Management Discussion And Analysis Report
The Indian entertainment and media industry, as a whole, grew from INR 587 billion in2009 to INR 652 billion in 2010. According to industry reviews and reports this sector hasexhibited a growth of 11% from 2009-10 and forecasted to grow at about 13% to touch INR738 Billion by 2011.
|Overall Industry size (INR Bn)* ||2007 ||2008 ||2009 ||2010 ||CAGR (2007-10) ||2011P ||2012P ||2013P ||2014P ||2015P ||CAGR (2010-15) |
|Television ||211 ||241 ||257 ||297 ||12% ||341 ||389 ||455 ||533 ||630 ||16% |
|Print ||160 ||172 ||175 ||193 ||6% ||211 ||231 ||254 ||280 ||310 ||10% |
|Film ||93 ||104 ||89 ||83 ||-3% ||91 ||98 ||109 ||120 ||132 ||10% |
|Radio ||7 ||8 ||8 ||10 ||11% ||12 ||15 ||18 ||21 ||25 ||20% |
|Music ||7 ||7 ||8 ||9 ||5% ||9 ||11 ||13 ||16 ||19 ||17% |
|Out of Home ||14 ||16 ||14 ||17 ||6% ||19 ||22 ||24 ||27 ||30 ||12% |
|Animation and VFX ||14 ||17 ||20 ||24 ||18% ||28 ||33 ||40 ||47 ||56 ||19% |
|Gaming ||4 ||7 ||8 ||10 ||32% ||13 ||17 ||23 ||31 ||38 ||31% |
|Digital Advertising ||4 ||6 ||8 ||10 ||39% ||13 ||18 ||22 ||28 ||36 ||28% |
|Total ||516 ||579 ||587 ||652 ||8% ||738 ||834 ||957 ||1104 ||1275 ||14% |
(Source: FICCI-KPMG Report 2011)
Revenue Streams: The revenue of media players, especially television and print, arelargely derived from advertising and subscriptions.
1. Advertising revenue: Your Company sells the airtime between our regularprogramming to advertisers where advertisers can place their advertisements. We also offerin-programme advertising opportunities and other branding opportunities such as titlesponsorships, special properties, etc. for which we earn advertising revenue.
2. Subscription revenue: Our channels are pay channels. We broadcast ourchannels using encryption techniques and the cable operators decrypt the signals usingspecial equipments and authorization provided by us. The cable operators feed thedecrypted signals as a part of the content package to consumers and collect a monthly feefrom their subscribers.
Industry Growth Fundamental Drivers
The Indian media and entertainment industry has benefited from some fundamental growthdrivers, which have facilitated its double digit growth in the past decade. They arecategorized and summarized as follows:
1. Evolving socio-economic environment in India Led largely by acombination of two key macro factors, India has emerged as a growth engine fordiscretionary consumption products and services, especially media and entertainment. Thefirst one is the favorable demographic composition of the nation, commonly referred to asthe "Demographic Dividend", which essentially implies that a large proportion ofthe countrys populace is young and in the working age group, thus allowing forgreater future consumption upside. Second, since liberalization, the country has witnessedrapid economic growth which has corresponded with the influx of foreign capital and brandsas well as stronger integration with the global socio-economic environment. This has ledto the emergence of an ever increasing large consuming class, with rising disposableincomes, which is globally aware and acquisitive in nature.
2. Digitization This is the process of converting analog informationinto digital formats. This has been a defining trend in the global media industryespecially in TV, music and films and now it is becoming evident in India as well. From anenhanced consuming experience for the end-user to greater addressability and monetizationpotential for the content provider; digitization can be a great value creator across thevalue chain. Many digital platforms, ranging from digital cable, DTH, IPTV to digitizationof films, print and online sales of music now exist. As per industry reports, DTH achieveda robust growth of 75 percent in 2010 in the net subscriber base over 2009, by adding 12million subscribers. With the increase in DTH, mobile and broadband penetration and the 3Groll out by telecom players, the market for other digital distribution platforms such asVoD, Pay Per View, online streaming and downloads is expected to improve considerably.
3. Narrowcasting Over the past years, the media industry haswitnessed the emergence of niche plays. These niche offerings are highly focused channels,shows and formats which seek to segment audiences and deliver unique offerings to thembased on their preferences.. This has in turn allowed advertisers to reach out to theirconsumers more effectively. Narrowcasting is inextricably linked to the growth ofaddressable media in the country and the digital wave.
4. Regionalization This is another one of the most significant growthdrivers for the industry. From providing regional versions or feeds of national mediabrands to launching local content driven titles and channels, regionalization andlocalization have been growing rapidly across media. This has been caused by thepercolation of media consumption in cities apart from the large metros and the gradualincrease in income and awareness levels in Tier 2 and Tier 3 cities. From the launch ofregional newspapers to city and region/language based channels to special shows, thistrend is spurring growth in multiple ways. In 2010, of the total ad volumes on television,53 percent was on regional channels as opposed to national channels, growing from 47percent in 2009.
5. Growing Importance Of New Media Another key trend is theconvergence and multi-platform presence of media services in the country. Over the pastyears, consumers as well as content providers have ensured that the same content isincreasingly deployed across platforms, from television to online to mobile and beyond.Whether its e-papers or online streaming of shows or mobile based applications, theconvergence of content across key "screens" is a defining phenomenon in theindustry. Considering the growth in Indias telecom and IT markets especially mobileand wireless markets (over 500 mn wireless subscribers), this wave of convergence is boundto be strengthened. Also noteworthy is the rollout of 3G services in the country whichwill provide a strong impetus to the convergence phenomenon amongst content providers andusers. Availability of infrastructure and appropriately pricing content across these newmedia platforms will be critical success factors for the Indian market.
