e4m Conclave: 'For M&E sector, situation will start improving from June'

Industry leaders discuuss the future of media and entertainment industry post Covid-19 at a webinar titled ‘The Show Must Go On: Emerging Stronger Post Covid-19’

e4m by exchange4media Staff
Updated: May 28, 2020 8:23 AM
the show mus go on

'For M&E sector, situation will start improving from June'

Industry leaders discuuss the future of media and entertainment industry post Covid-19 at a webinar titled ‘The Show Must Go On: Emerging Stronger Post Covid-19’

“During lockdown, where the television viewing went up by 42 per cent, advertising reduced by 30-35 per cent. Adverting has never seen such a bad time", said Sunil Lulla, CEO, BARC India. Lulla was discussing the future of media and entertainment industry post Covid-19 at the virtual edition of the e4m Conclave where industry leaders came together for a webinar titled – ‘The Show Must Go On: Emerging Stronger Post Covid-19’.
Apart from Lulla, the esteemed panel had Megha Tata, MD-South Asia, Discovery Networks; Vivek Srivastava, President-Strategy and Business Head, English Entertainment Cluster, Times Network; Ajay Gupte, CEO- South Asia, Wavemaker; and Abhishek Rege, Chief Executive Officer, Endemol Shine India. The session was moderated by Nawal Ahuja, Co-founder and Director, exchange4media Group.
Starting the discussion, Ahuja cited CRISIL and LPA surveys, which predicted woes for M&E industry. According to CRISIL, the ongoing economic slowdown, made worse by COVID-19, is set to impact the Indian media and entertainment (M&E) industry's revenue by 16 per cent, which is almost Rs 25,000 crores. Advertising revenue, which accounts almost 45 per cent of the pie, will see a sharper cut of 18 per cent. While subscription revenue, which accounts for the balance 55 per cent, will be relatively resilient and see a lesser cut.
“LPA is much more pessimistic. They say that the industry is likely to contract by 24 per cent. Spends across media will get contracted and obviously the ones more severely impacted than the others will be cinema radio, outdoor, etc”, he cited.
Ahuja observed that the industry had two consecutive bad months, April and May. He asked Gupte how the future of June looks to him as an industry leader?
Answering, Gupte said, “Starting from last week of March till May, advertisers faced problems at various levels, from production to distribution.”
He informed that in the last few weeks, since some states eased the lockdown norms, the movement of goods between states has improved significantly, due to which the situation of advertisers has also improved.
“If we are to look at essential products, June looks a lot better for the category. Categories which have more high value, like consumer durables, will still struggle, unless there is a sudden opening," he said.
Tata agreed with Gupte and said, “March to May has been pretty much a wash out, but June is indicating a silver of hope, but far away from real world we want to be in. Clearly adverting is hugely impacted.”
She expressed hope that if the trends of the US and China got replicated in India, channels like her's will benefit from it. The international trends show that there is an increase in 'revenge shopping' of luxury goods once the lockdown is lifted.
“Infotainment and lifestyle is the space where discovery operates, and those high-end categories are the ones who spend money on us. If the international trends are replicated in India, we will benefit from it,” she added.
When Ahuja asked BARC CEO to make an assessment of the situation for broadcasters for the next three quarters, Lulla said he doesn’t think there will be better returns in June as well. “With monsoons coming in, June will be a month where if there is a relaxation of production and supply chains starts improving from where they are today, then we may possibly see something improving in July”, he said.
He added that unfortunately it is not going to be a good year.
Ahuja too recalled Martin Sorrell's recent statement where he predicted that recovery from the pandemic will be reversed square root, which means an initial downturn followed by a little bit of pick-up and than a plateau. He asked Shrivastava what he is expecting from the year ahead.
Shrivastava said he agreed with other panelists and said he too expects June to be better than April and May. “I see a little bit of turnaround happening in quarter two, when the lockdown would be lifted. Q2 is when we should start comparing this year to last year. If all goes well, we should be in the same range as last year by then," said Srivastava.
Rege, giving the perspective of production companies, said that for production companies, original programming is going to be critical. “While all these conversations happen, there has also been a lot of standing costs that has been incurred over the last few months, and going into June, it’ll be incurred. In addition to that, there is cost of being COVID-19 ready as we go into shoot, until a vaccine is developed. Everything will affect the costs on ground," he observed.
He predicted that broadcasters may have lesser programming on air to deal with increased costs and may also reduce the budget of expensive shows.
Shrivastava too believed that cost efficiencies and digital transformation will affect businesses. He said, “Broadcasters need to start investing in new streams of revenue whether it’s on ground or live events.”
He added that consumption of content will be far more than it was six months ago and we'll see new and fresh eyes joining in.
Talking about future, Tata said, "The industry cannot afford any further off tracks. We need to start revisiting and reinventing so that we can face regulatory challenges and hopefully by next year, we will be back in a position of strength.”
Gupte estimated that by 2021, things will start coming back to normal. "It'll take a bit to stabilise but we'll see good changes. WFH will become more of a reality, travel will go down and we're used to this kind of communication now.”
He concluded by saying that in media, content will continue to be important. The tipping point of OTT will come closer. Household products purchase will increase because we'll continue doing things on our own.

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