the dominant mode of media consumption in India.
Tags
Girish menon
Kpmg india
Regional channels
Tv viewership
Fta channels
KPMG Media and Entertainment report 2018
