MediAvataar's News Desk
Media and entertainment revenue to rebound 27% next fiscal
Strong balance sheets, liquidity to cushion credit profiles of larger players
Revenue of India’s media and entertainment (M&E) sector should script a strong 27% rebound to ~Rs 1.37 lakh crore in fiscal 2022, after contracting ~26% this fiscal1. The time to bounce-back to pre-pandemic levels will be relatively shorter for segments such as digital and television (TV), while print, films, outdoor, and radio would take longer.
Credit profiles of large media companies would be unaffected due to strong balance sheets, liquidity and the revenue rebound, while mid-sized and small ones could see stress, an analysis of over 80 of them rated by CRISIL Ratings shows.
Says Nitesh Jain, Director, CRISIL Ratings Ltd, “Advertisement (ad) and subscription revenues contribute nearly equally to the overall M&E sector’s topline, but since the former correlates strongly with economic growth, the pandemic has had a bigger impact on it. Next fiscal, with strong economic rebound on the cards, ad revenue should grow 31% on-year and subscription revenue 24%.”
The TV segment – contributing around half of the sector’s topline – has recovered fully and will report healthy growth next fiscal. Ad revenue saw a sharp contraction initially, but recovered swiftly thereafter, aided by airing of new content, sports events such as the Indian Premier League and a buoyant festive season. As for subscriptions, TV was resilient even during the peak of pandemic as people remained indoors.
The print segment – contributing a fifth of the M&E sector topline – is recovering, though at a much slower pace, and should be able to rebound fully only by the end of next fiscal. Print is losing share in ad revenue mainly to the digital segment (refer to chart 2 in annexure). Circulation too, especially for English language, could see a loss of 8-10%, because of increased preference for e-papers in metros. However, print companies are rebooting their cost structure and accelerating digital adoption to stay relevant.
Films – contributing a sixth to the sector topline – is one of the most impacted segment. But occupancies in theatres should improve with the vaccination rollout and a strong pipeline of content. However, this segment is likely to remain impacted even next fiscal due to social distancing norms and fear of closed spaces.
Other traditional media – radio and outdoor2 – are seeing persisting pain, and will likely take much longer to recover. This is because commuting as well as ad budgets for micro, small and medium enterprises – the key drivers for these segments – will remain restricted even in fiscal 2022.
Says Rakshit Kachhal, Associate Director, CRISIL Ratings Ltd, “Digital has emerged as the medium of choice. The pandemic accelerated adoption of over-the-top (OTT) platforms, online gaming, e-commerce, e-learning, e-papers and online news platforms. This has meant the focus of advertisers has shifted from traditional to digital media. We expect the digital segment revenue to grow 14-16% annually over the medium term. Its share of M&E sector revenue is expected to double to ~20% by fiscal 2024 compared with last fiscal.”
Given the sharp impact on revenue, cash accruals this fiscal will weaken for all M&E companies except TV distributors. Credit profiles of the large companies are cushioned by strong balance sheets (with most of them net debt free), while those of small and mid-sized media companies have weakened. More downgrades among the latter led to the CRISIL Ratings’ credit ratio (upgrades to downgrades) for the sector sliding to 0.33 in the first nine months of the current fiscal from 0.75 in fiscal 2020. Liquidity pressure may intensify for them if recovery in ad revenue is delayed.
That said, there is a silver lining to this cloud, too. M&E companies have adopted aggressive cost rationalisation initiatives. Besides, the pandemic-led change in consumer behaviour has accelerated monetisation opportunities for these players through integration of digital media into theirf traditional businesses. Some of these aspects can lead to structural changes in business models of the M&E sector over the longer term.
1. Optically, the de-growth this fiscal and growth expectation next fiscal may sum up to a full rebound. But that won’t be true because the 27% growth will be on a much lower base. Industry revenue next fiscal will still be lower than that in fiscal 2020 (refer to chart 1 in annexure)
2. Radio and outdoor segments don’t have any subscription revenue
Opening Massive Market Opportunities For Advertising
New Mobile Streaming Report by Adjust finds 52.5% of consumers worldwide have used smartphones to stream more video content since the outbreak COVID-19
Over The Top (OTT) streaming has exploded during the global pandemic, according to a new report released today by global app marketing analytics platform Adjust, further demonstrating a fundamental shift in consumption patterns toward mobile. Busting the myth that the majority of mobile streaming takes place on commutes, 84% of consumers across the countries surveyed have used their smartphones to stream the same amount or even more content since the coronavirus outbreak.
On average, over half of consumers surveyed (52.5%) said they are streaming more video content since lockdown. Only 12% of consumers are streaming less — which means four times more consumers are mobile streaming.
Drawing on consumer research from 8,000 respondents across the U.S., the U.K., Germany, Turkey, Japan, Singapore, Korea, and China, The Mobile Streaming 2021 Report also finds strong streaming habits across generations in mobile-first countries. In total, nearly 90% of users aged 55 and older in China (89.8%) and Turkey (88.9%) say they stream via their phone every day or at least more than once a week.
