MxMIndia

Category: Opinion – Archives

  • Print media needs to plan its digital strategy asap in order to survive, writes Indrani Sen after a quick scan of the IRS 2019/Q1 findings

    IRS 2019: Future of Print under Microscope

     

    By Indrani Sen

     

    Indrani Sen

    The recent release of IRS 2019 by the MRUC did not have as dramatic impact as the release of IRS 2017 when the definition of readership was changed from “Average Issue Readership” (AR) to Total Readership” (TR). Yes, the TR has gone up by 2.7 crore from 40.7 crore to 42.5 crore with both newspapers and magazines contributing to the raise the numbers, but if we try to read between the information in the carefully drafted PPT released by MRUC for consumption of Industry at large, we find some red flags concealed in certain corners.

    Let us look at the slide on all media consumption highlighting the growth of internet. Internet accessed has grown by 5% from IRS 2017 to IRS’19Q1. No other medium has shown this kind of growth. While total readers have increased to 42.5 crore, the internet users are now 384 million, or 38.4 crore. With increase of another 5 to 6 million internet users, soon the internet penetration will be same as penetration of print on All India basis. Print media needs to plan for their digital strategy asap in order to survive.

    The NCCS distribution going flat is a clear indication that MRUC needs to rework the definitions based on ownership of durables. The PPT has put in a flag in couple of slides saying “Need for a sharper socio economic discriminator?” No timeline for a working plan was indicated at the launch event.

    In this connection, I would like to mention that my students at SIMC did a survey last year on media habits of non-teaching staff working in all Institutes of Lavale campus of Symbiosis, Pune. They found that the need of giving good education to their students and the availability of easy EMI have made 90% of ‘bhaiyas’ and ‘mausis’ with their children in secondary schools have made them purchase either desktop or laptop computers for their use at home. I have been commenting on this need for a change in NCCS for some time. I am happy to see that MRUC has acknowledged it this time in their PPT on IRS 2019.

    Finally, I would like to comment that print players need to respect the findings of IRS 2019. MRUC should get a continuous flow of funds from them, so that no disruptions occur in the field work like it happened after the release of IRS 2017.

     

     

  • It’s Game On, as online gaming leapfrogs 59.4% in 2018 over the previous year, notes Indrani Sen

    Online Gaming is the new Digital Rock Star

     

    By Indrani Sen

     

    Indrani Sen

    The digital gaming industry in India is currently undergoing rapid changes riding on the mobile revolution and fuelled by investment from big players such as Alibaba, Tencent, Youzu and Nazara. Many startup gaming developers are also lapping up the opportunities and providing the online gamers with new formats of online games and real-time experiences. Industry experts estimate that the number of online game developers has grown 10 times in last eight years from a mere 25 in 2010 to around 250 in 2018.

     

    A decade back, the accessibility to playing online games was not easy as it required downloading and installation of games on consoles and desktop computers. The rising affordability and adoption of smartphone has become one of the important factors contributing to the rise in the number of gamers and success of the online gaming Industry. The new age gaming developers are experimenting with innovative gaming formats backed by blockchain, artificial intelligence and machine learning technology. Action, adventure and puzzle are the popular gaming genres in India with fantasy sports rising at a fast rate supported by emergence of new sports leagues as well as promotion of traditional sports tournaments through online gaming.

     

    As per the FICCI-EY 2019 report on Indian M&E Industry, the industry growth was from 2017 to 2018 was led by online gaming and digital media as shown in the following chart.

     

    Source: FICCI EY ME Industry Report 2019

     

    The report further predicts that online gaming will have the highest CAGR (35%) from 2018-2021 and along with the digital media (28%) and in three years both sectors will more than double their value in INR. While digital media is tipped off to overtake filmed entertainment 2019 and print in 2021, online gaming is already bigger than OOH, radio and music and will overtake live events in 2021 and is likely to overtake Animation and VFX by 2022 to rise to the fifth rank in terms of the share of the Indian ME industry pie.

     

    Indian ME Industry Source: FICCI EY ME Industry Report 2019

     

    This trend is going to have a far-reaching impact on the effectiveness and efficiency of the digital media planning which is expected to ride largely on programmatic buying and planning. Many advertisers would like to try out the route of developing exclusive/ branded online games targeted at their audience profile. The Freemium business model, which is currently most commonly used model in the online gaming sector in India, will attract more support from advertisers. Digital Marketing and Media Agencies will explore more innovative ways of exploiting the scope of reach provided by online gaming. After mobile and social media, online gaming will develop as a distinct media channel in the next decade. Online gaming is going to be the new rock star of all online media from 2020.

     

     

     

  • An analysis has strategic implications for marketers and will help further digital ad growth, writes Indrani Sen

    EY-FICCI report rediscovers Indian Customer Segmentation

     

    By Indrani Sen

     

    Indrani Sen

    It has been nearly two weeks since the FICCI-EY Report on Indian M&E Industry “A billion screens of opportunity” was released at the 20th FICCI Frames held in Mumbai on March 12, 2019. Most leading financial newspapers and industry websites have carried the press release issued by FICCI with highlights of the findings.

     

    This website www.mxmindia.com carried a report with highlights of the findings on March 13, 2019 http://www.mxmindia.com/2019/03/me-grows-13-rs-1-67-trillion-in-2018-ey-ficci-report/. The marketing and advertising industry experts have been busy analysing and internalising the findings and useful insights given in the report and their strategic significance.

