Crystal gazing into broadcast industry: A year for consolidation and course correction?

The Indian broadcast industry witnessed some turbulence in 2022. The tough economic environment, fuelled in great part by the pandemic, meant that an uncertain future awaits the traditional broadcasters. They should deal with a multitude of issues, ranging from a shrinking business and competing for ad revenues. Let’s hear what industry experts have to say as they crystal gaze into 2023.

Ashish Bhasin, Co-Founder and Chairman, RD&X Network, is sanguine about the new year. He thinks that overall it will be a good year. According to him, the first part of the year is going to be slightly turbulent because of the global economic winds. There is talk of a recession particularly in the Western world, and so on. 

He feels that three things are going to be very important. “One is monsoons. Rural demand has to pick up, and that’s very much dependent upon the monsoons. We have been lucky to have had a good run in the last few years in terms of monsoons. Now, whether 2023 continues that way or not will be very important. Second thing will be the Budget, because there are certain expectations from the government in terms of taxation, etc., And then, of course, there is oil and petroleum price. And the third thing is how the festive season goes. Because more than 40% of our entire year’s advertising spends happen between, let's say, Ganpati and New Year. So, these three items will determine how the year is for the advertising industry and and therefore for the television and broadcasting industry,” he explains.

Overall, he expects double digit growth, but he thinks it will be a year of two halfs. The first half will see more turbulence, and the second half will probably pick up better. 

Consolidation

How will 2023 be for the Indian media and entertainment industry in general and TV news industry in particular? Experts feel that we can expect Zee-Sony-like deals in 2023.

Bhasin predicts that there will be a trend of consolidation, not only in television, but in all media. “I personally feel there are too many channels. It is better in certain genres that we have some consolidation, and we have players of a certain size and stature. But whether that will happen next year over the next two to three years is hard to say,” he says.

He also predicts that there will be mergers and acquisitions involving the regional channels. Regional channels will also start playing a role in in these mergers and acquisitions.

The impact of streaming platforms on the broadcast industry is already palpable. Rabindra Narayan, Managing Director and President, PTC, is sure that consolidations are bound to happen as a shake-up is imminent. He says that music channels and movie channels are bleeding and they will be the first casualty as movies and music gets consumed on OTT and streaming platforms.

“World recession will see its impact on advertising in India too, and those who deliver maximum bang for the buck will survive,” he points out.

Concurring with the views of the senior industry hands, Anil Kumar Singh, CEO, TV5 Kannada News, also says that there are huge possibilities for consolidation and strategic combination in 2023. “The media industry, especially the TV industry per se, is already going through a phase of consolidation pressure because of drastic changes in content access cost, choices, and ease of accessibility of content. Consolidation will bring many advantages to all stakeholders, including content creators and viewers,” he adds.

Content is the emperor  

Industry experts are unanimous in their view that it is no longer about the medium. People will look for good-quality content, irrespective of the platform.

Content, Rabindra Narayan points out, will formally be crowned King, and those who make good content will be sought after by every platform. There will be cut-throat chase to seek viewer attention as the viewers will get spooky for choice. There will be no patronisation of any single platform but wherever good content would be available, it will be consumed. He predicts that 2023 will be a golden year for creators!

What OTT has managed to do is bring up a certain level of quality expectations, points out Ashish Bhasin. And, he adds, as far as the customer is concerned, they are least bothered about the channel or platform.

“They are interested in watching the content and not watching a channel or OTT. They will go wherever they get good content. I predict that we will be back to the days where content is not only king, but content is emperor. Content is where you will find more and more viewership going. One of the principles of advertising is that advertising follows eyeballs. So, the key thing is that there will be more growth wherever there is great quality content, whether it's a channel or OTT. If TV channels are not able to cope with it, and OTT channels are giving better content, clearly eyeballs will shift there. On the other hand, if TV channels are able to give great content, then the viewer is not interested in the channel,” he explains.

Co-existence is the nature of law and equitably applies to the media industry, maintains Anil Singh. “The TV media industry has unique advantages and those advantages keep the TV media industry very relevant and important for society. With the growth in the overall economy size of our country, the TV media industry is bound to grow along with OTT platforms,” he says.

TV remains mass medium, but…

TV will continue to be a mass medium. However, the arrival of OTT platforms has changed the audience demographic in a considerable way, especially in the urban areas. And there is the increasing influence of digital media. We need to understand if these aspects will affect the advertising plans of brands and media agencies in 2023 and beyond.

Rabindra Narayan is certain that each medium has its own viewership; they will all co-exist. He points out the fact that not all OTT platforms have tasted success. “As the initial funding dries up and subscriptions start falling, new models and new equations will emerge. Those who innovate and experiment will be in demand. Regional television and OTT will be new champions as they will be flexible and more adept at providing. Agencies will focus on regional as it will be more cost-effective and more impactful for a concentrated campaign.”

Advertisers and advertising is going to grow phenomenally with growth in country’s GDP, says Anil Singh. Distribution cost and accessibility cost of content are two other key issues the broadcast industry will need to deal with. Anil Singh is certain that both these costs need to be streamlined.