6. Consolidation Another key trend with respect to how the industryhas been organized is the rise of the "media conglomerate" in India. Due totraditional benefits of size and scale from the diffusion of capital risk tocross-leveraging of audiences and promotional opportunities to managing volatility inconsumption patterns, media owners are realizing the importance of presence across thevalue chain and in that sense have large conglomerate forms, as opposed to stand aloneoperations which may not be able to withstand environmental exigencies or intensecompetitive pressures. The Media and Entertainment industry is increasingly becomingfragmented in nature due to entry of newer players and newer customers and regions gettingadded. These trends are giving rise to increasing competition and are expected to give wayto consolidation of operations. This could help in the emergence and growth of playerswith superior product, marketing, distribution, technological and innovation capabilities.In turn, this is likely to aid the growth in the overall market size and reach for theindustry.
7. Pay Led Revenue Models - Traditionally, advertising revenues have had astrong hold in the Media and Entertainment industry, but increasingly, subscriptionrevenues are becoming important with consumers paying for media services. The mediabusiness models in India are undergoing a change with audiences becoming more willing topay for content and value added services. Technology has enabled convenience and superiorquality offerings to consumers who have responded positively. The growth in ticket pricesof movies at multiplexes, increasing number of Pay-TV subscribers, increasing penetrationof DTH with its user-friendly interface and technology, and introduction of Value AddedServices (VAS) by media players are some examples of pay markets gaining importance.
8. 360 Degree Connect with Consumers - Players are looking beyond just thetraditional mediums by reaching the consumers across multiple platforms in order toestablish a stronger connect. They are taking the help of multiple touch pointssimultaneously to communicate to the consumer across platforms like TV, Print, Radio, OOH,Films, Internet, Mobile and Retail.
9. Other Key Enablers Apart from the above, there are other importantfactors such as gradual de-regulation in industry policies, easier availability ofinstitutional capital for funding growth and the opening up of global markets for Indianmedia content that have facilitated growth.
Opportunities, Growth Drivers and Concerns
The Indian Entertainment and Media Industry has shown structural shifts in its movetowards convergence with consumers increasingly taking control of their media consumption.With the evolution of the Industry, growth is increasingly being driven by increasingconsumer spending which has a large impact on revenue streams. Knowledge of evolvingconsumption trends will be a critical success factor in this scenario. The growth has beenevident in varying proportions across the different segments of the Indian Entertainmentand Media Industry i.e. Television, Print and Internet (Digital) being the major media interms of size and growth rates apart from other segments such as radio, out of home,mobile.
The Indian Television Industry
Your company operates primarily in the news and entertainment segments.
1. News : Two leading general news channels viz. CNN IBN andIBN 7 and the leading Marathi News Channel IBN Lokmat through its50:50 JV with the Lokmat Group.
2. Entertainment : We also forayed into the entertainment segment through our50:50 JV with Viacom called "Viacom18", which operates industry leading channelssuch as Colors, MTV, Nick and Vh1.
The private television industry commenced its operations in the year 1992, when theGovernment authorized licensing privately-owned cable and satellite televisions. Beginningwith 2 privately owned television channels in 1992, there are currently over 550television channels with IBN18 being one of the nations leading broadcasters in thenation. The Indian television industry has recorded a growth of rate of around 15% in thelast year. The Indian television industry has consequently been growing from strength tostrength with total revenues expected to double over the next 5-6 years. As per industryestimates, the television sector in India accounted for almost 45% of revenues of theMedia and Entertainment industry.
Key Growth Drivers for Indian Television: Apart from the trends mentioned earlierwhich impact TV, the following are some of the drivers of medium term growth for thetelevision sector at a generic level:
1. Digitization - Rapid growth in the number of digitized households leading to highersubscription revenues and ARPUs for broadcasters as a result of the greateraddressability due to digitization.
2. Niche - Growth in the number of niche and regional channels which will have aninclusive and expansionary impact on the television sector. The emergence of targeted andfocused channels will allow advertisers to derive maximized value and at the same timeincrease the participation of local and regional advertisers, thus impacting sectorrevenue growth.
3. Multi-TV Homes and Platforms and Increasing penetration of TVs and C&Shomes Even today, a large number of Indian households do not have access totelevision, especially in the rural areas. With strengthening distribution, easing ofhardware prices and growing awareness levels, the countrys television footprint isset to expand further. With the increase in consumption power, many households are nowopting for multiple television sets expanding the market further.
4. Infrastructure - Environmental factors such as increasing access to electricity(especially in rural areas) and the continued delivery of quality content are furtherenablers of greater penetration in the Indian television industry.
(Source: FICCI KPMG 2011 Report)
Key Concerns and Challenges: The following are some of the primary challenges tothe growth of the television sector:
1. Lack of transparency in sharing of revenues by distribution - The lack oftransparency in case of analog cable systems has traditionally been a challenge for thebroadcasters. As per industry estimates, local cable operators (LCOs) still garner almost75% of the subscription revenues due to under-declaration of the subscription numbers,broadcasters get around 15-20% and MSO get around 5%. There is a possibility for thisscenario to change to a more equitable sharing norm, with higher penetration of digitalplatforms.
