Mumbai: Several states have begun the unlock process, as the second wave of Covid-19 begins to ebb out after its catastrophic impact across sectors. Television and film shoots have resumed under strict restrictions, allowing the media and entertainment industry to emerge out of the crisis.
According to a recent report by Elara Capital, the second wave has submersed advertising spends softly versus 2020 levels. The first wave that hit last year defaced Q1FY21 ad revenues with decline of 61 per cent YoY(ex-IPL) for TV, 79 per cent for print, and 87 per cent for radio sectors, highlighted the report. The report has not factored the impact of the Indian Premier League (IPL).
"Nevertheless, we expect Q1FY22 tapering to diminish, versus FY20 base, at 25 per cent decline for TV, 45 per cent for print, and 35 per cent for radio. This is primarily because of the ongoing TV shoots led by a shift to alternate locations with minimal Covid impact on fresh content, state-level restrictions versus pan-India lock-down in 2020 and continued print-newspapers’ circulation and delivery, leaning on 2020 learnings," said the report, adding that vaccination pace should trigger a sharp ebb in new cases, which could uncork a faster unlock versus 2020 levels.
TV advertising to revive faster than print, radio
According to the report, TV advertising will reach pre-pandemic levels by FY2022 faster compared to print and radio. It estimates TV/digital advertising will grow 18.6 per cent (ex-IPL)/25 per cent YoY in FY22 respectively as verticals such as FMCG, e-commerce, auto, and telecom enjoy a larger share in these mediums. TV also remains the preferred medium for brand-building and favoured choice for advertisers as it has the widest reach among mediums.
While, it predicted tough times for print and radio which are likely to take a longer time, given higher exposure to local/SME advertising segments. Other verticals like cinema and out-of-home advertising (OOH) will also need more time to recuperate from the impact of the pandemic, it said.
"The shoots were not stalled completely for TV and films as several producers had shifted to alternate locations. Moreover, verticals like FMCG and e-commerce have a good presence for TV ad spends. It's also important to note that TV's has the least reliance on local ad spends compared to other mediums," said Elara Capital vice president and research analyst Karan Taurani.
Regional broadcasters and news genre to outshine others
According to the Elara Capital report, regional broadcasters are expected to outperform others in FY2022 when the industry returns to normalcy. Sports and news are the two genres with continued demand for live consumption, which should support their growth in the linear medium.
"Regional genres such as Marathi, Telugu, Tamil, Malayalam offer a largely untapped opportunity in advertising growth, as their transition to the digital medium should take longer versus Hindi and English genres. TV Today Network (TVTN) and Zee Entertainment (ZEEL) are our top picks within the listed broadcaster space given their presence in key genres and market share gain visibility," as per the report.
According to the report, the average time a person spends on television has risen drastically post the coronavirus lockdown, and the trend is still continuing. Moreover, social distancing norms may continue as a precautionary measure even after the lockdown, which could further elevate the TV viewing time.
