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News broadcasters likely to witness dip in ad- spends post-demonetisation

25-November-2016
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News broadcasters likely to witness dip in ad- spends post-demonetisation

The news broadcasting industry is treading cautiously in the post-demonetisation phase. As with most sectors, the verdict concerning the outcome of demonetisation on this industry is not fully known yet. However, industry sources said that a general slide in business has been observed.

No need to panic

Zee Media was among the first in the country to experiment with cable news. In August, the company ventured into international news broadcasting with the launch of WION. The Indian broadcasting giant is closely following the developments post-demonetisation. “As of now, there is nothing that we can comment on,” said Punit Goenka, CEO & Managing Director, Zee Entertainment & Enterprises Limited (ZEEL).

He stated that Zee was having a dialogue with its agencies to figure out whether the fallout is a matter of few weeks or is it something that is going to last longer. There is a general impression in the industry that ad spends are bound to go down in sync with a fall in consumer buying. But Goenka felt that panic at such a juncture was best avoided.

“Panic will not help anybody, neither the broadcasters nor the agencies. We must sit together and find solutions. We will have to think it through,” he said.

Dip in ad sales

The leadership at Times Group, another media giant having substantial viewership base particularly among English language audiences, reasoned that the effect on ad sales is likely to be seen in November and may get extended till December. “There is going to be some temporary nipping effect in the advertising activity primarily in the FMCG sector. But that will, I think, get softened by sectors such as e-commerce,” said MK Anand, CEO & Managing Director, Times Network.

When questioned about how the financial results of the existing quarter can be hit due to demonetisation, Anand told exchange4media, “There is a sharp impact in November of about 20% across. I think this will improve in December.”

Sources wishing to remain anonymous revealed that there had been “some deferments and cancellations” as far as advertising at NDTV was concerned. When contacted, KVL Narayan Rao, Group CEO & Executive Vice President, said, “It is an issue that is not really confined to news broadcasting business. It concerns others as well.”

Rao conceded that there was a “little bit of an impact” and that NDTV was “trying to deal with it.” Being veterans of private news broadcasting, NDTV is expected to find a way to sail through it steadily.

Overall impact can be positive

In the words of Anand, however, the overall story was going to be “good for broadcasting”. He argued that collection of subscription revenue at home level will become transparent as cash mode of transactions is put behind. At present, under declaration of subscription collection is a menace.

“That will improve MSO (multiple-system operators), broadcaster revenues and thus the quality of our products. Improved economic performance and efficiency in the medium term due to this move will surely lead to better overall ad sales performance,” he insisted.   

Tags demonetisation Punit Goenka ZEEL MK Anand Times Network KVL Narayan Rao NDTV

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