Election ad spends beef up news broadcasters' coffers during Q1 FY15
The Lok Sabha Elections pumped up the revenues for the broadcasters in Q1 FY15, though many consider June to be a slack month. Q2 is being eyed with some apprehension as it is considered to be a difficult quarter
Election periods have been a time for advertising bonanza for the broadcast sector, especially the news broadcasters. The first quarter results for FY2014-15 reflect this trend, putting the news broadcaster in an optimistic mode.
As the CMO of a major Hindi news channel puts it, Q1 FY15 has been highly encouraging for news broadcasters.
The Lok Sabha Elections 2014 set the mood for increasing the revenues in the months of April and May. Buoyed by the promise of “Acche Din”, broadcasters are expecting around 20-25 per cent increase in their advertising revenues. Given the intense viewer interest in the Elections this time, advertisers and political parties pumped in the monies, thus adding to the revenue coffers of the broadcasters.
Now’s the time for a reality check as companies gear up to take stock of their performance during the first quarter of FY2014-15.
Television enjoys a larger share of the advertising pie as compared to radio and print media. But do the numbers match the expectations?
exchange4media spoke to a cross-section of broadcasters to gauge their reactions to the Q1 results and most of them said that the results were above expectations. All the players that exchange4media spoke to, spoke on condition of anonymity.
The CEO of a major English and Hindi news network remarked, “Given the background of the Elections, the first quarter has been very good. Election advertising pumped up the revenues, but the real challenge lies ahead. The second quarter has always remained a problem.”
Meanwhile, the Managing Director of a Hindi news channel said, “In the first case, we cannot compare this quarter with the others as election advertising is considered as a premium. Obviously, we had a very good quarter, but June was not encouraging enough as it is not an advertising season.”
She further said, “We are hoping for a good response from the coming quarter as the Union Budget has been presented and the festive season is knocking the door.”
The Marketing Head of another leading Hindi news channel commented, “One Election season balances the revenues for two years for a particular channel.”
Some of the major networks listed in the stock exchange are waiting for the first quarterly results. Broadcasters are confident of a good increase in profits.
A glance at the results in the previous quarter shows that NDTV had reported consolidated revenues of Rs 496 crore for the financial year ended March 31, 2014 and EBITDA loss of Rs 29 crore.
Meanwhile, Network18 had reported revenues on a consolidated basis at Rs 2,692.4 crore, up by 12 per cent YOY. Operating profits (EBITDA) turned around from a loss of Rs 39.3 crore in FY13 to a profit of Rs 87.2 crore in FY14, led by a consistent increase in profits generated by the television operations and reduction in operating losses of the digital businesses.
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