Slowdown to impact outdoor advertising

Insearchindia.com Team

(13 June 2012 1:00 pm)  

MUMBAI: The looming slowdown in the Indian advertising industry will badly hit the outdoor medium, according to media agencies who are revising their forecasts for this year.

Zenith Optimedia CEO Satayajit Sen ranks it as the third most impacted, after print and radio. “We were expecting the outdoor space to grow at 5-10 per cent this year. But it will now post low single-digit growth. All peripheral mediums like outdoor will experience ad budget cut,” he says.

Lodestar UM COO Nandini Dias feels that outdoor and print will be the most affected ad mediums. “A number of sectors like retail, finance, and banking have pulled back advertising. Since outdoor and print have a higher CPT (cost per thousand) than TV or radio, they will be more affected. Even during the last pull back, cost effective mediums like TV were the least affected,” she says.

From the advertisers’ point of view also, the availability of other “cost effective” options with “better metrics for measuring effectiveness” may affect the growth in outdoor.

Broadcasters, who are one of the major spenders on outdoor advertising, are less bullish on splurging in hoardings than they were in earlier years. Zee Entertainment Enterprises Ltd. (Zeel) is reducing its ad spend on outdoor while increasing its exposure on digital. 

Says Zeel marketing head - national channels Akash Chawla, “If you see outdoor and billboards, it is involved in the marketing mix but that component has been going down for us since the last 3-4 years on a constant basis.”

In 2008, Zeel’s ad spend on outdoor was around 40-45 per cent of the entire marketing spend, which has fallen down to 28-31 per cent now.

“On an increasing ad budget, billboard advertising as a component has decreased. We look at hoardings from show to show perspective. In totality, ad spend on OOH is coming down. Reason being that there are lots of other options of advertising available and the metrics evaluation in the other mediums is far better. When you talk about the geographical coverage, the entire thing in outdoor is to get into smaller towns but issues like difference in printing and creative not being put up on time happen. On digital our ads spend has grown to 10 per cent from 2 per cent in 2008. How many people log on, cost per contact and pay per click help monitor the medium and get a better ROI. When it’s about BTL (below the line), we tend to do an aggressive job and that continues,” says Chawla. 

UTV Broadcasting, which spends almost 20 per cent of its marketing amount on outdoors, will keep the budget at the same level. 

Says UTV Broadcasting head marketing Kunal Mukherjee, “For us, it is a pretty much constant space. Outdoor is a good medium to be continuously present in smaller towns."

Sony Entertainment Television (Set) spends around 15 per cent of its overall marketing budget in outdoor and will keep it that way.

However, outdoor ad agencies feel that the slowdown will not be as much impacted as the other mediums.

Milestone Brandcom Founder and Managing Director Nabendu Bhattacharyya admits that it is not a very good year for the industry. “The industry as a whole is suffering and not only the hoardings. Though Telecom does not spend like it used to earlier, it is still the highest spender on hoardings followed by BFSI and then M&E. Automotive industry is also very active and luxury cars have been utilising hoardings as a medium in a big way. In smaller markets, the major spenders are gems and jewellery, lifestyle and real estate. I see FMCG spending a lot more.”

However, he hints that the need of the hour is a 15-20 per cent discounted rate. “With a 15-20 per cent discount, it (hoardings) will be preferred over other mediums. Because the demand and supply chain will change, the clients will look at it more because it has become cheaper. Hence, outdoor will be least impacted.”

According to Posterscope MD Haresh Nayak, hoardings as a percentage to OOH's total revenues have fallen over the years from 80 per cent to around 50 per cent. "The demand for activation continues. Clients have been looking at malls and multiplexes activations in a big way,” he says.

Nayak estimates the outdoor industry to grow by 10-15 per cent this year compared to 18 per cent a year ago."It is a very localised medium. It is easy to adapt and so it gets least impacted,” says Nayak.

Broadcasters get breathing space as Tdsat stays Trai's ad cap rule

Insearchindia.com Team

(12 June 2012 1:45 am) 

MUMBAI: Broadcasters have earned a five-week vacation from the upsetting regulation of limiting ad time on their networks, as Tdsat has stayed the Trai notification till the hearing comes up on 17 July.

For a while, broadcasters will at least not have their ad revenues hanging by a thread, its future determined by a 12-minute ad cap per hour fixed by the Telecom Regulatory Authority of India (Trai). Stressed by a slowdown in the ad economy and anxious about the implementation of cable TV digitisation, the least they want to do is cut down on commercial time and take up the troublesome task of upping advertising rates.

True, none of the broadcasters are willing to obey the Trai order as they feel that the broadcast watchdog is overreaching its powers by regulating TV ad time.

Still, the Tdsat’s stay order comes as a major source of relief at a time when the least that the media industry wants is more headaches.

“We got a stay from the Telecom Disputes Settlement and Appellate Tribunal (Tdsat) today. The hearing is due mid-July,” says Star India chief executive officer Uday Shankar.

