Network18 and TV18 key financials for Oct-Dec 2019\n\n\n\nTV18 Broadcast Ltd, one of India's top three broadcasting companies, reported yet another quarter of declining advertising revenue, but the company's profits zoomed due to cost cuts.\n\n\n\nNon-subscription revenue -- which is mostly composed of advertising sales -- fell by Rs 181 cr (16%) in October-December of 2019 compared to the same quarter of 2018.\n\n\n\nIn the preceding, July-September quarter too, the company had seen a decline of Rs 209 cr in its non-subscription revenue.\n\n\n\nAdvertising revenue has been falling for several pay channels due to two factors -- a sharp decline in channel reach due to an increase in monthly subscription charges, complicated by an overall decline in advertising activity due to a slowdown in the economy.\n\n\n\nCompanies, including TV18 Broadcast, implemented an increase in subscription charges in February 2019 after new TRAI rules allowed the channels to decide their selling price, instead of depending on distributors like cable and DTH companies. This resulted in lower reach -- and therefore lower advertising revenue -- but higher subscription revenue.\n\n\n\nAs such, TV18 Broadcast, home to channels like Colors and CNBC-TV18, saw an increase of Rs 131 cr in its subscription revenue for the three months. However, the increase was not enough to compensate for decline of Rs 181 cr seen in non-subscription revenue during the same period.\n\n\n\n"The prevalent weakness in macro-environment and sluggish spending appetite by advertisers continued to drag ad-revenue down YoY for both News and Entertainment. A shift of channels from DD Freedish to the pay ecosystem continues to impact Hindi GEC ad-revenues for all the top broadcasters," the company said.\n\n\n\n"Government initiatives to boost growth and a natural refresh-and-recalibration of ad-budgets should revive ad-growth as we head towards the new fiscal."\n\n\n\nBoth news channels and entertainment channels reported year-on-year declines in revenue.\n\n\n\nTo cope, the company implemented sharp cost controls during the quarter, resulting in an immediate improvement in profitability during the Oct-Dec period.\n\n\n\nWhile revenue during the quarter fell by Rs 39 cr, TV18 was able to cut its total operating expenses -- including non-cash items like depreciation -- by a whopping Rs 203 cr.\n\n\n\nThis lifted the operating profit to Rs 226 cr from Rs 62 cr a year earlier. Net profit rose to Rs 205 from Rs 147 a year ago. The previous year's net profit had been boosted by a tax write-back of Rs 77 cr.\n\n\n\nCost reduction was seen across headings. Operating costs fell by Rs 141 cr to Rs 629, while employee costs fell by Rs 33 cr to Rs 210 cr.\n\n\n\nTV18 quarterly numbers (consolidated)\n\n\n\nCost optimizations, however, were seen largely in the entertainment business, rather than the news business. Operating profit (EBITDA) fell to Rs 36 cr from Rs 47 cr for news channels, while it rose to Rs 245 from Rs 68 in the entertainment and infotainment channels division.\n\n\n\nDigital and print division -- housed under Network18 -- narrowed losses to Rs 12 cr from Rs 27 cr.\n\n\n\n"In sync with the ad-environment, operating costs were streamlined. Both quantum and cost of programming were tweaked for efficiency, and focus was maintained on key shows," said the company, controlled by India's richest man Mukesh Ambani.\n\n\n\nTV18's parent, Network18 -- home of some of the company's key digital properties such as First Post, reported largely flattish revenue from its digital and print businesses at Rs 48 cr versus Rs 49 cr in the previous year.