Weekend Musings: Headwinds and Tailwinds for the Television Industry

India harbors an ambition to become a 5 trillion economy by 2024 and the Government is working on fixing the key economic indicators to stay on course. Major efforts are also underway to establish India as a global electronics manufacturing hub. One such initiative is the National Policy on Electronics (NPE) 2019. It aims to position India as a global hub for Electronics System Design and Manufacturing – by driving capabilities in the country for developing core components, including chipsets, and creating an enabling environment for the industry to compete globally. It aims to attract an investment of USD100 billion. On the other hand, the consumer durable industry continues to battle with issues related to lower consumption, slow economic growth, rapid changes in technology, fluctuating raw material prices and exchange rates. 

And recently you may have read articles on how lower consumption, slow economic growth is driving down the demand for TVs. With this backdrop, I will try to give you a perspective of the TV industry and how this has the potential to create jobs and drive investments with the right impetus from the policymakers.

Television boom in India can be linked to the opening up of the sector in the 1990s with cable TV coming in with international shows, then the domestic industry picked up with original content and all of this impacted the TV industry positively with double-digit growth. During 2014-16, TV was still growing at 20%. This was the time when OTT (over the top) content started gaining traction in India. And over the last couple of years, three clear issues emerged for the television industry.

With a rise in OTT content, there is a rise in demand for personal screens leading to mobiles becoming preferred platforms for each family member to watch their favorite content and engage with it. Imports have gone up with several domestic players, too, relying on cheap imports from South East Asia. In 2018-19 the import of electrical machinery and equipment, including TV sets, accounted for over 10% of India’s imports adding up to $52 billion (over Rs 36,000 crore). Thirdly, competition is intensifying with more players entering the market leading to price wars.

When I was growing up, TV was a luxury and just a few houses in the colony had a set where everyone came together to watch the Sunday movie. However, with growing affluence, single TV households are starting to go for the second sets and rural India too is looking at LEDs not as a luxury anymore. In light of this, the consumption story is still there in the Indian markets and with improving availability of OTT content, technology advancement in large screen televisions and the required support from the Government, it will improve.

So here is my take on this. As an industry, we need to innovate for a fantastic user experience at an affordable price. The customers are ready for large screens now and this is where the next growth story lies. So we need to improve the performance of large screens and make them more affordable. And the reduction in GST for TV sets above 32 inches to 18% will help both the consumers and the industry

In a nutshell, I believe that the year 2020 is the T20 match for the Indian TV industry and we are ready to hit the ball out of the park.