Demonetisation, A History Now Broadcasting Industry Adapted Well With It


With the most-talked-about economic move in recent times, completing a year, the media and entertainment industry has finally managed to recover from it and is already witnessing a steady growth. With demonetisation, the broadcast industry de-grew in November-December 2016 as much as 21 per cent compared to last year losing an estimated Rs. 850 crores, but things started looking up from April onwards. However, it can never be forgotten how the strategy sent the media companies across the spectrum, from television broadcasters, newspapers, magazines to FM radio players into a tizzy as the biggest categories like FMCG, real estate, jewellery, retail, automobiles etc. started cutting advertising spends and the quarter looked bleak.

Having said that, demonetisation is history now according to Pawan Jailkhani, Chief Revenue Officer, and 9X Media. He pointed out the digital was the biggest benefactor of this move. He says, “It (broadcast industry) recovered by March-April. Because of demonetisation, digital payments have gone up. That sector got a lot of money.”

Most of the industry experts we spoke to mentioned that more than demonetisation, it was GST which dampened their spirits and uptake. Manav Dhanda, Group CEO at SAB group, pointed out that the upsurge started from March-April onwards but then it was impacted by GST in June-July. “GST had a bigger impact than demonetisation. Certainly November-December-January were slow. February got better. March was fantastic. There was huge spending by categories across the board to make up for the financial year closure,” he says.

Dhanda, whose company registered double digit growth amidst GST, is fairly upbeat about future. He adds, “For everybody in media, this November will be fantastic compared to last. But that’s no benchmark. If the positive impact of demonetisation and GST is to be felt in the coming few months or the next calendar onwards, then it’s terrific news.”

Going ahead Jailkhani feels that with decent festive growth and the current positive sentiments, next few quarters will show upsurge. He explains, “But I think somewhere we have come out of these things (GST and demonetisation). With lot of changes and amendments, it has settled down. Processes are in place more or less. We saw a decent festive season. There is an upward trend in the second or third week of November. We should end up with decent growth in the next two-three quarters.”

Avinash Kaul, Managing Director, A + E Networks | TV18 President – Strategy, Product & Alliances – Network 18, noticed that the industry has seen both good and bad quarters post demonetisation. He observed that the news genre has been challenging but it has seen good months as well. But he is hopeful of a brighter future for the industry. He says, “There is no reason to be pessimistic because advertising has to continue at the end of the day while consumers are there. It will get deferred by a month but eventually, things will come back and settle down and consumption will pick up again.”

Vineet Sodhani, CEO of an audit and advisory company Spatial Access, thinks otherwise. He analysed inventory positions of Hindi and English Genres for four weeks preceding Diwali last year and this year. He shares the findings, “As it turns out, absolute inventory sales were down two per cent. News and GECs were hit the most in both English and Hindi.”

According to Sodhani, TV industry has not fully recovered from demonetisation and GST impact. But the good news is sports and movie genres have performed well. He mentions, “Volumes are still below last year’s levels in most genres. It could have been worse but for sports and movie genres that have performed well.”

Yearly growth

Following the double whammy of GST and demonetisation, mid-October 2017 onwards the broadcast industry has been prepping up for yearly growth and is now slowly on the road to recovery as advertising spends get back on the right track. Punit Misra, CEO – Zee Entertainment Enterprises Limited, Domestic Broadcast Business, describes the industry sentiment as ‘cautiously optimistic’ after being struck by GST and demonetisation.

The yearly growth definitely play a huge role in this relatively positive sentiment with renewed interest being witnessed on spending by most categories including FMCG, automobile, ecommerce, consumer durables, jewellery and retail. The industry is also tactfully working around the crunched festive season – it condensed from six-eight weeks of the previous years to four weeks this year, which has been another cause for worry.

Overall this has led media planner Sujata Dwibedy, Executive Vice President, Carat India, Dentsu Aegis Network, to look forward to a 15-20 per cent increase in broadcasting ad spends. She says, “You will see ecommerce players and durables being very heavy because this is the time when they buy. A lot of telecom and auto is also happening. Diwali is considered good for purchases. Overall if we used to operate at a 100 index, the year was at 80-90 but we are back to 110 in October. It may go back to 90 in November-December.”

In fact, Sony Pictures Network (SPN) and ZEEL are already in a position to expect healthy balance sheets in October. In fact, ZEEL leveraged this festive occasion to unveil Zee TV’s new brand identity and look. A confident Misra says, “We have continued to be at a good double digit growth, except for the periods of demonetisation and GST. There’s no reason why we should want it to be anything less than that.”  Rohit Gupta, President – Network Sales & International business, SPN, shares, “Our network is growing double than industrial growth.”

9XM and SAB Group too are looking at 8-10 per cent and 15 per cent growth respectively this Diwali over last year.  However, the real test is the post-Diwali period, when the industry typically faces a lull for 10-15 days as the upbeat festive mood fizzles out. The timing is crucial for this year’s overall growth. Pawan Jailkhani, Chief Revenue Officer, 9X Media agrees as he says, “If it picks up from second week of November till December end then we will have a reasonable growth for this year.”

