1. In Perspective: TV penetration – Of advertisers and local sensibilities

In Perspective: TV penetration – Of advertisers and local sensibilities

In the world’s largest democracy, nearly 60% of the population does not speak Hindi. A huge chunk of this demographic wants to know what's happening locally and likes to be entertained in their mother tongue. As TV penetration and power availability grow in rural areas, we see a decidedly regional tilt amidst TV viewing behaviour.

By: | New Delhi | Published: June 21, 2016 6:06 AM

Twenty-three official languages and more than 700 dialects place India right at the top of the international linguistic diversity index (LDI). Evaluating this consumer diversity in terms of televised outreach, we have almost 885 channels licensed to operate as of April 2016 according to the Ministry of Information and Broadcasting (discounting the 250+ waitlisted channels).

In the world’s largest democracy, nearly 60% of the population does not speak Hindi. A huge chunk of this demographic wants to know what’s happening locally and likes to be entertained in their mother tongue. As TV penetration and power availability grow in rural areas, we see a decidedly regional tilt amidst TV viewing behaviour.

This realisation has led to most national broadcasters such as Star, Colors, Zee and Viacom18 to either launch or take over and rebrand existing regional TV channels. While one objective of these national players is to capture regional audiences, the other is to offer their advertisers a better mix of national and regional channels, and to bump ad-revenues by attracting big regional advertisers who had hitherto remained distant from TV spends.

However, when one looks at the ad pie in India, only 38% ad revenue from TV goes to regional channels. Today, national channels are able to charge a high premium per viewer compared to regional channels due to the mass reach and consequent credibility that such networks provide. As the quality of programming and viewership of regional channels increase, we might see premium pricing becoming a norm among regional networks too.

It is obvious that having multiple TV channels across genres including regional languages, creates an advantage for network sales at both distribution and advertisement levels.

Regional channels have garnered an appreciable amount of viewership, and in turn, this trend has led to the increased penetration of TV in rural and urban markets.

How has this helped advertisers?

a) They can now reach their target audience at a muchlower cost per thousand impressions, when compared to print or national channels

b) They can reach audiences in rural markets

c) They get to focus on markets of their choice and not necessarily be dependent on national television to deliver audiences in regional markets, which would turn out to be a cost-prohibitive proposition.

Additionally, it positions SME advertisers on a level playing field, given that there are considerably lower advertising rates on regional channels.

Many of the existing large TV networks are launching new channels, as the cost of launching them has gone down and the potential to add revenue streams, is high. This enables adequate leverage with advertisers and distribution platforms.

Between March 2014 and February 2016, the share of regional channels rose from 35.04% to 38.46%. And the proof of the pudding is in the eating: we have national brands like GlaxoSmithKline (makers of Horlicks), Amazon and P&G that have increased their ad spends on regional media.

The author is co-founder, Amagi Media Labs

Calculate your income tax post budget 2018 through this Income Tax Calculator, get latest news on Budget 2018 and Auto Expo 2018. Like us on Facebook and follow us on Twitter.

  1. No Comments.

Go to Top