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This blog is well researched, and data is gathered from reliable sources and simplified for better understanding. #ThinkWithNiche
The television industry has been the largest contributor to the Media & Entertainment sector's revenue for several years.It has had a 46 percent average share during the last five years (2014-2019). Furthermore, for the next five years, it is predicted to remain at the same level.
Opportunities
1. Strong Revenue Growth
The CAGR (Combined aggregate growth rate) for the television sector is predicted to be 12.8 percent. This is due to the fact that the present percentage of TV homes is /0 percent, and there is plenty of space for expansion. Additionally, advertising is likely to grow as a result of increased domestic consumption.
2. Growing Regional Viewership
Regional viewership is driving the growth across India. The overall share of regional viewership increased from 41% in 2015 to 47% in 2019, and this is expected to grow further.
3. Affordable Pricing
Mature markets like the USA are witnessing an increasing shift of viewers from IV to digital-only consumption on the back of price arbitrage and strong digital infrastructure. In India, TV offers a strong proposition in terms of price and content along with continued headroom for growth and a lack of in-depth digital infrastructure
4. Viewership Measurement
With the constant improvement in viewership measurement, targeted advertising will maximize the benefit for broadcasters
5. TV Is The First Preference Of Advertisers
TV is the first love of FMCG players, the biggest advertising category when it comes to reaching. Categories such as smartphones, travel, and even OTT platforms use TV to drive their growth.
6. TRAl's New Tariff Order
The New Tariff Order is a game-changer as it removes the ambiguity related to the pricing of channels and makes the system more transparent. A channel would be available at the same price across the country. Under the new system, consumers will be able to select the channel based on their preference; hence, the content will play a pivotal role and take precedence. There will be parity between the costs of small distribution platforms and big distribution platforms as the channel owners can charge the same price from all distributors. Currently, bigger networks get channels at lower rates due to their market power. Distributors' business model will be de-risked as they will receive a stable income.
Threats
1. Fast-Paced Growth In Online Video
The biggest threat to the TV industry comes from the growth in online viewership. For example, 291 million people viewed videos online in September 2019, a growth of 62% over 2017. This is expected to reach 369 million by 2021, driven by rapidly increasing mobile penetration, increasing internet speeds, the advent of 4G, and falling data charges. Also, the average time spent online has increased from 1.2 hours in 2017 to 1.7 hours in 2019.
2. Penetration Of Smart Devices
Smartphone penetration in India which was 24% in 2014 is expected to reach 59% by 2020. This change will be instrumental in shifting media formats from broadcast to digital. Viewers will no longer want a solely passive experience with a TV program. Instead, they would want to watch catch-up TV, engage with content on different devices or
talk about their experiences on social media sites. They would want different experiences on each platform, different flavors of content and they would want it all on their personal schedules.
3. Entry Of Social Media Players In Video Space
Facebook launched Facebook Watch in India in 2018, a video-on-demand service offering personalized recommendations for videos to watch as well as categorized content bundles depending on factors such as popularity and social media engagement. The broadcasters can expect a similar challenge to come from other social media players.
4. Single TV Homes
In India, single TV households account for more than 96 percent of cable and satellite households. This has limited content consumption on television to a few select programmes picked by the household decision-maker, forcing the younger population to turn to non-linear media for content consumption. Some broadcasters, on the other hand, have created digital platforms to mitigate the risks posed by OTT platforms.
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