Advertising and Media

December 6, 2019 India INC

Advertising and Media

There is no impact as powerful as that of the mass media and so is the power of its economy. The advertising market in India is not only robust but is growing with leaps and bounds. In fact, India is the third largest television market in the world only after China and the US. In 2003, the television industry had a turnover of $4.1 billion. A country that has an estimated 105 million homes having TV sets, which amount to 270 million watching the advertising industry blossoming with every passing year. With the total number of viewers touching around 415 million, including non-TV home viewers, India is indeed a fertile ground for the media to hook the viewers with catchy ads. In tune with the growing economy, the Indian advertisement industry has grown into a new industry of considerable scale and service capacity and is playing an important role in Indian economic construction. English-language advertising in India is among the most creative in the world. TV advertising (especially in the Hindi language) has made strong strides in the past one decade, especially with the advent of satellite TV. Hindi TV channels – such as Aaj Tak, NDTV India and ZEE, – have developed themselves on lines of Western channels, and most advertising on such channels are tailored for the middle classes. Most major international advertising firms have chosen local Indian partners for their work in this market. Foreign ad companies such as Interpublic Group of Companies, Publicis Groupe SA, etc. are making their presence felt in the country.

Keeping in view the recent trend in advertising, the Government has allowed FDI up to 100% in the advertising sector on the automatic route. In 2004, ad spends on television touched Rs 4,860 crore. According to a TAM study, the advertising industry in India is close to Rs 11,815 crore and has tremendous scope for future growth. Of late, the Indian market has emerged as the new theatre of strategic investment for the media barons. Independent News & Media, the owner of the British newspapers The Independent and The Belfast Telegraph recently paid $34 million for a 26 per cent stake in Jagran Prakashan, a Hindi-language daily publisher and television broadcaster. The government’s decision to relax foreign investment rules in print and current affairs media has attracted many foreign players into India. In fact, during the last one year, foreign players have invested about $300 million in the Indian media industry. In May, 3005, Reuters entered into an agreement with Bennett, Coleman & Co., publisher of The Times of India newspaper, taking a 26 per cent stake in its English-language TV news channel. Following the Centre’s announcement to allow foreign investment of up to 26 per cent in the print media in 2002 and 100 per cent foreign investment in the non-news and non-current affairs journals in 2005, many big foreigner players have expressed willingness to do business in Indian newspaper market. Last year, Pearson’s Financial Times paid $3 million for almost 14 per cent of Business Standard, the country’s second-largest business daily newspaper. Dow Jones last year started its own partnership with Bennett, Coleman to print The Asian Wall Street Journal; and Henderson Private Capital’s Asia Fund, a private equity fund, recently bought a $20 million stake in The Hindustan Times. The reach of India’s print media (dailies and magazines combined) has increased from 179 million to 200 million people in the last three years. So, the advertising and the media sector awaits a more prosperous future especially with more prospective foreign players likely to place their money in this field.