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Shemaroo says economic slowdown impacted business from YouTube

Updated : February 12, 2020 11:49:43 IST

Shemaroo Entertainment delivered tepid numbers in the December quarter. Hiren Gada, CEO and CFO of Shemaroo Entertainment, discussed the company's performance and the outlook for the 2020 in an interview with CNBC-TV18.

Gada said that in the next 3-4 years the company is aiming for an equal split across its digital and traditional business. “Next 3-4 years down the line, we should be 50:50. This year we hope to be about one-third and two-third between digital and traditional. This year our core customer base on the traditional side which is the broadcasters, faced tremendous slowdown on the ad side as well as on the new tariff orders. So the content investment has been low-key and that has affected the entire ecosystem.

“The regular operating business — we are looking at our Ebitda (earnings before interest, taxes, depreciation, and amortisation) margin is in the line of approximately 25 percent which even now in this current quarter has been achieved but the expenses on account of new initiative which has dragged it down,” he added.

Gada revealed that digital operations contribute 50 percent of Shemaroo's revenues, but the overall economic slowdown in the country also impacted the company's YouTube revenues.

“We make 50 percent of the revenue that our content earn and this is included in our digital media business overall. YouTube business this year has been on a growth path for us but the last quarter particularly has seen a slowdown which is the overall slowdown impact.”

He added that the slowdown has had an effect on the company's capital raising plans.

“We had envisaged these new investment capex for which we were looking to raise money but obviously in the current market conditions and given where the current stock price is, we will relook at the whole investment project and plan differently in terms of how we are taking that going forward.”
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