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TV broadcasters face the risk of lower-than-expected revenue growth in the first half of 2024 due to a lacklustre ad market and an unofficial embargo on increasing channel prices due to the general elections, industry experts said.
While the January to March quarter is typically a challenging period for TV broadcasters since it follows the festive season where brands typically exhaust much of their annual ad budgets, the second quarter is also looking lack lustre this year as the ongoing Indian Premier League (IPL) 2024 has failed to generate a major increase in ad revenue despite record viewership on both TV and digital in the 2023 season.
“The ad growth is underwhelming while subscription revenue continues to face challenges due to consumer shift to OTT,” revenue head of a leading TV network said on condition of anonymity.
Experts, however, note that political advertising may prove to be a silver lining for TV broadcasters as the alliances led by BJP and Congress battle it out at the hustings. GroupM has predicted that the political parties could spend ₹1,500–2,000 crore on mass media advertising amid the Lok Sabha elections to be held in seven phases from April 19 to June 1.
In 2024, the total TV ad spend is estimated to be between ₹35,000 crore and ₹45,000 crore, with both the first half and the second half equally divided, according to multiple industry reports by media agencies. In 2023, total TV ad spend fell 6.5% year on year to ₹29,700 crore, as per Ficci EY 2024 report on media and entertainment sector.
Ashish Sehgal, chief growth officer for ad revenue at Zee Enter tainment, said the overall TV viewership in India has grown by 5.1% in FY24 but the ad growth rate has somewhat slowed down due to the decline in spending by major gaming and D2C brands, increased ask for price reduction, and significant rise of livesports on digital space.
“The ICC Men’s Cricket World Cup 2023 gained interest from the FMCG companies as the property was sold at CPRP (cost per reach point) – impacting entertainment channels. However, (at present) ad spend on entertainment networks is increasing at a decent rate as IPL’s impact on these channels has diminished over time,” he added.
The TV subscription revenue of the broadcasters is expected to remain under pressure in the first half due to a decline in the pay TV base and the Telecom Regulatory Authority of India’s (Trai’s) diktat to broadcasters
to resist switching off signals to cable TV platforms if they fail to sign content deals as per the new pricing.
“While H1 has promising advertiser interest, including government advertisement spends, I am cautiously optimistic about the sector realising its full revenue growth potential,” said media analyst Rajesh Sethi. “Trai has urged broadcasters to avoid disconnection of signals to DPOs on the tariff hikes matter for the next couple of months, which will impact the growth in subscription revenue,” he said.
Media Partners Asia vice president Mihir Shah said subscription revenues for broadcasters continue to remain under pressure as the industry transitions to connected TV. “In terms of advertising, January and February began positively, but March was weak due to delayed summer,” he said. “This delay has resulted in a spill-over effect on advertising for seasonal summer products, extending into April and May, which will also be supported by a sports-heavy calendar.”
Billed as India’s largest media property and ad market barometer, the IPL this year faces challenges like less-than-anticipated ad demand, clash with the general elections, and hyper-competitive ad inventory pricing by Disney Star and Viacom18, hindering commercial exploitation for the second consecutive year.
“Google and Meta have built massive digital advertising businesses thanks to SMBs. JioCinema is wooing these advertisers with live sports as a hook,” an advertising expert said, adding that building long-tail advertisers will help reduce dependence on large advertisers. According to a Ficci-EY report, digital advertising surged 15% to ?57,600 crore, including ?20,000 crore in ad spend by small and medium enterprises (SMEs) in 2023.
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