James Murdoch talks about Star India’s FY18 EBITDA target, IPL monetisation

MUMBAI: 21st Century Fox (21CF) CEO James Murdoch has indicated that the company’s Star India business might not have hit the $500 million EBITDA target in FY18. In the same breath, he also stated that the company’s EBITDA was not very far away from the avowed target.

Murdoch noted that the company has made a big investment in Hotstar. On an earlier occasion, Murdoch had stated that the company will invest $50 million in the Hotstar platform in FY18.

The American media conglomerate’s EBITDA target from the India business for FY18 was $500 million. For FY20, the target is a more ambitious $1 billion.

“With respect to the TV business target of $500 million, we got there…thereabouts. Obviously, we made a big investment in Hotstar platform and it comes through in our international cable members. We are really pleased with the growth,” Murdoch told analysts during an earnings conference call.

The company announced its Q4 and FY18 results on 8 August.

21CF CFO John Nallen said that the company’s international cable revenue increased 25% led by advertising growth of 55% and a 12% increase in reported affiliate revenue in Q4.

The sharp increase in ad revenue was led by the successful debut of IPL tournament on Star Sports, he added. He also said that the reported international EBITDA increased 53% led by higher contributions from both Star Sports and its entertainment business.

Nallen also noted that the P&L results generated over $2 billion cash from operations in Q4 and $4.2 billion for full-fiscal. “This is 21CF’s strong cash generation result ever,” he declared.

He also guided that there will be a cost increase during the Q4 FY19 due to ICC Cricket World Cup broadcast on Star network.

Murdoch, meanwhile, said he is very satisfied with the Indian Premier League (IPL) debut on the Star network. The IPL, he said, was successful not just from a monetisation point of view but also from the performance side.

“The IPL was very successful for us and the advertising returns were very strong and the monetisation there across the board. The impressions that were

delivered by the IPL was so much higher than what Sony delivered with its previous ownership of it,” he stated.

He also lauded the strength of the India sports business. “When I look at the line-up and the overall growth of the affiliate income in India really the strength of the sports business is the IPL, BCCI, this year with ICC World Cup coming up and continued strength in Kabaddi. I think it’s in a great position there,” he stated.

He also provided some statistics to show the growth of the IPL on Star versus the previous edition Sony Pictures Networks India. “The tournament almost 30% increase in viewership over last year in the target audience on TV. Average match reach and engagement has increased by double digits to 15% and 13% respectively,” Murdoch stated.

The IPL, he said, also saw a big leap on digital. “We also saw the IPL increase the viewership on our mobile platform Hotstar. To give you one data point, 10.3 million concurrent viewers watched the IPL final match which was the most concurrently watched digital event in the world ever,” he added.

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