Ad spend on digital medium not at TV's cost: JM Financial - Chennai News

Chennai, Oct 6 (IANS) The advertisement in the digital medium is at the expense of other media and not the television (TV), states JM Financial Institutional Securities Ltd.

by IANS | Updated Oct 06, 2022

Ad spend on digital medium not at TV's cost: JM Financial - Chennai News

In a research report on the media and entertainment sector, JM Financial said: "Television has held on to its share of adspend while digital has gained at the expense of other media."

TV's wider reach and India's low ad-spend to gross domestic product (GDP) ratio mean significant headroom for both TV and digital ad-spend to grow.

At the minimum, TV ad-spend should grow in-line with India's nomina l GDP, as has been the case over the past decade, the report notes.

According to JM Financial, linear pay TV in India has been in the throes of a tempest over the past few years.

Even before the benefits of cable digitisation could kick in (read higher subscription revenues), the Telecom Regulatory Authority of India's (TRAI) new tariff order (NTO) threw a spanner in the works.

On the one hand, Over-the-top (OTT) streaming services started chipping away at pay-TV's top-of-the pyramid user base.

On the other hand, DD Freedish (free-to-air DTH) landgrabbed millions of lower-end subscribers.

These structural challenges were further exacerbated by pandemic-led demand slowdown and curtailed ad-spend by the FMCG sector.

As per the research report, growth in OTT, while expanding the overall video consumption, has not come at the expense of linear TV.

TV screen's dominance during prime time coupled with pay-TVa s low average revenue per user (ARPU) and wired broadband's lower penetration in India work against cord-cutting.

"Our checks suggest resolution of NTO impasse is around the corner. Broadcasters' withdrawal of general entertainment channels (GEC) fr om DD Freedish should help stem the migration to free TV," the report said.

Receding raw material cost inflation and buoyant festive demand could boost ad-revenue growth starting 2HFY23.

Disclaimer: This story is auto-aggregated by a computer program and has not been created or edited by FreshersLIVE.Publisher : IANS-Media

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