Coronavirus Impact: Ad expenditure to decline by 50-55% on TV between April-June 2020

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Updated: Mar 31, 2020 3:23 PM

Compared to this, TV had clocked ad revenue worth Rs 7,500 crore in Q1,FY20

Coronavirus Impact on Television Industry, Impact of Coronavirus on TV IndustryAccording to the latest FICCI-EY report, TV industry was valued at Rs 78,800 crore in 2019.

As the novel Coronavirus continues to wreak havoc around the world, television is one such industry which is currently under its grip, besides other sectors. According to industry estimates, advertising expenditure on television is expected to decline 50%- 55% to anywhere between Rs 3,750 crore – Rs 4,125 crore between April-June, that is Q1 FY2021 – if the lockdown continues. Compared to this, TV had clocked ad revenue worth Rs 7,500 crore in Q1,FY20 – this includes ad revenue from the Indian Premier League (IPL), ICC Cricket World Cup, both General Election and State Elections, among others. “The IPL is a key revenue earning property every year. As it currently stands cancelled, it has resulted in revenue loss of about Rs 2,5000 crore – Rs 3,000 crore. Unlike last year, there is no Cricket World Cup or elections which would have resulted into large ad spends,” a senior media planner said on condition of anonymity. 

According to the latest FICCI-EY report, TV industry was valued at Rs 78,800 crore in 2019. The industry earned Rs 32,000 crore from advertising, and Rs 46,800 crore as subscription revenue.  According to industry estimates, IPL raked in advertising revenue worth Rs 2,500 crore while elections generated revenue in the range of Rs 1,000 crore – Rs 1,500 crore, among others. Nonetheless, this year the government is expected to spend about Rs 500 crore in advertising to create awareness on the adverse impact of the novel Coronavirus. “Many companies have paused their marketing for now, giving the fact that consumers are not going out amidst lockdown. There are a lot of categories which would like to leverage the increase in eyeballs on television. Categories such as healthcare and nutrition, might up its ad spends to get better brand presence on TV,” Lloyd Mathias, angel investor, marketing and business strategist, said.  

One of the reasons behind the decline in advertising revenue is largely due to a drying pipeline of fresh content. With all the shoots currently stalled, broadcasters are expected to run out of original content soon. As a result, either old content will return or broadcasters might borrow content from video streaming platforms. Case in point is public broadcaster Prasar Bharti is now airing a clutch of old shows such as Mahabharat, Ramayana, besides Circus, and Byomkesh Bakshi. Moreover, Star Sports too is airing old content such as highlights of 50 of the best matches of the VIVO IPL from the previous seasons, among others. According to Ashish Pherwani, partner and media and entertainment leader, EY India, in addition to bringing back old shows, broadcasters might also look at bringing some of its content from video streaming platforms.

An email sent to all the leading broadcasters including Star India – a subsidiary of The Walt Disney Company India and Viacom18, among others, did not elicit any response till the time of publishing the story. 

Secondly, some of the categories such as travel and tourism, auto, two-wheeler, retail, jewellery are expected to completely cut down on advertising. Even e-commerce which is usually a heavy spender on TV is expected to reduce its spends by 50%.  “Still waiting to hear on IPL’s decision, so excluding that, there are some categories which are active even in these circumstances. Brands on hygiene/sanitization such as Dettol from Reckitt, Godrej Protekt, Lifebuoy are active and can be seen frequently’ Also Oppo and Mutual Funds brand are still active,” Sujata Dwibedy, group trading director, Amplifi, Dentsu Aegis Network India, said. 

 

CategoriesAd Revenue
FMCGRs 7,000 – Rs 8,000 crore
E-commerceRs 2,000 – Rs 2,500 crore
BeverageRs 300 crore
Two Wheeler/ Retail/ JewelleryRs 400 crore

Read Also: Coronavirus Impact: How ad industry is headed for a tough time

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