The 2017 festive season

The 2017 festive season is seeing a lot of action from FMCG players, automobiles, consumer durables, jewellery and retail. Partho Dasgupta, eminent columnist, noticed that ecommerce majors have increased TV ad spends by nearly 40 per cent this year. Automobile is pretty active with 50 per cent and a 160 per cent jump in ad spots is seen by four wheelers and two-wheelers, he pointed out. Jewellery ad spots are up by 90 per cent. Hence it’s not surprising that BARC’s top 10 Brands featured Lalitha Jewellery and Kalyan Jewellers for Week 40 (September 30-October 6) while Hindustan Unilever, Reckitt Benckiser (India), Procter & Gamble and Patanjali Ayurved appeared in the BARC Top 10 Advertisers list for the same week.

Industry experts we spoke with mention that this year spending by e-commerce has slowed down compared to last year. However, that’s contradictory with Paytm stealing all the limelight from Flipkart and Amazon by allocating Rs 1000 crore for festive sales including discounts, marketing, and hiring additional workforce, amongst others. Meanwhile, ecommerce majors Flipkart and Amazon have collectively spent nearly Rs 100 crore for promotions through television advertisements for their September sales.

Joy Chakraborthy, CEO – Forbes India & President – Revenue, TV18 Broadcast, is seeing a surge in white goods, e-commerce, FMCG and most other relevant TV advertising categories. He observes, “This is reflecting in our inventories as well, Hindi is going choc-a-block while English has surely improved. As a point of observation, English business channels do see a slowing down during the Diwali phase vis-à-vis mass channels, however this sort of slump on these channels recovers post Diwali. So it is safe to say, English business channels do witness a reverse cycle during this opportune time.”

He also mentions of the absence of government advertising due to the DAVP deadlock. “This is something that’s different. However, we are pinning hopes of government advertising to start soon.” Meanwhile there is renewed interest by ayurvedic FMCG brands after Patanjali came to the fore. Manav Dhanda, Group CEO at SAB Group – Sri Adhikari Brothers, couldn’t agree more. “They have been giving greater push than ever before. Automobile brands have picked up with interest from obvious ones like Maruti and Ford among others. Jewellery brands like Kalyan and Tanishq are showing considerable interest on our channels. Ecommerce is slowing down as the metrics of its measurement is changing,” he says.

Living Foodz will have brand campaigns around Diwali from Titan, Caratlane, Future Group (Harvest), Samsung, Hamilton, TTK Prestige, Usha and Philips, as informed by the Business Head, Amit Nair. Aparna Bhosle, Business Cluster Head – Premium and FTA GEC Channels, ZEEL, is noticing a similar trend. When it comes to &Privé HD she says, “We have brands from the FMCG, automobile, mobile and liquor industry associating with us. They are either already on-board or actively exploring associations with us.”


However, there are few who don’t subscribe to the above thought and see a different picture of big properties not getting filled. Vineet Sodhani, CEO, Spatial Access, feels that the spending is tepid this time of the year. “The tactical spending that you see during the festive period is tepid this time. This is also evident from the fact that some big movie premiers and sport properties have not filled up. Spends are soft for most categories save aside a few like auto, retail and handsets.”

Divya Radhakrishnan, ‎Managing Director – ‎Helios Media, too has her doubts if the growth will be better than last year. “Compared to previous year there is a drop. Also I am seeing a lot of inventory happening on regular ad spots. I am not seeing that kind of advertising on the larger properties,” she says.

As economists and analysts, corporate honchos and statisticians struggle to gauge the beneficial impact of demonetisation, many of the objectives claimed by the government have fallen by the wayside. New claims and afterthoughts on the note ban by senior politicians in power have remained unconvincing. Demonetisation has raised more questions than it has answered. The Prime Minister, in banning 1,000 and 500-rupee notes — or 86 per cent of total currency in circulation — had indicated that the decision would help remove black money from the system, rein in terrorism and take fake currency out of circulation. Have these objectives been met? “Demonetisation was an utter failure. Theoretically it was known it cannot be successful. It could not remove black money, but in turn it has damaged the white economy and growth,” Arun Kumar, former professor of economics at the Jawaharlal Nehru University (JNU) told.

The benefits of the decision are yet to percolate to the economy, but the disruption as well as pain that it caused to hundreds of millions was very real, whose lingering effects are seen to this day and, which, at that time, had shaken the country to its core, touching nearly every citizen and visitor. After months of vacillating, and being less than honest with citizens, RBI data in August 2017 said that 99 per cent of the banned currency in high denomination notes had returned to the banking system — Rs 15.28 lakh crore out of the Rs 15.44 lakh crore in circulation on November 8, 2016. The calculation does not take into account the money changed by people in Nepal, where it’s legal tender, or old notes held by many non-resident Indians who could not exchange it within the deadline. “Indian demonetisation was remarkable, because unlike many countries that faced major economic and political problems after even less drastic measures, this passed off peacefully as most Indians accepted the (wrong) argument that this would end corruption,” Jayati Ghosh, Economics Professor at JNU, told.

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