Network18 Media & Investments has reported 12 per cent growth in operating revenue for the third quarter of FY2023 to Rs 1,850 crore, driven by its entertainment segment.
The 12 per cent increase in operating revenue came despite a challenging macro environment that dampened advertising demand, in contrast to the strong festive season demand seen a year ago. The company said that not only were TV impressions down 5 per cent from a year ago, but the digital segment also faced headwinds as brands pulled back on performance marketing spend.
This, coupled with the company’s continued investment in materials led to operating earnings before interest, tax, depreciation and amortization (EBITDA) of Rs 2 crore for the quarter ended December 2022, as against Rs 373 crore a year ago. Investments in new initiatives, digital entertainment and sports had a negative contribution of around Rs 140 crore to EBITDA, the company said in a statement.
The consolidated net profit of the company was Rs.9 crore as compared to Rs.307 crore in the corresponding period of the previous financial year.
“We are really pleased with the operational performance of the businesses. However, the tough macro environment made it challenging from a financial results perspective,” Adil Zainulbhai, chairman of Network18, said in a statement.
entertainment shines
The entertainment vertical, comprising 38 channels from Viacom18, Voot and two infotainment channels from AETN18, reported an 18 per cent growth in operating revenue.
The growth in Viacom18’s revenue was primarily driven by the Movies and Sports segments. The company said non-sports advertising revenue declined due to softer advertising demand and the impact of withdrawal of Colors relationship with DD Freedish.
The segment reported an operating EBITDA of Rs 5 crore, mainly due to an increase in operating costs in the sports and film businesses.
Viacom18 takes a big step towards growing its digital business with FIFA World Over 110 million viewers watched the football spectacle on the JioCinema app in the form of the Cup. The World Cup final saw a peak concurrency of 12.1 million on JioCinema, the highest ever for a non-cricket sporting event in India.
Viacom18 further expands its sports portfolio with rights to Women’s IPL, SA20, South Africa Cricket and Olympics 2024.
The company also said that Colors consolidated its No. 2 position and significantly narrowed the gap to the No. 1 position in the Hindi GEC (General Entertainment Channel) segment, driven by its strong programming line-up, and entertainment The network’s viewership increased by 50 bps to 10.5 percent in the non-news genre.
Soft advertising demand hits TV news
In the TV news segment, revenue was down 8 percent compared to a year ago due to a decline in advertising sales. TV news ad inventory at an industry level declined by 27 per cent due to softer advertising demand as well as a decline in news genre share as a percentage of total viewership pie, the company said.
This vertical recorded an operating EBITDA of Rs 6 crore as compared to Rs 89 crore a year ago, as operating cost grew 23 per cent mainly driven by material cost and distribution initiatives.
“Our investments in the business have helped us establish a strong audience position across the market, which will play a key role in driving growth as advertising demand picks up,” the company said.
It added that the news network has shown steady improvement in viewership metrics in the last nine months (since restoration of BARC ratings) and has a market share of 11.4 per cent.
Weak Macros Affect Digital
In the digital segment too, operating revenue for Q3FY23 fell 2 per cent year-on-year to Rs 92 crore as brands pulled out of performance marketing campaigns given consumer demand.
At the same time, the network is ramping up its team across functions to enhance editorial coverage and technology infrastructure, which contributed to a more than two-thirds increase in operating costs, the firm said in a statement. As a result, the segment reported an operating EBITDA loss of Rs 8 crore as compared to a profit of Rs 22 crore a year ago.
(Disclaimer: News18 is a part of the Network18 group. Network18 is controlled by the Independent Media Trust, of which Reliance Industries is the sole beneficiary.)
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