“India is chasing a target of a $5 trillion economy by 2025, and without advertising we cannot achieve a $5 trillion economy. The TV media advertising spend is going to grow along with digital media. Change in streaming of content such as live telecast of TV channels on mobile will impact the digital content consumption and advertising growth of digital media. Key factors like distribution cost and content accessibility cost will significantly impact the TV media industry. Currently the distribution cost and accessibility cost of content is complex and very expensive; both need to be streamlined. With the changes in streaming services both content distribution and accessibility cost will get reasonable and affordable and that will lead to improvement in the overall TV media industry.”

Back to basics

Ashish Bhasin feels that the broadcast industry has to go back to basics. The TV industry, he adds, is a pretty mature industry, and there will always be pressures, but there will always be solutions to that. He thinks that the whole focus now has to shift on TV, because it is a medium that gives you good reach.

“Now the focus has shifted on as to how can you give excellent content consistently. It's not about making one good programme or one good serial. It's about consistently giving good programming. So that eyeballs start ticking. You have to go back to basics. India is a rare country where while digital obviously is growing much faster, television also continues to grow. So, it’s one of those markets where all media is growing, albeit at very different rates. But there’s still a scope for every medium to survive for quite some time to come. So, I think, going back to basics and making sure great content is available should be the focus.” 

The industry has become mature enough over the last two decades or so and they've been handling issues with regard to pricing, distribution, etc.. While there are ups and downs, those are issues that come up and get relatively, easily resolved, he adds.

What will be the future of TV in India amid the growing influence of streaming services? Experts are of the opinion that it is not yet time for naysayers to sing dirges for TV!

Television is here to stay and it is not going anywhere, says Rabindra Narayan emphatically. “TV remains the primary family viewing source of information and entertainment. TV didn’t kill newspapers. Cinema didn’t kill TV. All co-exist in their own space.”

Story will be the centre piece in 2023, says Rabindra Narayan. “You can make a Rs 500 crore movie, but it will flop if the story is weak. Web series with top actors fail if the story is weak. From larger-than-life characters, stories that appeal to people are about characters from around us, from small towns, from small offices, from villages – characters that mirror us and stories that are about people like us. No matter which medium, believable stories will get audiences,” he says.

A common minimum programme for TV news

TV news faced a lot of unsavoury issues in 2022. First and foremost was the never-ending saga of ratings. The toxic nature of TV news was another issue that was discussed in 2022 and the previous year, too. Experts feel that the industry should come together to do something about the issues.

Ashish Bhasin absolutely thinks that the industry needs to come together. He is proposing a common minimum programme for the broadcasters to work on. “I think that news broadcasters by pulling each other down are doing themselves an injustice. If the genre grows everybody will grow. If you just bring in negativity and suspicion about each other, it will actually pull the whole genre down. It is now becoming clearer and clearer that people are not interested in bickering. Every day you find 20 channels claiming that they are number one or each channel trying to outshout the other channel in terms of its performance, etc. Nobody is interested in the washing of internal dirty linen in public. Competition is always encouraged, but there have to be certain norms within which it is observed. So I think the news channels do well to agree on a common minimum programme, where obviously you have to compete with your competitors. There's nothing wrong with competition and that has to continue. But there has to be a certain basic agreed decorum of proceeding. And also there have to be certain agreed metrics. Twenty people cannot be claiming you are number one. You can slice and dice data in any way and claim everything. But in this manner you are fooling no one. So, unless there is a certain sense of propriety that comes in the news genre I am afraid the whole new genre is going to suffer. It's not about one player versus the other player. The whole genre is going to suffer,” he elaborates.

Already, he adds, while it takes a lot of noise value, the news genre takes less than 5% of the entire advertising pie. So it will drive itself to insignificance as far as advertising is concerned, if it continues going down the same route that it is.

Bhasin is clear that the industry needs to come together; but the onus clearly is with the news broadcasters.

There are factions within news broadcasters; they need to sit on the same table and agree on an equivalent of a common minimum programme, asserts Bhasin.

“They can agree on the areas where ‘we will come to an agreement that we will not pull each other down or we will not denegerate ratings, or whatever’, because if you question the currency ultimately you're doing yourselves a harm. On the other hand, we will compete in, let’s say, pricing or in innovation, or in other areas. And I do hope better sense prevails, because these are very intelligent players, and hopefully they will see the writing on the wall, and will come across to it. Having said that, I had this hope even in the last year, and even the year before that, and even the year before that, and it hasn't really happened, it's only gotten worse. So it really depends upon these players. But I hope it happens because news is very important from an Indian point of view. It's more than beyond advertising. Indians have a lot of interest in news as a category. They want to be informed; and it's not just global news or national news. It's also your local news, what's happening in and around you,” Bhasin explains.

He predicts that the measurement issue will take focus this year. He adds that the BARC is an industry body which has evolved with the broadcasters, the clients, and the advertising agencies. “I think it has done a stellar job thus far. There have been areas of concern, but hopefully all those need to get sorted out. And I hope that this year this will happen because that will do the Industry good. Also, I think the artificial dividing line which is there in the minds, in our minds of digital versus television, etc., is no longer there in the consumer's mind. The consumer is watching the same content on his ipad, and could be watching the same content on the 65-inch screen and changing between the two. However, we see it very differently. Hence, measurement has to evolve keeping digital in mind,” he adds.

He maintains that measurement has to become screen-agnostic. “I think the first seeds of that were sowed a few years ago. Hopefully in 2023, we will see some action ingho that area. The third thing is the trend of consolidation is going to continue, perhaps accelerate, and the fourth thing is the regional channels will now start playing an equally important role even in the M&A space.”