Media firms post strong Sept qtr on ad rev, content

Last Updated: Thu, Oct 28, 2010 14:10 hrs

Media firms such as Network18 Media & Investments Ltd and Sun TV Network posted a robust growth during July-September on the back of strong advertising revenue and growth in subscription.

Largely, Indian media companies were expected to witness steady profits during July-Sept riding on strong advertising revenue, but a delayed festival season was expected to limit year-on-year growth.

"The performance has been stronger than what has seasonally been so far," K.R. Choksey analyst Rohit Maheshwari said, adding that seasonally, the second and fourth quarters are the weakest for media companies.

Margin expansion of media companies was due to higher advertising revenue, buoyed by increase in volumes as well as prices.

During the quarter, Network 18 narrowed its losses by more than half on a consolidated basis and Sun TV saw its profits rise 28.4 percent.

Zee Entertainment Enterprises Ltd said its consolidated net profit rose 14 percent and advertising revenue swelled 66 percent, as results included ETC Network Ltd and the 9x business of 9x Media Pvt Ltd acquired in March 2010 and the regional general entertainment channel business acquired from Zee News Ltd in January 2010.

Sun TV's advertising revenue jumped 19 percent higher, helped partly by a rate increase in January.

The company had raised advertising tariffs for its Telugu channel Gemini TV by 6-16 percent, Kannada channel Udaya TV by up to 10 per cent and certain programmes of Malayalam channel Surya TV by up to 5 percent, effective Jan 1, 2010.

"We also had a bunch of new brands that came into play a little over a year back so that inventory getting incorporated also gives a certain increase to the amount of volume," said Ajay Vidyasagar, chief operating officer, Sun TV.

Vidyasagar said he expected overall subscriber revenue to grow 25 percent over the next year, adding that direct-to-home television was a big driver of growth for Sun TV's subscriber revenue business.

Network 18 posted a handsome 25 percent growth in net sales, boosted mainly by a jump in revenue from its television business.

"Rapid and profitable growth in the television business, largely driven by advertising revenue stream; subscription revenues to drive the next leg of growth," Network 18 said in a statement.


Multiplex chain Inox Leisure saw September-quarter profit dwindle due to a rise in interest costs, but sales remained strong driven by healthy movie releases during the quarter.

Fame India Ltd, in which Inox holds a controlling stake, also saw revenue increasing 26 percent.

Other theatre exhibitors such as PVR Ltd and Cinemax India Ltd are also expected to post healthy sales due to a higher screen-count and Bollywood crowd-pullers like Dabang, Peepli Live and Once Upon a Time in Mumbai.

In contrast, television content provider Balaji Telefilms swung to a quarterly loss, as revenue dipped 6 percent, costs inched up and other income plunged 70 percent.

(Reporting by Manasi Phadke, Editing by Rajesh Pandathil)

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