Network18 Media & Investments Limited announced its results for the quarter ended 30th Sep 2021. The consolidated EBITDA for the quarter grew 53% YoY (~3.3x of Q2FY20), operating margin at 18.2%.
Both News and Entertainment businesses further improved profitability. The strong revenue growth driven by viewership registered the highest ever Q2 revenue (ex-film), grew by 29% YoY (and 21% vs Q2FY20). Despite a lingering impact of the second wave, the operating margin stood at 18.2%, the Entertainment margin at ~19%. The ex-film revenue was up by 31% YoY (up 20% vs Q2FY20). The News margin revenue was up by 18% YoY (15% vs Q2FY20). The Digital News continues to grow revenue and improve margins. The revenue rose by 55% YoY and margins at ~17%. The Profit After Tax rose to Rs. ~200 Cr (~3x of Q2FY21), driven by improved revenue performance, controlled opex and lower finance costs.
Viacom18 is building a strong sports portfolio; acquired rights to FIFA World Cup ’22 and 3 major football leagues. Voot’s digital exclusive property, Bigg Boss OTT, drives substantial growth in paid subscriber base.
With strong performance in Hindi and select regional markets, share of the entertainment portfolio rose 90bps QoQ to 11.8%, highest ever in the last 7 years. This was despite a marginal decline in the Entertainment and overall TV viewership, which has now settled at the pre-COVID levels. The News genre viewership continues to be choppy, driven by topical events. However, their pan-India portfolio helps them to strengthen revenue salience, as reflected in this quarter’s numbers.
Entertainment revenues surpassed pre-COVID levels as ad volumes registered a strong growth during the quarter. As the number of cases came down sharply and the pace of vaccination drive accelerated across the country, consumption and advertiser sentiment got a big boost.
Having already scaled to FY20 levels in Q1, ad revenue registered a strong growth (vs both FY21, FY20) during the quarter, driven by an action-packed programming calendar that strengthened the network’s viewership share.
TV News advertising also witnessed strong growth (both YoY and vs FY20) even as viewership normalised to pre-COVID levels and channel ratings remained suspended by BARC. The Digital News ad revenue is growing strongly, albeit on a low base. With one of the biggest portfolios of digital news platforms spanning languages and genres, the business is well poised to gain from rising consumption on digital platforms.
Voot‘s paid subscriber base (Voot Select) saw a sharp jump during the quarter, powered by the launch of Bigg Boss OTT, the first marquee property to go digital exclusive. Advertising revenue for the quarter saw a robust growth driven by both display advertising and alternative monetization streams. The Operating margin for the quarter was a healthy 17.7% and EBITDA was up 68% YoY (~8x of FY20). Being a high operating leverage business, the profitability of the business got a fillip as the revenue scaled up
Commenting on the financial results, Adil Zainulbhai, Chairman of Network18, said, “This quarter has been quite remarkable, both from a macro as well as Company’s point of view. The way the country came out of the grip of the second wave of COVID was truly heartening, and equally reassuring was the full-swing return of economic growth. The outlook is looking quite promising from a medium-term perspective and this is good news for all our consumer-facing businesses. Our digital assets, both news and entertainment, got a lift during the pandemic and we continue to invest to leverage those gains. With expansion into the sports genre, we have taken a significant step towards scaling up our entertainment portfolio to the next level. This will help establish us as a truly integrated media company across broadcast, OTT and content studio business spanning general entertainment, news, movies and sports.”.