“This drastic shift to routine mobile streaming around the world and across generations has created massive advertising opportunities and a new role for mobile analytics,” said Dr. Gijsbert Pols, lead product strategist at Adjust. “By understanding how and when consumers stream, as well as which channels and campaigns deliver the highest marketing impact, the potential to build a large, loyal user-base with high lifetime value is virtually limitless.”
Additional key takeaways from the report include:
Most consumers are using mobile to stream at least once a day. Users in China (93.8%) and Turkey (91.9%) stream most frequently — every day to once a week — compared to 69.4% for the U.S., 57.2% for Japan, and 45.7% for the U.K.
Users across all generations and regions stream for at least an hour per session, proving viewers are no longer just snacking bite-sized content — they are binging on entire episodes and full-length movies.
Millennials, the biggest users of mobile streaming, are also watching for the longest periods of time. Session length averages just over 90 minutes (94.2), closely followed by Gen Z, which comes in at just under 90 minutes (87.6).
Users 55 and older may appear to be the laggards in the data set, but 65 minutes per average session suggests this audience is warming up.
Consumers are spending a sizable amount on streaming and on-demand entertainment services. Korea is out in front at $42.68 per month, compared to $33.58 for the U.S. and $34.82 for the U.K.
Connected Television unlocks new second-screening opportunities
Adjust’s research also sheds light on how pervasive second-screening has become around the world, with the rise of Connected TV (CTV). On average, more than three quarters (76%) of all respondents use their mobile phone while watching television, with this viewing behavior most pronounced in Singapore and China (both 85%), closely followed by the U.S. (83%).
Social apps are the number one choice for second-screeners — favored by 65.4% of respondents, on average — followed by banking (54.9%) and gaming (44.9%). Second-screeners in APAC have a healthy appetite for food delivery apps, with use strongest in China (65.2%), Korea (36.6%) and Singapore (48.2%).
Advertisers can tap into the dual-screening trend by putting a call-to-action in their television ads, such as downloading a mobile app via a QR code. This has the potential to create a whole new and interactive brand experience, across two devices.
The Mobile Streaming 2021 Report draws on consumer research conducted by Censuswide on behalf of Adjust from a global survey of 8,000 total TV/video streaming consumers aged 16+. The research uses nationally representative samples of 1,000 TV/video streaming consumers in each of the following countries: the U.K., Germany, Turkey, Japan, Singapore, Korea, and China between November 6, 2020 and November 10, 2020, and the U.S. between September 23 and September 29, 2020.
Launches a full-fledged video-on-demand service for TV and mobile screens with a unique pricing of INR 99/- per month and INR 499/- for a year
Announces the launch of 2021 ShortsTV Worldwide Film Festival in India, U.S., Latin America, and Europe, giving platform to filmmakers around the globe to showcase their craft
India has witnessed an unprecedented increase in content consumption on digital platforms. Keeping in stride with the evolving consumer trends and the digital world, ShortsTV, the world's first and only 24/7 linear TV channel dedicated to short films, ventures into its first partnership with Airtel, India’s premier communications solutions provider. Leveraging Airtel’s core strengths of Network, Data & Distribution, ShortsTV has launched its first video-on-demand service on Airtel Xstream that can be enjoyed on both the mobile app as well as television screens. ShortsTV is now available at a nominal subscription of INR 99/- per month and INR 499/- for a year.
ShortsTV through Airtel Xstream is now ready to entice subscribers with its expansive catalogue of quality short films that includes nominated and winning shorts from internationally acclaimed awards such as The Academy Awards, Cannes, BAFTA, and high-quality CGI animation from international independent filmmakers & local Indian filmmakers. Equipped with a specially curated library of over 4000+ titles from across the globe spanning genres such as comedies, musicals, documentaries, thrillers, dramas, and animation, the service is here to allure all the short film fans and offer a seamless binge-watching experience. The catalogue includes short films across English, foreign, and local Indian languages, including Hindi, Gujarati, Bengali, Marathi, Kannada, Tamil, Malayalam and Telugu.
Speaking about this partnership, Carter Pilcher, Chief Executive, ShortsTV, said, “TV and mobile phones are both integral to the Indian viewing experience—a perfect combination for ShortsTV and our ground-breaking short movie entertainment. ShortsTV is present in over 60 million TV households in India already, and our partnership with Airtel Xstream will bring us to Airtel’s 340 million subscribers -- who are always on the lookout for unique content. From Oscar Nominated movies to Travel Documentaries to exciting new films from India’s hottest new directors – ShortsTV is amazing entertainment. Binge on, dude!”
