The Industry: Growth Story

TV penetration in India is about 61% and is expected to reach 72% by 2017, digitisation of cable TV in India is at an advanced stage with three phases already covered, direct-to-home (DTH) subscriptions are growing rapidly, driven by content innovation and product offerings.

TV being the aspirational product will also witness growth with rising incomes and evolving lifestyles, leading to higher demand for aspirational products and services.

The increased usage of 3G and 4G services coupled with a very teeming young population and portable devices to augment demand could also provide the desired boost to the sector.

Content consumption has experienced a sea change with the influx of new content creation methods and delivery strategies. Broadcasters and content providers across the globe now battle for viewers and look for innovative ways to monetize their content using latest end-to-end solutions to stay ahead of the curve.

Consumer expectations in the region increasingly present new challenges to provide more convenient and reliable access to content. There is a whole new emphasis on OTT and multiscreen solutions and the need to explore the entire value chain of non-linear broadcasting.

 

 

As per the latest FICCI-KPMG Report, the M&E industry in India is poised to grow at a CAGR of 14.3 per cent to Rs 2260 billion by 2020, led by advertising revenue, which is expected to grow to Rs 994 billion at a CAGR of 15.9 per cent.

Digital advertising continued its strong run with 38.2 per cent growth over 2014 as a mounting Internet user base and data usage were supplemented by increased spend allocation by marketers.

The report suggests that by 2020 the digital advertising market is likely to scale up to Rs 255 billion and contribute to 25.7 per cent of total advertising revenues. Increased share of mobile and video advertising as part of digital media is one of the things to look forward to.

 

 

 

Television is projected to grow at a rate of 15.1 CAGR between 2015- 2020, and is expected to touch Rs 1098 billion by 2020.

 

 

Out of this, Rs 364.5 billion would be contributed by advertising revenue and 703 billion would be from the subscription stable which will grow at a CAGR of 19 percent. The current figures for 2016 stands at Rs 210 billion for advertising and Rs 407 billion for subscriptions in 2016. The subscription revenue forecast is based on the premise that complete Digitization would have occurred as per the sunset time.

 

 

The number of TV households in India has increased to 175 million in 2015 implying a TV penetration of 62 percent. The number of C & S is estimated to reach 160 million including subscribers of Freedish. The figures are estimated to touch 200 million by 2020, from the current figure of 175 million in 2015.

52% of world’s population is expected to be online by 2020

According to the latest Cisco Visual Networking Index (VNI), over half of the world’s population (52 per cent) will be online by the end of the decade, marking yet another landmark in the digital era.

This will lead to the mass adoption of connected devices and online behaviour. With the report predicting that video will account for 81% of all internet traffic ushering in faster speeds, broadcasting sector can sense an opportunity in special designing of content at the handset/tablet or device level. The explosion of more users, more devices, and more connections means an exciting era for the content creators ready to be exploited.

Cloud technology changing TV ad landscape

Cloud technology is making its mark on economies and business models across multiple industries worldwide. Leveraging utility -- computing, storage and network bandwidth -- it enables flexible, boundless and globally coordinated operations. It also allows the timely scaling of infrastructure in tune with business needs, and helps in developing distribution models that let businesses reach their end-users directly.

Broadcasting as an industry is at the cusp of change. Internet has transformed into a viable and highly desirable content distribution infrastructure. This, in turn, is leading to tectonic shifts across the industry, enabling end-user distribution opportunities for broadcasters. It is critical to have comfort in choosing the cloud architecture that guarantees security of content. Multiple networks across the globe are leveraging this model to either augment their existing satellite feed with a few hours of local content in specific geographies, or to completely adopt an edge channel playout infrastructure.

As broadcasting responds to the existing market dynamics of global content access and to the Internet as a distribution platform, cloud computing infrastructure is the only option for TV networks and content owners to scale their business.

Geo Targeting of Advertisements

Geo targeting of ads, a phenomenon that was limited to internet advertising is now being successfully leveraged by the broadcasting sector to target a particular group in a specific geographical area. This becomes essential for the sector to monetize, for the advertisers to locally crop up ads to maximize the impact amongst the target audiences and is the flavor of the season in a fragmented and price sensitive market. For a heterogeneous and underpenetrated market like India, this ‘localized service’ will not only allow the broadcasting sector to effectively tap the ad inventory and target local advertisers but will also enable them to share the local pie of advertising. Currently geo targeting contributes a small portion of the TV advertising pie but it has a huge potential to change the dynamics of the advertising going forward.

Over the top (OTT) Video Market, India - Competition set to intensify with broadcasters, studios and telcos expanding their services

Frost & Sullivan’s market insight on the OTT video market in India finds that there are about 66 million unique connected video viewers in India every month, and about 1.3 million OTT paid video subscribers.

With increase in the use of smart devices in India, content owners and aggregators are using non-TV platforms to improve reach and generate revenues through subscription and advertisement. Success in OTT video distribution will depend on the ability to offer variety of content, new content, at a reasonable price and impeccable user experience.

While today a few broadcasters are driving services as well as viewership for OTT video, there is an expectation of more and more broadcasters to follow suit expanding their OTT services.

Among content types, there is an increasing demand for short duration video content. This is primarily attributable to the average low Internet speeds and changing preferences of many Indian viewers.