- On prime time shows, over 60% of co-viewing instances are where families watch TV together.
- TV in India has an unrivaled position as a family entertainment platform both in terms of price and reach, said one
- grow in
OTThas expanded overall video consumption without sacrificing linear tv.
- Urban youth who have access to wired broadband and tend to watch international content are likely to shift exclusively to
OTT platformsthe report said.
- Low cost of pay TV and low penetration of broadband over cable can prevent cable severing, the report said.
For families across India, prime time is usually spent in front of their television sets. According to JM Financial, prime time shows have more than 60% of “co-viewing instances” — and this is what will keep TVs running in India despite the proliferation of OTT, according to the report.
In addition to the fact that 98% of Indian homes have only one TV, a low proliferation of wired broadband also prevents people from making the total switch to OTT alone. While India has more than 650 million mobile broadband users, it has only 18 million wired broadband connections.
“Note, these 18 million connections also include small and medium-sized businesses, leaving even lower connections for households. We believe these trends and facts suggest that TV screens – and linear TV – will remain the mainstay of India’s family entertainment,” the report said.
‘In the eye of the storm’.
It also said the growth in OTT has expanded overall video consumption and not at the expense of linear TV.
Pay TV vs OTT vs Free Dish
The cost of pay TV – that’s watching TV on a subscription basis – is about $3 per month. In comparison, OTT subscription costs are at least 2.5 times higher than pay TV. “TV in India has an unrivaled position as a family entertainment platform, both in price and reach,” the report said.
However, in the US, where subscribers are moving from pay TV to OTT, it’s quite the opposite. While pay TV costs about $100 per month, Netflix subscriptions start at $10 per month. In addition, wired broadband penetration in the US is 95%.
Despite the fundamentals that support linear TV’s long-term prospects, it is being damaged by many factors. The usual suspect is OTT, which has taken the top-of-the-pyramid user base away from pay TV, which are the top spenders. This is reflected in the 6% decline in pay TV subscribers between 2019 and 2021.
Over the same period, broadcasters’ subscription revenues were down 13% and advertising revenues were down 12% as well – plagued by lower FMCG ad spend and pandemic-induced issues. FMCG contributes to 50% of TV ad spend. At the other end of the spectrum is the government’s DD Free Dish, a free-to-air
Against cutting cords
However, the JM Financial report believes there is reason to be optimistic. “The dominance of TV screens during prime time combined with the low ARPU of pay TV and the lower penetration of wired broadband in India are counteracting cord cutting,” the report said.
Broadcasters have withdrawn General Entertainment Channels or GECs from DD Free Dish. That could hinder the migration of pay-TV viewers. In addition, it also expects that declining commodity cost inflation and buoyant party demand could fuel ad revenue growth from the second half of the current fiscal year.
“Contrary to common perception, our analysis indicates that TV has maintained its share of ad spend, while digital has grown at the expense of other media. India’s wider reach and low ad spend-to-GDP ratio mean significant room for both TV and digital ad spend to grow,” the report said.
In addition, India still has nearly 100 million non-TV households, providing a long runway for growth.
Where are the ad volumes going?
Ad volumes have declined differently by channel genres. Free commercial time (FCT) in genres such as English movies and English niche fell sharply even in 2019-21, reflecting the impact of OTT on certain genres.
The advertising volumes of English film channels fell the most at 45%, while the English niche fell by 29% and that of music channels by 19%.
“Urban Youth, the UK TV viewer base, appears to have shifted to OTT with global, on-demand content. Following the same logic, there seems to be a small impact on Hindi GEC (-3% FCT over 2019-21), while
On the other hand, the advertising volumes grew in genres like news, Hindi movies, Marathi channels, Tamil channels, Kannada, Bengali and Malayalam. However, the decline in advertising volume from UK channels has little effect on TV’s overall growth, as it accounts for only 1% of total TV viewership.
Even if the urban youth with access to wired broadband, greater spending capacity and a tendency to watch international and niche content are likely to cut the cords and shift exclusively to OTT platforms, there is still a lot of juice left on linear TV. -market.
“With approximately 300 million households, a vast regional language market and a diverse cultural background, India offers significant opportunities for the coexistence of all forms of entertainment. We believe that OTT, pay TV and free-to-air channels will all coexist in the country,” the report said.
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