Weekend Musings: Headwinds and Tailwinds for the Television Industry
Manish Sharma
Chairman and EGSO (Enterprise Growth & Strategy Officer), PLSIND | Chair, FICCI Electronics Manufacturing Committee | Member SCALE Committee
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.
Investments
5 年Manish Sharma Larger screens, better experience and rest of the other pros is fine, But the fundamentals of the OTT market is the flexibility of consumption without allocating a specific time to it. We must try to collect a factsheet of how is the content being consumed during what intervals of day and by what sort of a customer. Also, another significant factor is to consider behavioral pattern of the young millennial, he/she is bored too quickly and want to swap around content as and when he wishes to whereas in a large screen format s/he has a reservation to it for an interest of larger audience. Lastly, the customer himself doesn't know what content is he seeking for- the platforms are smart enough to help everyone give a personalized view point on what s/he might like and not just stick to what is trending. Honestly, when I go to Netflix- I have zero knowledge as an user about what I want to do with next 2-3 hours of my life.
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5 年I recently purchased a Sanyo 43 inches led tv in October which didnt even last for not even 4 months. What vision are you talking here Manish. I have send a mail to you Manish, please have a look at it & reply me accordingly.
Chief Executive Officer at Ravartech OPC Private Limited
5 年So true also from the bottom of the pyramid aspirations perspective the cottage TV industry gives a glimpse of the possibility that lies here in India . where it's is becoming like the old time PC assembly segment which drives down the prices to really affordable levels with a consumer choosing which grade panel and which cabinet etc the demand for the large screen at the right price is heading northwards . This if nurtured well can create big opportunity for the organised segment and bigger brands as well as the overall market and support the economy.
Business Development Manager
5 年Nice article.... Few points to be addressed by the Top Brands 1. CES 2020 launches were awesome but some of the TV's never make it to India and always have a delayed launch of your latest models in India. India is the fastest growing market for TV's right now but none of the brands are able to tap it to the fullest potential 2. Understanding the consumer needs is a very important aspect but Top Brands like Samsung, LG, Sony & Panasonic never seem to address this issue 3. Every market is different and customisation is needed to meet the end customers' needs