The Indian media and advertising industry is not aloof to the global economic slowdown, as reiterated by the Pitch-Madison Media Advertising Outlook 2009, which has projected a bumpy road ahead for this industry with a mere 2 per cent growth in 2009. ‘Managing Bottomlines’ was the second panel at the Pitch-Madison Media special session on ‘The Road Ahead for Indian Media’, which was held in Mumbai on February 20.
The panel pointed out that programming, content, distribution, manpower and operating costs had been shooting up in the last few years and asked whether these costs were sustainable in 2009. Should media owners, like advertisers, attempt to control or reduce these costs in order to maintain profitability given that the outlook for increasing topline is not bright and has the time come for all constituents to become more accountable?
The panelists for the session included Shantonu Aditya, Executive Director, UTV Global Broadcasting & CEO of UTVi; Markand Adhikari, pioneer in media, and Chairman & Managing Director, Sri Adhikari Brothers, Live India, Mi Marathi; Chintamani Rao, CEO, Times Global Broadcasting Co Ltd; Vinay Chhajlani, CEO, NaiDunia; Farokh Balsara, Partner & Director, Advisory Services-Technology, Communications & Entertainment Ernst & Young Pvt Ltd.
The session was moderated by Amit Agnihotri, Co-founder and Director of exchange4media Group, and Editor of Pitch magazine.
According to Chhajlani, “The reality is that if the topline is not growing, you would still need the bottomline to survive. You have to contain yourself in the space. For those in the regional space, we need to focus on the efficiencies and how we can get more from our circulations, and fortunately this is also a time where technology is not a cost for us, and if we merge it with our day-to-day content, I believe we can cut down on many costs.”
Rao observed, “This situation affects every single business and there is no question about it. The problem in our business is that we are all dependent on advertising and, therefore, we are suffering the cost. This situation is not going to improve unless there is a significant amount of decree of digitisation.”
Adhikari pointed out, “We have all gone away from reality, everyone was overbound on spending and everything was in the valuation game, and that is hampering the industry.”
Aditya said, “We began cutting costs sometime around October 2008 itself. We had cut back on our carriage and we even re-negotiated the movie prices. Overall, I believe it is better to cut cost, and in the bottomline, cash is going to be the king, and if we could only hold back to it, then eventually it will only help us.”
Having a different take, Balsara explained, “I don’t subscribe to this tale of gloom and doom, and I do not believe that it is all that bad as it is projected. While the topline growth will slow down, it will most certainly grow. Many of the costs have significantly come down and the media should leverage on that and, in fact, further improve the bottomline. The organisation structure and levels of management need to be closely monitored, and if there is ever a time to innovate, it is now. You need to bring the new media centrestage. One should look at digitisation of content.”
Wrapping up the panel discussion, Agnihotri said, “The times are bad, however, we need to use this time to ponder and rejuvenate, and let not it be only the Sensex that goes up.”
Pitch-Madison Media Advertising Outlook projects a growth of only 2 pc in 2009