Digital Shift to Boost TV Broadcasters’ Margins to 15% by FY27: Crisil

The operating margins of TV broadcasters are expected to improve by 300 basis points (bps), reaching 15% by the fiscal year 2027, as per a recent analysis by Crisil Ratings.

Digital Expansion to Drive Profitability Growth

The growth in the operating margins will be fuelled by an increasing focus on digital offerings, which are enhancing economies of scale and boosting revenue streams, Crisil Ratings said in a report. The analysis covers broadcasters contributing to 90% of the industry’s total revenue.

While this margin expansion brings profitability closer to pre-pandemic levels, the long-term sustainability of TV broadcasters will depend on how effectively they compete with digital platforms amid changing viewer preferences.

Crisil Ratings highlights that improved profitability will also strengthen credit profiles, with returns on capital expected to rise to 10-12% by FY27. However, this remains lower than the pre-pandemic levels of 12-15% and significantly below the peak of 15% recorded over the last 2 decades.

The Impact of Digital on TV Broadcasting Revenue

Between FY22 and FY25, revenue from traditional TV broadcasting has remained largely stagnant as more consumers shifted towards digital platforms, including OTT services on mobile devices and smart TVs, as well as social media platforms like YouTube and Instagram.

The expansion of broadband and internet penetration continues to accelerate this trend, with digital media offering the advantage of on-demand content and interactive engagement. Consequently, linear broadcasting revenue is expected to remain stable or experience a slight decline.

In response to this shift, TV broadcasters have actively expanded their presence in the digital space, launching their own streaming platforms and offering premium content such as live sports and news.

This strategic expansion has also enabled them to tap into higher advertising revenues, particularly from key sectors such as fast-moving consumer goods (FMCG), automobiles, e-commerce, and real estate.

Advertising and Subscription Revenue Fuelling Growth

The advertising industry has increasingly leaned towards digital channels due to evolving consumer behaviour and the ability of digital platforms to deliver targeted, data-driven advertisements.

Additionally, rising subscription revenues have supported broadcasters as they compete with OTT platforms and digital-only services for content acquisition and subscription income. To maximise profitability, many broadcasters have introduced paywalls, optimised content acquisition costs, and enhanced ad revenue strategies.

Ankit Hakhu, Director at Crisil Ratings, noted, “As a result, digital revenues of these broadcasters grew 15% on average over fiscals 2022-2025 and will continue to grow at double-digits over the next two fiscals. With the linear broadcasting segment nearly flat, this will increase the revenue contribution of digital to 25% by fiscal 2027.”

Conclusion

The digital expansion of TV broadcasters is playing a crucial role in driving profitability, helping them recover from stagnant revenues in traditional broadcasting. By leveraging digital platforms, broadcasters can optimise content distribution, increase advertisement revenue, and improve overall margins.

However, the industry’s long-term growth will depend on its ability to compete with OTT platforms and adapt to shifting consumer preferences.

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