KOLKATA: Despite all odds, Reliance Industry Limited's (RIL) media & entertainment business has recorded profitability during the pandemic-hit financial year. According to the company's latest annual report, Network18’s consolidated operating margins expanded to 17 per cent in FY 21, up from 11.5 per cent in FY 20, RIL’s annual report said.
Consolidated EBITDA of the business rose 29 per cent y-o-y to Rs 796 crore despite the pandemic impact dragging revenue down by 12 per cent y-o-y. The company’s overall profitability was attributed to cost controls and concerted efforts to increase annuity-style revenue streams, including subscription and syndication.
The margins of the news business expanded all through the year, despite pandemic-linked logistics constraints and blackout of BARC ratings in the second half of the financial year, the report added. Overall news segment’s operating margins expanded to 13 per cent. The TV News operating margin expanded to 16 per cent, marking four years of continuous improvement. In addition to that, digital news broke even on a full-year basis, driven by accelerated revenue growth.
Despite the Covid-19 impact, entertainment margins went up to 19 per cent thanks to operating leverages. TV Entertainment grew viewership share by two per cent to 10.9 per cent. One in two Indians watch Network18 television channels that reach more than 95 per cent of TV homes in India annually, as per the report.
The entire M&E industry started on a weak note in FY21 due to the onset of the pandemic, but there was a turnaround during the second half of the year. For Network18, TV News advertising recovered by the second quarter itself growing across the year. Entertainment advertising revived fully by the third quarter, led by a full content roster. Strong viewership trends for Hindi GECs, both pay, and FTA, drove underlying ad growth into high-single digits by the fourth quarter.
Digital media platforms witnessed an increase in content consumption. Digital advertising gained momentum from the platforms’ inherent advantages of being able to target audiences, drive personalisation, and lower costs.
“Digital engagement continued to grow due to the volume of high-quality content and key events. Industry sources indicate a ten per cent y-o-y increase in OTT video consumption. Increased propensity to pay has been witnessed, amidst domestic OTTs increasing prices selectively, while global players create India-specific cheaper offerings. Digital subscription revenue continued to rise sharply, albeit off a low base, both from B2C (direct) and B2B (telco-driven) distribution of OTT platforms,” the company stated on Thursday. The company was also satisfied with domestic subscription revenue in the M&E segment which remained strong, despite the stress in international. Improved distribution tie-ups for TV and Digital have driven the subscription growth.
The leading OTT platform under RIL’s M&E bouquet, Voot, garnered 12 billion minutes of watch time during FY21 and was the number two broadcaster-OTT, it said in its report. According to the company, Voot Select was the fastest to reach one million D2C subscribers, thanks to original content, digital-first TV content, and digital-only spin-offs.
