Thursday, February 04, 2010

2010 will be known as the year of radio

The way the world changed in the first decade of the 21st century can be gauged by the year-end covers of two prominent magazines. Time Magazine (Dec 7th issue) called this decade the "Decade from Hell". In contrast, Business Today's cover (Dec 27th issue) called this decade "India's best decade." Clearly, the center of gravity of the world of business has shifted towards the East!

While Indian industry battled the slowdown of 2009 rather bravely, and the Indian economy still grew at over 7 per cent, the advertising industry wasn't that lucky. As the downturn hit the ad industry, the bean counters took over and the focus of CEOs shifted towards management of bottom lines.

The first item to be cut was obviously the advertising line. Most media companies - who rely heavily on advertising for revenues - saw revenue drops of between 5 and 25 per cent in the first nine months of 2009. While the last quarter of the year looks better, the overall growth in 2009 is still expected to end negative.

There were more companies recording revenue de-growths than those recording positive growths. For every one Colors coming in and grabbing new revenues, there was a Star Plus and Zee that lost revenues heavily. The sum total: negative growth. Borrowing the terminology of business news channels, the "market width" was negative!

The few media companies that recorded positive growths in revenues did so on the back of inorganic growth (some parts of the business did not exist last year). Or they were in the early part of their growth cycle (hence last year's comparative revenue base was small). In other words, the quarters were incomparable.

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