Network18 and TV18 Q1FY21 revenues fall 35% due to COVID-19 impact

Network18 Media & Investments’ results for the quarter ended June 30, 2020 saw the peak impact of COVID-19 absorbed through the quarter. Consolidated operating revenues saw a degrowth of 35 per cent to Rs 807 crore in Q1FY21, as against Rs 1,245 crore in Q1FY20. Consolidated operating EBITDA, too, saw a fall at -41 per cent – from Rs 46 crore in Q1FY20 to Rs 27 crore in Q1FY21.

Meanwhile, TV18 Broadcast reported consolidated operating revenues of Rs 776 crore this quarter, a 35 per cent fall from Rs 1,198 crore in Q1FY20. Consolidated operating EBITDA, too, saw a decline of 43 per cent – from Rs 77 crore in Q1FY20 to Rs 44 crore in Q1FY21.

Also read: Basant Dhawan CEO of English Cluster at Network18 calls it quits

COVID-19 linked clampdown on spending by advertisers dragged ad-revenues sharply, especially on Entertainment. However, TV subscription revenue remained resilient, and Digital subscriptions have accelerated. The business strategy and operating methodology were re-engineered amidst a strategic review to address the current challenging environment.

The cost base was comprehensively reset across verticals, as the organisation embraced tech-solutions and a leaner, nimbler approach. Operating EBITDA dipped on account of the revenue drag. However, aggressive and broad-based cost-controls across business verticals limited the fall. Consolidated PAT improved YoY led by a decline in finance costs.

Though viewership in both TV and Digital media rose substantially during the lockdown, advertising revenue was impacted as the pandemic affected consumption across advertiser categories. While News was relatively better off due to a surge in viewership, General Entertainment suffered due to no original content being produced during the lockdown and nil movie releases. Resilience in TV subscription and Digital syndication revenue partly blunted the impact, limiting the fall in operating revenue to 35 per cent YoY.

However, linear TV subscription revenue remained resilient, recording 6 per cent YoY growth in Q1FY21.

Green shoots visible in June, consumption tailwinds and likely stickiness a positive: Easing of lockdown towards the end of the quarter has shown promising results with many advertisers returning to the roster, especially in News. Content production for National and Regional General Entertainment Channels (GECs) has also resumed recently, and will ramp-up in phases. Digital advertising continues to gain ground, led by growing acceptance by advertisers, targetability of audiences, and ROI measurement. The rise in TV and Digital media consumption augurs well for revival in advertising inflows.

Digital remained a growth area across both News and Entertainment portfolios, with increased engagement witnessed in properties having strong brands. Flagship news portal News18.com grew traffic >50 per cent, being at the intersection of news content, vernacular language and digital medium. VOOT saw an increase in consumption of digital exclusive content, as catch-up of TV content took a backseat due to re-runs being aired.

Commenting on the first quarter results, Adil Zainulbhai, Chairman of Network18, said, “The quarter that went by was the most challenging period that the industry has witnessed in many decades. That we are emerging on the other side bears testimony to our ability to question and modify established ways of operating, realign priorities and maintain focus, all while keeping our workforce safe and our audiences engaged. Our staff and employees undertook a heroic effort to adjust to the challenges posed by the pandemic, and kept our channels and properties running. We are proud of the personnel that kept the show going amidst trying circumstances, especially for the News18 network that provided peerless coverage and relevant campaigns during the pandemic. As we resume original content production in Entertainment amidst tight protocols, we wish to thank our audiences who have stood by us over the years. Growing TV and Digital media consumption, a nimbler business strategy and further-strengthened core brands in our portfolio... we believe this is indeed the new normal.”