Network18 Media & Investments (Network18) reported a 10.4 percent year-on-year growth in consolidated operating revenue for the quarter ended June 2022 at Rs 1,340 crore.
Revenue growth was led by the entertainment and digital news businesses, whose revenues grew 13 percent and 24 percent, respectively.
The media company reported a marginal consolidated loss of Rs 3 crore for the June quarter compared to a profit after tax of Rs 10 crore a year ago. Increased investments in content, marketing, and team expansion impacted profitability, it said in an emailed statement.
In the quarter gone by, the company’s subsidiary Viacom18 took a giant leap forward in enhancing its digital proposition as it acquired the exclusive digital rights for the telecast of the Indian Premier League (IPL) in the Indian subcontinent for Rs 23,757.5 crore. Viacom18 launched three dedicated sports channels during the quarter and increased investments in entertainment content & marketing.
“First quarter of FY23 has set the tone for the journey that we have undertaken towards making Network18 as India’s leading destination for content and the big development for us this quarter was the acquisition of exclusive digital rights of IPL”, said Network18 Chairman Adil Zainulbhai, while commenting on the business performance for the quarter. “With strong tailwinds favoring digital consumption, it gives us a perfect opportunity to scale up our OTT (over the top) offering”.
The Entertainment business’s revenue growth came primarily from a rise in advertising revenues, despite Colors Rishtey going off DD FreeDish (also impacting the margins directly). The ad revenue, adjusting for the impact of Colors Rishtey, grew in the high-teens, partly aided by the impact of the pandemic in the base quarter, the company said.
The increased investments, however, led to a 26 percent surge in operating costs, thereby impacting the overall profitability of the company. The story was the same in the digital news segment, where the 24 percent rise in operating revenues was outpaced by a 46 percent rise in operating costs as Network18 stepped up the expansion of its team. The digital news segment now reaches 200 million internet users every month.
“As we chase leadership across digital news verticals, we expect the business to be in the investment phase for the next few quarters,” the company statement said.
Revenues from TV news were lower by one percent compared to a year ago, primarily due to a decline in subscription income. Advertising revenues remained flat on the high base of last year when multiple states held elections. The 18 percent rise in operating costs during the quarter was again led by personnel costs and the company said it was investing in getting new talent to strengthen its competitive positioning.
“We are also working towards creating a 360-degree news offering with depth and breadth, which not only gives the user seamless experience across platforms but also optimises for relevance”, Zainulbhai added while stressing that these steps are laying down strong foundations on which businesses of the company can continue to grow for the foreseeable future.
Network18 ended the day Rs 1.25 lower at Rs 67.1 on the National Stock Exchange. The stock has generated returns of 30 percent during the past one year and is trading 7 percent higher over the past one month.
Disclaimer: Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary
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