Emerging markets boost TV industry

NEW DELHI: The television industry should experience rapid revenue growth in key emerging nations such as Brazil, China and Indonesia going forward, according to Media Partners Asia.

In India, three TV companies currently hold a 40% share of the advertising market, the consultancy said.

Moreover, this share stands at 50% for the three biggest direct-to-home satellite specialists in China.

Six Brazilian broadcasters and three media owners, receive 80% of TV ad sales, while four Russian firms responsible for a similar proportion of national television outlay among marketers.

Three Indonesian operators also channel 70% of domestic expenditure.

Household penetration has reached just 60% in India and 55% in Indonesia, measured against scores of at least 94% in Brazil, Russia and China.

The average revenue per user in Brazil is now approximately $50 (€37; £32), compared to Russia's $5 and India's $4.

Moreover, returns from all sources for the TV sector are expected to hit $101.9bn in Brazil in 2014, a lift on $59.3bn at present, MPA forecast.

These figures stood at $11.2bn and $19.6bn respectively in China, but declined to $5.3bn and $9.6bn in turn for India.

Networks' profit margins have contracted from 25% to 13% in India - where TV advertising only contributes 0.38% of nominal GDP - during the last four years due to rising competition.

By contrast, margins typically come in at around 30% in Brazil, China, Indonesia and Russia.

Looking ahead, it was predicted Indian broadcasters' earnings before interest, taxes, depreciation and amortisation may fall below 20% by 2014, while Brazil, China and Indonesia's totals range from 35% to 40%.

"The dominant trend in the emerging markets is that of concentration, capitalisation and consolidation,” said Vivek Couto, executive director, Media Partners Asia.

Data sourced from afaqs; additional content by Warc staff, 1 October 2010

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