Network18 Media & Investments (Network18) reported a 12 percent year-on-year increase in its consolidated operating income for the quarter ending September 2022, driven by its entertainment vertical. Consolidated operating income for Q2FY23 was Rs 1,549 crore and for Q2FY22 was Rs 1,387 crore, according to a statement released by the company. The 12 percent increase in operating income occurred despite a challenging environment. High inflation and weak consumer sentiment have dampened advertising spending on new product launches and retention campaigns, particularly among FMCG companies. Start-ups and e-commerce companies have also held back ads as they face a funding freeze.
Revenue growth continued to be hampered by macro factors that affect profitability, the statement said. The network’s consolidated operating EBITDA declined 87 percent year-on-year to Rs 32 crore in Q2FY23 from Rs 253 crore in Q2FY22. Network18 also said it continues to increase its investment in many businesses to further develop them. While these investments impacted profitability as costs grew faster than revenues, they had a positive impact on operational metrics such as market share and viewership numbers, he added.
TV18’s two national news channels – CNN News18 and News18 India – have emerged as market leaders in English and Hindi. CNBC TV18 was already a leading player in its segment. “The first half of the fiscal period was challenging for most sectors. However, we believe this phase should only be a small blip in the long growth trajectory,” said Adil Zainulbhai, Chairman, Network18. “Our presence across the spectrum of content segments and platforms puts us in a unique position to leverage the combined strengths of our assets.”
The TV18 entertainment vertical, which includes 38 Viacom18 channels, Voot and two AETN18 infotainment channels, saw a 17 percent year-on-year increase in operating revenue. Its operating revenues for Q2FY23 stood at Rs 1,176 crore as against Rs 1,007 crore in Q2FY22. Growth here was primarily driven by the film segment; advertising revenue stagnated. But after adjusting for the impact of the withdrawal of Colors Rishtey from DD FreeDish, ad revenue grew by high single digits on a year-on-year basis. The segment posted an operating EBITDA of Rs 45 crore, down 76 percent year-on-year.
Colors strengthened its #2 position in the Hindi GEC segment, the company said. Entertainment network TV18 had a 9.9 percent viewership in the non-news genre during the quarter, the statement said. Sales of TV18’s news segment fell 3 percent year-on-year for the quarter, primarily due to a decline in advertising revenue. However, the expansion of event-based monetization partially offset the loss of display advertising.
Operating expenses rose 20 percent for the quarter, primarily due to content costs and distribution initiatives, which led to an operating EBITDA loss of Rs 9 crore. However, the investment seemed to be paying off as there was a visible improvement in viewership metrics over the past two quarters. “However, due to a muted advertising environment, the increase in viewership did not translate into commensurate revenue,” the report said.
TV18’s news vertical division News18 had the highest reach among news networks and was the second player in terms of viewership with 11.5 percent market share in the news segment. With five of its regional news channels as leaders in their respective genres, New18 has become the dominant news brand for the Hindi-speaking audience.
Digital news vertical Network18, which houses flagship brands such as Moneycontrol and News18.com, has seen operating income grow 5 percent year-on-year. Operating revenues for Q2FY23 stood at Rs 87 crore compared to Rs 83 crore in Q2FY22. Here, too, the impact of the slowdown in advertising revenue was felt. The segment posted an operating EBITDA loss of Rs 6 crore for the quarter due to an increase in operating expenses. The company is chasing leaders across the digital news industries, so it expects the business to be in an investment stage in the next few quarters.
Network18’s digital news portfolio reaches nearly 200 million internet users every month, making it one of the top 3 digital news/information platforms by reach in the country. In the live streaming and ticketing vertical, BookMyshow continued to see a sharp improvement in operational and financial metrics on the back of several big-ticket films released this quarter, according to the release. “The live event vertical has also grown, led by music and stand-up comedy events. The company continues to benefit from the earlier cost rationalization to mitigate the impact of the pandemic and has shown an improvement in its financial performance during the quarter,” he added.
