The current slowdown in the economy as well as the depreciation of the Rupee has put pressure on several sectors. In the media industry, the broadcasting fraternity is experiencing the heat. Recently, one of the largest media groups, Network18 handed pink slips to more than 300 of its employees. There have been reports of a news channel laying off 30 of its employees.
GroupM’s revised forecast of ad spends for H2 has also put the industry in cautious mode. As per the revised forecast, AdEx has come down to 4.7 per cent from the earlier estimate of 7.3 per cent. The H2 slowdown brings down full year growth from 9.9 per cent to 8.5 per cent. The report further downgrades TV spends to 1.7 per cent.
Talking to exchange4media, Vikram Chandra, Group CEO, NDTV admitted, “Clearly, there is a downbeat mood across the country, especially relating to the economy. Hopefully, there will be a turnaround at some point soon.”
He further said, “We are still dealing with some crucial legacy issues. Digitisation was supposed to sort these out, but hasn’t done so far. Though they have come down a little, carriage fees are still very high and need to be reduced sharply. Subscription revenue also hasn’t begun to flow back to broadcasters. We need to move fast in getting traction on both these crucial fronts.”
When asked about his take on GroupM’s revised forecast, Chandra said, “Yes, there is short-term pressure on advertising due to the slowdown in the economy. But given the low ad-GDP ratio in India, the medium- to long-term trend should be positive.”
Meanwhile, Keertan Adyanthaya, Managing Director, NGC Network India remarked, “There are times in the economy when there are dips and certain times where there is a high. If you are not keeping an eye on your business or merely following trends, then there are knee-jerk reactions such as getting rid of people whenever there is a dip.”
He stressed that an organisation needs to manage its business in such a way that any dip or scarcity won’t affect its business model. “We need the right number of people on board, and when times are bad, we can tighten our belt and continue the business with minor cost cutting,” Adyanthaya added.
On a different note, Neeraj Sanan, EVP - Marketing and Distribution, ABP News observed, “The slowdown that we are seeing now is all due to failure of the market last year. This year is going to be very good, particularly for the media industry.”
He further said, “The last six months have been bad for the economy, but if one looks ahead, business is going to grow. The coming six to 12 months, till the next government takes power, will see business coming in.”
On a more sombre note, the COO of one of the leading Hindi news channels, on conditions of anonymity, remarked, “According to me, slowdown is a reality. The advertising community, including advertisers and clients, are spending money very cautiously as they are not sure about how the scenario is going to unfold.”
He added, “Pretty much everything is at a standstill till the 2014 elections and that’s the reality.” When asked about the road ahead for the broadcasting industry, he was more optimistic and said, “I feel the road ahead is very good, because post elections we will settle down to the 12-minute ad cap, which will improve viewership for the end consumer as well as bring about a hike in ad rates.” He felt that the industry is overreacting to the slowdown. “It is not here to stay permanently and will pass in another six months' time,” the COO affirmed.
Giving a marketer’s point of view, Sanjeev Kapur, CMO, Citibank India said, “The overall market context is that advertising spends are bit sluggish and the market is not growing as much as it was in the last four to five years. The GroupM forecast states that probably advertisement will be flat this year. But some media, such as digital, is definitely growing faster than traditional media.”