Indian broadcasters face hits on advertising, subscriptions
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Rebecca Hawkes
| 25 February 2019

India’s new television tariff structure could hit broadcasters’ advertising and subscription revenues in the fourth quarter of 2019, according to a report by Edelweiss Securities.

The country's content distribution platforms are implementing the industry’s new tariff regime, intended to offer both customers and broadcasters greater transparency. The new tariff regime will allow Indian consumers to pick the particular channels they wish to subscribe to on an a-la-carte basis from their direct-to-home (DTH), cable, HITS or IPTV platform operators.

“We anticipate advertisers and media agencies to be conservative in their ad spends on the TV platform in Q4FY19. Given limited clarity on subscription and black-outs happening in certain pockets, we anticipate impact on ad revenue for broadcasters this quarter,” said Abneesh Roy, senior vice president (research), Edelweiss Securities.

“We also believe this presents an opportunity for advertisers to assert their bargaining power, which would exert pressure on ad rates charged by broadcasters in the near term. However, once the transition is over, we expect ad volumes and rates to resume their march towards the new normal depending on the post-transition data.”

The Broadcasters Audience Research Council (BARC) India has stopped publishing data for the general public. The data is only available for BARC subscribers.

The withdrawal of popular Hindi channels from free-to-air DTH platform DD Free Dish is also expected to hit the revenue of the major broadcasters in the short term, said Edelweiss. The DD Free Dish platform constitutes about 16% of the TV universe in India, covering 30 million households.

“We believe this would impact broadcasters’ ad revenues in the near term and may linger on over the medium term. Over the long term, however, this move presents an opportunity for broadcasters’ to convert Free Dish users into paid TV subscribers which we see as a big positive,” said Abneesh Roy.