Network18 reports its highest ever EBITDA at Rs 373 cr in Q3FY2022

Network18 Media & Investments reported its highest ever EBITDA at Rs 373 crore with margins of 22.5% for the third quarter ended December 31, 2021. Not only did News business (TV and Digital) see a sharp improvement in profitability, but Entertainment business also continued to deliver strong margins.

Strong revenue growth momentum continued during the quarter as the company reported its highest ever quarterly revenue of Rs 1,657 crore (+16.5% YoY), despite the pandemic induced headwinds faced by the movie business.

Colors was the #2 channel in the Hindi genre; Voot continued to see growth in paid subscriber base driven by impact properties.

Network18’s digital news/ information portfolio was #2 in India, reaching 50%+ of the Internet audience.

Performance highlights

• Rs 373 cr EBITDA, consolidated operating margin at 22.5%
• TV News business saw a sharp improvement in margin to 27.2%; revenue was up 13% YoY
• Entertainment business margin was at 21.4%; revenue was up 16% YoY
• Digital News revenue grew 41% YoY and margins were at 21.2%.
• PBT rose 31% YoY to Rs. 337cr driven by growth in revenues, controlled opex and lower finance cost

Strong ad growth momentum continues

• TV industry saw a record high advertising volumes in the third quarter driven by strong consumer demand, increased spending by existing brands for a higher share of voice and new advertisers using the medium to widen their reach. Digital advertising continued to gain traction with increasing adoption of the medium by both users and advertisers.
• Both TV Entertainment and News businesses delivered strong growth in advertising revenues during the quarter driven by a robust viewership share and consumer reach.
• Digital News continued to grow at a strong clip with advertising revenue more than 2x compared to FY20. The business has been leveraging its strong reach and growing digital consumption to capture a higher share of digital advertising pie. Buoyed by a strong advertising demand, network’s YTD advertising revenues have already surpassed full-year FY21 level.

Domestic subscription revenue continues to be stable

• Domestic subscription revenue for the quarter was flattish YoY, while International subscription revenue saw a decline. The implementation timeline of NTO 2.0 regulation was postponed during the quarter by the regulator to April 1, 2022 even as the litigation regarding its validity continued in the Supreme Court of India.

Viacom18 expands its sports portfolio with NBA partnership

• Viacom18 entered into a multi-year partnership with NBA to provide live coverage of the regular season of basketball games and marquee events through its television channels and digital platforms. Basketball is one of the world’s most watched sports in the world and a localised marketing outreach and consumer-connect program will help build fandom for the sport in India.
• Viacom18 also has the rights of major footballing events and leagues - FIFA World Cup 2022, La Liga (Spain), Serie A (Italy) and Ligue 1 (France), Cinch Premiership (Scotland) and other sporting events like ATP Masters Tennis, Abu Dhabi T10 Cricket, World Boxing Championship and Road Safety World Cricket Series.
• Viacom18 has been expanding its sports offering with a belief that sports, especially live sports, will complement the current entertainment offering and will help strengthen the consumer value proposition of the network, on both broadcast and digital platforms.

Network18’s digital assets seeing a strong growth momentum both in terms of user metrics as well as revenue

• Voot, Viacom18’s OTT platform, saw a strong growth in its paid subscriber base (Voot Select) during the quarter driven by the new season of Bigg Boss. With a 24x7 live stream access to the latest episodes a day before, and plenty of exclusive and curated content around content, it was one of the key drivers of subscriber acquisition. The show garnered 15bn+ minutes of watch time (AVOD + SVOD) with a daily TSV of 64 minutes during the quarter.
• Network18’s portfolio of news/ information websites reaches 250 million+ people every month, more than half of India’s internet audience, making it India’s #2 news publishing platform.
• The growth in reach has been accompanied by a healthy improvement in revenues driving the business towards profitable growth.

Adil Zainulbhai, Chairman, Network18, said, “We are building a strong and sustainable media franchise, which not only delivers quality content to Indian audience but also value to the shareholders. Over the last few years, we have taken several significant steps which have helped us achieve the turn around on profitability front and it is really encouraging to see the business now consistently deliver healthy margins, especially the digital news business which has been growing in a profitable manner. As we have seen over the last several years, content consumption is an integral part of consumers’ lives and there is willingness to spend more time and money, provided they get access to quality content at an affordable price. Also, consumers are increasingly becoming platform agnostic, with both TV and Digital growing simultaneously. Our endeavour is to cater to all consumers looking for news and entertainment content in their local languages, movies and leading sports events, on platforms of their choice.”