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Mindshare India says: Industry expected to growby 18%

By Campaign India Team |Jan 14, 2011And, for the first time, TV will zoom past print thats the biggie. Digital will jump, albeitfrom the current small base. The number of days of live cricket will be a big factor. Sosays Jai Lala, principal partner, The Exchange, and team

Topline

The Indian Advertising expenditure is expected to touch the 300 billion mark by end of 2011. TV isexpected to overtake Print to be the lead medium in India and will continue to grow at 26%. Print isexpected to have a moderate growth of 9% as compared to the other mediums. Digital is expected to begrowing at 35%. Though it will be the fastest growing medium, it will not grow at the expense of TV orPrint.

TV OUTSTRIPPING PRINT


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As per the IRS R3, TV penetration is 79% out of which 69% is Cable & Satellite. The real growth in TVadvertising is coming from these homes. TV penetration has grown by 5% whereas C&S has grown by7% over 2009-10.Some of the key factors for growth in Television are:

1. Competition and Growth expanding the market This has given rise to consolidation of operations. 2010witnessed the adverse impact of the growth on smaller players, who found it difficult to survive in thegiven scenario. The players which were able to weather the downturn are likely to look at enhancing theirmarket shares. This could help in the emergence and growth of players with superior product, marketing,distribution, technological and innovation capabilities. In turn, this is likely to aid the growth in the overallmarket size and reach for the industry. Mergers and acquisitions activity in this space over the next twoyears is expected to significantly increase along with the level of participation by private equity players.

2. Fragmentation leads into broadened horizons Entry of newer customers, players and regions are oncontinuous increase and are thereby creating wider inroads in other domains beyond their traditionalhome grounds.Also, players from other sectors like IT,Telecom, etc. have entered the industry. Foreignplayers are also looking at increasing investments in their Indian portfolios.

3. Regionalisation fuels market growth and allows convergence of medium Growing regionalisation is alsohelping some regional players to become strong by tapping newer markets. Also, media players arelooking at leveraging their content across platforms leading to the emergence of conglomerates.

4. Cricket has become a regular phenomenon with more than 150 days of India playing cricket. 2011 will, for

the first time, see the World Cup & IPL in the same season The demand for these tournaments has beenhigh with each of them locking in the sponsors well before 2011. With both expecting to garner almost1500 crores, it is becoming a separate genre on its own. Today, advertising just on-air on cricket isestimated to be in the region of Rs.1100 Rs.1300 crore. Next year, it is estimated to grow to Rs. 2200crore. It continues to remain the single most entertainers across the nation.


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5. Newer markets are being tapped by media.Regionalisation not only includes all the four South markets,but now additionally we can include West Bengal and Maharashtra. Media plans no longer work on theregular channel spill-over. Markets like UP, Punjab are seeing the advent of regional specific channelssuch as Mahua TV.

6. Embracing Digitisation: Availability and penetration of newer distribution platforms like Digital

Cable, DTH and IPTV.The industry has benefited from digitisation and the growth is likely to continue in


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the years to come. Currently, DTH is growing at the rate of 30% and is expected to reach a base inexcess of 30mn household by the end of 2011.

The digitisation of TV platforms has resulted in:

a. better technology and picture and sound quality for viewers

b. more transparent distribution of revenues for stakeholders in the value chain and more bandwidthbecoming available to broadcasters, giving them opportunity to provide value-added services.


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All this has led to growth in advertising on DTH by:

a. availability of newer avenues

b. possibility of more target specific advertising

c. interactive content/ gaming/ sales!

d. HD Feeds being available

e. language options

f. the ability to record and view live content

7. More is less : Content hunger grows (Tentpoles and Reality shows): New Seasons of Bigg Boss, newerFormats like Master Chef, Celeberity programmes, Blockbuster Movies, Award shows, DanceProgrammes, etc., etc. the list is just increasing. Approximately 20% of total programming time isdevoted to Reality shows, up from 16% in 2010. These shows have high input costs, which are mainlydue to:

a. Celebrities

b. Outdoor Shoots

c. Expensive Production

d. High Marketing Costs


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8. Niche Fragmentation and the emergence of the Long Tail Today channels are available for our specificneeds. If you have interest in, say, Gadgets, Health, Food, Cars, etc., there is a TV Channel that catesr toyour specific needs. Each channel will cater to a specific Target Audience with a specific profile. 2011-12will witness the emergence of the Long Tail.


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Read Vikram Sakhuja's views on what's in store in 2011 in his Mindshare India Predictions 2011piece here

Read R Gowthaman's views on what's in store in 2011 in his Mindshare India Predictions 2011

piece here

Read M A Parthasarthy's views on what's in store in 2011 in his Mindshare India Predictions 2011piece here

Read Prasanth Kumar's views on what's in store in 2011 in his Mindshare India Predictions 2011piecehere

Read Alok Sinha's views on what's in store in 2011 in his Mindshare India Predictions 2011 piece here

PRINT THE NEW NORMAL

After a slowdown in 2009, Print in 2010 grew by 26%. In 2011 it is expected to grow at 9%(Jan Dec) tobring the Print AdEx to Rs. 13211 crores With these growth figures Print will be back to the similar levelsof 2007 -08.

Print growth is driven largely by the dailies. The volume growth came from almost all sectors withEducation and Services being the leading categories.


