Positive trends for South Indian TV industry in Q3; Q4 expected to perform better
Broadcasters look forward to a more lucrative quarter after an approximate 8% growth in Q3
After a sluggish Q2 of 2014-15, which marks the beginning of the festive season, the broadcasters are expecting a positive growth during the last two quarter for the financial year 2014-15. The month of October has been fuelling growth due to Diwali and this has led to an approximate 8 per cent growth for the TV industry in the south.
Since there has been a change in the government, the market sentiments have been positive. For instance, Sun TV Network had reported 9.1 per cent growth in revenue during the Q2 FY2015, when compared to the corresponding quarter of the last year. However, Q-o-q performance as well as taxes (PAT) results was lower in Q2-2015. The group has reported a 7 per cent growth in HY-2015 revenue. While Raj Television Network net profit reduced sharply by 78.2 per cent during Q2FY2014 to Rs 7.55 million from Rs 34.6 million in the corresponding quarter of the previous fiscal. The net profit during this quarter is also much lower than the preceding quarter.
But, with the new government in place, 10+2 ad cap and with the expected commencement of BARC India, has that had an impact on the Q3 results and what are the expectations for the TV broadcast industry for the Q4 results?
Q3 results not up to expectation; Q4 is in the wait and watch mode
One of the leading broadcasters, on condition of anonymity said, “There is a huge variation in the growth figures from channel to channel. GECs having been doing well especially during the festive season (Diwali) and has seen a 15 per cent growth in South India. There has been an increase on month-on-month revenue for almost all the GECs. The advertising rates have also gone up due to the demand in the inventory, so brands have cut their ad spends post Diwali.” He further added, “One needs to wait to see what advertisers are planning for the year 2015 as most of advertisers who work on Jan to Dec basis will start planning only by mid December. However, they have been talking big.”
Shankar B, CEO, Fourth Dimension, who handles ad sales for Puthiya Thalaimurai Group, feels that though Diwali has brought in smile to their face, post Diwali as usual the market has been quiet lull. He said, “We are expecting a growth of 8 per cent during December and January since in Tamil Nadu, Pongal is supposed to be the second biggest festival after Diwali.”
When IPL started, initially for the first two years, advertisers were keen on spending on IPL, which is in the Q1 of every year. But in Q1 of 2015-16, the world cup which comes every four years, will take away the major advertisers’ attention. So the big advertisers will want to jump on the World cup bandwagon. Smaller advertisers who cannot afford spends on a big scale will either reduce their spends and be present in a small way during the World Cup or will choose top GECs and be present there to make sure that they don’t fade out of the sight of the viewers.
Shankar remarked, “Though TV industry in South India has registered a 10 to 12 per cent growth, one needs to wait to see what happens in the last quarter, as the World Cup fever will show how many players were able to survive and do well.”
Another leading broadcaster from Andhra Pradesh feels that though the market was expected to bounce back after election, nothing much has been seen. He added, “Stakeholders are still in the wait and watch mode. There is some kind of unhealthy competition in the market as the TRAI norms of the 10 +2 ad cap has not been followed by some of the broadcasters. So, there is no level playing field.”
He further adds that there was a spike in advertising spends during Diwali and compared to corresponding quarter of the last year, this quarter has been doing better. He said, “The last quarter might see an increase in revenue only if the programs on the GECs are compelling, as there is the World Cup which is going to draw all the attention. Having said that, one may not expect a dramatic growth in the market. The growth could be somewhere around 8 to 10 per cent during the last quarter.”
Shreyams Kumar M V, Director- Marketing & Electronic Media, Mathrubhumi said, “ October and November were not exciting, although Diwali did give extra revenue. We hope to do well in January-March Quarter. Traditionally it’s a good time for us. Christmas and New Year is showing positive trends. It’s also an NRI home coming season for Kerala.”
S Rajiv, Senior General Manager- Sales, Kairali TV remarked, “We were expecting a growth of 15 per cent for Kairali TV in Q3, but it has not been up to our expectation. But since Christmas, New Year and our internal events are yet to commence, we are expecting a considerable growth during the end of the third quarter. We are also spreading to the Gulf which will help us in increasing our revenues.”
He also feels that Kerala has a low profile when compared to other regions in the market as jewellery and textile have decreased their spends.
While another broadcaster from Kerala feels quarter 3 has been performing better than the last quarter. He added, “Compared to Q1 and Q2, Q3 has been favourable and has been showing positive result for us. The revenue numbers have been good and have been roughly around 8 to 10 per cent. Automobile and retail have picked up well. Usually fresh financial activities get started up during Q4, so I am expecting better results.”
Media Perspective on Q3 performance of broadcasters
Divya Gupta, CEO Dentsu Media said, “Overall weak; the lead player, the Sun Group has taken a beating. Though the General Elections did boost the news channels revenues in the second quarter, entertainment saw flattish growth and continued to remain so in the third quarter. Rate hikes, legal issues, producers and Arasu cable network troubles have all played a part in bringing down their market shares.”
She added, “The competitors have reaped the benefits; Zee group has made timely investments and this has paid it rich dividend, taking their Telugu offering to the number 1 slot during primetime on weekdays. The Star-Asianet channels have also witnessed consistent growth in their revenues from second to third quarters. Vijay is now a clear number two in the Tamil market on the back of format shows that have caught the audiences’ imagination. Star Suvarna though, has taken a hit due to the resurgence of ETV Kannada, which has benefitted from the Viacom takeover.”
World Cup is said to be gobbling almost three-fourth of the advertising spends during the last quarter and the results for the GEC’s and other genres are generally said to be near to abysmal. E-Commerce has been showing positive trends, while the Jewellery and the retail sectors have reduced their spends. But, broadcasters still have a ray of hope that Q4 will though not be the greatest for them but it might also not be that worse and it will vary depending on region to region in the southern market.
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