     

    To me, the most significant insight of the report is its estimate of the customer segmentation in India by their access to various media consumption platforms. Last year, EY introduced the idea of this type of customer segmentation by introducing us to three types of segments, digital only consumers, tactical digital consumers (Pay TV & Pay OTT) and mass consumers (Pay or Free TV & Free OTT) and projected that by 2020 there will be 4 million digital only subscribers, 20 million tactical digital subscribers and 500 + mass subscribers.  I was delighted to discover that EY has refined their estimation of the customer segmentation by introducing another segment “bundled digital” consumers (as provided by telecom services) and segregating the mass consumers from the free consumers as shown in the chart below:

    Customer segmentation by media consumption platforms

    Source: FICCI-EY Report 2019

    The broad category of mass consumers accounting for 500 +million in 2020 has become more specific with 943 million subscribers in 2021 spread across three categories. This analysis of customer segmentation introduced in the FICCI EY report not only has strategic implication for marketers in the short run, but also will help to further accelerate the growth in digital advertising in the long run.

    Digital media has been consistently contributing to the growth of M&E sector. It is expected that digital will overtake filmed entertainment (currently in number 3 position) in 2019 and print (currently in number 2 position) by 2021. TV clocked the highest share (44%) of the entire industry in 2018 and is expected to grow by 8.8% from 2018 to 2021 but its share is estimated to drop from 44% to 40%. Digital media, growing at 28% from 2018 to 2021, is estimated to have 15% share of the entire sector in 2021 from 10% in 2018. It is difficult to predict what will happen in the next ten years and EY has not ventured into that forecast, but it will not be surprising if digital media overtakes TV by end of the next decade.

    In fact, MRUC should consider adopting this customer segmentation for revising their criteria for new socio-economic classifications as the current structure based on ownership of durables etc. is not reflecting the disposable income correctly, given the availability of easy financing schemes for purchase of white goods, etc. and the aspirations of the upwardly mobile population in rural and semi-urban areas.

    Uday Shankar, Chairman of the FICCI Committee said in his opening remarks at the FICCI Frames    “… in my humble opinion, the great Indian media & entertainment story has just begun. We are standing at an inflexion point. In business strategic inflexion point is described as a period when the individually the organisations and collectively the industry needs to respond effectively to the disruptive change in the environment in order to survive and grow.  The Indian ME industry entered the inflexion point/ period in 2018, when Indian ME Industry was at the “Digital Tipping Point”. The scope of making a choice no longer exists for the various segments belonging to the Indian ME industry and in order to stay in the race they need to adapt to the disruptive changes including the customer segmentation based on access to media consumption platforms.

  • Despite an increase in volumes by 8%, the print media needs to work out a strategy for survival, writes Indrani Sen

    Print AdEx: The writing is clear on the wall

     

    By Indrani Sen

     

    According to a report published in Brand Equity on February 27 based on TAM AdEx data based mainly on display ads, print advertising volumes are up by 8% from 2014 to 2018, though after 2016 there has been a decrease in print advertising volumes in the next two consecutive years. (https://brandequity.economictimes.indiatimes.com/slide-shows/print-advertising-volumes-up-8-between-2014-2018-tam-adex/68172547).

     


    Source: TAM AdEx/ ET Brand Equity

     

    If we compare this growth in volume with the growth in value as reported In PMAR 2019, we find that though there has been a growth in the print advertising Value by 27% from 2014 to 2018, the share of print Advertising in the total advertising pie has been decreasing steadily.

     


    Source: PMAR 2019

     

    As shown by PMAR 2019, from 2014 to 2018, the share of print advertising in the overall advertising pie reduced from 41% to 32%, a 9% drop in 5 years. In another five years, the share of print advertising in rupee value may come down to below 20% in India. The writing is clear on the wall as reflected in the diminishing/ stagnant growth rate of print advertising value.

    If we compare the above two charts, then we find that in terms of value, print advertising has grown by 27% from 2014 to 2018 as against only 8% increase in volume. Over the next five years, there may be still a growth in value of print advertising, but in terms of volume it may show a diminishing trend as reflected in the TAM AdEx comparative analysis of ad volumes across media in 2017 and 2018 where we find that magazines have lost 6% of ad volume from 2017 to 2018.

     


    Source: TAM AdEx/ ET Brand Equity

     

    So, print media needs to work out a strategy for survival which lies on one hand in promoting and monetising their online editions and on the other hand in innovative ways to tie up with other media which are still showing growth in both volume and value.

    In another recent article, Vanita Keswani, CEO of Madison Media Sigma, suggested that “Print ads will be more effective if they complement digital campaigns and entice readers to interact with brands online” (https://brandequity.economictimes.indiatimes.com/news/business-of-brands/what-print-media-needs-to-do-to-win-back-advertisers-faith/67959125). This solution however requires active support from the creative and media agencies which may not work out across categories and brands. It may be worthwhile for the newspapers to look at categories like Two-Wheelers, Cars & Jeeps and Services which are the leading contributors to the Print AdEx volume and experiment with strategic integrations.

     

     

  • With BARC's rural ratings foray, marketers will put on their thinking caps and rewrite their media briefs, plan for better distribution channels in rural India as well as logistics for reaching out faster to the rural consumers, writes Indrani Sen

    Guest Column by Indrani Sen | BARC goes Rural: The Great Media Manthan

    By Indrani Sen

     

    The Broadcast Audience Research Council (BARC) has churned the ocean of Indian TV audience and has found the nectar of rural market reach for our marketing and advertising industry. Startling trends about urban plus rural combined TV Audience Measurement, based on data collected over 22 to 31 weeks, were revealed at the BARC Road Show in Mumbai on September 7. Adding of Bharat (rural) to India (urban) in the survey has increased the average daily reach of TV by 3 times to a whopping 450 million!

