Indrani Sen: The Future of TV

09 Oct,2017

By Indrani Sen

 

Around the world, media experts are engaged in debates on what is going to be the future of TV in the Digital Age? While in India, the future of TV advertising seems to be secured for at least another decade based on various projections of the growth of Media & Entertainment Industry, we cannot ignore the fact that the rate of growth of TV viewership is declining. At the same time, the rise of on demand video and various OTT platforms along with a plethora of online streaming services are challenging the traditional television revenue model.

 

Are we also heading towards a scenario when Indians will be consuming more and more of television or video content and watching less of live TV? In such a situation, TV ad revenues will start shrinking. As it stands now, we are beginning to see some of the tell-tale signs with content marketing writing the scripts for native advertising/sponsored content on TV. Smart Indian advertisers are experimenting with content marketing and exploring the scope of becoming publishers.

 

In US, the revenue from native advertising is expected to grow from $ 17 billion in 2016 to $36 billion in 2021 (http://www.businessinsider.com/native-advertising-is-about-to-take-over-television-2016-5). The TV channels are reducing the commercial time per hour with the expectation that fewer minutes would be better targeted. Viacom has reduced per hour commercials by four minutes (http://adage.com/article/media/future-tv-advertising /303565). Apart from targeted advertising, advertisers as well as networks are considering sponsored content and product placements.

 

While most of the media experts are predicting a decline in linear TV advertising, an article in www.mediavillage.com has propagated an interesting view by arguing that TV advertising will be growing at the expense of below-the-line promotion. Jack Myers, the publisher of MediaVillage.com, who has been tracking and forecasting media and marketing budgets through this decade, has found a shift from “below-the-line promotional budgets” to “above-the-line advertising budget”, in particular to TV advertising budget due to demand of advertisers for higher accountability driven by digital media and performance based metrics. Omar Sheikh, US Media / Cable Analyst from Credit Suisse in the same article has supported the views of Myers by arguing that TV will continue to grow even if the digital share in the advertising pie doubles (https://www.mediavillage.com/article/credit-suisse-the-future-of-tv-advertising-is-below-the-line/).

 

However, the above trend of transferring the “below-the-line promotion” budgets to “above-the-line advertising” budgets may not happen in India as our advertisers are used to operating in a media dark environment and would not be perturbed by lack of accountability of the promotional budgets. While BARC has stabilised the audience research for TV, print and radio are still struggling with their audience research. However, Indian live TV shows have started facing challenges from on demand video and various OTT platforms, which has raised issues about the future of TV /Total Video measurement. BARC is currently gearing up for the launch of “Ekam”, its digital viewership measurement venture. Around the world, media researchers are exploring various methods for TV / Total Video measurement which clearly indicate that viewing of TV and on demand videos etc. are going to coexist in future, albeit with changes in consumer preference for content. The revenue model of TV may change, but TV revenue will continue to enjoy the highest share in the Indian advertising pie for many more years.

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