TV18 Q1 consolidated rev jumps 10% due to election advertising, growth in subs rev

MUMBAI: TV18 Broadcast’s consolidated revenue for the quarter ended 31st March has jumped 10% to Rs 1198 crore from Rs 1088 crore in the same quarter of the previous fiscal.

TV18 said that the revenue grew amidst a weak advertising environment, led by election advertising and strong growth in subscription income post the implementation of new tariff order (NTO). Subscription revenue increased by 48% to Rs 424 crore from Rs 286 a year ago.

TV18 chairman Adil Zainulbhai said, “Our channel brands have witnessed a strong uptake in the new tariff regime which places the consumer even more at the center of the broadcasting business model. Class-leading value, genre-defining content and a pipe-agnostic approach are the tenets which we believe will continue to propel our portfolio forward.”

The broadcaster’s standalone revenue comprising of its news business grew by 29% to Rs 298 crore from Rs 232 crore. The general news revenue of the company was buoyed by election-related advertising, especially in Hindi. Business news revenue growth has continued to face genre pressures due to weak markets.

The company said that its news bouquet (20 channels) maintained its #1 position. TV18’s Q1 viewership share in the news was 10.1%, up from 9.3% post NTO implementation.

Entertainment (Viacom18+AETN18+Indiacast) revenue saw a meagre 5% jump at Rs 899 crore compared to Rs 857 crore. The company highlighted that the 5% growth is amidst weakness in overall ad-spends and a sharp reduction in ad-revenue of channels shifted from FTA to Pay. Niche genres witnessed robust growth, underscoring the strength in Kids and Youth genres, and the virtues of a full portfolio offering.

The company said that its Q1 viewership share in entertainment was 9.1%. Post NTO and shift from Free Dish, aggregate entertainment viewership share of top 4 broadcasters has fallen by ~9% to ~55%. Major events driving sports viewership have also contributed to this decline during Q1.

Regional entertainment channels in Marathi, Gujarati and Kannada movies gained strength. Following up on the launch of regional movie channel Colors Kannada Cinema last quarter, the company launched Colors Gujarati Cinema to further cement our portfolio leadership in these regions, and sweat our movie library better.

EBITDA jumped sharply on operating leverage accentuated by cost controls. The EBITDA growth was 96% at Rs 77 crore compared to Rs 39 crore.

Standalone (News) EBITDA stood at Rs 20 crore against an EBITDA loss of Rs 1 crore in the previous fiscal. The standalone operating profit has been driven by election-advertising as well as continued reduction in regional news gestation losses, on operating leverage as well as cost controls.

Entertainment EBITDA jumped 40% to Rs 57 crore from Rs 41 crore. Operating loss of new initiatives (regional movie channels and Voot expansions) was Rs 11 crore for Q1. Adjusting for these, BAU EBITDA was Rs 68 crore, up 66% YoY. BAU margins for Entertainment grew to 7.5% from 4.8% in Q1FY19.

The company further stated that ad-environment has been tepid, led by advertisers paring spends amidst weak markets/macro/regulatory flux, and concentration of advertising around sports. However, news broadcasting benefitted from election-related advertising during the quarter. “We expect the environment to pivot as we head into the festive season,” the company said in its Q1 result update.

TV18 said that the NTO implementation pains have smoothened as the value-chain adjusts to the new regime. It also noted that the subscription income has received a boost due to the NTO. “Nevertheless, some flux in distribution and viewership is lingering, which we expect to taper away in the near term. As consumers make their pack/channel choices, we believe that strong content propositions and distinctive brands will continue to gain traction. Our bouquet is well-placed to benefit, through leading channels and improved distribution tie-ups,” it added.

The company said that the shift of Free-to-Air (FTA) Hindi general entertainment channels out of the DD Free Dish platform and conversion to Pay has impacted viewership (and consequently ad-monetisation) for those channels.

“All top 4 broadcasters have faced a drop of 2-5% viewership and consequent revenues. Similarly, viewership share for our Hindi news channel (as well as some others) which have chosen to be Pay has been impacted, versus peers which have chosen to be FTA. We continue to maintain portfolio ranks vs even FTA peers, despite being a pay network,” the company stated.

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