     

    The 30-minute total (urban +rural) gross impressions is 19.5 billion with urban share of 10.6 billion. Rural India has clocked 8.8 billion impressions against 7.7 billion clocked by 1 lakh+ C&S towns in urban!! Moreover, rural rat (number of individuals in 000s of a target audience who viewed an “event” on TV, averaged across minutes) contributes more than 50% in some large regional demographics – AP/TL 53%, RAJ 54%, UP 55% and PHCHP 59%. In the Hindi Speaking Markets (HSM) all states have 50%+ rural rat except MP and JH. In Western India, both MH and GUJ have rat shares tilted towards urban (64% in each state). In Southern India, rural rat ranges from Kerala 45% to TN 46% to KAR 48% to AP/TL 53%. Eastern India is divided into two pockets with three states (Assam &NE, Bihar and Odisha) having 50% + rural rat and the other two states (WB and JH) having around 40% rural rat.

     

    Among the highlights of the findings presented by BARC at the Road Show, rural rat shares of 41% in Hindi Movie genre and 45% in Hindi GECs genre were expected after viewing the shares across the states. The real shocker to the audience at Nehru Centre was 45% share of rural rat in English Entertainment genre! In the post-IPL weeks (22 to 31 weeks) 48% rural rat in Sports genre also came as a surprise. Among the various language news genres, rural rat of Hindi is 37% , followed by Tamil 38%, Telegu 42%, Kanada 45% and Malayalam 48%. Rural rat of Marathi and Bengali news genres have scored respectively 34% and 31%. With poor penetration of newspapers in rural India, it is disappointing to note that the rural rat is not showing higher share in the regional news genre. Kerala stands out as an exception with high rural penetration of Malayalam newspapers as well as Malayalam news channels.

     

    The advertising industry will have to sacrifice reports for ‘Below 1 lakh’ towns in order to get the rural data as BARC will report the all=India TV ratings by four pop strata, ie. Mega cities, 10 to 75 lakh towns, Below 10 lakh urban areas and rural.  Currently, out of 22,000 BARC meters, 16,000 are deployed in urban and 6,000 in rural areas covering population in 1000+ villages. The ratio is opposite of the ratio of number of people/ households in urban and rural India.  Census 2011 over Census 2001 showed a 75% growth in proportion of TV HHs in rural India. BARC has reported 153.5 million TV HHs, of which 77.5 million (50.5%) are in urban and 76.0 million (49.5%) are in rural. As mentioned before, 8.8 billion (45%) of half-hour impressions are coming from the rural sector. It may not be long before the industry urges BARC for reviewing the distribution of meters across urban and rural India and increasing the proportion of meters in rural India.

     

    For some time,we have seen the writing on the wall about the growth in our rural market potential as reported by many independent market surveys and realised by marketers from their own sales reports. BARC quoted some such findings in its presentation to lay the foundation for its discovery. Yes, it is a discovery as these findings will now help our marketing and advertising industry to reach the rural audience effectively through a mass media for the first time, delivering numbers which print can not deliver. Marketers will put on their thinking caps and rewrite their media briefs, plan for better distribution channels in rural India as well as logistics for reaching out faster to the rural consumers. The TV industry will rethink its programming strategies with a large chunk of viewers following the “early to bed and early to rise” policy and spending 41 minutes less time daily on viewing TV than their urban counterparts. As the combined BARC Ratings roll out on a week-to-week basis, TV programmes will also start rolling across timebands/slots trying to balance between the viewing preferences of urban and rural viewers. The ranking of the TV channels by genres may also see some ups and downs as channels struggle to understand the viewing habits of Bharat v/s India. With Rural TV Ratings becoming a reality, media agencies and media channels will engage in qualitative research to understand the TV viewership habits and preferences of our rural audience about which we do not have much clue.

     

    The BARC Road Show also covered the formation of the Meter Company (for lack of a given name) and re-confirmed that 12,000 TAM meters will be duly acquired and overlaid on their existing sample structure with TAM having only the responsibility of running the data files from the meters to BARC. Responsibilities for all other functional areas covering from establishment survey to sampling design to processing, validating and publishing of data stay with BARC, which emerges as the sole TV ratings provider.  Between the sections on Meter Company and highlights of all India findings, BARC talked about the fidelity in its data which has been noticed during last few months. BARC cited the Nepal earthquake, Dr Abdul Kalam’s demise, the Gurudaspur Terror Attack, etc. as examples for breaking news or topical news which caused immediate spikes in viewership.  It was also pointed out how the absence of celebrity anchors (Kapil Sharma and Arnab Goswami) led to a substantial drop in the ratings of the respective channels (Colors and Times Now). It was interesting to note the presence of Technical Committee stalwarts and senior BARC consultants on the stage during the Q&A session which followed the presentation. However, the questions raised by the audience were more general than technical which did not relate to range of relative errors or comparative stability of data, etc.

     

    Finally, BARC deserves an applause for its performance in delivery of TV ratings and brilliant marketing strategy. During this year,it first released the HH level data in April followed by individual level data in June and now in September it is releasing the all-India level data covering urban and rural. 2015 is not a “Year of the Rat” by the Chinese Zodiac Calendar, but the way rat’000 figures released by BARC have been jumping over the industry from week-to-week, Vanita Kohli Khandekar may perhaps like to describe 2015 as “The Year of BARC RATs” in the next edition of her book The Indian Media Business.

