Did the Big Four's ad revenue surpass pre-NTO levels?

FICCI EY Report 2021 estimates that the channels would have generated Rs 300- Rs 400 crore of incremental ad revenues in 2020 and will likely grow to Rs 1000 crore in 2021

e4m by Sonam Saini
Updated: Jun 18, 2021 8:15 AM
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After winning MPEG-2 slot bidding last year on June 3, the four broadcasters' free-to-air (FTA) channels made a comeback on DD FreeDish over a year after they pulled out in February 2019.

Within the few weeks of launch, the channels like Star Utsav, Zee Anmol, Sony Pal, and Colors Rishtey witnessed viewership as high as the pre-NTO levels. The channels made a comeback in the middle of the pandemic and initially couldn't command higher pricing. However, circumstances have changed for the broadcasters in a year in terms of ad revenue. 

As per week 22 Broadcast Audience Research Council(BARC) India data, Star Utsav is the leading channel in the rural market, followed by Colors Rishtey, Sony Pal and Zee Anmol. Whereas, in the overall market (Urban+rural), Star Utsav, Sony Pal, and Colors Rishtey were among the top five channels.

Experts believe that the big four are enjoying the pre-NTO level viewership and even getting similar ad revenues. In fact, some channels have surpassed the pre-NTO level revenues.   

"Despite the fragmentation of channels, every platform has space, and similarly with electrification across markets, DD Freedish has become a significant part of rural audience lifestyle. Almost all channels were well received, including Anmol, and viewership only surged," shared Ashish Sehgal, Chief Growth Officer - Ad Revenue,  Zee Entertainment Enterprises Ltd (ZEEL). 

He added, "Advertisers follow audience set as they are their critical consuming mass hence revenue not only grew but surpassed pre-NTO levels."

The lesser-known channels like Dangal, Big Magic which enjoyed high viewership and advertising revenue in the absence of big broadcasters' channels, saw a dip after the return of the big four.  

Stating a similar point of view, Sony Pictures Networks India (SPNI) Chief Revenue Officer - Ad Sales and International Business, Rohit Gupta, mentioned that the FTA space is doing exceptionally well. As a result, all the advertisers are keen on spending on this space. "The revenues are not just at par to pre-NTO level, but it has grown much more than that," said Gupta. 

According to the FICCI- EY M&E report 2019,  DD Freedish revenue crashed when the leading broadcasters removed their channels from the platform.  It was estimated that approximately Rs 1000 crore of advertising was affected. 

But when the channels returned to the platform in June last year, it also witnessed the comeback of the revenue.  The report estimates that the channels would have generated Rs 300- Rs 400 crore of incremental advertising revenues in 2020, which will likely increase to Rs 1000 crore in 2021. 

Though some channels witnessed growth in viewership and revenues in the absence of the big four, the overall market saw a considerable decline. This is because the existing channels were unable to sell the inventory as effectively as they did. As a result, the FTA space grew much more in 2020 after their return compared to 2019.

As per the report, as of January 2021, DD Free Dish hosted 161 channels, including 91 Doordarshan channels (comprising 51 educational channels launched during the pandemic) and 70 private channels. In 2019, the platform had 104 channels. 

Dinesh Singh Rathore, the CEO, Madison Omega, said that advertisers buy audiences, and these channels are delivering high viewership. Therefore, ad revenue is growing. "When the channels pulled out from DD FreeDish, their reach got impacted, but now, since the reach is back, so is the revenue."

Another media planner, who wishes to remain anonymous, agreed that the channels have surpassed the revenues of the pre-NTO level. He said, "The comeback has worked well for them because now their share of viewership has gone up. As a result, they have gone ahead in the market. Initially, they gave discounting when they gone paid because the viewership had taken a dent. Therefore, in that perspective, it has worked for them. They managed to take away the share from the other FTA players. I am sure that the revenues would have surpassed the pre-NTO level." However, the FMCGs remained the biggest spenders on the FTA channels.

Before coming back on DD FreeDish, the channels were making annualized revenue of Rs 70- Rs 80 crore, while during pre-NTO, the revenue stood approximately at Rs 200 crore.  

On the contrary, Karan Taurani, VP - Research, Elara Capital, feels that the channels are yet to surpass the pre-NTO level. "The ad revenue has not come back to pre-NTO levels. They must be somewhere 60-70% of pre levels. There is a lot of local advertising that happens on these channels, which is a significant constraint in the COVID times.  They were at the 30-40% threshold last year and now have come back to 60-70% of a pre-NTO level. "

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