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Key Trends which will affect Print Growth in 2011 are:

1. Expansion: Publication groups are expanding vertically into newer markets. For example, The Times ofIndia has expanded into Chennai and is now looking to enter Kerela, either through acquisition or newlaunches. Secondly, publications are horizontally expanding into other genres and verticals such asFinance, Health, Real Estate etc.

2.

Diversification: Radio, Digital, TV , Events are some of the areas where Publication groups areexpanding and are now offering 360 degree solutions under one roof

3. Digital The Comscore Plan Metrix report shows that, in developed markets like US, Print is losing shareyear on year at the rate of 11% to digital. This trend has not caught on in India. After a slow 2009, Printhas bounced back with an estimated growth of 9% in 2011. However, the challenge is that readers willspend lesser time on the medium and overall readership will continue to sufferand& ultimately it will followthe global trend.

CINEMA GOING DIGITAL


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Year 2010, was a good year for cinema advertising as it clocked 121 Cr. (2009 which had a cinema strikefor 3 months). Cinema is expected to grow @ 16% in 2011 mainly due to:

1. Total Digital screens cover approx. one-third of the total screens in India (where advertising is done) i.e.3000 screens. Also, movies being released on an average have 60% dependence on digital screens Vsprint screens which adds to saving costs for the distributor.

2.Better movie titles with top stars in 2011 like Ra1 (Shahrukh Khan), Don2 (Shahrukh Khan), Sultan(Rajnikanth), Untitled Name Aaamir Khan

3. Movies will be releasing during the 90 days of cricket in 2011 (like the World Cup, IPL4, etc happeningin India) unlike the last year where there were absolutely no releases during IPL

4. Multiplex screens which comprise of approx 1300 screens will see aa 15% growth to 1500 screens in2011.

5. Multiplex screens to open in tier 2 & 3 towns. Metros to witness more Gold Class theatres like PVR.

Read Vikram Sakhuja's views on what's in store in 2011 in his Mindshare India Predictions 2011piece here

Read R Gowthaman's views on what's in store in 2011 in his Mindshare India Predictions 2011piecehereRead M A Parthasarthy's views on what's in store in 2011 in his Mindshare India Predictions 2011piece here


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Read Prasanth Kumar's views on what's in store in 2011 in his Mindshare India Predictions 2011piecehere

Read Alok Sinha's views on what's in store in 2011 in his Mindshare India Predictions 2011 piece here

RADIO THE BUZZ MEDIUM

1. The Radio Industry in 2010 is estimated to close at Rs. 1325 crore (approx.); estimated growth of 25%by 2011 Rs.1653 crore . (approx).

2. Phase III bid announcement expected soon. 700+ new licenses in 235+ cities to be open for bid. Apartfrom syndicated news / current affairs broadcast, multiple frequency and increase in FDI limits could bethe icing on the cake.

3. International radio stations have begun syndicating content to Indian FM stations. This developmentwill:

a. Help in dealing with the lack of celebrity quotient for smaller players

b. Help in cutting costs especially in the late time bands in smaller markets

c. Increasing the risk taking ability to try new formats in the smaller markets and smaller players

d. Help as an image booster


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Some international radiocasters are believed to be attempting to lure the national FM players with panIndia presence through high value deals

4. Radio is also being used as a buzz medium. With a lot of clients, radio seems to fit in as the bestmedium for activation and instant amplification.

5. Top 5 metros still account for approx 50% of ad revenues; advertisers yet to realize the potential of thetier 2 & 3 cities (


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2011 will be the era of the digitisation of media planning. Digital, from being a niche medium, will startbeing the mainstay medium for categories such as Retail, Auto, Insurance, Service Industry and FMCG.We expect digital to grow by 35% (albeit from a smaller base). With Rs. 1573crore, digitals contribution tothe AdEx will be similar to that of Radio. Googles search volume has increased by 700% within the last 2years.Facebook has started operations in India and Linkedin has already tied up with advertisers suchVolkswagen, Taj Hotels and more.

Some key observations /trends in this direction are:

1. Flirtatious to a serious relationship: Every Advertiser in the country in one way or another has beenflirting with Digital. Our estimates indicate that approximately 1-2% of the marketing budget is towardsDigital. (This number would vary from Advertiser to Advertiser & across Categories). Increasing usage &time spent is making this medium unavoidable & if we were to take any indications from Global trendsespecially the Forrester report in the US time spent on Digital is higher than Television. Categories like IT/ITES, FMCG, Telecom have already increased their contribution to Digital and competing heavily withOnline Companies, BFSI & Travel. Contribution expected to cross 10% for certain brands. The onlineVideo market will compliment the TV spends from Saliency and rich media presence will grow significantlyfrom Impact perspective

2. Cricket & Blockbusters being streamed Live on Digital. A trend started during IPL3 where the matcheswere relayed live on You Tube. Approximately 55 million channel views and 22 million unique visitorswatched cricket or sampled the highlights on YouTube. The WC 2011 and IPL4 these numbers will besurpassed. In the future we will see more and more movies being released on the Digital medium i.e. PC

or Mobile. This has provided advertisers an opportunity to reach out to the youth & the upscale audienceon the go.

3. Mobile is another area which will drive Digital medium. With 700 mill mobile phone connections ofwhich 20% are smart phones mobile is one medium which will lead the internet growth in our country.Digital music distribution is mainly restricted to the telecom segment, through ring tones and caller ringback tunes. With increase in mobile and broadband penetration and expected 3G rollout, market for otherdigital distribution platforms such as full track downloads, streaming music and subscriptions etc might


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