News broadcasters have horrible woes. If there is a way for them to wriggle out of the mess that they have themselves created by coughing out high distribution costs, cutting ad rates amidst competition amongst themselves and living under high staff costs, it is by giving more commercial time to advertisers.

Hindi TV news, the most fragmented of the lot, dedicates on an average 20-24 minutes of ad time per hour. Even with this abundant supply, news broadcasters find their ad revenues crawling at below 10-per cent growth and their profitability under attack.

Zee News Ltd (ZNL) chose a different path to tread this year, cutting the commercial time of its flagship Hindi news channel, Zee News, by 30 per cent while upping the ad rates by 40 per cent. However, the 'Maximum News, Minimum Break' journey from 2 April has been a bumpy one.

“The ratings have not seen much impact. And we have ended up producing more content. Perhaps, this experiment needs more time to yield results. We will wait for a couple of quarters more before we take a call on whether we want to go back to our old route,” says Zee News Ltd chief executive Barun Das.

Let's not forget that Zee News’ slash in ad time of eight minutes for every half-hour slot is still above the ceiling of Trai’s prescription of 12 minutes of commercial time per clock hour. So imagine the misery news broadcasters will be in if they have to swallow Trai's medicine!

In the tangled financial problems that the news broadcasters face, it is the timing of Trai’s regulation that comes under question. News channels need more time to weed out the ad inventory flab that they have created due to economic compulsions, much to the irritation of the TV audiences.

Says TV Today Network CEO Joy Chakraborthy, “Trai’s so-called radical step would jeopardise the business models of news channels. Less ad time would mean more content costs. Besides, scaling back on ad inventory by 40 per cent (from our average of 20 minutes per hour to 12 minutes) would mean demand outstripping supply and, hence, higher costs. This will discourage small and local advertisers, who form a fair bulk of clients for news channels, to come on board. These steps suggested by Trai should come when the digitisation rollout is complete. We can’t fight on all fronts.”

The ad time on news channels varies from month to month.TV Today Network, for instance, offered 22 minutes of commercial time per hour in March. This came down to 18 minutes in April.

News and sports broadcasters consider another regulation by Trai as retrograde at this stage of maturity: the ban on part-screen and drop-down advertisements.

“We use scrolls on a positive sense. For Olympics, we, for instance, will run scrolls. We earn Rs 120-140 million from the part-screen and drop-down ads,” says Chakraborthy.

Trai’s ad regulation will also pinch hard the sports broadcasters. According to the broadcast regulator’s prescription, the ads during live broadcast of a sporting event should be only during the breaks in the sporting action.

A clock hour measurement system, however, does not suit this genre of channels as live content is seasonal and limited to a specific period.

Entertainment TV networks have also objected against the capping of ad duration on their channels.

“It looks like Trai is linking digitisation to shrinkage of advertisement space. There is no logic in this and it is very untimely,” says the head of a broadcasting company on condition of anonymity.

Trai’s control in ad diet is something that TV viewers would, indeed, love to have. Broadcasters, however, feel that the best route to maturity is self-regulation in content and ad inventory management.

“Trai’s order is ridiculous. It is like putting the camel’s nose in the tent. Every independent player should decide on what course of action to take. Market forces know best how to play the balancing role,” says Times Television Network MD and CEO Sunil Lulla.

Videocon, Philips gear up for digitisation minus set-top box
 
Videocon and Philips are gearing up to usher in a new regime with new models that can receive and broadcast TV signals without a set-top box, though a debate over the preparedness of cable operators to migrate to digitisation from July 1 continues to rage.


The two companies are launching light-emitting diode (LED) TVs that will eliminate the need for a set-top box, a device otherwise necessary to receive digital signals in the new regime. This will be the second time that Videocon will take a shot at this; it had launched ‘Satellite TVs’ almost five years ago, but these didn’t work in the marketplace.

IndusInd Media moves Tdsat against Trai’s tariff order  

Insearchindia.com Team

(11 June 2012 11:59 pm)

 

MUMBAI/NEW DELHI: With barely a month remaining for the first phase of digitisation in the four metros, a big multi-system operator (MSO) has surprised everybody. Hinduja-controlled IndusInd Media and Communications Ltd (IMCL) has moved the Telecom Disputes Settlement and Appellate Tribunal (Tdsat) challenging Trai’s tariff order for digital addressable systems.

IMCL, the the media subsidiary company of Hinduja Ventures Ltd, has approached the sector tribunal with mainly three complaints. The MSO’s first grudge is that the tariff order does not have a common rate for content from broadcasters, leaving space for negotiations that will weigh against smaller cable networks. By keeping the rate open with a ceiling at 42 per cent of analogue cable, it will also favour vertical media companies that have a presence in both distribution and content.

The implication on this is that pure play cable companies and small-sized networks will have a higher price to pay for the content from broadcasters compared to MSOs who have a wider reach and are aligned with broadcasters.

