2004: What the media sector has in store

For the third-largest economy in Asia, 2003 was a significant year. The second quarter GDP was up to 8.4 per cent from 5.7 per cent in the first quarter, and important sectors such as agriculture, business, finance, manufacturing, real estate, insurance, social, community and personal services posted impressive figures during the quarter ended September 30, 2003.

The stock markets showed a sustained bull run with foreign institutional investors pumping in more than $7 billion in 2003. Advertiser sentiment was predictably upbeat on the back of improved corporate performance, stronger economic fundamentals and increased consumer spending. The advertising industry saw growth of 10 per cent (some of course contend it fell just short of double-digit growth) with the sector poised to grow even further in the New Year.

Media companies too were caught in the vortex of activity with their scrips performing wonders on the bourses and the feel good factor raising buoyancy levels within organisations. "At a macro level, growth registered in media, that is, print, TV, radio, cinema, outdoor and Internet, was around 7 to 12 per cent in 2003," says Partho Ghosh, vice-president, The Media Edge. "With the kind of sentiment prevalent in the marketplace, 2004 should see growth over 12 per cent in media," he says.

Indeed, with sentiment running high and the Bombay Stock Exchange or BSE Sensex having crossed the 6,000-mark on January 2, 2004, media heads are decidedly upbeat about the New Year. "The year 2004 should be promising for news and sports channels," says Raj Nayak, CEO, NDTV Media Ltd. "The general elections are to be held this year besides the annual Budget, which is an important event for news channels. Further, India will be touring Pakistan in the month of March, which is significant for sports channels," he adds.

According to Meenakshi Madhvani, head of India's first media audit firm Spatial Access Solutions, 2004 will see advertisers driving the "value proposition" as the obsession with rates come down and broadcasters look increasingly at subscription revenues rather than advertising revenues. "This shift will make increased demands on agencies with the result that they will get more responsive," she adds.

Conditional access will continue as an experiment, she points out, with lack of unity on the subject. "I don't see all constituents becoming one on the subject of CAS," she says. "Nor will it really impact viewers and advertisers," she adds.

Rohinton Maloo, managing director, Cutting Edge Media, on the other hand, would like to believe that "CAS in its present form will not happen, while conditional access will". "Conditional access can exist in a number of forms. However, I don't think it will happen in the form that the Government of India wishes to implement it," he says.

On the subject of DTH (direct-to-home), Maloo is of the opinion that it is naïve of a broadcaster to kick off DTH at this point in time. "The broadcast business is like a restaurant, while DTH is like a hotel, " he says. "Just because you are a good restaurateur, it needn't have to be that you are a great hotelier. DTH is a highly capital-intensive industry, which requires a different set of core competencies," he opines.

Madhvani, meanwhile, asserts that DTH will emerge as a force to reckon with, with a quarter of a million to half a million signing up for the service by the end of 2004. "These subscribers will form a significant minority and the challenge for advertisers of high-end products will be how to communicate with this segment," she says.

In the print sector, 2004 will see the spotlight shifting to the language press, as it comes into its own. "Despite having significantly smaller readership, English-language publications have traditionally notched up higher revenues as compared to their language counterparts," says Madhvani. But, with the English-language press not growing at the rate at which the language press is, both in terms of readership and revenue, I think the focus will shift to the latter," she adds.

On the subject of FDI, Madhvani feels foreign players will evince interest in language brands. "Language is not a barrier," she says. "Publishing is publishing at the end of the day."

Indeed, small and medium level players in the print sector are waking up to the need to become as "process-driven" as their counterparts in the manufacturing sector. "In most media organisations, it is the second generation that has taken charge," says Jaisurya Das, ex-TOI hand and currently MD and principal consultant of Pune-based Xanadu Consulting Group. "Most of them have no exposure to print, which means that they bring totally new ideas into the business," he adds.

In terms of spends, print will see an overall growth rate of about 10-12 per cent, similar to the one experienced last year. "The year 2003 closed on a positive note for most publishers," says Das. Advertising has been growing at about 10-12 per cent, which should continue into the New Year as well."

Categories driving growth in print include education, real estate and travel. "As affluence levels increase and more airlines enter the country, travel spends should go up," says Das. "Parallely, telecom spends will come down," he predicts.

The year 2004 could be significant for city and locality-specific supplements and papers. "Smaller retailers are fighting a bitter war with the big retail chains," says Das. "These small-time retailers are getting active, which means that spend levels in geographically-restricted papers and supplements will go up," he adds. © 2004 agencyfaqs!