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How Videocon d2h plans to grow its ad revenue
MUMBAI: Having substantially scaled up their subscriber base, direct-to-home (DTH) operators are tapping new revenue streams. Carriage income has grown for the leading DTH operators in the fiscal ended 31 March 2015. Also getting new attention is advertising revenue.
Videocon d2h, the DTH arm of Videocon Group, earned $1.5 million of ad revenue in FY15. The company feels that the stage has arrived to exploit this revenue stream through targeted advertising across its bouquet of regional-language and proprietary channels.
Claiming a reach of 65 million consumers, Videocon d2h expects to post faster ad revenue growth this fiscal. A structure is being put in place to expand this revenue pool.
The company has appointed Tanmay Srivastava as national head of ad sales. He has a rich media experience and was heading ad sales for Multi Screen Media (MSM) network. In this post, he supervised ad sales revenue generation from India-based clients for 16 international feeds from the US, Canada, UK, South Africa, Middle East and Asia Pacific. He has also worked for media organisations like Star TV, National Geographic Channel, NDTV and Zee Network.
Srivastava will report directly to Videocon d2h deputy CEO Rohit Jain. Videocon d2h said it has also recruited two other senior executives with extensive local advertising sales experience.
The ad pie will also organically grow as Videocon d2h launches its own branded channels in future. The company believes that it will offer high-margin growth opportunities.
Says Videocon d2h CEO Anil Khera, “With the goal of generating new revenue through an expansive, targeted ad sales platform, we have assembled a solid team that is more than capable of moving this initiative forward for us. We look forward to being a part of their success in tapping Videocon d2h’s reach of 65 million consumers with exciting, new options, and we anticipate the advertising programme to expand even further as we launch our own branded channels in future.”
Media buyers will, thus, be able to advertise on Videocon d2h’s home channel and info bar when changing channels.
The advertising initiative, which will target inventory opportunities on the Videocon d2h platform, comes in response to positive feedback from Videocon d2h advertisers like Volkswagen, Honda, Disney, Sony TV, Zee Group and Star Sports, and taps the rapidly expanding Indian digital media space.
Says Silver Eagle Acquisition Corp co-founder Harry Sloan, “During the recent NASDAQ listing process, we focused on advertising sales as one of the important high-margin growth opportunities. As we look to roll out a bouquet of new branded channels, we will be able to use the extensive reach of our platform to turn ad sales into bottom-line dollars. This is a programme that will benefit our growing consumer base, as well as those advertisers seeking their stake in the lucrative Indian TV market. Given the exciting growth in overall Indian advertising and the television ad market in India, we are very pleased to see the development of an effective advertising sales force implemented quickly and effectively.”
Videocon d2h’s net subscriber base stood at 10.18 million, as of 31 March 2015. The DTH company expects to add 1.3-1.4 million gross subscribers in the first half of FY16, similar to what it mopped up in the year-ago period.
Carriage revenue for Videocon d2h grew over 75 per cent in FY15 to Rs 58 crore (Rs 580 million). “We continue to focus on this stream of revenue. Clearly, we have achieved a significant scale in our business, and having a big chunk of the last-mile subscriber base in India on a platform today, we are the premium choice of many new broadcasters. New channels are coming up in India so we only continue to see very good traction and very good increase in carriage revenue going forward,” Videocon d2h executive chairman Saurabh Dhoot had earlier told investors.
Market leader Dish TV booked Rs 81 crore (Rs 810 million) as carriage revenue in FY15. In fact, Dish TV’s carriage revenue slowly increased from Rs 35 crore (Rs 350 million) in FY13 to Rs 50 crore (Rs 500 million) in FY14.
In a revenue size of Rs 2337.7 crore (Rs 23.38 billion) in FY15, carriage and advertising are insignificant income streams for Videocon d2h at this stage. But sensing its subscriber size, the DTH operator is making efforts to grow these side incomes.