TV18 & Network18 see highest ever Entertainment EBITDA margin in Q3 FY21

TV18 Broadcast has reported a 14% YoY growth in its operating EBITDA for the third quarter ended December 31, 2020, even as Operating Margin continued to grow to a healthy ~24%. Ad-recovery, Cost-efficiency drove Entertainment EBITDA margin to 25%, its highest ever. TV News EBITDA margin ramped-up to ~19%, marking 4 years of consistent improvement. Profit After Tax (PAT) rose to Rs 377 crore, up ~2x YoY on improved performance, lower finance costs and tax reversals.

Ad-revenue inched up YoY; recovery has been sharp and broad-based. Entertainment fully recovered from the COVID-19 impact, led by programming returning to normalcy and high-impact content driving ad-yields up during festive season. Viewership remained strong despite sports (IPL) and peer non-fiction shows competing for eyeballs. Sustained focus on high-quality reportage sans hyperbole continues to bolster the News business, even amidst the absence of BARC ratings during the quarter.

Subscription revenue was up 2% YoY, even as lockdown impact on some consumer segments was seen tapering. Domestic subscription revenue remained strong, offset stress in international. Improved distribution tie-ups for TV and Digital continue to drive subscription growth.

Meanwhile, Q3 FY2021 Operating EBITDA for Network18 Media & Investments was up 21% YoY, even as Operating Margins continued to grow to a healthy ~23%. Ad-recovery, Cost-efficiency drove Entertainment EBITDA margin to 25%, its highest ever. TV News EBITDA margin ramped-up to ~19%, marking 4 years of consistent improvement. Digital News EBITDA margins rose to ~9%, after achieving break-even in the last quarter. PAT rose to Rs 333 crore, up >2x YoY on improved performance, lower finance costs and tax reversals.

Digital News revenue rose >50% YoY for the second quarter in a row, underscoring the success of Network18’s platforms in a fast-growing, but hyper-competitive domain.

Subscription revenue up 2% YoY; lockdown impact on some consumer segments tapering. Domestic subscription revenue remained strong, offset stress in international. Improved distribution tie-ups for TV and Digital continue to drive subscription growth.

Digital gained momentum, led by network-content core, interactivity and distribution thrust. Voot video-views rose 30% QoQ, driven by complete resumption of network content. With an average daily time spent per viewer (TSV) of >50 minutes, Voot continued to be a leader amongst direct peers. Niche edutainment product Voot Kids has a TSV of 86 minutes.

Apart from digital interactivity in non-fiction TV shows like ‘Bigg Boss’ being dialled-up, innovative interactive elements were introduced on Voot for even fiction shows. Interactive games were launched as the 5th vertical of Voot Kids. Pay-product Voot Select witnessed robust growth in subscribers, boosted by novel digital exclusives like a 24-hour ‘Bigg Boss’ channel and content-around-content. MC Pro gained traction from AI led analytical tools for investors, and access to content from renowned global publications like Financial Times.

Bundling of Voot with telcos, digital extensions of traditional distributors, and high-end non-media digital platforms further drove reach. Web-app of Voot Kids was unveiled too. MC Pro and Voot Select cross-promotion on Diwali drove user acquisition.  

Adil Zainulbhai, Chairman of Network18 and TV18, said, “The group has fully recovered from the effects of the pandemic, even as safety measures and innovative solutions to logistical challenges continue to be deployed. We have treated this period as an opportunity to rethink our businesses, and are emerging stronger and ready for the post-COVID world. As TV consumption remains healthy and Digital adoption grows in tandem, we believe the group is well positioned to straddle the space. The benefits of cost controls effected over the past year are now visible, as all three verticals are at much improved profitability levels. In this new year that is bringing in new hope, our constant endeavour will be to create value and deliver on our promise of class-leading content.”

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