Mumbai: Network18 Media & Investments Limited has announced its results for the quarter ended 30th September 2018.
Network18 reported a 59% jump in operating EBITDA to Rs. 92 crores in Q2FY19, driven by improved performance of regional channels (both news and entertainment); despite gestation losses of Colors Tamil and new launch Colors Kannada Cinema. While headline operating revenue grew 9% (on a comparable basis), revenue ex-movies grew 14% YoY, underscoring tailwinds in broadcasting.
Highlights for the quarter:
The industry ad-environment has substantially improved compared with the previous year, though certain pockets of the market (mobiles, auto, colas, etc) are yet to resume advertising full- throttle. Broad-based growth in regional markets and upcoming festive season are positives.
Broadcast subsidiary TV18 posted 17% revenue growth ex-movies on a comparable basis:
- Advertising revenue for TV18 grew at ~18% YoY overall.
- Regional channels across news and entertainment drove viewership growth and ad-revenues for the portfolio, reducing our dependence on national channels.
Subscription revenue for our entire bouquet grew 16% YoY. We are in negotiations with two of India’s leading DTH players for long-term deals on terms commensurate with the strength of our channel bouquet.
TV18’s News bouquet (20 channels) is #1; News viewership share rose to 10.7%:
- The viewership share of our regional news cluster has risen further to 5.7%, vs sub-2% two years ago.
- Hindi News channel News18 India broke into the top two in urban HSM, driving revenues in tandem. Business news channels showed commendable growth amidst choppy markets.
- Marketing campaigns around raising the profile of news channels and driving the “News18” brand were undertaken, which have continued to push viewership and mind-share.
Regional News losses have shrunk sharply: Government/election-related ad-spends rose, substantially reducing the gestation losses of our multiple channels launched over FY15-17. The regional news + infotainment cluster slashed its operating losses by 70% YoY to Rs (8) Cr.
Viacom18 bouquet’s (31 channels) share of entertainment viewership at 11.1%:
- TV18’s entertainment bouquet revenue ex-movies grew 13%.
- Regional entertainment channels have grown their viewership and monetization substantially across all our geographies.
- FTAchannels like Rishtey Cineplex & MTVBeats continued their strong performance in a fast- growing segment.
- Colors Kannada Cinema was launched in the last week of the quarter. The channel aims to solidify our existing leadership in the Kannada market, and already has an existing library to bank upon.
Business-as-usual margins continued to rise: A shift of some high-impact non-fiction programming towards the festive season in H2 was implemented to improve monetization, which impacted topline growth in Q2 but improved margins. Entertainment EBITDA includes operating loss of Rs 25 Cr on account of new initiatives – Colors Tamil (launched in mid-Q4FY18) and Colors Kannada Cinema (launched recently). Adjusting for operating losses of new initiatives (i.e. launches made over past 4 quarters), BAU margins for Entertainment grew to 12.1% from 8.9% in Q2FY18.
Network18 digital content properties reach 24% of total news consumption audience: Network18’s digital revenues from prime properties MoneyControl, News18 & Firstpost grew 12% YoY to Rs 35 Cr in Q2. The overall Network18 Digital, Print & Others revenue declined due to lower programming executed by 100%-owned content producer Colosceum.
BookMyShow completed US$ 100mn Series D funding: Category-defining entertainment- ticketing platform BookMyShow raised Series D funding, adding TPG Growth as a new investor. Network18 also participated in the round, and remains the largest shareholder in BookMyShow.
HomeShop18 continued to face headwinds, led by competition from e-commerce and issues around vendor supplies. Due to the stress on the home-shopping category and resultant P&L pains, an impairment study was undertaken. Based on the same, an impairment loss of Rs. 347 crores has been booked by Network18, which has been classified under “Exceptional Items” in the standalone P&L. This does not have any impact on the consolidated P&L.
Mr. AdilZainulbhai, Chairman of Network18, said, “Our regional properties across news and entertainment have shown significant improvements in viewership and monetization, cementing our belief that vernacular content will be a key growth driver. We continue to see opportunities in the Indian media space; and aim to create segmented offerings to deepen our presence.
