Clearly the 627 million Indians spending over four-and-a-half hours every day watching television are not as valuable as they are during normal times. They can’t buy anything, but essentials, and that too is a bit of a struggle. They are not buying cars, electronics, financial services or travelling or dining out. Why then would anyone advertise to this audience?
This problem of plenty says two things.
One, that an economy is not just about GDP numbers and interest rates, it is about the people who work, earn money, save, spend and invest it in a country where money and goods flow with ease. It says that health care, economy and society are not abstract concepts, but living and breathing ecosystems like a rainforest. You mess with any one of them and the whole thing wobbles.
India was already coping with the slowdown triggered by demonetisation in 2016 when the corona crisis came. The system’s ability to take another knock is at its lowest.
There is a strong, positive correlation between economic growth and activity, and advertising. And the fall in volumes and value simply reflects that.
Two, most epidemiologists reckon the virus will affect 30-60 per cent of the population of a country eventually. The mortality rate depends on a variety of factors like demography and health care
systems. So even after the lockdown
is lifted, the danger exists and people will be cautious in theatres, flights, restaurants or any other public place. Social distancing will be the norm for a long time at least till there is a vaccine.
Most businesses are preparing for this.
Theatre owners are talking about staggered seating layouts. This spaces out people by using alternate seats. It will mean lower occupancy, shrunken top lines and possibly higher ticket prices to offset the loss of capacity and the increased costs of the hyper-sanitisation that theatres will need to do. Not just theatres; across the board, newspapers, TV and radio are talking about staggered seating arrangement in offices. This will impact productivity, costs and a whole lot of things.
Think of it. The Barc has been sharing data on how well the TV is doing during the lockdown, over-the-top (OTT) channels are shouting how many people are watching dramas. However ad revenues, the primary source of income for both of these, continue to fall. The bright spots? Almost all the major OTT and TV channels have some element of pay. Also the rise in viewership suggests large amounts of sampling and habit forming, both good things for creative products.
However, with studios shut, no films or shows being made, how long will the rise in audiences continue? A TV channel or OTT brand needs a good mix of old and new. A Ramayana or some other repeat will create buzz for some time. Eventually the broadcaster or streaming brand will need fresh programming in sports, movies or drama. And it will need a country where people are out working, buying, spending and generally enjoying life for advertisers to want to reach them.