     

    Indrani Sen is a media services veteran, having worked with JWT, later Mindshare and then with Emami. In recent years, she is an independed consultant and academic. She is Adjunct Professor in charge of the Media Management programme at the Symbiosis Institute of Media & Communication, Pune. The views expressed here are her own.

     

  • When the TV Industry has got a new currency from BARC which uses superior technology than its predecessor, the print Industry needs to rally around MRUC to ensure that IRS can also claim similar upgradation, writes Indrani Sen

    Introducing new fortnightly column by Indrani Sen – MediaSENse: Why our Print Majors must come out of their Comfort Zones?

    By Indrani Sen

     

    In his recent digital pitch with media bosses in New York, our Prime Minister claimed that unlike manufacturing, in the world of media, India is almost as evolved as any other country. Does his observation hold good for our print industry on which the sun continues to shine? The print majors are basking in the comfort of the findings of FICCI-KPMG and other such industry reports which are predicting growth, but a comparison of the CAGR percentages projected over the years reflects erosion.

     

    Projections of Print CAGR CAGR 2011 to 2015 CAGR 2011 to 2016 CAGR 2012 to 2017 CAGR 2013 to 2018 CAGR 2014 to 2019
    Total Print Market

    10%

    9.10%

    8.70%

    9%

    8%
    Source: FICCI-KPMG Reports

    2011

    2012

    2013

    2014

    2015

     

    So, it is obvious that slowly but steadily the global trends have started to creep into Indian print industry.  Accelerated penetration of mobiles in smaller towns and rural areas will support the growth of digital and social media and may result in faster erosion of CAGR in the print market and the CAGR 2020 to 2025 may come down drastically.

     

    Instead of strengthening their arsenal with readership currency for protecting their share in the total advertising revenue, currently the Indian print industry seems to have taken up a negative stance against the IRS. Agreeably, many publications had genuine grievances against the findings of IRS 2013, but that should not be a legitimate reason for withdrawing their support from the readership survey. When the TV Industry has got a brand new currency from BARC which uses superior technology than its predecessor, the print Industry needs to rally around MRUC to ensure that IRS can also claim similar upgradation by introducing improved methodology.

     

    In a large scale ongoing quantitative survey, teething problems and relative errors are quite normal. Perhaps the magnitude of the errors in IRS 2013 crossed the tolerance level of some print majors, but they should recollect that initially NRS findings also had many issues which got corrected over the years. We saw emergence of MRUC and IRS as a protest against the methodology and findings of NRS and subsequently the merger of the two surveys. We are witnessing now a dark period of three years in print currency as IRS 2013 was rejected by the print Industry, IRS 2014 (based only on fieldwork of one quarter) has not been taken seriously by the advertisers and agencies, and the field work for IRS 2015 has not yet commenced. In a developed country, such a gap in a media currency is unheard of. The sooner all the stakeholders of MRUC resolve their differences and kickstart the field work, the better it would be for second and third line publications who are likely to suffer more due to lack of readership data. The media planners and buyers cannot determine the incremental reach/ OTS/ CPT for adding more than one publication in the plan and are likely to limit their print campaigns to only the established market leaders.

     

    Indian newspapers need to take up two challenges at two ends of the audience market. Firstly, they must try to reduce the gap between the literate population and the number of newspaper readers. Secondly, they must improve and promote their web editions and convert the internet savvy Indians to online readers. The concept of “Integrated Newsroom”, which is being advocated by many researchers and industry observers, is essential for achieving these two diverse tasks.

     

    According to IRS 2012, approximately 44 percent of literate Indians do not read any newspaper. This average percentage decreases as one climbs up the SEC ladder and increases in small towns and rural areas. It is obvious that the current combination of regional, national and international news dished out by most newspapers is not acceptable reading material by a large chunk of Indian population. Special, smaller editions with more emphasis on hyper-local news may be more acceptable in the small towns and rural areas.

     

    Most Indian newspapers have launched their e-editions, but there is lack of efforts in promoting as well as making them user friendly and interactive, perhaps due to the apprehension that the growth of online readership will cannibalize readership of the hard copies. There is a huge scope of growth for web editions of regional newspapers if they plan to ride on the growth of computer literacy in secondary schools in small towns and villages. Innovative marketing tie-ups with mobile manufacturers and service providers can increase the initial trial and subsequent conversion rate of the e-editions.

     

    In this connection, it will be pertinent to note the new trends in readership surveys in developed countries, particularly in UK, as we have traditionally followed the example of UK for setting up our media infrastructure, media regulations, etc. In the 1970s, Indian National Readership Survey was also modeled largely on the Readership Survey of UK. NRS PADD was introduced in UK in September2012 to provide a unique measure of combined print and online audiences to cater to the demand of a dynamic and changing digital media age. It is a fusion of data by RSMB from two independent surveys, print readership survey by Ipsos MORI and comScore digital survey. It provides a single database for planning across print and digital platforms of NRS publisher brands. (Source: http://www.nrs.co.uk). Apart from full NRS demographic and classification data for profiling and targeting, the NRS PADD provides the unduplicated reach of a print publication and its website, duplication of print titles and websites – which websites do a publication’s readers visit, and vice versa. NRS PADD: Mobile was launched in September 2014. The future lies in combining readership research across the print and digital platforms. The opinion leaders in the print Industry must realise that the digital trends are irreversible and steer the industry in that direction.

