Indrani Sen: Global Media Gloom

13 Jul,2020

By Indrani Sen

 

We are all feeing the fallout of the Covid-19 crisis in our lives and livelihoods. According to a report by World Economic Forum, global poverty is expected to increase for the first time since the 1998 Asian Financial Crisis and unemployment rates are going to increase across developed as well as developing countries of the world.  No business sector is immune to the effects of the pandemic, but Media & Entertainment (M&E) Industry is among the few sectors which are likely to be affected more.

We have not yet seen any report on how the Indian M&E Industry has fared during the first two quarters of the current year by the agencies who regularly publish such reports annually.  There was a report “Media and entertainment post Covid-19: The best and worst of times” released by KPMG in April, 2020 which touched on the broad trends. Brand Equity reported in an article published on May 12, 2020 about the predictions by Crisil, the global analytics company, predicting a 16% decline in the revenue of Indian M&E Industry in FY 2021 (https://brandequity.economictimes.indiatimes.com/news/media/media-entertainment-sector-revenue-could-take-16-pc-hit-in-fy21-crisil/75687403).

 

While we wait patiently for mid-year reviews from FICCI-EY, KPMG, Group M, Pitch-Madison, etc, let us take a quick look at what has been happening around the globe. I read three reports in www.emarketer.com during last week and would like to share a few findings with our readers. On July 6, 2020, an update on Global Digital Ad Spending Q2 2020 was published which highlighted that “…every market we cover will experience a decline in ad spending except China. Google will see its first ever contraction in digital ad revenues, as search advertising will struggle compared with display….Overall ad spending will decline by 4.9% worldwide this year, a significant drop from last year’s 6.3% growth and from our pre-pandemic 2020 forecast of 7.0% growth” (https://www.emarketer.com/content/global-digital-ad-spending-update-q2-2020).

 

Source: eMarketer, June 2020

On July 8, 2020, there  was an article on UK predicting sharp declines across traditional media will drag total ad spend down by 7.5% in 20202 (https://www.emarketer.com/content/uk-sharp-declines-across-traditional-media-will-drag-total-ad-spend-down-by-7-5-2020?ecid=NL1009). The report also predicted recovery of the media industry in 2021 with a healthy growth rate of 15.3%.

On the same day, there was another article on US, predicting a substantial fall in TV Upfront ad spending in the 2020-2021. “US upfront TV ad spending will decline 1.4% in the 2019-2020 season to $20.28 billion, and drop a substantial 27.1% in the 2020-2021 season to $14.78 billion….”( https://www.emarketer.com/content/tv-upfront-ad-spending-will-fall-5-5-billion-2020-2021-season?ecid=NL1009). The UK economy is officially in a recession and there is a Huge uncertainty about investment in advertising by most advertisers.

It would have been wonderful if similar reports could have been generated for Indian media industry showing the advertising revenue of the first two quarters, January to March, 2020 and April to June 2020. In absence of such information, we can use the above global trends in making some estimates about the Indian Media industry.  It can be safely said that we are also going to see a decline not just in the growth rate, but also in the size of our media industry across traditional and digital platforms.

 

 

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