TV18 Broadcast's consolidated loss in June quarter fell to Rs 14.3 crore from Rs 15.7 crore in same quarter last year. Revenue during the quarter increased 4 percent to Rs 219.1 crore, compared to Rs 210.7 crore in corresponding quarter of last fiscal.
TV18 Broadcast is one of India's largest television broadcasting networks comprising channels such as CNBC-TV18, CNBC Awaaz, CNBC-TV18 Prime HD, CNN-News18, IBN7 and IBN-Lokmat (a Marathi regional news channel in partnership with the Lokmat group).
It also operates a joint venture with Viacom, called Viacom18, which houses a portfolio of popular entertainment channels – Colors, Colors HD, Colors Infinity, Rishtey, MTV, MTV Indies, SONIC, Comedy Central, VH1, Nick, Nick Jr. and Nick Teen - and Viacom18 Motion Pictures, the group’s film entertainment business.
To discuss the first quarter performance and the outlook going forward CNB-TV18's Latha Venkatesh spoke with TV18 CEO - News and Network18 Editor-in-Chief Rahul Joshi, and Viacom18 Group CEO Sudhanshu Vats.
Below is the verbatim transcript of the interview.
Q: Why is the increase in viewership not translating into an even better increase in revenues?
Joshi: I think the numbers are really good for us. Except maybe in one or two cases, I think the overall viewership has really grown for us whether it is regional or national news. We have done a really good year and I am proud of that. However, what you have to look at is in the context of the times we are in. We have just come out of demonetisation. The second half was bad. Despite that, I think we did very well in the first two months of the last quarter. April and May were good. It was only in June that we have seen the pressure, really. And that was also on account of some uncertainty around Goods and Services Tax (GST).
I think GST is a long-term positive for the economy, but in the short term, there will be some pain. I think that might continue into the next couple of months as well. Having said that, if you look at the overall big picture, 16 percent growth in news national is quite commendable. I think where we have lost a little bit is regional news and I think that is because of some investments that we have made in the last one year, and some of those channels are yet to show ratings and revenue traction. I am reasonably sure in this year we will be able to move forward on that front as well.
Q: It is fairly impressive in terms of the TV18 standalone business and general news. It is as you said, the regional news, so that would be infotainment, and the regional channels that did not perform so well. There, the revenues have gone down from Rs 79 crore to Rs 66 crore. When do you see that turning?
Joshi: If you look at even the regional number, a large part of that last quarter was driven on the back of government revenue, essentially from Uttar Pradesh (UP) which was going into elections last year. So, if you remove that, then we have not done that badly, though it is still under pressure, yes. I think if you look at this year, most of our regional channels are doing very well. The ratings are up. The three or four channels that we invested in, in the last one year, are also now showing traction -- Tamil Nadu, Kerala. So, once these pickup, the revenue will pickup there as well.
Q: It is the expansion of losses that is worrisome in the regional news segment. Losses have expanded from Rs 24 crore to Rs 47 crore effectively reducing the gains that was made by the business and general news space. I take your point that revenues did not grow at the same extent because of the UP elections coming in..
Joshi: Also investments in the new channels that we have launched.
Q: Can we expect this Rs 47 crore to -- are we peaking off in terms of losses and can it be expected that your company will report lower losses?
Joshi: I sincerely hope so this will also depend on the times we are in. Let us see. July has not taken off to a great start. It is a soft month. We feel that this softness could extend into this quarter given there is uncertainty still around goods and services tax (GST), but I do think that the second half looks more promising and I hope that we will be able to cut our losses.
Q: Coming to the entertainment part. What has been generally the entertainment revenue, it looks actually lower. You have only given us the consolidated Viacom, IBN Lokmat, IndiaCast. There it looks like the overall revenues have grown but not as well as in previous quarters?
Vats: Yes. I think it is a mixed bag because it is a combined thing, so when we talk about entertainment and let me talk to you about specifically Viacom18 and our entertainment portfolio there. I think the three components to the entertainment portfolio are our television business, our film business and our new digital business where we have launched Voot.
If you look at our television business, we have grown in double digits. So our growth in television business is double digits - that is good but it is not as good as it could have been. As Rahul was saying April and May were trending well. We could have perhaps been in mid teens, in my opinion at least. I think June came in under pressure on advertising and that sort of brought down but having said that we have delivered a double digit growth in our television entertainment business.
Films is a project business, it varies from quarter-to-quarter and therefore it is not strictly comparable on a quarter business and Voot continues to do very well and it is an area where we are investing but it is has done extremely well, it is continuing to trend high on monthly actives, about 17-18 million monthly active users, gross downloads of 32 million now, an average time of about 35 minutes. So on that piece I am very satisfied, we are doing quite well.
Q: A lot of effort or a lot of news also dispersed through digital means, there is Moneycontrol, and other Facebook and Twitter methods or Twitter media -- any revenues from that, that gets included in the news?
Joshi: TV18's parent Network18 runs three very strong digital properties and I am very happy to report that in the last year there has been a dramatic turnaround in the fortunes of most. Not only in terms of traffic which has grown remarkably, both on desktop which is stagnant for most people, we have grown about 15-20 percent across all our properties. We have grown 300-400 percent on mobile. That is the good story there. In the first quarter, we have reported very good numbers of overall growth upwards of 25 percent for Moneycontrol and Firstpost -- two of our flagship properties.
Q: Only for news can one expect that the 16 percent could scale up, are we looking for a full year that is closer to 20 percent?
Joshi: Early days. As I said, we are not very certain about how this pans out. Fundamentals are looking good, markets are on a roll. Overall, today being a bad day though, but overall fundamentals look good, monsoon has been good as you also pointed out. I am reasonably sure that this should be a good year for broadcast and for digital.
Q: When do we get into the black as a whole?
Vats: I will tell you, let me just sort of take that on because this is a question which is often asked. Let me tell you a few things, I think one thing is that if you look at our entertainment portfolio and Rahul talked about our performance in news on viewership shares, but our entertainment portfolio in the quarter which is just gone by, clocked a total 10 percent viewership which is our all-time high. So, we have got a 10 percent viewership now and we are very strong and that is growing. To me that is a lead indicator of things to come, number one.
Number two, if you look at our existing businesses, most of them deliver very strong operating margins, but what we do is because we are one of the new entrants on the block, to give you an example, last year we had launched 12 new channels including HD feeds. Of these, three or four important channels if you look at it which is basically Rishtey Cineplex, MTV Beats, and even Colors Super, all these channels have recovered wonderfully well from the losses which were there from last year. So, we are confident as we continue to drive this forward that this group will deliver excellent results going forward.
Disclosure: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.
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