TV18 Broadcast, a part of the Reliance Industries Ltd-owned Network18 Group, on Tuesday reported a consolidated net loss of Rs 6.82 crore for the quarter ended June 30, 2018.
The company had registered a net loss of Rs 14.28 crore in the same period a year ago.
"Our television channels reach out to 700 million people across the country, making every 1 in 2 Indians our consumer. The improving advertising environment and our rising viewership are positives, as we continue investing into growing our offerings across genres," said Adil Zainulbhai, chairman, Network18.
Rahul Joshi, managing director of TV18 Broadcast and Network18 and Sudhanshu Vats, managing director of Viacom18 also discussed the results.
Read Here: TV18 Broadcast reports Q1 net loss of Rs 6.82 crore Edited Excerpt: Q: Let me start with the news business. You have separately given us this time subscription revenues 10 percent higher, does this mean subscription revenues across the board or was it better for the news channels compared to entertainment channels? Joshi: A lot of analysts wanted us to report our subscription numbers separately. So we have done that from now on. I think subscription has grown 10 percent for both news and entertainment. News on the other hand – if you look at the display advertising and our branded content business that has almost grown more than 20 percent. So at an overall level, we have grown 13 percent. This quarter has been good. Things seem to be turning around. Last two years have not been that spectacular for news. Q: This is not the best quarter for us, for television channels especially news channels, it is the budget months that are very profitable. How do you see FY19 itself. There will be many state elections and there may not be a budget, it may be a vote-on-account, can one extrapolate this 13-14 percent revenue growth? Joshi: Without getting into specifics, I do think that things seem to be turning around, the overall macro picture is looking good, markets are on a roll, the overall sentiment is upbeat and I think this would be a good year for news. There are lot of state elections, general elections next year so as a run up to that, you can expect some interesting excitement there.
On the other hand, there is no budget this year. So fourth quarter is usually very good. So we must keep in mind, vote on account is not the same thing as budget but I think the overall momentum is there, the sentiment is positive and I am hopeful – as I said in my last interview to you that I think we will grow in the high teens. That should be the trend going forward. But you have to be prepared for any imponderable there.
Q: What about revenues in the entertainment business, ad revenues first? Vats: Ad revenue growth for entertainment business has been a little muted this time. So we have grown at early teens or low single digits. I would have liked to grow in late teens or maybe early 20s. I think the reason for that is that if you look at our ad revenue, if I break it into three, our regional portfolio has grown exceedingly well. That has grown at about more than 45 percent. That is very good news.
Our kids’ portfolio and some of our niche channels have grown really well. They have grown in line with what I expected. Our Colors portfolio, Colors channel this time around has not grown. The reason for that is because this is largely phasing. So what happens is we do a lot of large non-fiction tent-pole items and these are usually staggered over each quarter. So these are things like Fear Factor, Khatron Ke Khiladi and India Has Got Talent, Big Boss and all that. This year around, a lot of them will be bunched up in the second half in Q3 – all three of them will come so I think we will make up for that because the good news even on Colors is that we continue to remain a strong number one channel in urban India and in primetime.
So the channel is performing very well but our revenue because of comparators, last year there was a big tent-pole, there isn’t one this time, so the comparators got a little muted. That is what has happened.
