TV18 Broadcast Limited, a unit of Network18 group, on Tuesday reported a consolidated
net profit of Rs 147 crore for the third quarter ended December 31, 2018.
TV18, which operates channels such as CNBC-TV18, CNBC Awaaz, CNN-News18, posted a 41 percent rise in consolidated operating profit to Rs 115 crore in the quarter, despite continuing investments into recent launches -- Colors Tamil and Colors Kannada Cinema.
Rahul Joshi, MD, TV18 Broadcast and Sudhanshu Vats, MD, Viacom18 discussed the Q3 results and the future ahead.
Edited Excerpts: Can you tell us more about the jump in the operational performance in Q3? Joshi: I think if you look at this quarter, it has been a very healthy growth of 22 percent in our overall revenue. I think there has been a healthy percentage, EBITDA as well. On the back of robust advertising in the festive season, we have been able to grow our revenues in a good way.
We have also been able to reduce our losses considerably and that has led to a fairly positive EBITDA. If you look at the overall news picture, we are the number one news broadcaster in the country with 11.4 percent share, that is almost a 2 percentage lead over our nearest rival. We have only widened our lead over the number 2 player and we are way ahead of others. We have established ourselves as the number one news broadcaster in the country and some of the advantages are now being seen there.
The reduction of losses in the regional news channels has helped a bit. In fact, I think the losses have fallen from Rs 29 crore to about Rs 9 crore, is there a chance of it getting into the black there? Joshi: Yes, absolutely. Next year we remain reasonably confident that it will be in the black. Over the last three-four quarters, we have been reducing our losses 70 percent on the trot and I think backed by an aggressive revenue growth of almost 30 percent, last quarter we grew 37 percent, this quarter we have grown 27 percent and finally the losses are reducing and any revenue jump going forward would fall to the bottomline. We are very happy about our regional news performance. It has turned around and it is likely to hit the black very soon. I want to ask both of you about future revenues as well, especially because it is going to be not just one budget but two budgets as well election season, I will come to the outlook in just a bit. A more operational question, this unbundling rule by Telecom Regulatory Authority of India (TRAI), you think that will allow us to keep the subscription at 13 percent growth, will there be any problem? Vats: The new tariff order, which TRAI has come is good in the long-term. It is good for the industry and for the consumer. It gives choice to the consumer. But for implementation, I think it might take a couple of quarters in my opinion.
There will be some level of disturbances where I could say or settling down or teething problems and that could have some headwinds. Both for subscription and we could even see it if there are disturbances when the period in which they are getting implemented, we could see some headwinds on advertising as well. So I think the settling down period will have some headwinds very clearly.
It is the entertainment business, revenues have grown by 23 percent. How much of it came from Andhadhun? Vats: Andhadhun was a blockbuster. I also wanted to let you know that IMDb has rated it as the best film of 2018 but more importantly, it is the tenth best film ever for which we are very delighted. It has done very good business. It was a small film, so profitability has been very high but absolute profits, not as compared to some of the bigger films.
I think what has helped our revenue growth this quarter is – the festive season and the advertisement as Rahul Joshi was also talking about. We also had two of our tent-pole properties -- Big Boss and India Got Talent. More importantly, films in general and, you spoke about
Andhadhun but we opened our account in Telugu as well with the film called Devdas, which did quite well.
Three-four films, which we released in this quarter all did very well. So that gave us the robust 23 percent growth in revenue. Our EBITDA as well, despite all our investments continue to grow, our EBITDA on business as usual in this period has nearly doubled.
I agree business as usual EBIDTA has done well. I think it was more because of the loss on Colours Tamil and the newly launched channel? Vats: We have launched three channels so Colours Tamil is an investment which is continuing which was launched earlier but we also introduced Colours Kannada Cinema which is a movie channel in Kannada and towards the end of the quarter we introduced Colours Gujarati Cinema which is our entry into Gujarat. Would that explain this, if I looked at the consolidated numbers the income growth quarter-on-quarter the income is fairly good. It has gone from a Rs 120 crore to Rs 146 crore but expenses also have gone up almost similarly and that is largely operational cost. What would be that? Vats: It is the new channels which we have launched, it is an investment in content which we are continuously making and it is also the movies which we did in this period. So, I think it is overall broadly investment in content which we are continuing to do. We are counting on a fairly important set of events for the news guys. Do you think it will generate revenue subscription? Joshi: If you look at this quarter and the first quarter of the next financial year elections will really play a big role in the news business. Even though Vats talked about the softness that we are witnessing in January and probably also in the next one or two months thanks to the implementation of the new tariff order. I think this one event will help us in the last quarter of this financial and the first quarter of next.
The revenue from the government is up across the board thanks to our regional channels. It was very well aided and abated by in some measure. The last three state elections and now the general elections I think there will be ancillary activity around elections and political parties will advertise. We will do some tentpole properties, events so all that would add to some amount of robustness in the revenue and in this last quarter of this financial year and in the first quarter of next.
Does it usually drive digital revenues? Joshi: It also drives digital revenues maybe more in the case of broadcast less in the digital, but it does have a solitary impact on digital as well. Don’t forget that while we will take a little bit of a hit in this quarter because of Vote on account not a full Budget, but next year we will have two full Budgets not one. So, that is good news for the next year as well. If economy and you would know better if economy does well, market behave I think we would see some amount of buoyancy in advertising going forward. I just spoke to a conference of Paint industry guys, even other industry other than autos almost everyone is speaking about fairly good demand. So, hopefully it should translate, you can feel it in advertising? Joshi: I do think that the last quarter has been good, this quarter also would have been decent again now because of this new tariff order, unbundling one or two months maybe a little uncertainity but we do feel that the economy is robust. I don’t see any reason why it should not do well in the next couple of quarters. Anything else like Andhadhun on the anvil? Vats: Two things one is one the digital piece so our Voot app continues to do very well. There are two-three things I wanted to let you know about that our daily views on Voot are crossing 25 million plus. We are getting a substantial scale. Particularly for ad led video on a video platform that is wonderful. By the way, all news channels are there on Voot as well so you should sort of enjoy them.
Lastly, on Voot, a good thing which has happened is that in the last two years our reliance on our tentpole was very high. Which is let us say Big Boss, this year around we are getting a more holistic views which is very good so therefore regional is picking up, different things are being watched so on and so forth, so that is really good news. On Voot we are launching -we are in beta for our product on Voot kids which is something which all the parents who have young children should look forward.
Any movie, any blockbuster that you want to share or keep a secret? Vats: We have Thackeray coming up. This is the first time in recent history where Hindi and Marathi is launching at the same time. Disclosure: Network18, the parent company of CNBCTV18.com, is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.