     

    The Global Media Report 2014 by Mckinsey & Co. predicted “Digital advertising is becoming a dominant force in the global media advertising market. Excluding the online and mobile components of TV advertising, in 2017 digital advertising will overtake TV, which for decades has been the largest advertising medium……….We project digital advertising to continue to increase at double-digit rates, growing 15.1 percent compounded annually to 2018 and accounting for 65 percent of the total increase in global advertising over the next five years. Most of that gain will come as advertisers substitute away from print media.” In India, the above trends are not likely to set in before at least another 5 years. Indian Print Industry needs to utilise this time period from 2016 to 2020 for protecting their future by ensuring immediate availability of print media currency, developing and promoting the websites and last but not the least, effectively converting more literates into readers.

     

    Indrani Sen is a veteran media agency and marketing services professional. She is currently an Independent Consultant and Adjunct Faculty, Media Management at Symbiosis Institute of Media & Communication, Pune. This column will appear fortnightly. The views expressed here are her own.

     

  • As advertisers spend less on promoting their products and brands given lockdowns and less demand, M&E will see a cascading effect, writes Indrani Sen

    Effects of Covid-19 on M&E in 2021

     

    By Indrani Sen

     

    Indrani SenThe second wave of the pandemic is spreading all across the country and we are seeing state after state imposing various restrictions like night or weekend curfews, conditional lockdowns etc. The central government has decided not to impose a nationwide lockdown like last year which paralysed the entire Indian economy. The decision to impose restrictions for curbing the spread of the second wave has been left to the state governments. As the pandemic situation stands now in the second month of the April-June quarter, our economy is likely to see a contraction in this quarter which will have a cascading effect on M&E industry as advertisers will spend less on promoting their products and brands.

     

    Till now, most economists have predicted that the effect of the second wave of COVID 19 will be less on India Inc. than the effects of the first wave when we had a national lockdown for 70 days. However, it is too early to be assured about that prediction. The outbreak of Covid-19 is no longer concentrated in urban areas, it has been spreading virulently across villages, particularly in the Hindi hinterland of Uttarakhand, UP, MP, Bihar and Chhattisgarh. The rural areas of other states, particularly the states which recently held Assembly elections, are also experiencing a surge of the pandemic.

     

    Urban India contributes to 60%-65% of the sales of FMCG companies while rural India accounts for the balance 35% to 40. In certain FMCG categories the share of urban and rural is 50%: 50% or even tilted a bit more to the rural sector. Last year, when the lockdown had affected the sales of FMCG industry in urban areas due to restricted consumer spends, Bharat or Rural India spurred the growth of FMCG companies. An article published on February 28, 2021 in www.livemint.com  said: “To be sure, companies are betting on large swathes of consumers in rural India switching from unbranded, loose products to branded ones over the next few years. This gives them room to push their soaps, shampoos, biscuits, beverages and packaged staples in India’s villages, albeit at lower price points. Demand in rural markets has outstripped sales growth witnessed by companies in urban markets over the last several quarters. Companies expect India’s smaller cities and villages to continue driving growth.”  (https://www.livemint.com/companies/news/why-are-fmcg-majors-chasing-growth-in-rural-india-11614504243913.html). At the beginning of 2021, most economic analysts expected the momentum of sales in rural areas to continue. However, the ground realities have already turned out to be different which will affect not just the sales of FMCG products in rural areas, but also the production of Argo industries.

     

    The controversies over vaccination between the Centre and the states coupled with shortage of oxygen supply and inadequate health infrastructure have given a different dimension to the Covid-19 crisis induced by the second wave. Middle class urban families are spending their live savings, begging and borrowing to try and save their near and dear ones, in the process reducing their subsequent purchasing power. Upper class affluent urban families have realised suddenly that the big fat medical insurance in which they invested are not of any use to them if they cannot get their relatives admitted to any hospital or nursing home. Many insurance companies are refusing to give coverage for Covid treatment. These rich people are feeling the need of having large amount of cash in hand for emergency treatment of Covid, which will reduce their disposable income and affect the sales of consumer durables.

     

    The pandemic has already managed to disrupt our cricket calendar by postponing the IPL 2021 indefinitely to another venue in another country and it is unlikely that T20 World Cup will be held in India in 2021 which has affected the tourism and hospitality industry, the on-ground display, etc. The advertisers having peak season during summer months are putting a brake on their TV expenditures due to state level lockdowns, restricted movement of transport for delivering of goods and reduction in consumer spends due to very small windows of time available for daily shopping.

     

    Medical experts are predicting a third wave of the pandemic around September, 2021 which may result in further contraction of the economy in the October-December quarters, in spite of the festive season. Lack of economic recovery in the next two quarters will result in further loss of business for the M&E industry. As per the Pitch Madison Advertising Report 2021, overall AdEx de-grew by 20% and traditional media AdEx degrew by 29% in 2020 with only digital media growing by 10% during the same period. The PMAR 2021 predicted that in 2021 overall AdEx will grow by 26% touching the 2019 level. In the second month of the second quarter of 2021, it is too early to predict the overall effect of Covid-19 on the M&E industry over the entire year. The current signs indicate that it will be difficult for the AdEx to jump back to the 2019 level in 2021.

     

  • Copycats in the digital world are here to stay, as long as they copy smart, writes Bhuvi Gupta

    To Copy or Not to Copy. That’s the Question

     

    By Bhuvi Gupta

     

    Bhuvi GuptaHave you ever used any of the short video apps that sprung up after the ban on Tik Tok?