Q: Just for the information of viewers, this time Viacom18 and IndiaCast are integrated into TV18 and therefore the numbers will not be strictly comparable. Looking at comparable numbers itself, you have got a 10 percent rise in entertainment revenues, are you therefore telling me that we should expect better because some of these fictional programmes you say are bunched up later? Vats: Yes. So as the year progresses, we should definitely look at strong mid-teens to even high-teens kind of growth as we go forward. We are very confident about it because the overall sentiment in market is strong. Q: Regional news – there is a negative EBITDA in the regional news probably because in some spaces you are not still making money in some of the states, there is no question of rationalising over there, moving out of some states so as to cut losses, that is not on the cards? Joshi: Regional news if you look closely, the news is quite positive there. We have been able to cut down our losses from Rs 37 crore to Rs 22 crore. Q: You won’t think of rationalising? Joshi: No, not at all. In fact, the good news is that after a long time - analysts have been asking us over the last few quarters that when do we expect this business to breakeven and I think we are truly headed in that direction. I think not only have the losses reduced, we have also been able to grow our viewership share and also our revenues this year. So this quarter, our revenues have been pretty healthy. More than that, if you look at our regional news portfolio, till about two years ago, our viewership was just 2 percent of all television viewing, today it is more than 5.5 percent. So it is a dramatic turnaround according to me and I hope to see that reflected in the numbers going forward. Q: We may be able to breakeven over there? Joshi: I would not like to say when but yes, I think we are headed in that direction and we should soon get there. Vats: Overall, regional is a very strong space and I think particularly if you look at both from the future but this specific quarter as I just told you, our ad revenue growth on regional has been very good in entertainment. Our share expansion has been robust. We have added 200 basis points (bps) or 2 percentage points on overall consolidated share in regional for Viacom18 and interestingly, some of our existing channels, which are big channels like Colors Kannada and all that are beginning to deliver operating EBITDA upwards of 50 percent. So regional is a very strong space. Q: I take your point about Colors Kannada or Colors Gujarati but you cannot say the same of Colors Tamil or Colors Bangla. At 5 percent, will you persist to make it profitable or it is an experiment and one day call it off? Vats: No. Let me break them up into two. I think Colors Tamil, first of all, is a new entry, which happened towards the end of last quarter. It is one of the most successful launches in recent times - it has notched up a 5 percent share in two-three months. We have strong competitors there but we are focused on that market. We will continue to grow. It is a large market and I think our journey has started very well.
I think on Bangla, we continue to work on and it is a duopoly in that market but we are confident that with the work which we are doing, there is a lot you will see. Very recently, on July 16, we have launched Kaun Banega Crorepati in Bangla as well. So there is a lot of work, which we are doing. We are invested in the regional space. Regional has been a star performer for the quarter and has huge potential overall.
Q: Let me come to the digital piece. You see it as a threat or you see it as an opportunity? When is the money making – now of course I am trading into Network18 numbers but is it beginning to play for itself? Joshi: I clearly see it as an opportunity. I think our linear business is doing well and our digital last year clocked 22 percent growth full year basis, revenues. I think this quarter we have grown revenues 22 percent. We have got moneycontrol, we have firstpost, we have news18. News18 in May, in comScore, is a number two site that we have, it is a two-year old brand. So News18.com has done exceptionally well.
If you look at moneycontrol, in the last one year, it has - on mobile, on our app, the traffic has gone up three times. It has again grown more than 20 percent. I think firstpost is now today the number fourth general news destination in the country. So we have two in the top four, news18.com and firstpost. I think we are prepared better than anyone else.
Watch out this year, we have two big high profile launches coming up in this space. So, I think we are well prepared on the digital side. We might even partner Voot on their OTT platform. So our news could go on Voot.
Q: That definitely is catching up, entertainment apps, for sure, so give us some colours about Voot. Vats: The progress there has been very good. On a revenue front, albeit on a small base, on ad revenue front, we are doubling quarter-on-quarter. That is fantastic news. More importantly, for me, the gross downloads now are over 90 million. We are approaching the three-digit mark and monthly actives are in the region of about 35 million and very importantly, we are the number one app when it comes to time spent by user per day amongst all premium OTTs that hovers at around 45 minutes. So our overall performance on digital is good, we are continuing to be bullish on this.
As I had said earlier, we are prepared for the digital world and finally as Rahul Joshi was saying even in entertainment towards the second half of this year, we are going to expand portfolio. You can look at launches coming up and things which we are doing around this space.
Disclaimer: Network18, the parent company of CNBCTV18.com, is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.