Tag: Indrani Sen

By Indrani Sen

2018 has been an interesting and inspiring year for the Indian media industry. After struggling with the aftermath of demonetisation in 2016 and the GST in 2017, the industry saw a year without any external interruption and was able to regain the momentum of growth. We have to wait for another couple of months before we get the estimates for 2018 and the projections for the future from various industry sources, but market indicators show that traditional media industry in India has good reasons to welcome tonight 2019.

Indian traditional media has continued to remain resilient inspite of the growth of the digital media. Globally, 2018 would perhaps go down in history as the watershed year in advertising industry when the old guard bowed down to the new generation, best illustrated by the announcement made by  WPP in November 2018 to merge the traditional agency J Walter Thompson and digital agency Wunderman to form a new agency ‘Wunderman Thompson’. Abi Dan wrote an article in Frobes on the merger where he commented “While these are positioned as mergers of equals, they are essentially a takeover by the digital agencies of their older siblings.”

Against this global backdrop, traditional media continued to thrive in India in 2018 and the momentum is likely to last till we usher in the third decade of the new millennium in two year’s time. For Print, the oldest medium in the traditional media team, 2018 began on a high note with IRS 2017, released in January 2018, showing a growth of 9% in total newspaper readership from 2014 to 2017 and reiterating the reach and strength of the print media in the digital age. The continuous growth of the regional newspapers which sustained during 2018 indicates that Print in India is going to write its own history. The “fake news” controversy and the “#MeToo” movement made some scratches on the reputation of some publications, but did not have any lasting effect. On the other hand, digital media bore the brunt of the “fake news” more heavily and made readers turn to the printed words for assurance.

The various new ventures and deals in the Television sector announced in 2018 showed clearly that the medium is thriving for growth. The process of merger of Dish TV India of Essel Group with Videocon D2h was completed in 2018. Essel Group announced in November 2018 its plan to divest up to 50 per cent of its stake in ZEEL to ensure disruptive technological advancement and transformation of the company into a digitally equipped media tech firm. The decision is expected to be processed and implemented in 2019.

Reliance Jio announced in July 2018 Giga TV set-top boxes which will have the ability to use Internet to offer live TV and live interaction through Jio TV Call. This announcement was followed in August 2018 by the announcement of Jio Giga Fibre, an ultra-high speed fixed line broadband service for homes and enterprises. Jio also made substantially large primary and secondary investment in Den Networks and picked up majority stakes 51.3 per cent in Hathway Cable and Datacom Limited.

After winning the media rights of Indian Premium League in September 2017, Star TV managed to increase the overall viewership of IPL 2018 through successful implementation of their marketing strategy in national and regional markets.

E-Auction of DD Free Dish slots was postponed from 2018 to 2019, probably in view of the uncertainty around the implementation of the new tariff policy announced by TRAI. . The next E-Auction of DD Free Dish will play a significant role as all TV viewers will have to pay a fixed base rate for getting access to the free to air channels and then choose the pay channels as per the rate cards.

Early in 2018 we saw Star India & Star Viay challenging TRAI’s new guidelines related to the tariff order (issued in 2016) in Chennai court. After Chennai High Court ruled in favour of TRAI, Star India made an appeal in the Supreme Court, who also upheld the order of TRAI in October, 2018.  The year has ended amid a lot of confusion related to the implementation of the new tariff order forcing TRAI to extend the deadline by a month from end December 2018 to end January 2019.  Most of the large TV operators have announced their own package deals for subscribers, but the distributors are not offering the same as TRAI has not given any guideline related to such package deals and how the revenue of the same will be shared between the TV channels and the distributors. It remains to be seen if the consumer actually benefits from the new tariff orders or emerges as the looser, particularly in small towns and rural belts.

Radio, the older yet weaker sibling of the Broadcast media, managed to retain its share of business against the financial disruption caused by demonetisation and GST in 2016 and 2017. The same trend continued in 2018 when we saw the base of FM Radio expanding with many of the new radio stations sanctioned in the Phase III Auction going on air. FM radio stations have been actively integrating for some time their on-ground activations with digital content through innovations which has helped in their overall growth of revenue. 2018 was no exception to the same. While the growth of Radio Adex has remained moderate in 2018, the overall growth in revenues of the radio stations has probably seen a healthier growth riding on the rapidly growing digital and social media.

