Advertisers to spend more on digital videos, TV to lose its share in upcoming time; here’s why

By: | Published: October 22, 2018 5:20 AM

Advertising spends on digital video platforms are tipped to grow by about 50% this year.

smart television sets, tv sets, entertainment industryPenetration of smart television sets and fixed-line broadband is relatively low. (Representation image)

Advertising spends on digital video platforms are tipped to grow by about 50% this year and the momentum should sustain over the next few years. Revenues from the OTT (Over the Top) market are expected to hit $3 billion over the next five years as viewers pick and choose content and watch at their convenience.
Today, monthly active digital video users are at about 250 million and daily active users at 180-200 million. That’s way smaller than the TV universe of 836 million people. But Kotak Institutional Equities analysts say the gap will narrow. Digital video, they said, is not far behind in terms of scale and reach in the top 10 cities compared with a single TV channel.

That will pull in the advertisers and digital video advertising will swell to $2.2 billion in five years or by 2023. Once it becomes possible to measure digital viewership just as television viewership is measured, TV will start losing the advertising share at a faster pace. Also, even though Indian consumers are loathe to pay for content subscription, revenues are expected to hit close to $1 billion. It’s not as though they will give up on TV — there won’t be the kind of cord-cutting seen in the West. That’s because video services cost more than Pay-TV bundles, priced at about `250-300 and offer lots of variety.

Also, the penetration of smart television sets and fixed-line broadband is relatively low.

To that extent, television will see subscribers being added, especially in the very small towns since penetration of TV to total households is 66%. But digital is catching up fast.

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