Media sector in India faced a slowdown in the early part of the year 2009. The last quarter of 2008 and early 2009 saw empty billboards, lower ad spends and freeze on new campaign budgets etc. However, the outlook began to change from the second quarter of 2009. The trend that is emerging today seem to suggest that the upward trend will continue and may pick-up steam in 2010. Growth of advertisement spends may still hover below 10% on a yearly basis.
Some specific sectors/areas are discussed below:
Television and radio – acquiring dominance:
Television will continue to be one of the preferred media for advertising – considering that it is becoming one of the most accessible entertainment media for the masses. This could result in a shift in ad spends from print to TV in the medium to long-term. Ad spends on TV could see a figure of around 40% for heavy spenders who also use the print media to a great extent.
Radio industry is booming using the present technology, particularly FM. The reach of FM in the past few years has been phenomenal in Tier I and II cities in India. At times, this medium is proving to be a favourite of enterprises who are in the mid-market segment, particularly because of the popularity of FM and its reach. However, on an overall basis, the ad spends on radio may take some time to pick-up. The ad spends are still lower than the global average of around 8-10%.
Advertisers will need to be more aware of the choices, interest of the viewers for TV and the listening audience for radio and plan their campaigns accordingly. For example, audience statistics on realty shows, specific content shows on FM radio can help advertisers reach their target audience. This medium (TV and radio) will remain a dominant medium along with print.
Online advertising – going on-line:
Advertisements on internet have shown a trend to be successful only if they targeted to the needs of the user. With the growth of internet, ad agencies and clients are spoilt for choices. However, on-line ads have a narrow range of audience, with the computer yet to make substantial in-roads in the Tier III cities and rural areas.
However, a trend is seen by big established brands to utilise this medium increasingly to target their specific audience. Further, a response system is possible in the digital medium. This helps tabulate ad reach and changing interests of the internet users. For this purpose, ad agencies in this area are increasingly becoming like IT companies, which provide a one-stop-shop for all the research and advertising needs of their clients.
Given the trends of increased internet usage, the ad spends on this medium could grow at an expected rate of 1% a year for the next few years. The use of the medium will continue to be along with the other mediums, like outdoor and radio etc. and may not be on an exclusive (only) basis.
Ebooks – yet to find their way:
Ebooks are yet to take off in India in a big way. Though it is an industry that is taking off in the developed world, in India the trend has been very slow mainly due to lack of awareness and availability of devices and content.
Like the music industry, this medium is prone to piracy and copyright related issues, which are difficult to resolve. Providing additional content and attractive pricing, both of devices and content, along with awareness may result in growth in this sector in India. If the growth does happen, it will certainly reduce the cost of publishers besides being environment friendly to the extent of less use of paper.
Publishing – still a dominant medium:
Though a dominant medium for advertisers, newspapers on the net are also being increasingly viewed. The debate for free use on the net v/s chargeability will always remain. Here again, miniscule charge for premium content can help offset some cost of on-line publishing. However, the models for payments or free use need to be worked out for content. In India the free use will survive, just as economics for cheap printed newspapers. The business model of maximising ad revenue will forever remain the dominant factor in budgeting and pricing publications. Ad spends on this medium will tend to remain the maximum for those who choose to use all mediums of communication. Newspapers on the mobile will also be subject to connectivity issues. May be the launch of 3G will help, but the pricing will be the deciding factor for the success of this medium.
To be one-up in the publishing world, focus will be needed on opinions, analysis, feature articles etc. to hold back readership and loyalties. In India newspapers have a success story, what with numerous languages and multiple editions. It remains the daily companion of millions of Indians along with the morning cup of tea.
Magazines also follow the same trend as the newspapers. The ad spends on this medium is audience specific. For e.g. in-flight magazines of airlines carry advertisements which are targeted to, both, the occasional and the frequent traveller considering their demographic and status profile.
TV and Web – the convergence still not ‘on’:
Internet and Television on one screen is yet to take off in India in a big way. Marketing and business models of service providers may be partly to blame. The economics and logistic for an average Indian family simply does not help this technology work, although TV is increasing being used for games and on-line content on the DTH platform.
Music – through an ever changing medium:
The trend in India will follow the global pattern as far as digital music is concerned. Share of downloaded music and music in digital form will forever increase and expectations are that more than 50% of the music we buy will be in the digital format in the years to come. Within digital music, downloads on mobile may become the dominant player. Content in other forms - ringtones, caller tunes and related revenue will be the driving force for digital music in the mobile arena.
Piracy remains the biggest issue. To ensure success, for digital music the pay models need to be innovative - exclusive content only on pay basis etc. may help. However, in India radio will continue to be important source of music – what with recording devices available now that can record live radio. The CD is not dead yet, but will need to be part of a rethought sales strategy, rather than a CD for every compilation, soundtrack etc. i.e. the albums being brought out need to be more thought about and should have tracks that can sell together. An example of the last year was the Michael Jackson compilation, which was re-released after his death and which flew off the shelves in no time.
Video-on-demand – taking off:
Renting of DVDs will remain active in Tier II cities. The growth of satellite television and in-built movies on demand feature will grow faster in Tier I cities. Advertisers and content providers needs to be constantly aware of the trends, in both Tier I and II cities and TRPs in this area. Piracy will always remain an area of concern (e.g. copying movies, cheap DVDs on the street etc.).
Technology innovations – 3D TV – yet to arrive:
3D TV are yet to arrive in India in a big way. However, new technologies in the market have picked up. For example, there are only flat screen TVs visible in shops today. Plasma TVs are on their way out, except in large formats and newer versions of LCDs are in the market. 3D may just be the next trend over the coming years if the pricing is right and content availability picks up. 3D Games are popular on LCD TV and this could be the important aspect of entry and growth of newer technologies in 3D TV. However, the pricing will define the success or stagnation of this technology.
A word on technology:
Though technology will help growth in all sectors, particularly the media sector, the bundled issues of piracy and abuse will forever remain. Advertisers and their clients, content providers and all those concerned and connected with this sector will have to be increasingly aware of these and plan their spends, business models and strategies to maximise benefits
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