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Streaming surpasses traditional TV: Advertisers follow the trend
Mumbai: As per an Ormax report, streaming has become India’s preferred choice for content consumption, boasting over 480 million OTT users. Its convenience and accessibility, allowing users to watch content anytime, anywhere, and on any device, have fueled this trend. The surge in smartphones, 4G feature phones, and widespread high-speed internet availability in urban and rural areas contribute to this shift, creating a new frontier for advertisers.
Advertisers are capitalizing on streaming platforms’ interactive nature, crafting immersive and engaging ad experiences. Interactive ads seamlessly blend with content, enhancing the viewing experience and resonating better with audiences. Streaming also offers a wealth of data, enabling precise targeting and tailored campaigns, ensuring maximum impact and ROI. Brands are leveraging innovative placements and exclusive content to effectively engage audiences.
According to a Magnite report, 80 per cent of Indian streaming audiences prefer ad-supported content over paying for an ad-free platform. This preference opens up opportunities for advertisers to drive brand awareness, engagement, and conversion. The report indicates that almost half of streaming users actively search for products featured in ads, and one in three makes a purchase based on these ads, underscoring the significant impact of streaming platform advertising on consumer behavior.
Furthermore, 59 per cent of Indian streamers spend an average of 8 hours per week streaming content on the big screen at home. CTV advertising is gaining popularity among BFSI, e-commerce, automobile, and OTT categories, with an expected spending of $395 million by 2027, reflecting a remarkable 47 per cent CAGR growth.
Despite the popularity of UGC platforms for on-the-go content consumption, CTV’s premium and engaging advertising environment sets it apart. Advertisers have more control over ad placement and brand association on CTV, making it a more effective advertising channel. A Kantar report highlights that 22 per cent of consumers are more likely to recall brands advertised on CTV than on a leading UGC platform.
Over the past five years, there has been a 25 per cent decline in Pay TV subscribers, with over 200 million households unreachable by Pay TV, according to an EY-FICCI report. Advertisers are increasingly turning to digital routes, and the decline in Pay DTH subscribers further supports the preference for CTV. Linear TV has consistently declined, with a 6.2 per cent fall in subscription revenue in 2021 and the loss of 6 million Pay TV households.
As streaming, especially CTV, continues to rise, advertisers are adapting strategies for enhanced ad experiences, focusing on creative storytelling and dynamic digital touchpoints. Technological advancements, evolving consumer preferences, and growing advertiser interest are propelling streaming’s strength. The first half of 2024 promises more immersive, powerful, and impactful ads, delighting both advertisers and consumers.
The upcoming TATA IPL is expected to define the next phase of this evolution, with JioCinema unlocking cutting-edge ad innovations on CTV for an estimated 600-650 million viewers streaming the matches across devices for free. Advertisers have a golden opportunity to connect with their desired audiences among cricket fans in this ever-expanding streaming landscape.
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Bill Ackman’s Pershing Square makes $64 billion bid to acquire Universal Music Group
Ackman pitches NYSE relisting plan as UMG board weighs unsolicited offer
The hedge fund has proposed a business combination that values UMG at €30.40 per share, representing a hefty 78 per cent premium to its current trading price. The offer includes €9.4 billion in cash alongside stock in a newly formed entity, with shareholders set to receive €5.05 per share in cash and 0.77 shares in the new company for each UMG share they hold.
Under the proposal, UMG would merge with Pershing Square SPARC Holdings Ltd and re-emerge as a Nevada-based entity listed on the New York Stock Exchange. The move is designed to boost investor visibility and potentially secure inclusion in major indices such as the S&P 500.
Pershing Square Capital Management ceo Bill Ackman argued that while UMG’s operational performance remains strong, its market valuation has lagged due to external factors. “UMG’s stock price has languished due to a combination of issues that are unrelated to the performance of its music business,” Ackman said, pointing to concerns ranging from shareholder overhang to delayed US listing plans.
Ackman also flagged what he sees as untapped potential in UMG’s balance sheet and a lack of clear capital allocation strategy. He added that the market has not fully recognised the value of UMG’s €2.7 billion stake in Spotify, alongside gaps in investor communication.
The proposed transaction would also result in the cancellation of around 17 per cent of UMG’s outstanding shares, while maintaining its investment-grade balance sheet. Pershing Square has said it will fully backstop the equity financing, with debt commitments secured at signing. The deal is targeted for completion by the end of the year.
UMG, however, has struck a measured tone. The company confirmed that its board has received the non-binding proposal and will review it with advisers. It reiterated confidence in its current strategy and leadership under Lucian Grainge, signalling no immediate shift in stance.
The proposal comes at a time when global music companies are navigating evolving investor expectations, streaming economics and capital allocation pressures. For Pershing Square, the bet is clear: sharpen the financial story, relist in the US, and let the music play louder in the markets.
Whether UMG’s board is ready to change the tune remains to be seen, but the spotlight on its valuation just got a lot brighter.