2. Carriage Fees - As per industry estimates, carriage fees in 2009 wasaround INR 1000 to 1200 Crores. The fee depends on the pull factor of broadcasters interms of the kind of content produced, overall popularity of the channel and the bouquetthat the broadcasters provide. The bargaining power of broadcasters is limited due to theshortage of bandwidth in the analog market. However, it is expected that the onset ofdigitization will make more bandwidth available to distributors.
3. Advertising Environment Risks Pursuant to the last global economiccrisis, the macro advertising environment had been affected. However, since the last year,we are seeing some recovery momentum. This risk of sudden environmental pressures, leadingto cuts in ad spending, can be substantial for broadcasters.
4. Competition from other media Owing to multiple factors, includingthe mass nature of television, some proportion of advertising revenue is also moving awayand into media such as internet, mobile and radio which are relatively cheaper, moremeasurable and have greater local connect.
5. Content costs for channels As a result of the clutter andcompetitive pressures in the market, there has been a high degree of volatility in contentcosts which is a cause for concern.
6. Regulatory and Other concerns - The Indian broadcasting, especially thenews genre, is subject to significant Government regulations. License to uplink channelsfrom India provide broad discretion to the Government to influence the conduct of businessof a channel by giving the Government the right to modify, at any time the terms andconditions of licenses granted. Any adverse change in regulatory environment cannegatively impact the business of channels. The Telecom Regulatory Authority of India("TRAI") has also implemented a series of additional regulatory measures,including a standardized template that fixes the commercial terms between programmers andcable operators. The emergence of a large number of channels in the market has lead tofragmentation of audiences. Also, advertisements in India are regulated by applicableguidelines issued by the Government of India, with the discretion to determine the displayor broadcast of any particular advertisement on the basis of public policy, generalinterest of society and such other factors. Increasing regulation(s) and governmentintervention in the news broadcasting space could impact news broadcasters. Thebroadcasting industry is subject to rapid changes in technology. The Company strives tokeep in line with the latest international technological standards. The cost ofimplementing new technology significantly influences the financial condition of theCompany.
The Indian New Media Industry (Digital)
Internet and new media including digital content usage in India has been on the riseover the last few years with a greater number of users being able to have access todigital content. The cost of network access and handsets is falling, penetration ofwireless networks is increasing and Indias young population is leaning towardsdigital content. Increasing focus on literacy, PC education, mobile internet, greaterpenetration of affordable smart phones and vernacular content on the web is expected togenerate an increase in online penetration in the country. The Internet has had a profoundeffect on consumers viewing habits and the proliferation of devices is alteringtheir media and entertainment consumption behavior.
Internet audiences in India stand at approximately 81 million users (Source: FICCI-KPMGReport 2011). Smartphone sales in India accounted for 5.2 percent of device sales in thefirst quarter of 2010. This share is expected to increase to 18 percent by 2014, driven bybroadband technologies and customer aspirations. As broadband penetration and mobile basedconsumption grows (3G), Internet audiences will grow especially from smaller towns, whoare discovering how the Internet can be used to surmount the barriers of distance andtime. Another key factor in spurring heightened interest in the online medium has been therelative affluence and empowered nature of internet users. Faster broadband speeds andhigh user demand in India will drive content to be presented and consumed in differentways such as social media, videos and streaming of music and movies.
The Indian Film Industry
Your company entered the Indian Film Industry through Studio18 and was amongst thefirst few studios that were set up in the Indian film industry. It became essential toremodel Studio18 into an entity that not only aligned itself with the industry trends butis also more integrated with the other businesses of Viacom18 and Viacom18 MotionPictures is a step in that direction. The second half of the last financial yearwitnessed the roll-out of the plan to rebrand Studio 18 as Viacom 18 Motion Pictures.
The Indian film industry is projected to grow at a CAGR of 9.6 percent to touch INR133.5 billion in revenues by 2015. The contribution of domestic theatrical revenues to theoverall industry pie is expected to reduce slightly, while the share revenues from cableand satellite rights is expected to increase going forward and account for 13 percent ofoverall industry size.
(Source: FICCI KPMG Report 2011)
GROUP STRUCTURE OVERVIEW
Network18[BSE: 532798,NSE: Network18] is one of Indias leading full play mediaconglomerates with interests in television, print, internet, filmed entertainment, mobilecontent and allied businesses. Through its holding in Television Eighteen India Ltd (TV18)[BSE: 532299, NSE: TV-18], Network18 operates Indias leading business newstelevision channels, CNBC-TV18 and CNBC Awaaz. It also runs one of Indias largestInternet players - Web18, as well as one of Indias leading real time financialinformation and news terminals - Newswire18. TV18 expanded into print with Infomedia18,following the acquisition of Infomedia, Indias leading player in the specialinterest publishing and local search space. Through its holding in ibn18 Broadcast Ltd(ibn18) [BSE: 532800,NSE: ibn18], Network18 operates in the general news and entertainmentspace with leading general news channels CNN-IBN and IBN7 and has IBN Lokmat, a Marathinews channel in partnership with the Lokmat group. ibn18 also operates a joint venturewith Viacom, called Viacom18 which houses the MTV, VH1 and Nickelodeon channels in India -as also Viacom18 Motion Picture, the Groups filmed entertainment operation andColors, the countrys leading Hindi general entertainment channel.Additionally, Network18 holds the Groups online and on-air home shopping venture,Homeshop18, its full spectrum events management venture, E18 and its sports management& marketing division, Sports18.
