One of the most popular shows on Indian television last year was a soap opera called Bade Acche Lagte Hain.
Ormax Media, which tracks the audience preference share of programmes through its monthly popularity study called Characters India Loves, said the story of a middle-aged couple’s romance and their family dramas topped the charts, followed by a serial on child marriage titled Balika Vadhu. Both shows held on to their viewership even as many others were being abruptly wound up as studies indicated audience preference for non-fiction programming.
Simultaneously, at least 10 new serials and an equal number of reality shows premiered on Indian television last year indicating the industry’s strategy to counter the impact of the economic slowdown, and a planned move to a more profitable and sustainable future.
The Indian Media and Entertainment Industry Report for 2013, jointly published by the federation of Indian chambers of commerce and industry (FICCI) and KPMG, indicates the estimated Indian television industry, worth 370 billion rupee (Dh21.79bn) last year, is expected to grow at 18 per cent over the five years through 2017, to reach 848 billion rupees.
The optimistic forecast, the continuing popularity of some shows and new programming hitting the small screen is despite the fact that the first half of last year saw the industry conserve capital and implement huge cuts in advertising budgets. Most companies had to revise previous projections to reflect the new macro-economic reality.
“The television advertising industry continued to be under pressure due to the soft global and domestic economic condition,” says the FICCI-KPMG report.
“On an overall basis, the total TV advertisement market is estimated to have grown about 8 per cent in 2012, lower than industry expectations. In comparison, growth in the TV advertisement market was estimated to be 12 per cent in 2011 and 17 percent in 2010.”
Estimates for this year from the central statistics office indicate a sharp fall in the growth of real private final consumption expenditure (PFCE). At constant (2004-05) prices, the PFCE is estimated at 34.73 trillion rupees, an increase of only 4.1 per cent over the previous period. In comparison, the increase in private consumption expenditure was estimated at 6.5 per cent in 2012 and 8.1 per cent in 2011.
Also, the absence of mega sporting events in India, such as the 2011 Cricket World Cup, combined with a downbeat advertiser response to season 5 of the Indian Premier League contributed to the low television ad spend last year. The report’s study of marketing spend of a sample of advertisers suggests that while select large advertisers increased spending to revive demand, on an overall basis, advertising spend remained “muted”.
Many in the industry consider restructuring has set the tone for change. Implementation of last year’s mandatory digital access system (Das) in the four metros of Delhi, Mumbai, Kolkata and Chennai has changed the cable television industry in India.
As the report suggests, the digitisation of distribution infrastructure in TV is also expected to improve broadcast economics. It is expected to reduce carriage fees, building a case for the launch of niche channels and investment in content for existing channels. Developments and refinements in viewership measurement systems may also affect the way advertising is distributed among channels. Further, the process is expected to bring in transparency and increase subscription revenues for multi-system operators (MSOs) and broadcasters.
A “KPMG in India Analysis” states that, aided by digitisation and the consequent increase in average revenue per user, the share of subscription revenue of the total industry revenue is expected to increase from 66 per cent last year to 72 per cent in 2017.
Despite the overall PFCE slowdown, the industry saw an increase in the total number of channels, from 623 in 2011 to 845 last year, which also led to an increase in advertising inventory. These include new channels for children, based on the fact that the genre saw a 20 per cent growth in its advertisement revenue share last year. These new launches targeted viewers based on age, leading to sub-segmentation in the genre. Disney Junior and Nick Junior, targeting pre-schoolers, were launched last year. Zee Q and Discovery Kids also premiered, focusing on children between four and 11 years old.
KPMG discussions with industry players suggest digitisation the childrens TV genre will see increasing localisation of content, as broadcasters create offerings suited to Indian culture and tastes. Local content creation will also serve to reduce content cost.
The FICCI-KPMG report says Hindi and regional General Entertainment Channels (GECs) continued to account for more than 50 per cent of the total viewership. GECs are the key drivers of television viewership, accounting for 65 to 75 per cent of Hindi and regional markets. Hindi GEC and Hindi movie genres consolidated their position with a viewership share of 30 per cent and 11.9 per cent, respectively, last year, compared with 26.5 per cent and 10.6 per cent, respectively, in 2011.
The report quotes MK Anand, the chief executive of broadcasting at Disney-UTV as saying “if there is a phenomenon waiting to happen, it’s regional”.
A steady increase in the sale of television sets was also noted. Approximately 145 million sets were sold in India last year. A large proportion of these sales represent replacement of old models, institutional TV sales and a second or third TV set entering a household. The information and broadcasting ministry estimates, institutional and multi-TV households account for approximately 17 per cent of television sets in metro cities. LCD and LED panels were estimated to account for 40 per cent of sales last year and this share is expected to rise to close to 100 per cent by 2017.
Further, in a reflection of India’s growing diaspora, Indian channels have also been aggressively increasing their presence across international markets.
The report cites entertainment channels such as Zee TV, SET, Star Plus and Colors, which are available in approximately 169, 77, 70 and 50 countries, respectively. Industry experts suggest although the US, UK and Canadian markets are close to saturation in terms of penetration, the Middle East and Africa continue to offer significant growth opportunities.
In addition to the Indian diaspora, offerings are also targeted at the local population, primarily through dubbed or sub-titled content.
“ZEE has reach in 169 countries, entertaining over 670 million viewers across the globe,” points out Atul Das, the chief strategy officer at Zee Enterprises Entertainment.
“With a rich bouquet of 32 channels and 29 dedicated international channels, ZEE as a brand has achieved global recognition.”