The Week That Was: 27-31 July
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This week, we wrote about regulations over bundling (in the context of TV channels), a speech by the Governor of the Reserve Bank of India, the business of cricket and how consumer brands have had mixed success in the wake of the pandemic.
It is not hard to see why we needed a NTO 2.0 to follow NTO 1.0. Once the transparent pricing regime was brought in, broadcasters took to extensive bundling. With the price of each individual channel being transparent, the way to sell otherwise less popular channels was to bundle them with more popular channels and then offer the bundle at a good price.
NTO 2.0 puts an end to that practice. Firstly, the price of a bundle cannot be less than two-thirds the price of all the channels put together. Secondly, no channel within a bundle can be priced at over three times the average price of a channel in that bundle. Thirdly, no channel priced above ₹12 a month can be offered as part of any bundle.
The combination of these regulations means that using “bundled pricing” to “push” channels that people may not buy standalone might be a thing of the past. In fact, that might be the intention of the NTO 2.0 itself.
However, if you are in certain positions of responsibility, every word you utter gets recorded and reported. When you head your country’s central bank, more people are trying to read between the lines of your speech than understand what you actually say. So when Shaktikanta Das, Governor of the Reserve Bank of India (RBI, India’s central bank) gave a speech (over videoconference) to the Confederation of Indian Industries on Monday, the speech got widely reported.
We will thus defer to our colleagues elsewhere in Indian media and provide “footage” to this speech. Maybe he watched Kill Bill recently. Or perhaps he read Chetan Bhagat’s first novel. Or he was dreaming about the Pentagon. In any case, his speech to the Confederation of Indian Industries contained five points to reshape the economy, in light of the pandemic.
Back to this season, there is optimism that spending will be completely back to normal (from the pandemic-induced lows) by the time the IPL comes around, and that it will present marketers an opportunity to make up for lost sales in the earlier part of the year.
While the average spends in April was almost 55-60% lower than the pre-Covid period, it was only 28-30% for June and the numbers for July and plans for August look better, indicate top media agency executives. The view of the rest of 2020 is looking up due to the addition of cricket to the ‘Fifth Quarter’, an informal name for the festive season.
Last week we did this story on the theme of “people doing the same things, but in a different manner”. One of the heroes of that story was biscuit maker Britannia, whose profits in the April-June quarter more than doubled on a year-on-year basis. This might have lulled you into believing that other companies that have a broadly similar product portfolio, consisting of things that can be done at home (rather than outside) would have done well.
Unfortunately that hasn’t been the case. Nestlé, the maker of Maggi, Everyday milk powder and Nescafe underperformed compared to analysts’ expectations. While the company did make a profit, and one that was 11% higher (YoY), this was less than what analysts expected thanks to the rise in demand for packaged food (something that is consumed much more at home than outside).