Saugato BanerjeeA+E NetworksVice President – Strategy and Operations, Asia Pacific
Anna MathewSTAR IndiaCorporate Team |
Elections are a defining part of the modern political and economic structures in most parts of the world. In the Asia-Pacific region, 2014 is a crucial year with 3 important territories choosing their political destinies in the coming months: Indonesia, Thailand and India.A broadcast and content industry blog is certainly not the place for debating the direction and merits of each country’s policy. But the role of media, the policies surrounding ownership, creation and dissemination of content has a deep impact on the fortunes of our industry. Added to that, the boom in Internet penetration and bandwidth availability positions the entire ecosystem on the brink of profound changes, from piracy to transaction led entertainment consumption. None of which can be de-linked from the economic outlook that determines the future of over 1.6 billion people, roughly just over 1 in every 5 human beings on this planet.There are common threads to these countries. They have all been dubbed economic miracles; they have all fallen out of favor at various points in time. No one disagrees on the potential that comes with the weight of population driven domestic demand, richness in natural resources, the unlocking of local entrepreneurship spirits and the overall move towards more free-market policies. Equally, perhaps everyone disagrees on the ‘populist’ streak that characterizes decision-making in most large democracies when it comes to various subsidies, entitlement programs and protectionist policies. What may be bad economics and populism on one side of the prism may simply be empowerment and political necessity on the other side.All of this is of course being discussed against the mutual backdrop of a global economic scenario that is interlinked like never before. It has been 6 years since the financial crisis first came knocking with a battering ram. The bulge of fiscal stimuli, 50 shades of Green aka shoots of recovery, the roller coasters of manufacturing indices, ‘now we spend, now we don’t’ demand in the developed economies; we seem to be caught in a spin cycle of alternating optimism and pessimism. Ironically, the broadcast and content industry has mostly had a good ride through all of this. The health of most businesses, the increased localization of content and advertising spending decisions, the size and gamut of risk-taking seem to reflect an eco-system that is sure-footed, maturing and increasingly confident that these countries will be in a position to emerge stronger and move on to the next level of growth in the next 5 year period. So where do the challenges lie? And what is required?
India: Boom underneath the gloom? Much has been written about an economy that was poised to make the next big leap and then proceeds to develop a fear of heights. But good monsoons, rural demand and entitlement programs have still kept the economy growing at 5% p.a. The interim budget pegged growth at 6% for the coming FY. The industry finally adopted digitalization, with all analogue subscribers to be converted to digital by December 2014. Deadlines may slip due to change in governments, but industry has reason to be optimistic about a measure that promises to finally unlock distribution value in the market. As more and more Indians move online, traditional content consumption habits will be tested. As will the regulatory environment around the deployment and monetization of such content. Note – The election schedule in India just been announced. More than 800 million voters will decide the outcome in a phased process in April and May, with results out on the 16th of May. Cue frenzy and ad spends on India’s numerous news channels.
Indonesia: More the same, a bit faster? There seems to be a feeling that the economic hiccups of 2013 are poised to go away this year. The consensus from experts points to the need to accelerate the pace of infrastructure development, investment in human capital and advancement in responses to natural disasters. For our industry, cable penetration continues to grow; new platforms continue to invest in growing penetration and broadcasters test new programming formats from slightly different countries. Elections and WC 2014 are likely to continue to drive growth in the short term, as Indonesia’s economy looks to overcome the depreciation in the rupiah.
Thailand: A clear direction? As we write this, the political stalemate is beginning to have a real effect on the economy. When everyone from the farmer to the business owner starts hurting, the fight for the future direction of the country is in danger of jeopardizing that very promising future. Competition in the content industry points to an era of prolonged growth, and the chaos has not come in the way of the prevailing excitement or bidding levels around the DTT licenses. But the immediate situation on the ground may prove to be the most important determining factor.
Nick Binns, Group M adds: The situation in Bangkok is slowly getting better. Thailand has a record of resilient ad spending despite political instability in the past. If the situation is backed to normal, we will see spending back on track quickly. Yesterday, the protest sites have been combined to just one site. In term of ad spend; the spending in March is back to the normal level. World Cup in Q3 will maintain the momentum to the end of Q3. However, there is possibility to have deep cut in Nov-Dec due to an economic slowdown. Political unrest plays important factor. There could be a double-digit drop in media spending if the protests drag on to the second quarter. My view: Overall, minor impact of the protests but more deep-rooted economic uncertainty here, within a market that matured a lot earlier than the VIP ASEAN markets (VIP – Vietnam, Indonesia and Philippines)
The CASBAA 2020 Summary: The true outcome of an election lies not in the mandate it throws up, but in the decisions that are taken by those the people have empowered. As 3 of CASBAA’s most important markets decide their futures, the natural instinct of business is to renew optimism. There is hope that the political will of the elected leadership will continue to harness the potential of these economies and realize their abundant promise.
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A CASBAA Committee with a future perspective.
