Media has been one of the most suffered sectors due to Covid-19 pandemic. The Print Media has lost significantly in circulation and also suffered huge Ad revenue loss. Electronic Media also lost heavily in Ad revenues, the Outdoor Media got all orders cancelled owing to no traffic on roads due to lockdown, the Events business drew blank as there were no events allowed in this period. All these have been revealed in a Research Report of PHD Chamber of Commerce & Industry “Outlook of Media and Entertainment Industry in the COVID Scenario”.
The Report is submitted to the Union Minister for I& B, Shri Prakash Javadekar, by Dr D K Aggarwal, President, Sanjay Aggarwal, Sr Vice President, Mukesh Gupta, Chairman – Media & Entertainment Committee, Saurabh Sanyal, Secretary General and Yogesh Srivastav, Principal Director, PHDCCI.
COVID pandemic has caused mass disruptions to the Nation’s economy, its trade, industry and the lives of citizens. There is no industry or sector of the economy which has been left unaffected by this wave. As the world has accepted the Covid-19 as the new normal, the crises has also impacted how different forms of media is consumed in the world of today.
PHD Chamber of Commerce and Industry appreciates the government for undertaking continuous reform measure to support industry, trade and economy to break free from the grip of Covid crises, said Dr D K Aggarwal, President PHD Chamber of Commerce and Industry (PHDCCI)
Chamber urge the Minister to undertake immediate reform measures based on the stated recommendations.
The report suggests that one of the major impact of Covid on the M&E industry is the instability caused and a downfall in the advertising revenues across all media segments. Radio,TV, Print, Outdoor (OOH)out-of-home media see a significant decline in the advertising revenue, said President Dr Aggarwal
This falling advertising revenue trends is expected to pose a significant threat to the industry as Advertising is a prime source of revenue for Media. We urge the government to make a conscious effort towards ensuring full utilization of its annual advertising budget in the respective financial year. This deliberate move will help the government receive its due credit by effectively publicising the numerous effective and efficient reforms and initiatives undertaken by the government towards Nation building and at the same time will also ensure that the media sail through these tough times with inflows of revenue, said Committee Chairman Mukesh Gupta.
PSUs, Corporates and industry stakeholder should also make a consciously connect with their consumers by reaching out to them through effective advertising campaign. It is the connectivity with the consumers in these trying times of crises which will be remembered and will go a long way in adding value to their businesses, said Sr VP Sanjay Aggarwal.
We urge the Government to direct all other Ministries, DAVP, State Govt, PSUs etc to clear all outstanding payments of the entire media industry, which is a significantly large amount, said Dr Aggarwal
This move will provide the much needed relief to the industry, which has played a pivotal role in creating jobs and spreading awareness during the crises of Covid-19, and yet has been grappling with cash crunch and are unable to pay the salaries to their employees, who have been the frontline warriors, said Aggarwal.
As a goodwill gesture and keeping the importance of Media industry’s role in these critical times, the development of economy as well as socio-political fields, the government must pay salaries for the lockdown period for those employees of Media who are registered with ESIC. This will go a long way in restoring the faith in the government by the media industry, said Dr Aggarwal
While the media and entertainment sector is currently grappling with various challenging issues, with the economic activities returning to normalcy, we are assured that eventually with the allowance of 100% FDI in the Media and Entertainment industry and effective handholding by the government, the industry will bounce back and continue to provide to each citizen the much-needed information & entertainment.
Recommendations
Use Advertising as a tool to make India a Covid-free Nation:
Knowing that the government has a significantly large allocation towards the advertising budget, the government should make a conscious effort towards ensuring that same is utilised in the respective financial year. This will ensure that the government receives its due credit by publicising the numerous effective and efficient reforms and initiatives undertaken by the government towards Nation building. The effective utilization of the budget allocation towards advertising by the government will also ensure that the media and entertainment industry keep sailing with inflows towards advertising, one of the major contributors to the industry’s revenue.
Continued Advertising from Corporates too in the time of Covid-crises:
Corporates and industry stakeholder should also make a conscious effort to reach to their customers and end users, through effective advertisings in these current time of Covid-19 crises. It is the connectivity with the consumers in these trying times of crises which will be remembered and will go a long way in adding value to a corporates business.
