Q1 FY20: Zee Entertainment reports 62.6% growth in YoY profit to Rs 5,306 million
Implementation of new tariff order in the previous quarter negatively impacted reach and viewership of most entertainment channels, says Punit Goenka
Zee Entertainment Enterprises Limited on Tuesday reported a total revenue of Rs 20,081 million for Q1, registering a growth of 13.3% YoY. The growth was driven by the strong performance of domestic broadcast and digital businesses, the company said in astatement.
The advertising revenue for the quarter was Rs. 11,867 million, a growth of 3.6% YoY. Domestic advertising revenue grew by 4.2% YoY to Rs 11,322 million. International advertising revenue for the quarter was Rs 545 million.
The subscription revenue for the quarter was Rs 7,088 million, growth of 36.7% YoY. Domestic subscription revenue grew by 46.7% YoY to Rs 6,240 million. International subscription revenue was Rs 848 million.
Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) was Rs. 6,598 million with an EBITDA margin of 32.9%. PAT for the quarter was Rs 5,306 million. This was a growth of 62.6 % from Rs 3,264 million recorded in the same quarter last fiscal.
Talking about the results, Punit Goenka, Managing Director and CEO, ZEEL, said, “We delivered another quarter of strong performance despite the operational challenges faced by the industry due to the implementation of TRAI tariff order. We have witnessed a strong uptake of our channels across markets which is reflected in the 47% growth of our domestic subscription revenues. It validates our standing as the #1 entertainment network of the country, built on the foundation of strong position in each of the markets we operate in. We are confident that the new tariff regime is going to be beneficial for all the stakeholders and will greatly improve the consumer experience.”
“Domestic advertising growth of 4.2% YoY is considerably lower than the growth in past quarters. This is primarily on account of the decision to convert our two leading FTA channels to pay, which significantly impacted the ad growth for the quarter. Additionally, the implementation of the new tariff order in the previous quarter negatively impacted reach and viewership of most entertainment channels, leading to a temporary shift in some of the ad spends from entertainment to sports. We believe that the underlying demand for advertising still remains strong and we are confident that spends would come back as the tariff order settles down and the festive season kicks in,” he said.
“ZEE5 continues its strong run and is working towards achieving its aim of becoming India’s #1 digital entertainment platform. In the international markets, it has seen an encouraging response in the initial phase. I am confident that with its strong content line-up and partnerships with leading players in the digital eco-system, value proposition of the platform and engagement with the consumers will continue to improve,” he added.
Domestic Broadcast Business
During 1QFY20, ZEEL maintained its position as the #1 network in the non-sports entertainment segment with an all-India viewership share of 18.7%. The implementation of tariff order is impacting the reach and viewership of all the leading broadcast networks during the transition phase. Additionally, the viewership was also impacted due to the conversion of two leading FTA channels into pay channels. Despite these developments, ZEEL continues to strengthen its position in the payTV ecosystem.
In June’19, ZEE5 had 76.4 mn monthly active users (MAU) globally. The platform had a global daily active user (DAU) base of 6.6 mn in June’19. Further, ZEE5 users spent an average of 33 minutes per day on the platform. ZEE5 was recognised amongst the top-5 ‘Impactful Debuts’ in the ninth edition of the Pitch Top 50 Brands Awards.
During the quarter, ZEEL’s International business revenue was Rs. 1,603 million. The advertising and subscription revenues declined by 7.6% YoY and 9.2% YoY, respectively.
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