Network18 Media and Investments reported a 12 percent year-on-year increase in Q3 revenue from FY23 to Rs 1,850 crore, driven by the entertainment segment.
The 12 percent increase in operating income came despite a challenging macroeconomic environment that depressed demand for advertising, as opposed to strong festival season demand a year ago. Not only were TV impressions down 5 percent from a year ago, but the digital segment also faced headwinds as brands pulled back on performance marketing spending, the company said.
This, coupled with the company’s continued investment in content, led to an operating profit before interest, tax, depreciation and amortization (EBITDA) of Rs 2 crore for the quarter ended December 2022, compared to Rs 373 crore a year ago . Investments in new initiatives, digital entertainment and sports made a negative contribution of about Rs 140 crore to EBITDA, the company said in a statement.
The company’s consolidated net profit was Rs 9 crore as compared to Rs 307 crore in the corresponding period of the last fiscal year.
“We are very satisfied with the operational performance of the companies. However, the difficult macroeconomic conditions made it challenging from a financial results perspective,” Adil Zainulbhai, Chairman of Network18, said in a statement.
The entertainment industry, comprising the 38 channels of Viacom18, the two infotainment channels of Voot and AETN18, reported 18 percent growth in revenue.
Viacom18’s revenue growth was primarily driven by the film and sports segments. Non-sports advertising revenues declined due to weak advertising demand and the impact of Colors Rishtey’s withdrawal from DD FreeDish, the company said.
This segment reported an operating EBITDA of Rs 5 crore due to an increase in operating expenses, mainly in the sports and film industries.
Viacom18 took a big step towards scaling its digital business with FIFA World Cup as more than 110 million viewers tuned into the football spectacle through the JioCinema app. The World Cup final saw a peak concurrency of 12.1 million on JioCinema, the highest for a non-cricket sporting event in India.
Viacom18 further expanded its sports portfolio with the rights for women’s IPL, SA20, cricket in South Africa and Olympics 2024.
The company also said Colors strengthened its No. 2 ranking and significantly narrowed the gap for No. 1 ranking in the Hindi GEC (general entertainment channel) segment, driven by its strong programming, and the entertainment network’s audience share increased by 50 bps to 10.5 percent in the non-news genre.
Weak advertising demand impacts TV news
In the TV news segment, revenues were down 8 percent year-on-year due to the decline in ad sales. TV news ad stock fell 27 percent at the industry level due to soft ad demand and a drop in the news genre’s share as a percentage of the total viewership, the company said.
This industry reported an operating EBITDA of Rs 6 crore, compared to Rs 89 crore a year ago, as operating expenses increased by 23 percent, mainly due to content costs and distribution initiatives.
“Our investment in the company has helped build strong viewership positions across the market, which will play a key role in capturing growth when demand for advertising picks up again,” the company said.
It added that over the past nine months (since the resumption of BARC ratings), the news network has shown continuous improvement in viewership and had an 11.4 percent market share, it added.
Weak macros affect digital
Also in the digital segment, revenue fell 2 percent year-on-year to Rs 92 crore for Q3FY23 as brands retreated from performance marketing campaigns due to weak consumer demand.
At the same time, the network is expanding its team across functions to increase editorial coverage and technology infrastructure, which contributed to more than two-thirds of the increase in operating costs, the company said in a statement. Consequently, this segment reported an operating EBITDA loss of Rs 8 crore compared to a profit of Rs 22 crore a year ago.
(DISCLAIMER: News18 is part of the Network18 group. Network18 is operated by the Independent Media Trust, of which Reliance Industries is the sole beneficiary.)
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