     

    At first look, you couldn’t differentiate between the apps. They have similar if not outright identical user interfaces. The differences only start peeping in when the ‘satisfaction’ achieved after some scrolling doesn’t quite match up to what was achieved with TikTok due to their much-praised algorithm.

     

    While the apps did receive some flak for not investing into development, innovation, and design despite having the resources to, the logic, which I believed trumped, was user familiarity that accelerated migration.

     

    TakaTak is designed to be mistook for TikTok

     

    Feature Replication has become a common practice for digital products. Snapchat’s success with stories was very quickly replicated across all platforms as was TikTok’s short videos. Substack and Clubhouse are the the latest digital groundbreakers whose formats are being replicated by tech giants or already have been launched (Twitter’s Spaces)

     

    So should brands copy? Or innovate? I think the right answer is to copy, but  innovatively like Apple. Apple has never launched a product category. What it has done and brilliantly, is to innovate on user experience and design on what already existed. This is true for its vast product line, be it the personal computer, the iPod or even their latest success, Airpods.  This is the holy grail of imitation.

     

    Why Copy? The answer is Network Effects

     

    All social media networks have largely been governed by Metcalfe’s Law, which states that the value of a network is 2x that of the total users using it. Metcalfe’s Law governed the success of the telephones and explains the dominance and success of all digital social networks today. By replicating popular features into their pre-existing interfaces, digital networks try to make best use of their critical mass, which helps to stem migration to other platforms.  Also, great for creators which to take advantage of monetization and different audiences often come to the legacy imitator social network.

     

    The Art of Imitation

     

    Beware though; blind replication without paying attention to brand and objective will lead to deterioration and debacle. Something, which is happening with LinkedIn. LinkedIn has tried replicating Facebook’s newsfeed and Snapchat’s Stories but both have been done without much thought and adequate content moderation filters. As a result, LinkedIn has moved away from its primary objective of a robust professional network to somehow straddle a reality that is now part social. Stories on LinkedIn are another such misfire. Stories, which by their format, are fun and frivolous, do not fit with the brand ethos of a professional network that LinkedIn is.

     

    This is in contrast to Instagram, which copied Stories from Snap but modified them to suit their audience rather than replicate all features of Snap. As a result, Stories has now become a useful addition to Instagram, and more successful than the original.

     

    Apple, which understands its brand positioning and accordingly creates products in pre-existing categories, is also able to get away with charging a sizeable premium for copycat products.

     

    Copying today is essential for survival for social media networks. One is already seeing the mass migration of people from Facebook to other social networks. If it was not for products such as Groups and Messenger, the platform would have been long dead. Hence, all the Snapchat-inspired features and now a Substack copycat product have ensured that Facebook has not gone the Orkut way.  Hence, it is safe to say that the copycats in the digital world are here to stay. They will live long but prosper only if they copy smart!

     

  • The overall situation was saved by growth of spends on digital media, writes Indrani Sen

    Adspending globally degrows only 1.2% in 2020!

     

    By Indrani Sen

     

    Indrani SenLast week, I read an article “How the pandemic changed worldwide ad spending” by Etham Cramer-Flood on emarketer.com. The article compared the forecasts made by them with the revised estimates and spoke about their predictions for 2021. The reason I would like to share the highlights of that article here is due to the optimistic attitude reflected in their calculations. They pointed out that according to their analysis, the final figures for 2020 “outperformed dire mid-pandemic projections.” According to this article, the global adspending has a degrowth of only 1.2% in 2020 which is the lowest among all the various estimates seen till now. (https://www.emarketer.com/content/how-pandemic-changed-worldwide-ad-spending?ecid=NL1001)

     

    As shown in the above chart, after a contraction of 1.2% in 2020, the global ad pending is predicted to grow by 15.0% in 2021. Even traditional adspending will grow this year, by 7.6%.  The growth rate will come down to 10.2% in 2022 and subsequently over next two years will fall down to 7% in 2024 compared to 7.5% growth rate of 2019. By the end of 2024, ad spending worldwide is expected to be close to $1 trillion.

     

    All the various estimates on global advertising spending released so far agree that while the ad spending on traditional media suffered a huge degrowth, the overall situation was saved by growth of adspending on digital media with the share of digital advertising varying from one research to another. Traditional media were already in slow declining mode across various countries in the pre-pandemic years. The pandemic aggravated their degrowth. As the article does not have a chart showing the share of different medium in worldwide advertising spend. I have sourced one chart from www.statista.com with the medium-wise distribution of global advertising spend in 2020 which is shown below:

     

    Distribution of advertising spending worldwide in 2020 by medium

    Source: https://www.statista.com/statistics/376260/global-ad-spend-distribution-by-medium/

     

    The www.statista.com has estimated that in 2020, the shsre of digital advertising in the worldwide advertising has touched 51.%. The balance 49% is distributed among the traditional media with TV leading the pack with 28% share followed by newspapers 6%, outdoor 5%, radio 5%, magazines 4% and cineam 0.4%. The analysis of www.emarketer.com agrees that globally the share of digital advertising spend may touch 60% by end of 2021 and 70% by 2025.

     

     

    The pandemic has surely accelerated the growth of digital media across the world in the middle of major economic disruptions.  We have also been surprised by the kind of resilient growth of digital advertising in India showed in 2020. However, it will take at least this decade before the share of digital advertising in India can have the highest share in the Indian advertising pie.