FY11 as a great year for Network18 and our various businesses News,Entertainment and Digital; performed well on all parameters advertising revenues,profit margins and market share. It was truly transformational as most of our businessesreturned to operational profitability and we consolidated and strengthened our leadershipacross Television and Digital. Our Television Business Revenues crossed Rs. 1,100 Croreswith Operating Profits Up 9x and our Digital and eCommerce Business Net Revenues crossedRs. 200 Crores.
Key Highlights for FY2010-11
Consolidated revenues for the year 2010-11 stood at Rs. 1,484 crores for theyear, up 21%, compared to the last year, 2009-10 (adjusted for the sale ofInfomedias BPO unit).
Network18 delivered a robust operating profit (EBITDA) of Rs. 48 crores for theyear, compared to an operational loss of Rs. 61 crores in the last year, signaling thatthe investments in the various operating businesses over the last few years are on trackto deliver on their potential.
Our Television Business turned in a sterling per formance as reported revenuesgrew to Rs. 1,110 crores, a growth of 23% over last year, crossing a thousand crores forthe first time. Operating Profit (EBITDA) surged to Rs. 135 crores for the year from Rs.15 crores in the last year.
We consolidated our market leadership positions across all our businesssegments.
- Television News and Entertainment - 6/9 TV channels were No 1 for the year
- Digital and eCommerce Network 18 is the largest Indian digital media companyglobally as per the Comscore World Report March 2011 and our eCommerce propertiescontinue to build on their market leadership.
We announced The Scheme of Arrangement that during the year, aimedat optimization of our group companies and it was approved by the Honourable High Court.This will allow us to further consolidate our leadership position and continue on ourstrong profitable growth trajectory.
We announced our strategic alliance with Sun Network, Indias largest mediaconglomerate, to launch one of Indias biggest distribution entities- Sun18. It isthe first truly pan-India distribution company distributing a total of 33 channels acrossall platforms in India. This partnership extends Network18s presence into yetanother critical component of the Indian television and entertainment space.
We announced our Joint Venture with A&E Television, called AETN18 Indiawhich will see the roll out of international AETN channels such as History and Bio inIndia. AETN is the fastest growing pay television company in the US.
The following pages provide an overview of the performance of our various businesses.
Network18 operates one of Indias largest and most respected news networks. Weoperate in two sub segments Business News and General News broadcasting fivechannels, CNBC TV18, CNBC Awaaz, CNN IBN, IBN7 and IBN Lokmat. Our News business turned inanother robust operating performance in FY11 with our revenues growing at 14% to Rs. 558crores and our EBITDA now stands at 75 crores, a growth of 143% over FY11.
| ||FY11 ||FY10 ||% Growth |
|All figures in Rs. Crores unless stated otherwise ||Revenues ||EBITDA ||EBITDA Margin ||Revenues ||EBITDA ||EBITDA Margin ||Revenues ||EBITDA |
| || || ||% || || ||% || || |
|News ||558 ||75 ||13% ||489 ||31 ||6% ||14% ||143% |
|Business News ||306 ||87 ||28% ||273 ||50 ||18% ||12% ||74% |
|General News ||252 ||(12) ||-5% ||216 ||(19) ||-9% ||17% || |
a) BUSINESS News Operations CNBC TV18 and CNBC Awaaz
Our Business News Operations continued to grow smartly over the year - revenuesincreased by 12% and operating profits increased by 74% (FY11 over FY10).
- Revenues grew to Rs. 306 crores for the full year FY11 (compared to Rs. 273 crores inFY10).
- Operating profit increased to Rs. 87 crores in FY11 from Rs. 50 crores in FY10;operating profit margin stood at 28%.
- Our Business News Channels CNBC TV18 and CNBC Awaaz continued to be marketleaders with 59% market share during the year. They were also the leading news channels intheir respective categories on Budget Day 2011. The CNBC Channels have a nationalnews-gathering network, with best in class infrastructure, providing the latest incorporate and financial news from Indian and global markets.
CNBC-TV18 - INDIAS NO.1 BUSINESS MEDIUM
The undisputed leader in business news and information in India, CNBC-TV18, is trustedby business leaders for its analysis, insight and real-time market coverage. Since 1999,CNBC-TV18 has been the platform for thought leaders across India, giving Indiasdecision makers unparalleled news, analysis and perspective facilitated by one ofthe largest and most comprehensive television content libraries in India. Not only has thechannel revolutionized business programming in India, helping viewers to understand andprofit from the markets and from their businesses, it has also built loyal communities, byinteracting with people of all ages through non-markets programming, special on-groundevents and a series of awards that have set the standards for industry benchmarks.
For the year ended March 31, 2011, CNBC-TV18 continued to lead the business news genreand reiterated its position as the nations most preferred news source amongst thecore business audiences.
CNBC-TV18: Continuing Leadership in English Business News
CNBC AWAAZ - INDIAS NO.1 HINDI BUSINESS NEWS CHANNEL
CNBC Awaaz as launched in 2005 as a business news channel targeting theHindi speaking consumers, retail investors and businessmen to provide information on areassuch as stock markets, commodities, consumer products and financial planning. It caters tothe new progressive Hindi speaking Indian who is globally aware, enjoys a high propensityto consume and seeks value in life. Its focus on consumers, retail investors and smallbusinessmen has helped us expand the business genre remarkably over the last few years
b) General News Operations CNN IBN, IBN 7 and IBN Lokmat
In the General News Operations, CNN IBN maintained its leadership position as thechannel of choice for English audiences in a competitive market and there was strongratings traction at IBN7. Revenues grew steadily at 17% for the year.
