Some channels to see rise in domestic subscription revenues: Emkay Research Q4FY20 preview

The report says sustained macro weakness along with the Covid-19-led lockdown should lead to a significant decline in ad revenues across platforms

e4m by exchange4media Staff
Updated: Apr 9, 2020 3:45 PM
Slowdown

A preview of the media and entertainment sector’s performance for Q4FY20, according to a report by Emkay Research, says there is weakness across the board.  

The sustained macro weakness along with the Covid-19-led lockdown should lead to a significant decline in ad revenues across all platforms, the report has said.

“In our coverage universe, broadcasters should be worse-off when it comes to ad revenues. Meanwhile, weak content performance at the box office in February, along with complete cinema shutdown starting from mid-March across the country, will be a dampener on footfalls, and in turn, on ticketing revenues as well. Multiplexes’ F&B margins should be adversely affected by inventory write-down.”

On the broadcasters’ front, because of the current slowdown and lack of fresh content the report says Zee and Sun are expected to record a 20% YoY decline each in ad revenues. The report further says: “Despite the partial impact due to lack of fresh content on account of the restriction on production schedules, we project domestic subscription revenues to rise meaningfully for both the broadcasters, with Zee and Sun clocking 22% and 33% YOY increases, respectively. We believe that there could be an increase in subscription receivables, as collections generally take place toward the end of March, during which the lockdown was in place. International subscription revenues for Zee should continue to see a sharp decline YoY.”

Regarding multiplexes, the report says amid the postponement of major movie releases, closure of cinema halls from mid-March and a strong base quarter, PVR and Inox are expected to post steep revenue declines of 19% and 24% YoY, respectively. “With Bollywood box-office collections dropping 24% yoy, driven by only two films crossing the Rs1bn mark vs. 5 in Q4FY19, ticketing revenues are anticipated to be weak. The only silver lining was the uptick witnessed in regional content, which has been feeble for the past few quarters,” the report adds.

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