“Short films are slowly making their presence felt among mainstream cinema, thus adding momentum to the growth of shorts on the Indian movie map. At ShortsTV, we always believed in providing a global platform for filmmakers to showcase their work since the audience's affinity towards the short format is growing. Understanding the rise in content consumption on the small screen, our partnership with Airtel Xstream will not only help us extend our reach into the Indian heartland but also provide an opportunity for Indian filmmakers to expand in India and beyond.”, said, Tarun Sawhney President – Asia, ShortsTV.
Acquisition immediately provides advertisers new levels of protection at scale with operational efficiencies
Flashtalking, the leading global independent platform for ad management, data-driven creative, and unified insights, has acquired anti-fraud innovator Protected Media. The deal will enable Flashtalking to provide comprehensive verification capabilities across Desktop, Mobile Web and In-App, at scale, to the rapidly growing APAC media sector. It will also see the company become the only MRC accredited independent ad server for Sophisticated Invalid Traffic Detection and Filtration in OTT.
By bringing advertisers and agencies unprecedented levels of protection from fraud and improvements in viewability, at scale and with operational efficiencies, Flashtalking is reinforcing its commitment to providing independent evaluation of media quality across all channels, including the growing CTV market.
The acquisition establishes a unique and vital set of operational benefits:
Complete suite of verification tools
The company now offers fraud detection and viewability services globally across Desktop, Mobile Web, In-App, CTV/OTT, and is able to fill any verification gaps.
Flashtalking and Protected Media provide accelerated speed to market for verification set-up and management by eliminating the manual, error-prone shared spreadsheets in favor of a fast, automated, errorless workflow.
As with everything Flashtalking brings to market, the offering simplifies the ad tech stack. By bundling verification services with an advertiser’s ad serving globally, the company provides the opportunity to reduce the administrative burden of managing multiple vendor relationships across regions.
MRC Accreditation for OTT
As the only independent ad management platform that is MRC accredited for Sophisticated Invalid Traffic Detection and Filtration in OTT, the company finally fills a critical gap for advertisers who may have charged ahead into the OTT segment but have yet to implement the necessary verification safeguards.
“The marketplace knows that Flashtalking is wholly committed to quality in all channels and on all platforms where we support and serve our clients. That’s who we are at our core,” said Flashtalking CEO John Nardone. “This incredibly beneficial acquisition signals that we are all-in on combating ad fraud, from the most powerful position to do so at scale. As the only independent ad server that the MRC has accredited in this arena, Flashtalking is positioned to be the most objective third-party evaluator of OTT/CTV media quality on behalf of advertisers and their agencies.”
“We’ve long been recognised as the industry’s boldest innovators in the fight against fraud in the digital advertising supply chain,” said Asaf Greiner, Founder and CEO of Protected Media. “Given the company’s overarching philosophy on ensuring quality and their operational commitment to the OTT/CTV space, our coming together with Flashtalking could not be a more helpful union and proposition for advertisers. The new offering stands alone in its ability to serve advertisers at the interface where it matters most.”
Dominic Powers, Head of Business Growth, Solutions APAC Dentsu, said of the news: “While verification has become a standard requirement for global brands, the complexity and cost of implementation across channels has until now prevented its growth in APAC; and it only really started to gain momentum in 2020, when we saw a 40-50% drop in post bid fraud in the region. That being said, market data would suggest that only around 10% of brands are using verification for channels such as CTV. At Dentsu, we are firm believers in aggregation and automation in media, and this acquisition is the next step in making sophisticated analytics more accessible and providing operational efficiencies that will help brands of all sizes, and their agencies, drive real growth.”
President Barack Obama and Bruce Springsteen first met back in 2008. Though the two have very different backgrounds and careers, they formed a deep friendship.
Starting today, listeners can eavesdrop on their personal, intimate conversations in a new podcast: Renegades: Born in the USA.
The eight-episode series was announced today during Spotify’s Stream On event and is the second podcast to launch through Spotify’s partnership with President Obama and Michelle Obama’s Higher Ground. Over the course of the season, President Obama and Springsteen will explore topics of race, fatherhood, marriage, and the future of America.
Dollar Shave Club and Comcast will serve as the first season’s presenting sponsors in the United States.
The longtime friends discuss their hometowns and role models, explore modern manhood, and confront the painfully divided state of the country today—and offer a vision of how we can all move forward together.
President Barack Obama asks in the introduction of the first episode of the podcast: “How did we get here? How could we find our way back to a more unifying American story?”
He then goes on to explain: “That topic came to dominate so many of my conversations last year—with Michelle, with my daughters and with friends. And one of the friends just happened to be Mr. Bruce Springsteen. On the surface, Bruce and I don’t have a lot in common. But over the years, what we’ve found is that we’ve got a shared sensibility. About work, about family and about America. In our own ways, Bruce and I have been on parallel journeys trying to understand this country that’s given us both so much. Trying to chronicle the stories of its people. Looking for a way to connect our own individual searches for meaning and truth and community with the larger story of America.”
The first two episodes are available exclusively to the hundreds of millions of Free and Premium Spotify users around the world now. Give them a listen: