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Guest Column: 5 Trends lending the Power to Believe in Indian TV industry

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The four pillars influencing the M&E sector are: Infrastructure, Government policies, Devices and Digital Technologies. Growing consumer demand is inviting policy support driving innovation and resulting in increasing investments in the sector.

There are 5 identifiable trends which lend television industry the power to dream and the analysts the power to believe.  These are:

1. Positive Government Directives

2. Surge in Digital consumption

3. Consolidation the new buzzword

4. Rural India beckons

5. Data undergirds everything

1. Positive Government Directives

The M&E industry is expected to leap forward after a slow 2016. 2016 experienced two large government directives which affected the TV industry in negative ways for the short term. 

Demonetisation came as a bolt from the blue and shaved off around 2% of ad revenues for the TV industry. 

GST as another one to rationalise taxation across the M&E industry. While challenges abound initially, overall M&E industry is however a beneficiary for two reasons:

• Availability of input credits across the board and inclusion of entertainment tax within the ambit of GST are both positive developments.

• Formalisation of economy and widening of tax base will result in overall positive impact on GDP and thereby resultant positive impact on ad spends.

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Both Demonetisation and GST will however give a further boost to GDP in the long run. Over and above these, Cable digitisation is already creating a paradigm shift as a game changer with ARPU on an uptrend post digitisation.  Even as it is delayed, the same is expected to be completed in 2017.  

2. Surge in Digital Consumption 

The surge in digital consumption is compelling existing players to take a hard look at their business models.  OTT VOD is emerging as a parallel platform along with TV broadcast.   Entry of Netflix, Amazon Prime as global leaders; VOOT, OZEE, Hotstar and Sony Liv as broadcast network backed platforms; and Jio Apps and Airtel Wynk as telecom companies backed platforms joining the game with syndicated content offerings. 

Development of a sustainable digital ecosystem will be required in the long run to address credible measurement and limited monetisation models.

3. Consolidation the new buzzword

Consolidation is gaining momentum across the value chain.  Even as there have been less number of transactions, the good news is that they are of higher value.  The three biggest ones are Dish TV and Videocon merger, Ten Sports acquisition by Sony and Reliance ADAG TV broadcast business takeover by Zee. 

4. Rural India beckons

Post commencement of rural measurement by BARC, the big story has bene that of the high levels of TV viewing habits of rural India. This has resulted in higher advertising spending in rural HSMs, introduction of new FTA channels and realignment of content focus for mass tastes.

5. Data undergirds everything

Along with the data dividends of digital becoming visible, BARC viewership data has led to consumer analytics becoming indispensable thereby leading to changes in content, distribution and ad strategies.

Conclusion

The long-term future for the television industry is very robust with CAGR projections above 14% for both segments of ad revenues and subscription revenues. The Indian Media & Entertainment industry is on the ball with Television leading the charge. 

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(Piyush Sharma, a global tech, media and entrepreneurial leader, created the successful foray of Zee Entertainment in India and globally under the ‘Living’ brand. The views expressed here are of the writer’s and Indiantelevision.com may not subscribe to them.)

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