The second grouse is that the provision of a la carte channels to consumers in Basic Service Tier (BST) is operationally cumbersome and can be a logistic nightmare.

The third contention is that creating a 500-channel capacity is not required across India. What we make out from this is that Chennai, for instance, would not need 500 channels as there is no appetite for Hindi content.

The matter was listed before the Tdsat on 11 June. Senior advocate S Ganesh appeared and stated that the government is considering extension of the deadline for digitisation. He requested for a hearing on 25 June. After some deliberation, the Tdsat agreed to list the matter on the same day (25 June).

Incidentally, the deadline for the first phase of digitisation in Mumbai, Delhi, Kolkata and Chennai is 30 June.

In a separate but related development, United Cable Operator’s Welfare Association, New Delhi, has moved Tdsat seeking better revenue share from the MSOs and an extension in date for digitisation. Trai has fixed revenue share of 45 per cent for free-to-air channels (FTA) and 35 per cent in case of pay channels. The Tdsat has also kept 25 June as the date for hearing.

Meanwhile, the Bombay High Court will hear on 15 June and the Delhi High Court on 20 June petitions by independent operators and local cable operators challenging the sunset dates set by the Government for switching off analogue cable in the metros.

The Information and Broadcasting minister Ambika Soni will meet the stakeholders to consider all points of view before any final decision and this would be conveyed to them after the Task Force meeting on 15 June.

Ram Kapoor continuous to be most loved character on Hindi GECs

Insearchindia.com Team

(5 June 2012 3:56 pm)  

Mumbai: Ram Kapoor, who is playing the lead role in Sony Entertainment Television's Bade Achhe Lagte Hain, continues to be the No. 1 favourite character among Hindi GEC viewers, according to the 11th edition of Characters India Loves (CIL) study.

CIL is the quarterly study, conducted by Ormax Media, the media research and consulting firm.

Bade Achhe Lagte Hain had launched last year in May and Kapoor entered the CIL charts its July-August 2011 track (edition eight) at rank No 5. Sakshi Tanwar (his co-star) entered at the No 10 rank. Kapoor is in the first position since CIL nine, while Tanwar ranks No 4 in this track.

The favourite non-fiction show characters are Kapil Sharma (Comedy Circus), Raghu and Rannvijay (MTV Roadies) at rank No. 1, 2 and 3 respectively.

The track was conducted among 3000+ respondents of 15-44 years age group in six cities - Mumbai, Delhi, Ahmedabad, Lucknow, Indore and Jalandhar.

TV18, Viacom18 form new JV  

Insearchindia.com Team

 

(5 June 2012 2:58 pm)

 

MUMBAI: TV18 and Viacom18 have formed a strategic joint venture, IndiaCast, which will distribute all channels and content of the two companies in India and abroad.

IndiaCast will also distribute Eenadu channels, post completion of acquisition by the TV18 group.

The Sun TV group channels and Disney Channels will also be distributed by IndiaCast in the Hindi Speaking Markets (HSM).

The new company will be headed by Anuj Gandhi as Group CEO, while Gaurav Gandhi is named COO.

TV18 and Viacom18 said that IndiaCast will create India’s first multi-platform ‘Content Asset Monetization’ entity. It is mandated to drive domestic and international channel distribution, placement services and content syndication for TV18, Viacom18, A+E Networks I TV18 and the Eenadu group, post completion of its acquisition by TV18.

"IndiaCast has been created with the aim to consolidate the distribution functions of both media houses to, reach newer markets and increase operational efficiencies," the two companies said.

IndiaCast will distribute all the 26 channels across all platforms, including Cable, DTH, IPTV, HITS and MMDS, and will offer a range of channels, from entertainment, kids, news, infotainment and music, to regional genres.

Network18 group CEO Sai Kumar said, “The Indian distribution market is throwing up ample opportunities and we are uniquely poised to make the most of this proposed alliance in an increasingly digitized environment. We have entrusted this mandate with Anuj, who brings with him impeccable leadership and rich experience across various formats.”

He further added, "Distribution is one of the high-growth areas in this industry and we’re excited to have a presence in this part of the business as well."

Viacom International Media Networks president and CEO Bob Bakish said, “As the Indian market continues to expand and evolve, the move to bring two media houses and proposed consolidation of Eenadu channels post acquisition into one distribution sales house presents an opportunity to accelerate our growth in the region, while increasing efficiencies of operation. We’re excited about the potential of IndiaCast and are looking forward to deepening our partnership with TV18 and Eenadu Group."

Anuj Gandhi added, "This is a momentous step forward and will create a paradigm shift in distribution and syndication. The new venture gives a clear impetus to digitalization. Also, it brings more channels and greater flexibility to consumers.”

According to him, "The Company will be the focal point not only for content and media distribution but also to drive the Content asset monetization business of TV18, Viacom18, A+E Networks I TV18 and Eenadu Group. The growth and way forward for media brands in the journey ahead is through Content Asset Monetization – taking content across geographies, platforms and mediums."