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May 15, 2009

Impact of slowdown on the Media sector

Businessworld has an article on the impact of the slowdown on media industry.



On television, the advertising volume in November last year fell sharply to 45.31 million seconds compared to the previous month’s 55.37 million seconds — a fall of 18 per cent in a single month. The print industry’s pain was worse. From a high of 20.99 million column centimetres of advertising in October last, ads fell 45 per cent to just 11.59 centimetres in November. Radio advertising, too, declined by 30 per cent from 9,176 seconds in October to 6,515 seconds in November.

The actual fall in ad revenue would be far larger considering that advertising rates have crashed between 15 and 30 per cent across all mediums. From November onwards, too, television advertising has continued to decline marginally. On the other hand, both print and radio ad volumes have been inching up. The April-May Lok Sabha elections are, however, expected to arrest the downward trend. “We expect an infusion of Rs 800 crore – Rs 500 crore in national media and Rs 300 crore on regional platforms,” TAM Media’s CEO L.V. Krishnan said.

...What is the forecast for calendar 2009? Estimates vary. The Pitch-Madison survey expects a flat scenario. After a heady 17 per cent growth to Rs 20,717 crore, total ad revenues are expected to inch up just 2 per cent in 2009. WPP’s media arm Group M on the other hand is more optimistic forecasting a 8.9 per cent growth to Rs 24,900 crore by the end of 2009. In this, television is expected to grow faster at 11.4 per cent to Rs 9,353 crore as compared to the print medium that is expected to log a 7.4 per cent growth rate to inch up to Rs 10,770 crore.

Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of data and analysis on private equity, venture capital and M&A deals in India. View free samples of Venture Intelligence newsletters and reports. Email the author at arun@ventureintelligence.in