During 2018, OOH has recovered from the effects of demonetisation and GST but we did not see much growth in Digital OOH which was expected. Due to lack of a proper Adex system in outdoor medium, its revenue as well as growth has been getting under estimated over the years and 2018 has not seen any change in that condition.

According to the industry sources, the cinema advertising has seen a healthy growth in 2018 riding largely on in film advertising, particularly in regional cinema. Again, this growth may not get reflected in the overall calculations of advertising expenditure in 2018 which we will get to see in another couple of months.

As predicted, Indian digital media has grown in an exponential rate during 2018, in spite of the disturbance created by “fake news” etc. The growth has been helped by the increase in internet access through mobile internet and various forms of internet advertising.  Video Games and on line streaming of music and movies have continued to accelerate the growth. The international and homegrown OTT players have also helped in the overall process of digitization of media exposure in India.

To sum up, 2018 has been a fruitful year for media industry in India with lot of activities across different media. It is expected that the growth will not only continue but will accelerate during the first half of 2019 riding on the upcoming General Elections.

By Indrani Sen

Indian nroadcasters are apprehensive of the effect of the consumer friendly new tariffs order which TRAI plans to introduce from January 1, 2019 allowing the viewers to chose and pay for only the channels which they want to watch. According to a report carried by ET today, the Indian Broadcasters Federation (IBF) is worried about the implications of the new tariff order on the channels with relatively less viewership which are currently riding on the more established and popular channels from the stable of the same broadcaster. Therefore, IBF, which has majority shareholding in BARC, is planning to put up a proposal to the Board of the monitoring agency to suspend the TV ratings monitoring reports for 45 to 60 days (https://brandequity.economictimes.indiatimes.com/news/media/broadcasters-want-a-tv-ratings-blackout-of-upto-two-months/67018521).

While I feel that the new tariff order of TRAI is restrictive in nature and puts a lot of constraint on broadcasters by dictating them how they should set up their pricing policies for the marketing their bouquet of channels to the consumers in the market place, I think it is also not right on the part of the IBF to request for a TV Ratings blackout for almost two months. If we look at the current marketing strategies and pricing policies followed by publications, we find that there are ample examples of newspapers and magazines offering combo-pricing of titles to the readers. Long time back, a few years after Independence, the government tried to introduce an act for controlling the number of pages and pricing of newspapers ie. Newspaper Price & Page ACT 1956, which had to be withdrawn later as the Supreme Court ruled it as unconstitutional. Currently, there are some pending legal cases filed by broadcasters against the TRAI tariff order pending in various courts.

With three weeks to go before the new tariff order is to be implemented, the Cable & TV industry is in doldrums with no clarity on how the new tariffs order should be implemented.  The broadcasters are justified to be concerned about the future of the long-tailed channels which are riding piggyback on their more established channels. However, their concern does not justify their plan for a blackout of the TV ratings for two months. I presume by proposing a blackout, IBF does not want to put a stop to the continuous monitoring process which will be disaster. I hope IBF just wants to stop the publication of the ratings reports by BARC.

While setting up the rules about who can operate as a Broadcast Monitoring Agency in India, our I&B Ministry was concerned about the ownership and shareholding pattern of the incumbent monitoring agency TAM, but they did not foresee the hidden implications of a Broadcast Monitoring Agency formed as an industry body with majority of shareholding by the association of broadcasters. If the A&M industry allows this proposal to get implemented, it may just be the beginning of many other high-handed moves by IBF exercising their majority shareholding of BARC.

Indrani Sen is a media agency veteran and now an academic and strategy consultant. She writes fortnightly – and often weekly – for MxMIndia. Her views here are personal

By Indrani Sen

Last week, I read the Executive Summary of the eighth Global Media Intelligence Report by eMarketer (file:///C:/Users/Lenovo/Pictures/GMI-2018-ExecutiveSummary.pdf). As I am not a PRO subscriber of eMarketer, I was not able to access the full report which covers 40 countries across the globe and has been conducted by eMarketer in collaboration with Starcom on the state of global digital media.  But the Executive Summary revealed some interesting trends which are worth sharing with the readers of www.mxmindia.com.

Among the four key trends shown in the report, it reconfirms that the “World has gone mobile” and “World internet users have also embraced social networking”. On top of that, the statistics further shows out of the total social network users worldwide, the Asia-Pacific region accounts for 57% of the users as shown here.

According to the data released by TRAI, India’s total mobile phone users have touched the 1 billion mark, of which smart phone users are over 300 million. In other words, we have a bigger number of smartphone users than each of the four regions, i.e. Western Europe, Central & Eastern Europe, North America and Latin America!

The above chart shows the estimates of the total media ad spending by regions, where Asia-Pacific ranks second after North America.  The chart below shows the split between traditional media and digital media by different regions, where traditional media is enjoying 53.6% share in the ad spends of the Asia Pacific region.

The report’s third insight says “Individual markets are just that: Individual” quoting different trends of different markets. It comments that “Print media were particularly strong in India; newspapers rivalled TV for penetration among internet users there in H1 2018”. The fourth trend quoted by the Executive Summary says that “Digital has hardly dented TV’s popularity”. The findings of the report have shown that television remains by far the most popular content-based medium despite the explosion of content over digital platforms. “In every country surveyed by GlobalWebIndex, a majority of internet users took advantage of the myriad options now available to view TV content at all hours, and on a range of screens—including TV channels’ catch-up services and video-on-demand providers such as Netflix and MUBI, as well as video recorders”.

Indian advertisers, who use TV as their main medium for advertising and rely on print for creating topical/ immediate impact, will find the findings of this survey reassuring and useful.

By Indrani Sen

About two months back, on July 11, 2018 the Telecom Commission (TC), the highest decision-making body in the telecom ministry, approved TRAI’s recommendation on net neutrality rules that prohibit internet service providers (ISPs) from discriminating between their web traffic. This decision ensured that internet for Indians will continue to remain free without any discrimination or restriction.

BBC said earlier that India has “the world’s most progressive policy on equal internet access for all” and we continue to hold that status. India’s reaffirmation of net neutrality has come at a time when the Federal Communications Commission (FCC) in the US repealed its free internet rules in December 2017 and allowed internet providers to charge more for certain content or giving preferential treatment to certain websites through commercial agreements.Recently, on August 31, 2018,California state lawmakers passed a bill preventing internet service providers (ISPs) from blocking traffic or providing so-called fast lanes. For the bill to become law, it has to be approved by the Governor of California by the end of September.

The telecom operators in India are not very happy with this decision of the Telecom Commission as they feel that they need to have some control to manage the traffic going through their infrastructure for which they have made investment of crores of rupees. They also think the ruling would curtail the scope of innovation on the medium as ISPs cannot offer any fast lanes for content providers who are ready to pay for the privilege.Young talents within the Advertising & Marketing industry engaged in designing and implementing delivery of content, particularly on various OTT platforms will also be disappointed with the limitation on the scope of innovation.

This decision also means the ruling that service providers cannot make any agreements with services like Facebook’s ‘Free Basics’ or Airtel Zero (services banned later by TRAI) offering only a set of services or websites for free, stays on. However, some critical services and emerging technologies like remote surgery and autonomous cars requiring high-speed internet lanes have been kept out of the ambit of net neutrality rules.

The telecom secretary Aruna Sundararajaninformed the media that a committee formed by the Department of Telecom will shortly draw up a list of the technologies that will be allowed the exception and theTelcos will be allowed to use traffic management practices to maintain the quality of service for them as and when required. CDNs (content delivery networks) will also be treated as an exception and will be out of the ambit of the restrictions of net neutrality. It is not clear how the government proposes to regulate the operations of CDNs in India.

 

Some of the media reports mentioned about Government’s plan for spreading WiFi hotspots to rural India. Hindu Business Line reported that “An official, who was part of the meeting, said that the TC has also approved installation of around 12.5 lakh WiFi hotspot in all gram panchayats with viability gap funding of around Rs 6,000 crore by December 2018”.(https://www.thehindubusinessline.com/info-tech/net-neutrality-telecom-panel-approves-trai-recommendations/article24389534.ece). The Commission also cleared the new“National Digital Communications Policy 2018” for approval by the Union Cabinet at the same meeting.

Subsequently on August 19, www.livemint.com  reported about TRAI starting consultation for traffic rules for net neutrality – “The telecom regulator will soon start consultations over a framework for traffic management practices as well as the structure of a multi-stakeholder body outlined in the net neutrality principles, according to a senior TRAI official”. (https://www.livemint.com/Industry/cvf8xlYB4PpBy5NT25AmsI/Trai-consultation-soon-on-traffic-rules-for-net-neutrality.html).

Currently, there is a need of a strong industry body for the telecom sector. In 1995, Cellular Operators Association of India (COAI)https://www.coai.com/about-usbut unfortunately the association does not function as the spokes person of the industry, nor does it take a leading role in negotiating with TRAI and the Telecom Ministry. There is strong competition among the telecom companies and currently the sector is facing a financial crisis largely triggered by price wars since Mukesh Ambani-led Reliance Jio’s entry. However, considering the emerging importance of the sector in shaping the digital future of India, the telecom companies should get together and form a stronger association to lead the interactions with TRAI and the Telecom Ministry for forming the rules and regulations.

By Indrani Sen

Recently we saw an unprecedented move from the IBF chief Punit Goenka who sent an email to all agency heads asking them to take prior approval from the broadcasters before quoting any discount on their channels to the advertisers particularly during pitch presentations. So far, most of the agency heads have refrained from commenting on the same; advertisers, who actually instigate such practices and demand the same from the agencies, have been totally silent. We read an anonymous comment in exchange4media on August 13. “In a free market, only demand and supply determine prices,” said the head of a leading agency when asked to respond to the concerns raised by the Indian Broadcasting Foundation (IBF) on ‘pitch discount rates’.

The process of an AOR pitch is supposed to be confidential and the idea of getting a prior approval on the rates quoted/ used for arriving at the savings would betray the confidentiality. Even if we imagine that agencies would agree to observe the IBF dictate, on what basis would a broadcaster differentiate the discounts offered to multiple agencies pitching for the same business? How can the agencies at the stage of pitching agree to the terms and conditions of the broadcasters offering the same or differential rate discounts to them based on certain guaranteed business without the consent of the advertiser concerned? Globally, there is no such precedence of getting approval from media owners on rate discounts before making any media pitch.

Including an offer of rate discount in a media AOR pitch is not a new practice, it has been existing from Day One of the system. In fact, it is the crux of the approach on which advertising agencies were divided into creative and media agencies was the efficiency of media buying (read as discounted rate) based on large volume of media buying  Similarly, “Pitch Discount” has been an integral part of pitching for any media AOR business. This change in the mass approach of buying and selling media has been in practice for two decades, beginning in end of 1990s. It was accepted by the all the players in the market (media owners, advertisers, agencies) and has been running without any major hitch. So, what has prompted IBF to raise this issue with the agencies now?  Why are the broadcasters gunning for only the agencies without having a tri-party discussion involving the clients?

It is the advertisers who actually gained most from the system of dividing the creative and media portfolios of their advertising agencies. When the break-up took place, the traditional 15% commission was split into 12.5% for creative function and 2.5% for media function. Working in the media segment, I never understood the logic of marginalising the value of the media functions to one-fifth of the value of the creative functions. Media agencies have been struggling to make profit within the frugal 2.5% service fees since then. In some cases, their service fees have been raised to 3% or 3.5% or some incentives have been added on ROI delivered by the media plans. On the other hand the service fees of the creative agencies have been delinked with the value of the annual advertising expenditure. The creative agencies now get annual fees for their services based on the terms of their contracts varying from 5% to 8% of traditional media expenditure. The practice of calculating the creative agency fees based on traditional media expenditure has been becoming obsolete over the years. So, it is the advertisers who have laughing all the way to their banks.

It appears that the IBF members are concerned about the drop in their business margins. If there is a pressure on the margins, it is not just due to the rates negotiated by the media agencies, the growth in number of TV channels, rural ratings reported by BARC, rise of the digital media the change in the process of delivery of video content have all added to the pressure on the business margins of the broadcasters. Last week, we saw an article in Brand Equity on the phenomenon of Indians shifting from cable or Dish TV connections to OTT platform for video streaming and viewing(https://brandequity.economictimes.indiatimes.com/news/media/cutting-the-cord-many-indians-are-skipping-cable-to-binge-on-video-streaming-services/65383783). The shadow of Programmatic Buying getting extended to TV spots is also looming large on the TV industry. So, broadcasters have to take a pragmatic view of the overall situation instead of zeroing on the “Pitch Discount” offered by the media agencies.