- FY11 revenues on a reported basis for CNN IBN and IBN7 stood at Rs. 244 crores, up17% against Rs. 210 crores in FY10.
- ibn Lokmat continued on a growth trajectory revenues in FY11 increased 19%over FY10.
CNN IBN and IBN7
Launched in December 2005, CNN-IBN is one of Indias leading EnglishNews channels highly regarded for its editorial integrity, high production standards andunbiased, issue based coverage of news and current affairs. CNN IBN, its news programmes,featured shows, reporters and anchors have received numerous awards for various categoriesin the field of journalism. CNN-IBNs guiding philosophy is embodied in the spirit ofdelivering news, Whatever it Takes. CNN-IBN has also pioneered the trend ofinclusive journalism in the country by being a voice and mirror of the common citizens.The channel has adopted a powerful multi-platform approach to content with seamless online(ibnlive.com and ibnkhabar.com) and mobile (51818) integration forming a part of its coreprogramming strategy. During the year 2010-11, CNN IBN continued its market leadershipposition on days that mattered to the nation including the Bihar Elections (polling andcounting), Ayodhya Verdict Day and Annual Budget Day.
IBN7 was launched in 2006 and is one of Indias leading Hindi News channels. IBN7has always been focused at reflecting on the moment and bringing to its viewers contentthat is relevant, engaging and highlights important issues with robust, high quality newscoverage from every region of the country. IBN7 has shown good revenue traction in theintensely competitive Hindi news genre in the country. In the last year, IBN7sFocus has continued to grow with events such as the Citizen Journalist Awards,IBN7 Super Idols, Indian Sports Legends and IBN7 Diamond States Awards and won severalawards and accolades for its programming.
ENTERTAINMENT Viacom 18
Our Entertainment Business - Viacom18 continued on its strong growth trajectory throughFY11 and turned in handsome operating profits as against a loss last year.
- FY11 revenues on a reported basis stood at Rs. 1,104 crores, up 32% against Rs. 834crores in FY10.
- The company turned profitable with an operating profit of Rs. 120 crores up sharplycompared to a loss of Rs. 31 crores last year. Profit After Tax (PAT) increased to Rs. 85crores for FY11 on the back of 11% operating margins.
- Colors continued its strong performance in the Hindi GEC space during the yearmaintaining its joint market leadership position in prime time. The channel deliveredstrong ratings across programming categories: Reality, Movies and Fiction.
- MTV and Nick maintained their market leadership in the youth and kids genresrespectively. Nick became the No. 1 kids channel in India after launching feeds in twoadditional languages - Tamil and Telugu in April 2010. Vh1 continued to be preferredlifestyle cum English Music Channel in the country.
| ||FY11 ||FY10 ||% Growth |
|All figures in Rs. Crores unless stated otherwise ||Revenues ||EBITDA ||EBITDA Margin ||Revenues ||EBITDA ||EBITDA Margin ||Revenues ||EBITDA |
| || || ||% || || ||% || || |
|Entertainment (50%) ||552 ||60 ||11% ||417 ||(16) ||-4% ||32% || |
Colors is Viacom18s flagship brand in the entertainment space in India. Thechannel launched on 21st July 2008 and offers an integrated spectrum of programming to itsviewers, from Fiction shows to Format shows and from Reality shows to Blockbuster Movies.The mulit-hued basket of Colors content provides the viewers with all Jasbaat KeRang and dedicated to promoting cohesive viewing, through genre leading andinnovative programming.
COLORS leads in 4 out of 7 prime time Slots
|Time from ||Colours ||Star Plus ||Zee TV ||Sony ||SAB ||Imagine |
|20:00 ||3.3 ||2.4 ||2.9 ||1.0 ||1.0 ||0.7 |
|20:30 ||3.1 ||2.6 ||2.9 ||0.9 ||2.5 ||0.8 |
|21:00 ||2.6 ||2.9 ||4.4 ||2.0 ||1.1 ||1.0 |
|21:30 ||2.7 ||3.6 ||3.1 ||2.1 ||0.9 ||1.1 |
|22:00 ||3.7 ||2.9 ||2.5 ||1.9 ||0.9 ||0.9 |
|22:30 ||3.3 ||3.6 ||1.6 ||1.6 ||0.7 ||0.7 |
|23:00 ||1.9 ||1.5 ||1.2 ||1.0 ||1.0 ||0.4 |
Source: TAM; HSM; CS 4+; All Day; FY Q1-Q4 2010-11
MTV Indias No 1. Youth Brand
MTV, Indias leading multimedia youth platform, is centred around the interestsand passions of 15-34 year olds, offering them a compelling mix of music and non-musicprogramming (Bollywood, adventure, humor, fashion and style and fiction), presented in itsinimitable style by Indian VJs. Since its launch in 1996, the channel has won numerousawards at Indian as well as International level for its unique humor and unmatchedcreativity. In FY 2010-11, MTV launched its new philosophy "STAY RAW" inline with the changing values of the Youth. MTV now claims a legion of followers acrossvarious media and launched several innovative digital properties that connected lakhs ofyouth across colleges allowing them to participate in shows on a digital platform(internet + mobile).
Nick launched in India in 1999 as the countrys first multi-genre kids TVchannel and is today viewed in over 29.69 million households in the country. Nick India isa 24-hour pay channel with kids at the centre of its approach; Nick provides respectful,non-violent and empowering entertainment for both boys and girls alike. Its pioneeringcontent for 2-14 year olds includes animated series, live-action shows, comedy shows,popular game shows (including the locally produced Dum Duma Dum and GiliGili Gappa), hosted shows and Indias very first live-action-cum-animationseries, J Bole Toh Jadoo. It also launched various 360-degree clutter breakinginitiatives such as "Lets Just Play" and "Young Astronauts" toincrease brand resonance with kids and parents.
