Top Story

e4m_logo.png

Home >> Media - TV >> Article

Network18’s margins take a hit with new launches

10-February-2012
Font Size   16
Share
Network18’s margins take a hit with new launches

Network18 Group has reported a growth of 24 per cent in consolidated revenues at Rs 503.8 crore for the quarter ended December 31, 2011, compared to the corresponding quarter last year. But this growth was at the backdrop of a one-time expense of launching four channels, write-offs, offset revenue gains and increased expenses – forcing the company to report a loss of Rs 85.81 crore, as against a profit of Rs 78.61 crore in the same quarter last year.

TV18 Broadcast incurred launch costs and operating losses amounting to Rs 25 crore towards their new channel History TV18. Even 45 per cent increase in revenues of TV18 to Rs 342.8 crore did not help them avoid losses. “It has clearly been a sluggish phase for the industry as a whole. Advertising revenues continue to exhibit lacklustre growth and may continue at the same pace over the next few months. During the last quarter, our profits from continuing operations were offset by largely one-time costs incurred towards investments in the expansion of our television channel portfolio and the conscious impairment of our film library given the deferment of our Hindi movies channel,” said Sai Kumar, Group CEO, Network18, in a company statement.

At Viacom18, Rs 39 crore of one-time expense was incurred in relation to the deferment of the Hindi movie channel and Rs 20 crore were incurred with respect to launch costs of Sonic, Comedy Central and Colors HD channels. In addition, the company has taken write-offs at The Indian Film Company to the tune of Rs 14.6 crore. Only 50 per cent of these numbers (Rs 37 crore) are reported in TV18 Broadcast’s current quarter’s statement. The remaining 50 per cent (Rs 37 crore) and Rs 25.3 crore of the launch of AETN18 have not been included in the current quarter.

Notwithstanding the challenging macroeconomic environment, Network18 continued to perform steadily and business continued to consolidate and grow, said Raghav Bahl, Managing Director, Network18. “Earlier, there were concerns about potential fund raising plans for the company, but the company is in a better position now with the deal with Reliance. The company will not be looking to consolidate its business,” said an analyst, who did not wish to be quoted.

It may be recalled that earlier this year, RIL divested its investments in Eenadu Group to TV18 Broadcast Ltd, for which Network18 and TV18 will be raising funds for the acquisition of ETV channels through a Rights Issue. Independent Media Trust (IMT), a trust set up for the benefit of Reliance Industries Ltd, has agreed to fund the promoters of Network18 and TV18 to enable them to subscribe to the proposed Rights Issue. As part of the deal, Infotel Broad Band Services Ltd, a subsidiary of RIL, has entered into a Memorandum of Understanding with TV18 and Network18 for preferential access to all their content for distribution through the 4G broadband network being set up by it.

Rajat Sharma who was recently elected as President of the NBA talks about his plans for the industry body

The Country Sales Manager Media at Akamai says that technology seems to be taking over all possible spaces and people considering it in both positive and negative ways

The India Marketing Lead of Skyscanner believes that with the acquisition by Ctrip they have reached the market leader status

Our typical marketing budget is usually 10 per cent of the topline spend

The BBC carried out a survey along with Globescan to see how the world looks at the issue of ‘fake news’

The objective of content marketing is not just to encourage product purchase or generate ROI. The key to its success lies in building relationships based on trust, opines Dasgupta

The interesting animated rap music video encapsulates Droom’s ecosystem tools and their role in facilitating second-hand automobile transactions