Not just India, the entire world is staring at a recession. Though we expect in a couple of months most countries would have controlled the spread of Coronavirus but it may not translate to the revival of the economy immediately.
The total lockdown in India was expected by a few, if not many. Most of us are not getting newspapers in the morning (expected to be normal from April 1). Irrespective of whether your job is Work From Home doable, we all are at home.
During the initial days of COVID-19 digital news sites showed an increase in traffic. An expected behaviour as,
- People are curious to know what is happening
- How to safeguard themselves and their loved ones
- What are the state and Central govt saying about COVID-19
- And most importantly – trying to do a fact-check of the toxic fake forwards you get on WhatsApp
But after some time there is an overdose of COVID-19 related news and fatigue sets in.
After the lockdown was announced by Prime Minister Narendra Modi (March 24 midnight – April 14 midnight) most news related publishers have seen a spike in their traffic. People want to know what is happening around. One of the leading news aggregators reported a 100% increase in their traffic.
The above graph from Neil Patel’s blog shows the performance of various categories in the digital space. Only finance, food, healthcare and media (news) are doing well. The rest are in red.
Impact of Covid-19 on Indian Economy
According to FICCI’s report,
- The coronavirus epidemic has made the recovery extremely difficult in the near to medium term
- Tourism, Hospitality and Aviation are among the worst affected sectors that are facing the maximum brunt of the present crisis
- Closing of cinema theatres and declining footfall in shopping complexes have affected the retail sector by impacting consumption of both essential and discretionary items
- Consumption is also getting impacted due to job losses and a decline in income levels of people particularly the daily wage earners due to slowing activity in several sectors including retail, construction, entertainment, etc
- The overall confidence level of consumers has dropped significantly, leading to the postponement of their purchasing decisions
Traffic up, Digital Ad Revenues down
Digital publishers in India would always hope election results are not announced on a public holiday. People depend on digital news sites for updates on working days.
With a 21 days national lockdown, most people are watching TV for news, hence digital publishers will take a hit. However, the time spent on smartphones per user per week has risen by 12% (3.8 hours vs 3.4 hours per day, frankly, not that big a jump). People must be spending time on mobile-only platforms like Tiktok, Sharechat.
A few data points about TV viewership during the lockdown as per the report “Crisis Consumption: An Insights Series Into TV, Smartphones and Audiences” by BARC & Nielsen,
- The average daily TV viewers have grown by 62 million, making the total number of viewers to 622 million
- Viewership in the age group of 2 to 14 years of age has grown by 47%
- News TV viewership jumps nearly fourfold
- The news genre has grown by 252%, rising by 260% in the Hindi-speaking markets
- Television consumption has seen a 37% spike across India, with 622 million watching TV daily for 4 hours 40 minutes.
- Movies, news, etc., news viewership saw a growth of 200%
Publisher’s revenue had already taken a hit as ad dollars were going to Facebook and TikTok type apps.
Even though traffic has grown for the big news publishers their revenues haven’t increased in the same proportion. After all the number of advertisers who are spending on print, radio and digital have gone down.
Why would the auto, travel, finance industry spend now on advertising? You cannot even buy their products even if you want to. Also, people are conserving their savings as companies are trying to save money by asking people to take pay cuts or deferred salaries.
Direct advertising revenue would have shrunk. Only networks will be supplying the necessary oxygen to digital publishers. But then we need advertisers spending on Google Adsense. The big publishers will manage to keep their operations running, the small sites will be in trouble for some time.
Nobody can predict accurately by how much the revenues will fall for digital publishers but people expect it will fall by 33% for Q1 (Apr-Jun quarter), Q2 unknown, Q3 – well that is too far to even think about!
Google, Facebook helping global news agencies
Facebook pledges $100 million to help news organizations,
- $25 million directly to news organizations (removing paywalls, pay journalists etc)
- $75 million on ad money to news publishers in the US, Europe (NOT India)
Google is donating $340 million in ad credits to support small and medium-sized businesses with active accounts over the past year. We assume India based MSMEs will be eligible for this.
Govt of India should help the digital industry
Online publishers never ask the government for help. Maybe their lobbying effort is not strong. The radio industry in India has already asked for help from the government.
Digital publishers would find it very useful if government sets aside a good 20% of its entire ad spend to digital publishers. And govt should ensure this is not gobbled up ENTIRELY by the big publishers. Small and medium publishers need help too. And yes, many digital publishers are being bad by flaring up the emotions, publishing fake news. Ban them from this list of beneficiaries.
COVID-19 has ‘infected’ digital revenues, this phase will pass. We will bounce back.