Mindshare India says: Industry expected to grow by 18%

And, for the first time, TV will zoom past print — that’s the biggie. Digital will jump, albeit from the current small base. The number of days of live cricket will be a big factor. So says Jai Lala, principal partner, The Exchange, and team

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Jai Lala, principal partner, The Exchange

Topline

The Indian Advertising expenditure is expected to touch the 300 billion mark by end of 2011. TV is expected to overtake Print to be the lead medium in India and will continue to grow at 26%. Print is expected to have a moderate growth of 9% as compared to the other mediums. Digital is expected to be growing at 35%. Though it will be the fastest growing medium, it will not grow at the expense of TV or Print.

TV – OUTSTRIPPING PRINT

As per the IRS R3, TV penetration is 79% out of which 69% is Cable & Satellite. The real growth in TV advertising is coming from these homes. TV penetration has grown by 5% whereas C&S has grown by 7% over 2009-10.Some of the key factors for growth in Television are:

1. Competition and Growth expanding the market This has given rise to consolidation of operations. 2010 witnessed the adverse impact of the growth on smaller players, who found it difficult to survive in the given scenario. The players which were able to weather the downturn are likely to look at enhancing their market shares. This could help in the emergence and growth of players with superior product, marketing, distribution, technological and innovation capabilities. In turn, this is likely to aid the growth in the overall market size and reach for the industry. Mergers and acquisitions activity in this space over the next two years is expected to significantly increase along with the level of participation by private equity players.

2. Fragmentation leads into broadened horizons Entry of newer customers, players and regions are on continuous increase and are thereby creating wider inroads in other domains beyond their traditional home grounds.Also, players from other sectors like IT,Telecom, etc. have entered the industry. Foreign players are also looking at increasing investments in their Indian portfolios.

3. Regionalisation fuels market growth and allows convergence of medium Growing regionalisation is also helping some regional players to become strong by tapping newer markets. Also, media players are looking at leveraging their content across platforms leading to the emergence of conglomerates.

4. Cricket has become a regular phenomenon with more than 150 days of India playing cricket. 2011 will, for the first time, see the World Cup & IPL in the same season The demand for these tournaments has been high with each of them locking in the sponsors well before 2011. With both expecting to garner almost 1500 crores, it is becoming a separate genre on its own. Today, advertising just on-air on cricket is estimated to be in the region of Rs.1100 –Rs.1300 crore. Next year, it is estimated to grow to Rs. 2200 crore. It continues to remain the single most entertainers across the nation.

5. Newer markets are being tapped by media. Regionalisation not only includes all the four South markets, but now additionally we can include West Bengal and Maharashtra. Media plans no longer work on the regular channel spill-over. Markets like UP, Punjab are seeing the advent of regional specific channels such as Mahua TV.

6. Embracing Digitisation: Availability and penetration of newer distribution platforms like Digital Cable, DTH and IPTV. The industry has benefited from digitisation and the growth is likely to continue in the years to come. Currently, DTH is growing at the rate of 30% and is expected to reach a base in excess of 30mn household by the end of 2011.

The digitisation of TV platforms has resulted in:

a. better technology and picture and sound quality for viewers

b. more transparent distribution of revenues for stakeholders in the value chain and more bandwidth becoming available to broadcasters, giving them opportunity to provide value-added services.

All this has led to growth in advertising on DTH by:

a. availability of newer avenues

b. possibility of more target specific advertising

c. interactive content/ gaming/ sales!

d. HD Feeds being available

e. language options

f. the ability to record and view live content

7. More is less : Content hunger grows (Tentpoles and Reality shows): New Seasons of Bigg Boss, newer Formats like Master Chef, Celeberity programmes, Blockbuster Movies, Award shows, Dance Programmes, etc., etc. — the list is just increasing. Approximately 20% of total programming time is devoted to Reality shows, up from 16% in 2010. These shows have high input costs, which are mainly due to:

a. Celebrities

b. Outdoor Shoots

c. Expensive Production

d. High Marketing Costs

8. Niche —Fragmentation and the emergence of the Long Tail Today channels are available for our specific needs. If you have interest in, say, Gadgets, Health, Food, Cars, etc., there is a TV Channel that catesr to your specific needs. Each channel will cater to a specific Target Audience with a specific profile. 2011-12 will witness the emergence of the Long Tail.