COVID-19 to spike TV viewership but will that help ad revenue?
Industry experts express mixed sentiments - while some are hopeful about the industry tiding over the situation others feel a drop in advertising revenues is imminent
With coronavirus forcing most Indians to stay indoors as part of the preventive measures, TV viewing is set to scale along with other forms of ‘in-house’ entertainment. The lack of outdoor activities coupled with work-from-home is set to give the television industry higher viewership numbers but will it also translate into higher ad revenue is the question of the hour.
Also, with production houses halting shooting to abide by the health advisories the new challenge is if broadcasters will be able to sustain their flow of content.
The Indian Motion Picture Producers Association has said shooting for TV serials, web series and all other entertainment formats, including digital, will be stopped till March 31.
For Ashish Sehgal, Chief Growth Officer, Ad Sales, ZEEL, viewership is unlikely to get affected on account of production being put on halt. “In 2009, TV production houses were on a month-long strike and even then no fresh episodes were aired. We were running old episodes with some fresh elements and got good viewership. I don’t think there will be a situation when viewership will get affected and if things get worse we will run old shows if needed,” Sehgal said.
The other plus for TV, according to Sehgal, is that if one doesn’t want to watch daily shows they always have the option of moving on to movie channels. “The viewership of movie channels is likely to go up. If people are not watching shows they are likely to watch movies.”
Channels always have a bank of shows to last a fortnight, points out Pawan Jailkhani, Chief Revenue Officer - 9X Media. “All channels have a bank of shows for at least 10 to 15 days. I am positive and hopeful that shoots will resume by March 31. There will be a spike in viewership but we shouldn’t see this as an opportunity.”
However, those watching the markets have sounded a word of caution. Industry experts, we spoke to, said the coronavirus threat is expected to hit the markets further and this in turn will affect ad revenues too.
A senior executive, on the condition of anonymity, said: “It will take a week’s time to ascertain the actual situation. Today, television is still dependent on FMCG and we hope that they continue to advertise on television though there are chances that they might cut down their spends too. As far as other categories are concerned, we are already seeing low consumption by consumers and hence it is going to impact advertising spends too.”
According to Pitch Madison Report 2020, FMCG continues to rule the roost in terms of TV adex, contributing 49%. In 2019, however, the sector’s contribution dipped by 1%. The categories that stand second and third in terms of adex share are telecom and auto at 12% and 7% respectively.
Meanwhile, another industry expert said: “It's difficult to say if adex on television would grow or not, but adex on movies and news channels will go up if the shutdown continues.”
As per Jailkhani, the impact on ad revenue could be there for the next two weeks but not more. “We have just come out of two to three bad quarters and I am seeing March already getting good traction. There might be an impact for 10 to 15 days but we are not seeing a major impact on the television adex.”
Sharing an interesting insight, Karan Taurani, VP, Research Analyst (Media), Elara Capital, said TV viewership will be high for a fortnight but it could be for a short duration. “TV viewership will spike for the first initial 10-15 days because there is fresh content available. There are chances that a new set of audiences will emerge who stopped watching TV. But this looks like a short-term occurrence as shoots are getting cancelled and there will be no new episodes after a while which will lead people to watch digital content.”
However, on the advertising front, Taurani doesn’t see things getting better. “I don’t see any kind of improvement and it will get worse. A slowdown in consumption is happening, a lot of brands even globally have cut down on advertising spends. FMCG TV advertising spends have gone down and it will put the category under further pressure. Therefore, I don’t see any improvement in advertising and after 15 days if broadcasters don't air fresh episodes, it will further hit the business.”
It remains to be seen how the TV industry wades through these turbulent waters. One thing is for certain that channels catering to Hindi general entertainment, kids, movies, and news will record higher numbers, considering that IPL and other big ticket sporting events have been postponed.
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