All India leadership achieved through successful south regional foray; Held on to HSMleadership for last 2 years
Leads in the category in HSM with 24% market share and neck to neck with CNW inAll India
Launched in the competitive South Markets in April 2010 with Tamil and Telegufeeds and grabbed 12% market share
No. 1 in Both Hindi Speaking Markets and All India
Top 2 Shows in the Category are those of Nick: Ninja Hattori and Oggyand the Cockroaches
Sticky content ensures that kids watch at least 110 mins. of Nickelodeon per week
Vh1 is Indias only 24-hour international music and lifestyle channel, providingmusic buffs with their daily dose of international music, pop culture, reality TV andcelebrity lifestyle. Launched in January 2005, the channel today reaches almost 23.5 +million homes across India and is growing rapidly. Vh1 has brought the best internationalmusic to India, coupled with the biggest stars, the juiciest stories and the latest inyour favourite artistes life. With an exhaustive music library spanning over 30years and genres like flower power, punk, rock, reggae, hip hop, pop and many more, Vh1customizes its music and programme mix to appeal to Indian tastes. Vh1 is #2 in terms ofreach as compared to other channels across markets.
DIGITAL CONTENT and eCOMMERCE
Digital Content Web18 and Newswire18
Web18 as one of Indias leading Internet player continued to build on itsleadership in the online space through strong traffic sustenance on its web portals,growth in its WAP services portfolio and continued innovation in its features andofferings. Web18 recorded 13% revenue growth (FY11 over FY10) and delivered a profitableQ4FY11.
- FY11 revenues of Rs. 82 crores (against Rs. 73 crores in FY10).
- Moneycontrol.com and In.com continued to be market leaders in their categories financial portal and horizontal respectively.
- Bookmyshow.com continued its strong revenue growth and turned profitable on an EBITDAbasis this quarter.
MONEYCONTROL.COM Indias Largest Non-Banking Financial Destination*
- Strengthened its mobile presence significantly with the re-launch of its mobile siteand delivering high end mobile applications such as Markets on Mobile, M3available on major mobile operating platforms
- Hindimoneycontrol.com was launched in May, 2010
- Re-launched PowerYourTrade.com with 11 broking houses and 8 experts giving tradingand investment stock advice, which was additionally fully enabled for the mobile. TheSubscriber base grew over 100% during this period.
IN.COM Worlds Biggest Indian Portal*
In.com continued to deepen its engagement with both Indian and global audiences. Itfocused on delivering cross format shows, music and creating special interest communitiestargeted especially at youth.
Ibnlive.Com Indias Benchmark General News Web Portal
Ibnlive further strengthened its mobile presence this year, by launching its mobilesite and power packed apps with live TV functionality on multiple platforms: Nokia touchphones, iPhone, Blackberry, Android
Bookmyshow.com - Indias premier ticketing solutions and services provider
Bookmyshow continued to strengthen its position as Indias premierticketing solutions brand, available across platforms including the Web, IVRS, mobile andtelecalling.
Bookmyshow was the Official ticketing partner for Mumbai Indians, DelhiDaredevils, Rajasthan Royals and Kings XI Punjab for IPL Season 4.
Newswire18 had a profitable FY2011 with 20% revenue growth (Rs. 39 crores in FY2011compared to Rs. 33 crores in FY2010). The operating profit stood at Rs. 2 crores for thefull year.
We operate MoneyWire, EquityWire, CommodityWire, and FundWire, each designed tomeet the specific information needs of the participants in each of these growing markets.Further, we also have launched our own real-time news and market data platform, theNewsWire18 WorkStation, providing customizable views and several analytical toolsstructured to meet unique consumer needs. The platform has news on India, Indian exchangedata, Indian OTC data, global news and OTC data, financials of companies and datahistories all edited by our in-house team of editors and journalists. In addition, theNewsWire18 WorkStation provides real-time data feeds from local and global exchanges,real-time updates on more than 100 currencies, and live rate updates from the domesticover-the-counter market.
HomeShop18 participates in and leverages the fast expanding retail opportunity. It hasbuilt a robust and scalable virtual retail business and a home shopping network that notjust provides the "best in class" products and services to consumers but alsoassists them in taking "well informed purchase decisions". A virtual retailservice that on one hand will enable the consumers to take well informed purchasedecisions through specially developed infotainment led TV content, and at the same time anon ground logistics foot print and a web enabled fulfillment mechanism that will deliverquality, value and convenience to his doorstep.
HomeShop18 continued to scale steadily across all key operating parameters and launchedfocused initiatives delivering customer service excellence across all touchpoints. An integrated marketing campaign to enhance reach and brand salience was initiatedand it continued winning various industry accolades through the year.
- Orders executed during the year grew by over 33% and we launched over 1000 newproducts through 2010-11. The CRM base crossed the 4 million mark.
- www.homeshop18.com was re-launched in FY2011 and has broken into the top 3 leagueamong ecommerce sites in India as per the Comscore data with over a million uniquevisitors in March 2011. www.homeshop18.com reached 1011K Unique Visitors / month in March2011 and delivers a superior shopping experience, armed with high end technologyinfrastructure and a great product catalogue with over 1,00,000 SKUs.
