​​​
  1. FTA channels’ ad spend growth to push Hindi GEC revenues

FTA channels’ ad spend growth to push Hindi GEC revenues

With the advertising spend on free-to-air (FTA) channels in the Hindi GEC space growing at a faster rate of 16%, its contribution to the overall revenue is expected to increase to 25% — at about Rs 1,400 crore in 2018.

By: | New Delhi | Updated: March 7, 2018 3:41 PM
FTA channels,FTA channels ad, Hindi GEC space, Saurabh Yagnik, Sony Pictures Networks, Sony Pal  Broadcasters believe that what had started as a way to earn incremental revenue, is now an area of concern with FTA channels cannabalising the growth of paid GECs as more and more advertisers shift their spends to FTA. (IE)

With the advertising spend on free-to-air (FTA) channels in the Hindi GEC space growing at a faster rate of 16%, its contribution to the overall revenue is expected to increase to 25% — at about Rs 1,400 crore in 2018. Compared to this in 2018, ad spend on Hindi GEC is expected to grow 13%, to reach Rs 6,200-6,800 crore. According to Pitch Madison report, in 2017, ad revenue generated by Hindi GECs on TV stood in the range of Rs 5,500-6,000 crore. Of this, FTA channels accounted for 20% of the spend — about `1,200 crore.

Broadcasters believe that what had started as a way to earn incremental revenue, is now an area of concern with FTA channels cannabalising the growth of paid GECs as more and more advertisers shift their spends to FTA. “Media planners prefer to buy advertising inventory on FTA channels against paid Hindi GECs, as the ad rates on FTA channels are lesser. Thus, broadcasters need to be careful while selling advertising inventory, so that a balance is maintained,” Saurabh Yagnik, EVP, monetisation strategy and consumer insights, Sony Pictures Networks, said.

Ashish Sehgal, COO, Zee Unimedia, said while there is a room for growth in advertising revenue on both FTA and paid Hindi channels if in the future the spend on paid GECs slows down from the expected 13% and FTA channels continue to grow at faster pace, it can hurt the business. While a ten-second ad spot on a Hindi GEC during prime-time is priced at around Rs 80,000-1 lakh, on a Hindi FTA channel it would cost between Rs 20,000-30,000.

As per the EY report, the success of channels such as Zee Anmol with ad revenues of about Rs 80 crore, besides Sony Pal with ad revenues of Rs 110 crore, among others, has led to broadcasters launching more FTA channels but with original content. According to industry estimates, the cost of launching a paid Hindi GEC with original content is about Rs 600 crore, when compared with the launch of a FTA channel which requires half at about Rs 300 crore.

Media planners point out that the next level of growth in ad spend in case of FTA channels is going to come from launch of new channels packed with original content. “The only way to create more advertising inventory is by launching new channels. The increase in ad inventory will allow broadcasters to increase their rates, further leading to jump in revenues,” Himanka Das, CEO, Vizeum said.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Go to Top