NETWORK18 Archives | Ultra News

July-Sept results for TV18 Broadcast TV18 Broadcast, which operates channels like Colors and News18, has reported a dip of Rs 71 cr in its revenue after a shift from free to pay for some of its entertainment channels and a soft economy hurt advertising sales. "Macro-weakness and shift of channels from DD Freedish to Pay ecosystem continues to drag ad-revenues of GECs for the entre industry. Pushing of some high-end content vs last year for better monetization (i.e. planned delay in the launch of Big Boss, shifting of IIFA awards to Q3, etc) makes the base not fully comparable," it said. Like other broadcasters, TV18 had converted several of its channels -- such as Rishtey, Rishtey Cineplex & MTV Beats -- into pay channels in February to continue to bundle them as part of their mega packs under the new TRAI tariff scheme. This was followed by a sharp decline in the reach of these channels, which in turn resulted in advertisers paying less money to put their ads on these channels. However, broadcasters had hoped that the drop in advertisement revenue will be compensated by an increase in subscription revenue. Going by the July-September numbers of TV18 Broadcast, that compensation is yet to materialize. The company, however, did see an increase of Rs 138 cr in its subscription revenue during the three months. Subscription revenue increased from Rs 323 cr in July-September of last year to Rs 461 cr this year. This was primarily because of the new tariff order, under which broadcasters get to decide their channels' retail selling price. However, even as subscription revenue increased by Rs 138 cr, TV18 saw a fall of Rs 209 cr in its non-subscription revenue -- which is overwhelmingly composed of advertising income. In other words, the compensation failed to occur to the expected degree, and overall revenue was down by 71 cr. The impact was felt more in the entertainment channel category, compared to news channels. This may be because TV18's news channels are mostly priced at 10 paise per month, and continue to be almost as popular today as they were before going pay. Out of the Rs 71 cr decline in revenue seen during the quarter, 64 cr of decline was seen in entertainment and infotainment channels. "The advertising environment continued to remain tepid during much of the past quarter. Weak macroeconomic trends dragged down consumer spends and depressed broader corporate appetite for above-the-line marketing activity. "However, certain categories of new-economy advertisers were bright spots, and tailwinds in regional and digital consumption continued to attract attention. Ad-spends began to rise led by the advent of the festive season late in the quarter, and big-ticket programmes and events planned around the same. We are hopeful that Government policies aimed at stimulating demand shall aid the recovery as we head into H2," it added. Advertising revenue was also lower when compared to the immediately preceding three months (April-June), which had seen a lot of political ads come in ahead of the general elections. As such, total operating revenue showed a decline of Rs 71 cr when compared with the Apr-Jun quarter as well. On the increase in subscription revenue, it noted: "The implementation of the new tariff order (NTO) has created a transparent and non-discriminatory B2C regime. Flux around the NTO has largely settled, though the cable segment continues to face some billing and reporting issues." PROFIT MARGINS Despite the fall of Rs 71 cr in operating revenue, the company was able to prevent the entire fall in its revenue from reflecting in its profit margins by controlling costs. It reduced its total expenses -- including interest and depreciation -- by Rs 42 cr compared to last year. Together with an increase of Rs 21 cr in income from non-operating activities (such as rent), it was able to contain the damage at the pretax level to just Rs 7 cr. Pretax profit came in at Rs 56 cr versus Rs 63 cr last year. It was an improvement over the April-June quarter, which had seen a sharp run-up in the company's marketing, distribution and promotional expenses.

Tag: NETWORK18

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