- HomeShop18 enhanced its distribution reach across DTH platforms. The channel went onair on BIG TV and further increased its reach in Delhi and Mumbai through Cable. It alsolaunched its first Advertising Campaign through Television and Print Media. Further itscorporate portfolio was expanded by venturing into new categories-Furnishings, Innerwear,Bakeware and Insurance.
E18 (A Division Of Network18)
E18 is the events division of NETWORK18. E18 is fast establishing itself as a reputedfull service player in the events & activation space and has a robust pipeline ofevents across verticals. The company is unique in the event management space as it spansthe entire gamut - from entertainment to business events, from customized single-sponsorto large format multi-sponsor events. E18 cross-sells Network18 media platforms to magnifyreach and communicate the message to a larger audience.
In its fourth year, E18 has firmly established its position as a brand solutions andexperiential marketing agency with expertise in diverse domains. The company has developeda significant number of IPR properties in the Business Events and Entertainment space andhas also successfully executed complex, customized corporate events for clients acrossvarious sectors. The company has added a MICE (Meetings, Incentives, Conferences andExhibitions) and hospitality component to its portfolio with an international offsite atSingapore and launched a new genre of events in the entertainment space with ComedyEvenings. E18 has enhanced its regional presence with a full fledged office in a thirdcity i.e. Bangalore to cater to business opportunities in the Southern Region and has alsolaunched LExperience 18 - the Luxury Experiential Marketing Division to provide BTL/ marketing solutions to the growing luxury sector in India with a team operating inDelhi.
Print Media Operations Infomedia18 And Forbes India
Infomedia18 and other print operations recorded revenues of Rs. 160 crores in FY11registering a healthy growth when compared to FY10 (adjusted for the sale of the BPOoperations).
- Forbes Life (a premiere lifestyle publication), the Hindi edition of our popular automagazine Overdrive and Noise Factory (a magazine targeted at the youth) were some of ourmost notable launches during the year.
- Infomedia Yellow Pages, our flagship product and a super brand for three yearscontinued to grow steadily.
Infomedia18 was acquired in 2007 as part of our strategy of being an integrated playerin the media and publishing space. The two key pivots of Infomedia18s growth are thelocal search business and the special interest publishing business. The company is themarket leader in the local search business providing consumers and businesses localinformation on the media of their choice internet, mobile, on the phone and inphysical yellow pages. Infomedia18 is also Indias largest publisher of specialinterest publications, which target both mass and niche audiences. Infomedia18 alsoprovides various printing solutions to its customers. We have been successful inleveraging our strengths in the television and internet businesses to establish synergiesand further expand the local search and publishing segments.
Our Business Directories Division continued to grow steadily with the addition ofadditional cities and advertisers. New niche business directories were also added in FY11.
During the year both the B2B and B2C, special interest segments demonstrated highgrowth, indicating a positive response for the publications from both advertisers andreaders. Advertisement revenues for B2C titles grew by 34%, driven by volume andrealization growth. Overdrive, Better Photography and BetterInteriors have demonstrated exceptional revenue potential and growth.Overdrive was launched in Hindi, a pioneering move in the space.
In its second year, Forbes India continued to build on its impressive performance,leading the premium business print space and generating greater traction with readers,subscribers and advertisers. The Forbes India Rich List cover was unveiled in a specialevent in October 10 also featured a forum on Inclusive Growth. The eventwhich was attended by several Forbes India Rich Listers along with the whos who ofcorporate India underscored Forbes Indias influence with Indias businessfraternity.
Riding on the phenomenal success of Forbes India, Network18 launched ForbesLife Indiain January 2011. ForbesLife India is set to become the premiere lifestyle publication forthe countrys most influential community. The clutter breaking product elicited astrong response from advertisers while generating record on-ground sales.
SPORT18 : A Division Of Network18)
Sport18 is the sports management division of Network18, established in July 2008 and isfocused on emerging growth opportunities within the business of sports in India includingbut not limited to rights management and representation, licensing & advisory andsponsorship marketing
Sport18 in the past year has recorded consolidated its properties and has conducted 6mass mobilizing events in the previous year including the Delhi, Chandigarh, Pune andBengaluru India Cyclothons. It has launched into distance running with the Hyderabad 10Kand the Chandigarh Marathon. The PGTI tour events have also grown to newer heights.Sport18 also successfully conducted two events in the past year - the Hyderabad 10K andthe Chandigarh Marathon. Sport18 by virtue of its expertise in golf and sailing hasventured into providing sporting solutions for organizations in the form of golf andsailing clinics. Fortune 500 companies including Dell and IBM have used Sport18sservices in this sphere.
CAPITAL18 MEDIA ADVISORS (A Division Of Network18)
Capital18 Media Advisors is in the business of providing investment advisory andconsultancy services to clients in media and other sectors. Capital18 Media Advisorsprovide services to its clients in and outside India such as searching investment targets,valuation and due diligence of investment, advising on structuring investments and ontransactions related to consultancy and advisory services.
Capital18 investee companies continued their growth momentum and consolidated revenuesstood at Rs. 142 crores (excluding revenues from DEN)* during the year (a growth of 38%compared to FY10).
Internal Control Systems
Your Company has put in place a proper system of internal controls that ensures theeffectiveness and efficiency in all its operations and compliance with applicable laws andregulations. As a part of its internal control measures, an independent Internal Auditorscrutinizes the financials and other operations of the Company. Diversions from setstandards are reported to the Board through the Audit Committee and appropriate remedialmeasures are taken. The Internal Control Systems are periodically reviewed andstrengthened to meet the changing requirements of the business. We also have a robustinternal evaluation system for all acquisition or investment opportunities based on welldefined parameters of financial performance, operating metrics and infrastructurerequirements. Each opportunity is evaluated by a cross functional team of seniormanagement, before being referred to our Board for further evaluation and approval.