Settling outstanding dues of all media companies immediately:
The Government through the Ministry of Information and Broadcasting should direct all other Ministries, DAVP, Autonomous bodies, Public Sector Undertakings and other State Governments to clear all outstanding payments, which is a significantly large amount, without any further delay to the entire media sector. This initiative will provide the much needed relief to the media and entertainment industry, which has played a pivotal role in creating jobs and spreading awareness during the crises of Covid-19, and yet has been grappling with cash crunch and are unable to pay the salaries to their employees, who have been the frontline warriors.
Special package to the devastated Outdoor media industry is the need of the hour
The Outdoor media owners and agencies have been caught in the spiral of a financial crisis even before the outbreak of Covid-19. Now with the outbreak of the pandemic, they have been pushed to the wall and are now facing closure of many companies and unprecedented loss to their finances. Hence the need of the hour is to hand hold the outdoor media industry which is in urgent requirement of special relief packages which the following inclusions:
Abolition of ‘Advertisement Tax’ by the govt./ municipal authorities
Waiving of ‘Licence Fees’ for the financial year 2020-21
Defer all Tendering or Auctioning activities of all outdoor media by the Civic bodies and Railway and Airport authorities till September 2020 and continue with existing licenses till then.
Cover the cost of salaries / wages/ treatment of those who have been infected by COVID-19 and who are unable to return to work.
Declare the pandemic as natural calamity to be covered under ‘Force Majeure’ clause of all contracts.
Paying salaries for the lockdown period to employees registered with ESI
As a goodwill gesture and keeping the importance of Media industry’s role in these critical times of pandemic Covid-19, the development of economy as well as socio-political fields, the government must pay salaries for the lockdown period for those employees of media companies and advertising agencies who are registered with ESI. This will go a long way in restoring the faith in the government by the media industry.
Reducing GST rates for Electronic and Outdoor Media
The government should reduce the applicable GST rates for Electronic and Outdoor media and bring the rates on par with the Print media, which is 5%. This will reduce the burden of the Media companies as well as the advertisers to a great extent and help the companies tide over the crisis much faster.
Take Covid-19 in stride and work it for the industry’s advantage:
To make the impact of Covid-19 work to the industry’s advantage the advertisers should start to develop content that enlightens the viewers and speaks about the current situation. The importance will be laid on the message imparted, as consumers are wary of advertising that comes across as tone deaf in this challenging environment.
Think out of the box & implement innovative new ideas:
Coming in terms with the massive cancellation of events due to the implementation of lockdowns, it’s time that the industry stakeholder think off out of the box innovative new ways to reach their customers digitally and organise online simulated sports events to provide content to fans, with even the professional players and athletes engaging in Esports competitions.
Renewed Focus on Technology led start Merger & Acquisitions (M&As):
Companies with access to capital should make up opportunistic plays to acquire innovative start-ups, with renewed focus on technology led M&A, as many start-ups in the industry will tend to perish due to challenges faced on liquidity front and substantial dips in valuations.
Time for stringent Social Media Laws:
High time that the Indian Government formulates stringent laws for social and digital media to save these platforms from continued bombardment with fake news, age inappropriate availability of content, misterpretations leading to communal violence, imparting of misinformation, among other hazards.
Industry must look at equity linked stock options to employees:
The prolonged financial impact, similar to many other industries, may force media companies to consider workforce reduction or salary reduction of employees, as a costcutting measure. In this context, companies could also consider granting equity linked stock options to employees, as a measure to make up for the reduction in salaries or other payments, if any, and to retain key employees and talent.
As there is been a continuous surge in the demand of online streaming and online viewing of content, the industry needs to focus on Network resilience and continued and uninterrupted capacity.
Sector Needs efficient government hand-holding
Print media will see a cut-throat competition in the new future post the COVID-19 crisis leading to the survival of the fittest and pushing the segment at the end of a difference if now handled with enough government support through effective reform measures and increased advertising demand/opportunities.