Q2FY19: Network18 posts 59% jump in EBITDA to Rs 92 crore

Advertising revenue for TV18 grew at 18 per cent YoY overall

Network18

Network18 reported a 59 per cent jump in its operating EBITDA to Rs 92 crore in Q2FY19. The jump was driven by improved performance of regional channels (both news and entertainment), despite gestation losses of Colors Tamil and recent launch of Colors Kannada Cinema.

 

While headline operating revenue grew 9 per cent (on a comparable basis), revenue ex-movies grew 14 per cent year-on-year (YoY), underscoring tailwinds in broadcasting, the network said in a statement.


 

Highlights of Q2 as mentioned by the network:

 

The network stated that the industry’s ad environment has substantially improved compared to the previous year, though certain pockets of the market (mobiles, auto, colas, etc) are yet to resume advertising full throttle. Broad-based growth in regional markets and upcoming festive season are positives.

 

Broadcast subsidiary TV18 posted 17 per cent revenue growth ex-movies on a comparable basis:   

 

Advertising revenue for TV18 grew at 18 per cent YoY overall. Regional channels across news and entertainment drove viewership growth and ad-revenues for the portfolio, reducing the network’s dependence on national channels.   

 

Subscription revenue for the entire bouquet grew 16 per cent YoY. The network said they are in negotiations with two of India’s leading DTH players for long-term deals on terms commensurate with the strength of their channel bouquet.

 

The network claimed that TV18’s news bouquet (20 channels) is number one; News viewership share rose to 10.7 per cent:  The viewership share of the regional news cluster has risen further to 5.7 per cent, vs sub-2 per cent two years ago.   

 

Hindi news channel News18 India broke into the top two in urban HSM, driving revenues in tandem. Business news channels showed commendable growth amidst choppy markets.   

 

The network said that marketing campaigns around raising the profile of news channels and driving the News18 brand were undertaken. These continued to push viewership and mind-share.  

 

Regional news losses have shrunk sharply: Government/election-related ad-spends rose, substantially reducing the gestation losses of our multiple channels launched over FY15-17. The regional news + infotainment cluster slashed its operating losses by 70 per cent YoY to Rs 8 crore.  

 

Viacom18 bouquet’s (31 channels) share of entertainment viewership stood at 11.1 per cent: TV18’s entertainment bouquet revenue ex-movies grew 13 per cent. Regional entertainment channels have grown their viewership and monetization substantially across all geographies. FTA channels like Rishtey Cineplex and MTV Beats continued their strong performance in a fast growing segment.

 

Colors Kannada Cinema was launched in the last week of the quarter. The channel aims to solidify the network’s existing leadership in the Kannada market, and already has an existing library to bank upon.

 

Business-as-usual margins continued to rise:

 

A shift of some high-impact non-fiction programming towards the festive season in H2 was implemented to improve monetization, which impacted top line growth in Q2 but improved margins. Entertainment EBITDA includes operating loss of Rs 25 cr on account of new initiatives - Colors Tamil (launched in mid-Q4FY18) and Colors Kannada Cinema (launched recently). Adjusting for operating losses of new initiatives (i.e. launches made over past 4 quarters), BAU margins for entertainment grew to 12.1 per cent from 8.9 per cent in Q2FY18.

 

Network18 digital content properties reach 24 per cent of total news consumption audience:


Network18’s digital revenues from prime properties MoneyControl, News18 & Firstpost grew 12 per cent YoY to Rs 35 cr in Q2. The overall Network18 Digital, Print & Others revenue declined due to lower programming executed by 100 per cent-owned content producer Colosceum.  

 

BookMyShow completed US$ 100mn Series D funding: Entertainment ticketing platform BookMyShow raised Series D funding, adding TPG Growth as a new investor. Network18 also participated in the round, and remains the largest shareholder in BookMyShow.

 

HomeShop18 continued to face headwinds, led by competition from e-commerce and issues around vendor supplies. Due to the stress on the home-shopping category and resultant P&L pains, an impairment study was undertaken. Based on the same, an impairment loss of Rs 347 crore has been booked by Network18, which has been classified under “Exceptional Items” in the standalone P&L. This does not have any impact on the consolidated P&L.

 

Talking about the results, Adil Zainulbhai, Chairman of Network18, said, “Our regional properties across news and entertainment have shown significant improvements in viewership and monetization, cementing our belief that vernacular content will be a key growth driver. We continue to see opportunities in the Indian media space; and aim to create segmented offerings to deepen our presence.

 

 

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