     

  • The content jungle has truly become cutthroat and for survival of the fittest, Bhuvi Gupta

    Bhuvi Gupta: Consolidation, the content economy & the consumer

    Bhuvi GuptaBy Bhuvi Gupta

     

    How many times have you watched Leo the Lion roar on a screen to herald the beginning of an enjoyable few hours? Confused? I am talking about the MGM mascot.  Last week when the news of Amazon acquiring MGM Studios came, my thoughts immediately went to Leo and his survival in the ‘prime’ jungle.

     

    The content jungle has truly become cutthroat and for survival of the fittest. Two years ago Disney acquired 21st Century Fox. The world over major players in Media and Entertainment are consolidating. This comes at a time when smartphones have enabled media consumption to skyrocket, platforms have solved for distribution and smartphones have enabled both easy creation and consumption. As a result, there is no dearth of content to consume. Becoming a content creator has become one of the most desirable jobs.

     

    As this ‘creator economy’ flourishes, legacy players are consolidating. This is a survival tactic, because unless there are consolidation and strong economies of scale these behemoth legacy players would find it near impossible to survive in the long term. How does this affect the consumer? Does the consumer benefit or not. Let us examine the pros and cons of this oligopolistic market.

     

    PRO – Customer is King – Infinite Choice

    In a typical oligopolistic market, there can be a lack of innovation as customers have a limited set of options to choose from. However, due to the pressure of the creator economy and the glut of consumer choice the major players know that unless they invest in creating new content, expanding the language markets they serve and have to be on their toes to only survive (forget thrive).  Hence, enabled by their deep pockets they have high-risk appetites that raise the bar for the entire market. The ultimate winner is the customer because of the variety of content, he or she has something to consume.

     

    Therefore, the creator economy is ensuring that downsides of oligopolies, i.e.

    barriers to entry and a lack of choice are both non-issues.

     

    CON – Market Dynamics

    When fewer players exist there are two major possibilities – first, prices may become as competitive as can, in a bid to gain market share or alternatively players may collude and prices are artificially hiked to benefit all players instead. The creator economy keeps the market in check because both options are bad for the economy. However, these companies have deep pockets, and they can take advantage of these deep pockets to manipulate customers via advertising to create an illusion of competitiveness in the future.

     

    CON – Manipulation by Big Media

    The disadvantage of an oligopolistic structure in media and especially news media is that propaganda can become common. Whether done blatantly by some and subtly by others, big media players often employ tactics to control perception and when only a few companies control the landscape they control the narrative. This is very dangerous as across the world we are seeing inciting riots and civil unrest. To a perceptive user these manufactured biases are apparent, but how many users are perceptive?  An oligopolistic news media structure can be detrimental to a country.

     

    To end, it is only 30 years that we in India went from being a monopolistic  (video) market with the state-owned Doordarshan to a pluralistic market crowded with media sources. Today, digital platforms are creating another kind of monopoly where 24/7 tracking, algorithms and resultant recommendation engines typecast people so they end up developing deep biases. While newer platforms break this dangerous cycle, by means of acquisitions this may be overcome. The US government has filed an antitrust lawsuit against Facebook, as it owns both WhatsApp & Instagram, and they claim it has monopolistic advantage.

     

    It will be only a matter of time that it is forced to break up to ensure a free and fair market, but I strongly think that will be for the greater good.

     

     

  • Under the disguise of introducing a soft touch progressive institutional mechanism, will we see censorship, writes Indrani Sen

    Will Indian netizens lose their digital rights?

     

    By Indrani Sen

     

    Indrani SenOn February 25, 2021, the Electronics and Information Technology ministry notified the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 for news publishers and OTT platforms giving a three-month deadline to websites to comply with the same.

     

    The Government introduced the new rules aiming to “establish a soft touch progressive institutional mechanism” for adherence to Digital Media Ethics Code by the news publishers and OTT platforms “featuring a Code of Ethics and a three-tier grievance redressal framework”. The new rules are applicable to all digital news publishers, social media platforms like Facebook, WhatsApp, Twitter and all OTT platforms like Disney Hotstar, Netflix, Amazon Prime, Zee Live, etc.

     

    The time limit of three months expired on May 25, 2021. Subsequently, on May 26 the Digital Division of the I&B Ministry has extended the deadline for OTT platforms by 15 days till June 10, 2021 through a public notice. The public notice has three different formats for furnishing information designed for three types of publishers:

    1. Digital news publishers who also publish/ telecast news through traditional media
    (newspaper/ TV)
    2. Other digital news publishers
    3. Publishers of online curated contents (OTT platforms)

     

    There is not much difference between the three types of forms except that for the first category under “Entity Information” the digital news publishers are only required to furnish the RNI registration number or details of TV channels licensed by the I&B Ministry under Uplinking and Downlinking rules. Where as the publishers of the other two categories have to provide various other details about their entity. In all the three formats, the publishers have to provide details of their membership of Self-Regulatory bodies in the industry.

     

    The first two categories of publishers are required to give details of their News Editor while the OTT platforms have to give details of their Content Manager. All three have to furnish the details of their Grievance Redressal Officer (GRO) in India.

     

    In the meantime, both News Broadcasters Association (NBA) and News Broadcasters Federation (NBF) have requested the I&B Ministry that traditional news broadcasters also publishing digital news should be excluded from coming under the purview of the new IT Rules. With only three days left before the new deadline on June 10, 2021 the Ministry has not yet replied / given a clarification to MBA and NBF. A reminder has issued a reminder on June1, 2021 asking all publishers on the digital media to furnish the required information to the Ministry.

