South Story: What's in store for media industry in 2023

South of India, with its massive regional content and a varied audience, has had a very fruitful 2022. The media industry in the south is growing at a phenomenal pace. All the five states have seen an improvement in their advertising rates and are looking at next year with tremendous opportunities. Television, print and digital, the main sources of media in the south, have different trends coming up, and we are all eyes for it.

According to a report by the Confederation of Indian Industry in April this year, media and entertainment industry in South India grew at a compound annual growth rate (CAGR) of 15%. With the year having seen a successful festive period, growing knowledge of regionalization and content in the south reaching more households across other parts of India, this category of Southern media becomes an important pick to watch out for.

Television

According to Krishnan Kutty, Business Head of Disney Star, linear TV continues to be a habit amongst TV households in the south. “As many as 32 million additional NCCS AB audiences were added on TV over the past three years in the southern states. Primetime in India is family time. Indian families have a preference for collective content viewing, this holds true in the south markets too,” he shared.

Kutty also talked about the kind of shows that have done well for the south television this year. “Regional is the new global. Rooted stories from the south have performed very well across India this year. Both scripted and non-fiction adaptation of south shows continue to do well across markets (Karthika Deepam (Telugu), Mouna Ragam (Telugu) and Start Music (Tamil) were all hits across languages.”

Talking about what kind of changes or trends we can expect for southern television industry, he says, “TV advertising will continue to be the fastest and most effective way for brands to build awareness and salience among consumers. TV advertiser base will expand – driven by retail advertisers in south and businesses in smaller towns. South content will continue to succeed pan India in 2023. Original ideas from the south, both scripted and non-scripted, will continue finding resonance across India. TV brands and characters will expand their reach more effectively with the world of social.

Print

The print industry in south is seeing a recovery in terms of ad expenditure, but is still coping with the pandemic slowdown. According to Varghese Chandy, Vice President, Marketing & Advertising-Sales, at Malayala Manorama, in terms of advertising revenue, 2022 has been the year of recovery for most media, particularly print. “We have seen that we reached the 2019 level in the last quarter. Most of the retailers have done well in catering to the pent-up demand, and for them, print had been the primary medium especially during the festive seasons.  Circulation drop had been the least affected for Kerala papers during Covid. So we are all working towards the pre-Covid numbers,” he shared.

Pradeep Gairola, VP and Business Head- Digital of The Hindu, also had similar views for the print industry. “For legacy publishers, 2022 was a year of growth. Most of them are likely to be back to the pre-Covid levels of revenue. Given that publishers were able to optimise their cost structure during Covid, the rebound in revenue is likely to result in a healthy bottom line for them. However, due to the dramatic increase in the newsprint price because of the Ukraine-Russia war, publishers are under pressure and are cautious about the events that unfold in the next few months,” he explained.

In 2022, the dependence of publishers on government advertising increased and the resurgence of the retail sector pushed publishers to generate more local and regional content.

For 2023, Varghese Chandy believes the existing challenges will persist, but certain categories might pull through.

“Yield has been a challenge and it will continue to be so. So will be the bottom line, as the escalated newsprint prices are nowhere near the prices a year ago. Lot of categories like consumer durables and mobiles will come back in a big way to print as print is definitely delivering results. Tourism and allied businesses like hotels, airlines will do well. Retail will continue to grow and will be a big contributor to print advertising. Categories like health, education etc will continue to be important categories for print. Increased attention will be on transforming space sellers to solution providers. Hence focus on events, activation, BTL activities, strategic partnerships etc will be on the rise,” Chandy opined.

Pradeep Gairola believes there is potential for growth for a struggling print industry. “GroupM has projected about 16.8 per cent growth in advertising in 2023, so legacy publishers are quite hopeful of another good year. Given that 2024 is an election year, chances are that in 2023, the ad spends of various governments and political parties are likely to increase and help the legacy media,” he mentioned.

“Legacy publishers are quite cautious about the newsprint prices and are likely to increase the cover price of their news products. Increasingly, publishers are becoming aware that there may be opportunities for them to ask their readers to pay more for paper products. India, after all, has the cheapest cover price for newspapers in the world. Even countries like Pakistan (Rs. 25/-). Sri Lanka (Rs. 50/-), Bangladesh (Rs. 12/-) etc have substantially higher prices for their papers,” added Gairola.

Digital

The digital media in the south has seen the most growth in the past year. Digital transformation is happening at a rapid pace and the southern states are making the most of it.

According to Gairola, digital transformation efforts are likely to get a further push with the legacy publishers, who are increasingly aiming to develop an audience- first approach to business. For most of them, the challenge is not only to acquire new users in digital, but also to ring fence their existing subscribers of the legacy products, who are increasingly becoming digital savvy.

“While the current tax structure is not friendly for bundled products of paper and digital, it is very likely that Indian publishers, like their international counterparts, will start pushing the agenda of unified audience, which is print plus digital. As we see in the international markets, publishers like FT, WSJ, and NYT etc only mention their combined subscriber base and do not distinguish between print or digital, the same is likely to start gaining some roots in India in 2023.”

Talking about OTT and other forms of media like podcasts, Gairola shared, “Digital is likely to see higher commitment and experimentation from publishers to develop reader revenue. Attempts to reduce dependence on advertising by building diversified revenue streams is also likely to gain more roots. Due to AVOD offerings from OTT players, the competition for the video ad dollars is likely to intensify further. While the supply side of video has increased dramatically, the advertiser appetite has not kept pace. This is only going to get worse in 2023.”

“Podcasts have started gaining traction in India, however, advertising is still alluding to the audio efforts. In 2023, audio is likely to gain a critical mass and emerge as a medium of interest for larger advertisers.

Pure play digital display ads are likely to lose share as publishers will try to move up on the value chain by providing customised solutions to the advertiser. Other sources that are likely to gain traction include newsletters, events, commerce, affiliate revenue, etc.”