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Will the top line of listed TV news companies de-grow at the end of FY 2017?

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Will the top line of listed TV news companies de-grow at the end of FY 2017?

The annual results of various listed companies will start trickling in when the current financial year comes to a close on March 31. However, a close look at the financials of listed television news companies shows that their top line is most likely to register depletion. These projections are premised solely on their performance during the first nine months of FY 17 (April-December) and may vary eventually when the final quarter’s results are made public. Though the companies referred to herein are conglomerates with presence across mediums, they are more or less led by their television broadcasting arm.

As of December 31, 2016, NDTV’s consolidated results peg its total income from operations during Q1, Q2 and Q3 at Rs 368.32 crore. In the last fiscal, NDTV generated a sum total of Rs 396.03 crore as total income during the same period. Comparatively speaking, the income slashed by Rs 27.71 crore or 6.99%.

Next up in line is Zee Media Corporation Limited or ZMCL, the network behind 11 news channels. The year to date figures till December 31 records a decrease of Rs 16.47 crore in total income. At ZMCL, the total income slipped by 4% between April to December from Rs 406.79 crore (FY 16) to Rs 390.32 crore (FY 17).

Commenting on the lack of top line growth, Jwalant Swaroop, CEO of Happiness Infinite Solutions said, “The market has been really volatile especially post demonetisation.” He reasoned that the third quarter results only represented a “month or so of impact” in the immediate aftermath of demonetisation, which caused ad spends to dry down. 

The surge in advertising, which broadcasters were used to riding on in the festive spirit of Diwali, disappeared in November. But Swaroop reasoned that the increasing relevance of digital has also led to television losing out on money since the medium was eating away both TV and print’s advertising pie.

The former CEO of Sakal Media pointed out that television news was somewhere failing to deliver. “The innovation that was required in programming hasn’t happened much,” he added. On the contrary, he noted that a digital player like Hotstar would be making far more money than it did in the previous year.  

The two listed companies belonging to the Network18 Group have a similar story to tell. TV18 Broadcast Limited’s total income has fallen by Rs 47.9 crore so far in the ongoing fiscal. Between April-December 2015, the company made Rs 748.4 crore as total income. The figure slid by 6.4% to Rs 700.5 crore between April-December 2016. As far as the holding company Network18 Media & Investments Limited is concerned, total income has gone from Rs 1179.14 crore to Rs 1103.36 crore. Numerically, income depleted by Rs 75.78 crore or 6.4% on a comparative basis over a period of nine months.  

But TV Today Network Limited’s standalone financials released in early February buck the trend. According to the three quarterly results released by TV Today, the company clocked a total income of Rs 408.03 crore, which is up from Rs 400.19 crore as recorded on December 31, 2015. Hence, an increase of Rs 7.84 crore in total income is reflected on the books.

Wondering whether “hard news ever had commercial value”, Archana Datta admitted that the sector was always struggling. The former Director General of Doordarshan and All India Radio emphasised that even Prasar Bharati had its share of troubles when it came to the commercial side of the news business. “We were able to get sponsors for a programme on the stock market but for others we struggled,” she said.

According to her, the state broadcaster had limited success with advertisers despite experimenting with sponsored content. Going further, the President’s former Press Secretary stated that hard news, when presented factually, doesn’t “sell well” though it might perform better financially when mixed along with opinions. “I think the string is likely to continue unless they find out some modus operandi,” she remarked concerning the economic viability of television news. 

While the entire picture pertaining to revenue growth and profitability will become clear only when the annual results are revealed, the numbers till the end of Q3 clearly establish a slowdown in the top line performance of many listed television news companies. A late surge in revenues during Q4 can, however, can set the bar higher for top line growth.

But media buyer Arun Sharma mentioned that it was unlikely. Arguing that the last six months have been close to being disastrous, Sharma said, “All the channels have written off these two quarters.” Pinning the entire blame for the underperformance on demonetisation, Lodestar’s Senior Vice President noted that the broadcast industry witnessed overall growth with GECs achieving healthy profits.

Stressing that the market is gaining momentum, he cited the timely buying of Indian Premier League’s (IPL) sponsorship rights and expensive ad slots during the event as a positive indicator. “It is going to be back to normal from April to June,” he said. As we inch closer to the new financial year, efforts are already underway at various news broadcasting houses to arrive at a strong economic standpoint.

For instance, NDTV is now opting to gather news using mobile phones instead of expensive broadcast cameras. Simultaneously, they are betting big on landing lucrative channel sponsorship deals to make up for the fall in direct advertising revenues, as reported earlier by

In the case of ZMCL, their television business has registered significant gains in terms of advertising revenues despite demonetisation. For them, the challenge would be to work on their falling subscription revenues, which de-grew by 50.3% till December 31, 2016. Once ZMCL’s new channels like WION, Zee Kalinga News, Zee Purvaiya and Zee Rajasthan News establish their standing in the market, the company will expect them to collect considerable subscription returns. These channels had not opened their subscription revenue accounts until the end of the previous calendar year.

With the Pitch Madison Advertising Report (PMAR) – 2017 predicting the television advertising industry to grow by 13% in the current year, news broadcasters have reason to be optimistic. At the end of 2017, the estimated size of television advertising is worth Rs 21,296 crore. News broadcasters have garnered more than 10% of this advertising pie in the past. If the trend is replicated this year then it can help them stand tall in the aftermath of demonetisation as FMCG brands like Patanjali are expected to carry on with their aggressive ad spends.

Tags NDTV ZMCL TV18 TV Today

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