We have all been shaken up by the demonetisation and are currently divided by pro or anti this move rather than caste or other barriers – which in itself is a good thing! My view is that demonetization will benefit the country in the long run. Banks will become cash-rich and this cash can be directed to sectors which need funds. Despite the positive sentiment around, there is a feeling of uncertainty on how this step will ultimately play out.
Short term hiccup
There will be short term hiccups that will impact media houses – especially from an advertising perspective. Spends will slow down slightly in the short term but will definitely take off thereafter. I don’t see that much of a loss in advertising revenue for the television industry as indicated in a recent article by Mint (Rs 500-600 crore). If that was the case, then big broadcasters would lose Rs 150-200 crore each and that’s not happening. Yes, for a few weeks there hasn’t been much of tactical advertising on television but from a sales point of view, this is short term with plans getting postponed. I believe this is a minor hiccup and things should pick up soon. When it comes to news, there is a bit of chaos created as channels somehow like to put things across in a negative context, which has been the case for the last five to six years. Positive news doesn’t get them the ratings, as a result of which deciphering viewers are moving away owing to the credibility factor.
However, the common man is optimistic about it and confirms that it is a good move. It is, in fact, a big and brave step which has never been taken in the history of India. No government has had the courage to do it in the past. Sentiments are very different to what the 3-4 per cent of news channels are currently showcasing.
Long term benefits
In the long run, there are bigger advantages because now money will come into the system legally. The government can spend that money on infrastructure, education and healthcare. The other point is that this step will encourage people and businesses to pay their taxes which they haven’t been doing honestly earlier as compared to the working class who do. With this, the tax bracket will widen and probably bring down the tax rates for the middle class and corporates. As a result, the overall bank interest rates will come down. People will have more disposable income and spending capacity will rise, resulting in more advertisers. Money will be put into infrastructure improvement and new industries will emerge which will also ultimately need the visibility of advertisements. With the kind of reach that television has, it will continue to play a huge part and thus benefit everybody.
Handling cash-based transactions
I asked few people around about their difficulty and they mentioned that do not have any issue because they don’t have that kind of money on them. When it comes to the unbanked population, they have time to open accounts till December 31, 2016. For instance, one of my house-helps who didn’t have an account earlier, has opened one.
In smaller countries like Thailand everything is plastic money. But in India, we are so used to cash that unaccounted for money had become a parallel industry. I am glad that the government has taken this bold step and is getting in a lot more transparency into the system.
Impactful changes ahead / Why television industry hasn’t been affected much
Buying habits are sure to change now. People will be more conscious about spending. Sectors like luxury and housing will take a hit. How can a country survive with a parallel economy like the one we had? With this step, there is a bit of turmoil that will stabilize over time, but I do believe that this is what the economy needs today. This will not affect the television industry that much because both the real estate and luxury sectors were never big on television advertising. The latter had started putting more money towards print and magazine advertising. For other industries it’s a temporary hit which should get sorted in about a month’s time.
Overall, I think it is a groundbreaking move and as responsible citizens, people have to get to do the right thing for India.
(The author is President, Network Sales & International Business, Sony Pictures Networks India)
Disclaimer: The views expressed here are solely those of the author and do not in any way represent the views of exchange4media.com