The IBF members are at a liberty to refuse a discount promised by any agency to an advertiser which will leave the agency to stew in its own juice. In order to implement such a step, IBF needs to have a control over their own members so that when one broadcaster refuses to accept any discount, another broadcaster would not agree to accept the same. Instead of controlling their own members, IBF is contemplating taking stringent actions against agencies even to the degree of revoking their accreditation (https://www.exchange4media.com/spotlight/margin-pressures-push-industry-to-find-solutions-to-pitch-discount-issue_91580.html) which is totally unfair. It is strange that when IBF includes representatives from agencies and advertisers, such a move has originated without a tri-party discussion at industry level involving AAAI and ISA.

By Indrani Sen

The latest Broadcast India 2018 survey by BARC indicates that like Press, TV in India is going to set another trend which will be contrary to the global trend. By 2020, people around the world will spend more time online activities than watching TV, as predicted by Zenith. In a recent article on June 8, 2018, Rani Molla shared the global forecast made by Zenith. (https://www.recode.net/2018/6/8/17441288/internet-time-spent-tv-zenith-data-media)

BARC’s latest Broadcast India 2018 survey states that in urban areas, average time spent (ATS) per viewer is about 246 minutes, while in rural India, it is about 207 minutes with an all India average of 224 minutes. It is unlikely that in the next five years Indians will spend less time watching TV than the time spent on online activities.

As per www.statista.com, in 2016, Americans watched 274 minutes of TV per day, while people from India only watched 140 minutes per day. What was interesting to note that Americans spent 240 minutes watching live TV and a further 34 minutes watching time-shifted TV (https://www.statista.com/statistics/276748/average-daily-tv-viewing-time-per-person-in-selected-countries/). The Indian viewers have come a long way from 2016 with 60% increase in their time spent on TV over two years. As TV viewership in India is driven by family viewing and only 17% of the households are nuclear family with elders, time shifted viewing may not be a significant feature of our TV viewing habit.

According to the FICCI EY 2018 Report on Indian M&E Industry, 2017 TV ratings saw the impact of BARC’s enhanced weightage on rural panel. The same has also been reflected in the BI2018 survey with TV homes outpacing the growth of total number of homes in India. India currently has 298 million homes, of which 197 million have a TV set with 88 million located in urban and 109 million located in rural areas. While there is a scope of adding almost 100 million more TV homes to the existing 197 million TV homes, the opportunities for growth is higher in below 1 lakh towns and in rural areas.

Source: BARC Universe Update- July 2018

The BI 2016 and BI 2018 both covered 3 lakh households selected on the basis of stratified random sampling with 68% from urban and 32% from rural areas. Considering that 55% of TV homes are located in rural areas and the percentage is likely to grow further, a further correction by BARC may be required in the spread of their audience panel in order to do justice to the distribution of TV homes across population strata.

As per the press release issued by BARC , both HSM and South markets have seen a spike in viewership with HSM saw an increase of 12%, while South grew by 10% in week 29. In BI2018 survey, the overall penetration of TV stands at 66% with all the states in South India having more than 91% TV penetration. Maharashtra, Gujrat, Punjab, Haryana, Himachal Pradesh and J&K follow with TV penetration of 80% to 90%. A vast land mass across the country from Rajasthan to Madhya Pradesh, Chhattisgarh, Odisha, West Bengal and North East have more scope of growth with current TV penetration of 45% to 59%. In the Hindi hinterland, UP (30% to 45%), Bihar and Jharkhand (both below 30%) are at the bottom of the table re-emphasising the dilemma of the advertisers targeting these markets through traditional media. West Bengal with as large bouquet of regional channels as the Southern states remains an enigma with its comparatively low level of TV penetration.

On 27^th July www.mxmindia.com quoted Partho Dasgupta, CEO, BARC India: “With BI 2018 we have been able to showcase the changing face of India. However, what hasn’t changed is the fact that TV remains the most effective platform for both content creators and advertisers to reach their audiences.”

The Media & Advertising Industry will agree wholeheartedly with Dasgupta and we will see dominance of TV’s share in our advertising media pie continuing in the next decade challenging some media forecasts which have predicted a shift towards digital advertising.