     

    Over the last three months we have seen lot of debates in various media websites on if live news will continue on the OTT platforms and what will be the implications if OTT platforms stop live news. There has been hardly any discussion on mainline media on the implications of the proposed Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules. If we deep dive into the three-tier structure for grievance redressal or for observance and adherence to the Digital Code of Ethics, then we find that the Level I comprise Self- regulation by the specific entity and Level II comprise of Self-regulation by the self-regulating bodies of which the specific entity is a member of. It is Level III which becomes an area of concern where Oversight mechanism by Central Government will be acting over and above the Self-regulatory bodies with power to censor and even block the contents.

     

    The Wire published an excellent analysis of the proposed IT rules on February 27, 2021, day after the new IT Rules were announced and commented on the three-ties system “All of this is being planned to be done without any legislative backing or a clear law made by parliament.” (https://thewire.in/tech/explainer-how-the-new-it-rules-take-away-our-digital-rights). On the same day https://scroll.in also published a detail analysis of the new It rules explaining why the same is anti-democratic and unconstitutional
    (https://scroll.in/article/988105/explainer-how-indias-new-digital-media-rules-are-anti-
    democratic-and-unconstitutional).

     

    Under the disguise of introducing a soft touch progressive institutional mechanism, the Central Government is about to introduce an autocratic digital censorship and rob all Indian netizens of their digital freedom as well as of expressing their own views on social media platforms. And this move is being executed when the country is still struggling with the second wave of Covid-19, when digital media is acting like a lifeline for many Covid patients, Covid volunteers and frontline medical practitioners all across the country.

     

    Indrani Sen is a veteran advertising professional and academic. She writes on MxMIndia on Mondays. Her views here are personal

  • After circulation & ad revenue going south in 2020, newspapers seems set on the path of recovery, writes Indrani Sen

    Newspaper Industry in India after the Second Wave of the Pandemic

     

     

    By Indrani Sen

     

    Indrani SenThe Indian newspaper industry faced an unprecedented crisis last year after the National Lockdown was declared at a very short notice. Circulation fell drastically when many subscribers, particularly housing societies, shut their doors for the newspaper delivery persons for the fear of the contagious virus being carried by the newspapers or the delivery folk, leading to change is consumption pattern of newspapers. Lack of local transport also prevented the distributors and hawkers from reporting for work. This was followed by withdrawal of commercial advertising as advertisers were worried about a fall in circulation and readership and were themselves affected by choking of distribution pipelines and economic slowdown leading to loss in their sales. The FICCI EY Report on Indian M&E industry 2021 showed that ad revenue of Print came down from INR 206 billion in 2019 to INR 122 billion in 2020.

     

    After the National Lockdown was lifted in 2020, the newspaper industry tried its best to recover their lost grounds. As per the same FICCI EY report, it will take Print four to five years to regain the pre-Covid ad revenues level. However, the industry seemed to be recovering well during the first quarter of 2021 as TAM AdEx data for Jan-Mar 21 showed that 1350 new brands advertised on print during that period.  When compared with Jan-Mar 20, the quarter also showed 9% increase in ad space mostly from Hindi and other language newspapers. Similarly, April-May 2021 recorded better results compared to April-May 2020.

     

    As per TAM AdEx analysis in May 2021, when the second wave of the Covid-19 was at his peak, there was an average 58% growth in ad space per publication as compared to May 2020. However, all was not well as compared to February 2021 and March 2021, the ad space in Print saw a drop of 42% and 29% in April 2021 and May 2021 respectively. As the phased process of unlocking has begun, the newspaper publishers expect that both the ad volume and value would pick up by August 2021 and grow further during the festive season of 2021.

     

    It appears that newspapers were better prepared to handle the second wave of the pandemic in 2021 and the lockdowns imposed by various state governments across the country. Along with the process of gradual unlocking, the newspapers now are looking forward to recovering their lost grounds. The credibility of the printed word, the vaccination drive, revival of the corporate sector and good rain forecasts are the other factors which are expected to contribute to the overall growth of the newspaper industry in 2021. The Print industry has appealed to the government for a stimulus package and an increase in FDI in 2021. The government has not responded so far, but the industry is still hopeful of getting, some positive response though no relief was announced in terms of waiving the import duties on newsprint by the finance minister in her 2021 Union Budget.

     

    The newsprint prices, which saw a decline in the international market (below $300/metric tonne) in 2020, have started going up from the beginning of the calendar year 2021. The price was $670/tonne-$700/ tonne in April-May. The industry expects it to go up further. It appears that quite a few paper mills which used to export newsprint to India and other countries, either shut down their business or migrated to the businesses of producing brown papers and craft papers during last year when their business was hit due to the global pandemic.

     

    As India is far from being self-reliant in newsprint production, our newspaper industry, struggling to recover from the effects of the pandemic, has been hit further by this demand supply imbalance of newsprints in the international market. Many newspapers are increasing the use of indigenous newsprints to balance out their cost of productions.  However, most newspaper owners feel that this crisis of newsprint prices is not going to last for a long term and expect the international market to stabilise before our festive season in the third quarter of 2021.

     

    To sum up, the newspaper industry in India seems to be set on the path of recovery after a severe decline of both circulation revenue and advertising revenue in 2020. In recent times, during the second wave of the pandemic, the industry was not much affected and would have been in a better financial position if they were not hit by the crisis of newsprint prices. It is expected that by end of the calendar year 2021, their overall performance may be better than predicted earlier by media analysts.