Human Resources and Development
Your Company firmly believes and recognizes that our talent is a key contributor to thesuccess of the organisation and a significant part of its success depends on the qualityof its human resources. Your Company continuously recruits skilled professionals fromvarious streams to meet its business requirements. This intellectual capital is reflectedin the quality of our programming and broadcasting, our business strategy, our excellentcustomer relations and our financial health. Robust human resource systems and processeshave been implemented to provide an enriching professional experience to employees. Aculture of incentives and pay-for-performance has been inculcated to ensure excellence indeliverables.
Network18s Human Resource team continues to make a concerted effort to cultivateyour Companys image as an employer of choice at leading campuses acrossthe country. This coupled with the Groups strong brand equity, continues to attractthe best talent in the industry. The comprehensive Performance Management System continuesto help employees recognize their strengths and areas of improvement. Your Company hascreated a dedicated Organization Development team which aims to create a LearningOrganization in the coming years. In our efforts towards building a High Performance WorkCulture, a set of five values have been deployed along with our Mission statement. TheRewards and Recognition Program continues to identify and reward the outstandingperformers for their contribution and excellence. Embedded HR teams are working closelywith different businesses so that there is rigor in the support. As on March 31, 2011, 121employees were on the payroll of the Company.
Outlook and Way Forward
Network18 is one of Indias leading media networks with strong leadershippositions in television broadcasting and digital media. The rapid growth of the group overthe years has been driven by an optimal combination of organic ventures, inorganicacquisitions and strategic alliances. Our integrated cross-media portfolio, which includestelevision channels and digital properties, attracts a wide spectrum of economic and agedemographics in India. The scale of our platform, we believe positions us as the focalpoint of a unique ecosystem of consumers, advertisers, partners and talent in India. Itpermits us to leverage our existing media properties into greater user penetration throughcross-media marketing of our brands and further expanding and strengthening of ourportfolio. We believe that our strong brand recognition and salience, our leadershippositions in television broadcasting and digital media and ability to leverage ourcross-media ecosystem of audiences, advertisers and talent, position us well to capitalizeon this promising and challenging growth opportunity ahead. The following are the keyaspects of the Groups business strategy:
Enhance our television broadcasting platform and further strengthen our marketleadership position. We believe that there is an opportunity to expand the current reachof our television broadcasting network by developing innovative content and entering newtelevision genres. Our current television channels are concentrated in general news,business news, Hindi general entertainment, youth, kids and lifestyle genres. In order toexpand the reach of these current channels, we plan to innovate and experiment with newprogramming concepts, show formats and strategic and marketing initiatives. We may alsolook to expand into other genres.
Grow television subscription revenues. Subscription revenues have hitherto constituteda relatively smaller percentage of our total revenues given that we are a relatively youngentrant in television entertainment, entering the industry in late 2007 through our jointventure with Viacom and our efforts over the past three years were focused on buildingaudience shares and concomitant advertising revenues. We also only recently begandistributing our television channels directly through our Sun18, a television distributionalliance with the Sun Group.
We plan to grow our subscription revenues disproportionately going forward tosupplement our advertising revenues through our distribution alliance, Sun18 which wasannounced in FY11, and an increase in the international distribution of our channelofferings. We believe that the imminent increased digitization of the television industryin India will supplement our efforts in this direction.
Continue to invest in and strengthen businesses in our Digital and eCommerce segment.We are a market leader in the small, but rapidly growing digital space in India. We intendto further strengthen our digital and ecommerce business segment by investing in ourexisting market-leading brands and additional areas that we view as growth opportunitiesfrom time to time. We plan to continue creating new offerings that will leverage theintroduction of 3G and Broadband Wireless Access services in India
Continue to strengthen and build our partnerships. We have an established track recordof entering into successful strategic alliances with leading global and Indian mediacompanies. We have forged partnerships with several leading global media players includingViacom in entertainment, CNN in English general news, CNBC in business news, Lokmat inMarathi regional news, A&E Television Networks, or AETN, in factual entertainment, SunNetwork in television distribution and Forbes in publishing.
We believe that we derive substantial benefits through the licensing of brands and/orsharing of programming content and market knowledge with our media partners whererelevant. We also believe that our media partners recognize the value we bring to thesealliances, which is demonstrated by their willingness to collaborate with us for extendedperiods. Our alliances provide us with significant synergy upsides through the sharing ofstrengths and reputational benefits. We believe that our continuing partnerships willassist us in building our market share in India and internationally.
Leverage the strength of our network to enhance our media offerings through organic andinorganic growth: We believe we are well-positioned to introduce a range of new offeringsto our existing consumers, drawing upon consumer insights and synergies with our existingoperations. We believe that we can launch these new offerings in a cost-effective mannerby allocating our resources efficiently and marketing to our existing audiences andadvertisers in our other business segments.
Statements in the Management Discussion and Analysis describing the Companysobjectives, projections, estimate, expectations may be "forward-lookingstatements" within the meaning of applicable securities laws and regulations. Actualresults could differ materially from those expressed or implied. Important factors thatcould influence the Companys operations include economic developments within thecountry, demand and supply conditions in the industry, input prices, changes in governmentregulations, tax laws and other factor such as litigation and industrial relations.