TV Broadcasters Eye Profit Boost as Digital Shift Gains Momentum

CRISIL reports TV broadcasters could see operating margins rise to 15% by 2027 as digital offerings enhance economies of scale. Despite slow income growth during 2021-2025, the shift towards digital is projected to accelerate due to broadband penetration, with digital revenues anticipated to reach 25% of total revenue.

In a significant development for the television broadcasting industry, CRISIL has projected an increase in operating margins by 300 basis points, reaching 15% by the fiscal year 2026-27. This anticipated growth is largely attributed to the expanding digital offerings that are expected to enhance the economies of scale for broadcasters.

CRISIL's analysis, covering broadcasters responsible for 90% of the industry's revenue, indicates that these changes will bring profitability closer to levels seen before the COVID-19 pandemic. However, the industry's success remains contingent on effectively competing with emerging digital platforms as consumer preferences evolve. The period between fiscal years 2021-22 and 2024-25 saw stagnant revenue as more consumers gravitated towards digital content available via over-the-top (OTT) services like YouTube and Instagram.

As the trend towards digital viewing continues, spurred by faster broadband and greater internet penetration, revenues from traditional linear broadcasting are expected to remain stable or decline. Broadcasters have responded by launching digital platforms catering to content like live sports and news, helping capture advertisement revenue from sectors such as FMCGs and e-commerce. With linear broadcasting growth flattening, digital revenues are projected to rise significantly, contributing 25% to total broadcaster revenue by fiscal 2027, said Ankit Hakhu, Director at CRISIL Ratings.

(With inputs from agencies.)