Advertisers continue demanding deep discounts even as broadcasters see a resurgence in advertisements

Television viewership has hit new heights rising by 40% in the COVID-19 era while the share of news in overall TV viewership rose to 21% from 7%.

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By Basil Kannagi Arasu

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COVID-19 related lockdown has sent the economy across the country in shock with MSMEs to large corporates affected by the outbreak of coronavirus. Television viewership has hit new heights rising by 40% in the COVID-19 era while the share of news in overall TV viewership rose to 21% from 7%. Broadcasters have however been struggling to grapple with advertising revenues taking a major hit.

The subscription revenues have grown for broadcasters with ZEEL reporting higher subscription revenue numbers in Q1 FY 21 while TV18 managed to keep stable subscription revenues in Q1 FY 21. The advertising revenue however continues to languish although the ad volumes have started ticking up month by month as things open up gradually. The ad volumes are said to be 23% lower than pre-COVID with a gradual revival after witnessing one of the worst quarters in terms of ad revenue.

ZEEL reported a decrease in advertising revenue by 66% Y-o-Y basis while TV18 also witnessed a major downfall in revenues due to advertising clampdown. The advertisements on television grew by 44% in week 30 (19 – 25 July 2020), as per TAM Media Research while other categories also saw increase in advertisers and brands. With fresh content production resuming, Hindi GECs have withnessed 5% growth in average ad volumes per day in July 2020 compared to June 2020, garnering 23% of ad share volume.

The ad rates however continue to be significantly low with advertisers continuing to demand hefty discounts. The rates are said to have been slashed by 35-50% for genres and channels that are performing significantly during the lockdown. Broadcasters are obliging with deep discounts to stay afloat given they are over reliant on advertising revenue.

Sun TV Network has however refrained from any discounting and choosing to curtail the number of minutes while keeping the rates firm up. It has made a strategic move to ensure that it doesn’t have to tackle the uphill task of getting the price up once it gets down. Sun TV has restricted advertising time to 6 minutes per 0.5 hours instead of 8 minutes and giving more content for every show.

Rajaraman Mahesh Kumar, Sun TV Network Limited – President, MD & Additional Director speaking to analysts said, “We are not actually — as a policy, we are not offering any discount to anybody. So what we have done is we have actually curtailed the number of minutes, so that we have restricted the supply so that the rates firm up. And we are not officially giving any discount to anybody. So we are just taking whatever is coming, but we are not compromising the rate. We have restricted the number of minutes in terms of ad time, so that the rate, more or less, remains the same as it was in the previous year of pre-COVID levels. So we are not offering any discounts to anybody.”

S. L. Narayanan, Sun TV Network Limited – Group CFO added, “So this is a very strategic move because once we drop the price, getting it back up will become quite an uphill task. So we are holding on to rates. And if people are not coming — I mean it’s a very calculated move. If it was really bad, we will have to. Maybe we would have done it if this had continued on for some more time like it was in April. Fortunately, there is definitely an uptick like we’ve seen this in our newspaper business, which is, of course, privately held. The uptick is definitely there across the board. I mean if it was something like an 80% fall in April, it is down to something like a 20% fall now. So it gives us that leverage to hold on to prices and then hope for better times to come when the recovery is actually in full blow.”

With the festive season coming up, viewership will keep increasing which will attract advertisers to invest in commercials and keep promoting their brand awareness. Broadcasters are expecting to be paid premiums during the festive season as the customers loosen their strings as the Industry looks to revive the advertising revenue in H2 FY 21.

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Basil Kannagi Arasu

News Reporter

1328 articles published
Basil likes to cover the latest happenings in the Media and Entertainment Industry in India. You can always find him browsing his phone.

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