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NDTV turnaround plan: Develop new revenue streams, cut costs, divest from non-core areas

19-May-2017
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NDTV turnaround plan: Develop new revenue streams, cut costs, divest from non-core areas

Days after the NDTV board approved the financial results for the fiscal year ended March 31, 2017, Director – Finance and Group CFO Saurav Banerjee lent an insight into the company’s three-pronged financial turnaround plan. The first part of the process is to increase the company’s revenues. “While most of the channels are dependent on advertising revenues, we want to look at other streams of revenues,” said Banerjee.

Citing the trust and respect which NDTV commands, he said that advertisers are still interested in them despite the network lagging in ratings. In the days to come, Prannoy Roy’s company will strongly rely on campaign-driven revenues such as Banega Swachh India and Save The Tiger. It will also seek partnerships with companies on various other themes. The Harvardian revealed that NDTV was looking at tying up with more than one player for a shorter duration of time.

 “We have already signed deals and are in the process of finalizing a few,” added Banerjee, specifically quoting alliances with the likes of Paytm, MobiKwik and Amity University. Though the advertising market is said to be picking up pace after the restoration of liquidity, the NDTV executive was critical of advertising revenues being determined by ratings which, in turn, were premised on a small sample. He insisted that NDTV was going to stay away from shouting matches on news television to gain more eyeballs.

The second part of NDTV’s turnaround strategy is to curb expenditure, which has been fairly successful. In FY17, the company’s expenses went down to Rs 593.02 crore from Rs 645.23 crore. “We want to cut our costs at all costs,” asserted Banerjee, adding that NDTV will continue slashing its expenditure wherever possible. Batting for evaluating the results segment-wise, he hailed the “digital story” as “very encouraging”.

Claiming to attract monthly web traffic of 120 million unique visitors, NDTV is amazed at the fact that Gadgets is becoming bigger than news with the digital business driving profitability. However, there is no denying that the broadcast business is not in good shape. NDTV’s consolidated financials for FY17 recorded a revenue drop of 7.2% from Rs 577.12 crore to Rs 535.21 crore even as Banerjee clearly identified the weakling. “The performance of NDTV Profit Prime has been suboptimal,” he said.

Over the past several years, NDTV has expanded into new territories and experimented with domains such as general entertainment and e-commerce. As per Banerjee, the third and final step of the turnaround plan is to “get out of non-core areas” of business. In the case of such properties, NDTV’s mantra will be to “build, operate and transfer” while retaining a “substantial stake of 49 per cent”. The idea is simply to insulate the network from the pressure of running those businesses. With clear goals in mind, NDTV now has the mighty task of improving its bottom line position which reflected a loss Rs 68.79 crore at the end of FY17.

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