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Tag: advertisement revenue

  • Ad revenue growth drives Zee Media numbers up in Q1 FY20

    Ad revenue growth drives Zee Media numbers up in Q1 FY20

    BENGALURU: The Essel group’s Zee Media Corporation Ltd (ZMCL) reported 29.7 per cent growth in consolidated operating revenue for the quarter ended 30 June 2019 (Q1 2020, quarter or period under review) at Rs 200.66 crore as compared to Rs 154.69 crore for the corresponding year ago quarter Q1 2019 (y-o-y). Growth in numbers was led by 35.7 per cent y-o-y growth in advertising revenue in Q1 2020 at Rs 185.90 crore as compared to Rs 136.97 crore in Q1 2019. Subscription revenue for Q1 2020 increased 1.6 per cent y-o-y to Rs 11.28 crore from Rs 11.10 crore. Other sales and services declined 47.5 per cent y-o-y to Rs 3.47 crore during the period under review from Rs 6.62 crore.

    However, the company’s consolidated profit after tax (PAT) for Q1 2020 declined 52.9 per cent to Rs 26.07 crore from Rs 55.38 crore in Q1 2019. It must be noted that ZMCL had sold off its entire equity stake in Ez-Mall Online to a related party effective 30 June 2018 and the company has arranged for impairment as per Ind-AS-109 for its investments in Diligent Media Corporation Ltd. For further details please refer to the company’s financial statements. Consolidated operating EBITDA for the quarter under review increased 83.6 per cent y-o-y in Q1 2020 to Rs 65.88 crore from Rs 35.88 crore.

    Let us look at the other numbers reported by the company

    Consolidated total expenditure for Q1 2020 increased 13.4 per cent y-o-y to Rs 134.78 crore from Rs 130.45 crore. Operating costs increased 41.7 per cent y-o-y in Q 2020 to Rs 36.12 crore from Rs 25.49 crore. Employee Benefits Expense in Q1 2020 increased 21.8 per cent y-o-y to Rs 42.40 crore from Rs 34.81 crore. Marketing, distribution and business promotion expenses in Q1 2020 increased 7 per cent y-o-y in Q1 2020 to Rs 22.23 crore from Rs 20.77 crore. Other expenses during the quarter under review declined 9.8 per cent y-o-y to Rs 34.03 crore from Rs 37.74 crore.

  • Siti relooks at broadband as cable subscription drove revenues in FY18

    Siti relooks at broadband as cable subscription drove revenues in FY18

    BENGALURU: In FY 2017 (fiscal or year ended 31 March 2017, previous year), the Essel Group’s Siti Networks Ltd (Siti) was all gung-ho about broadband. In its annual report for fiscal 2017, the company said that it had become the largest multi-system operator (MSO) and a leading wired broadband services provider. The tone of the company’s 2017 annual report showed that Siti was fired up by the doubling of broadband revenue in FY 2017 as compared to FY 2016 to Rs 97 crore (about 8 per cent of total revenue for fiscal 2017) from Rs 48.6 crore (about 4 per cent of total revenue for fiscal 2016). The company’s broadband operations added 7.2 lakh home passes during the year taking the total footprint to 16.1 lakh homes. Broadband customer base grew to 2.28 lakh by Q4 2017 exit, up 73 per cent year-on-year (y-o-y). Further, Siti said in its FY 2017 annual report that it planned to channelise more capital to its broadband division, which it then felt was a highly scalable opportunity.

    Cut to FY 2018 and the story has changed. Siti’s broadband operations with a total footprint of 16.8 lakh homes had a base of 2.5 lakh customers.  Siti added just about 22,000 broadband subscribers in fiscal 2018, and y-o-y broadband revenues grew by only 4 per cent to Rs 101 crore in FY 2018.The company said that it was working on building a growth strategy in the sector.

    Quoting from its fiscal 2018 Annual report:

    “We are also looking closely at better and centralised inventory controls, besides identifying unsustainable locations running on IP bandwidth with the objective of phasing them out. We also aim to focus more aggressively on high definition (HD) penetration, broadband expansion, and improving monetisation in digital addressable system (DAS) phase III and IV areas.”

    At another place in the 2018 annual report Siti states:

    “In broadband, your company is looking to deepen its penetration levels in its existing markets to better utilise existing capital expenditure incurred. Going forward, we are also looking to arrive at an ideal business model that will allow us to grow profitably and sustainably in this segment, especially considering the disruptive pricing environment prevalent in mobile internet currently and the entry on new entities in wired broadband.”

    It must be noted that broadband contributed to just about 8 percent and 7 percent to Siti’s revenues in FY 2017 and FY 2018 respectively. Cable business is and has been the major revenue earner for Siti.

    While its broadband business has not met with Siti’s expectations, its cable business and more so subscription revenue has been the revenue growth driver. Cable subscription (Video) revenue in FY 2017 grew 39 per cent to Rs 569 crore as compared to Rs 410.2 crore in FY 2016. Siti’s cable subscription revenue grew 41 per cent in fiscal 2018 to Rs 799.7 crore as compared to the previous year. Carriage revenue, which had grown by 17 per cent in FY 2017 to Rs 300.1 crore from Rs 256.8 crore was almost stagnant in terms of growth in FY 2018. It grew by about 1.3 per cent to about Rs 303.8 crore in fiscal 2018. Siti’s activation revenue has also been almost constant and will taper off once its entire subscriber base has been digitised, since this is generally a one-time revenue. Activation revenue in FY-2016 was Rs 170.6 crore, it was Rs 170.1 crore in FY 2017 and was Rs 175 crore in FY 2018. Advertisement revenue had declined in FY 2017 to Rs 13.5 crore from Rs 32 crore in FY 2016 has increased in FY 2018 to Rs 18.5 crore.

    Siti has yet to report profit after tax and reward its shareholders with dividends. But, the good thing is that Siti’s operating profits (EBITDA) without activation revenue have grown 2.6 times in FY 2018 to Rs 150.7 crore from Rs 58.6 crore. Overall EBITDA including activation has grown 41.9 per cent in FY 2018 to Rs 324.5 crore from Rs 241.2 crore in the previous year.

    All numbers in this report are consolidated unless stated otherwise.

    Siti’s position with regards to broadband is more of a norm rather than an exception. Many other MSOs’ and LCOs’ that have also been providing broadband internet services have had muted numbers from this business stream in FY 2018 as compared to the previous year. This implies either a slow growth or even de-growth of subscriber numbers, reduced ARPUs’ or even both.

    Mukesh Dhirubhai Ambani’s Reliance Jio Infocomm Ltd (Jio) has been the biggest disrupter that has got both wireless and wireline internet service providers struggling to match up. With its plans to start FTTH wired internet services, with strategies that many in the industry term as ‘predatory’, it is likely to make the ground difficult to sustain and grow for incumbents.

  • Q2-2015: Facebook Ad revenue up 43 percent

    Q2-2015: Facebook Ad revenue up 43 percent

    BENGALURU: The Mark Zuckerberg led Facebook, Inc (Facebook) reported a 43 per cent increase in advertisement revenue in the quarter ended 30 June, 2015 (Q2-2015) at $3287 million (94.7 per cent of Total Revenue or TR) as compared to the $2676 million (92 per cent of TR) in Q2-2014 and a 15.3 per cent increase as compared to the $4420 million (93.6 per cent of TR) in Q1-2015. As is obvious, advertising revenue, which in any case formed the biggest component of TR is increasing its share of TR even more. Facebook offered fresh evidence of its allure to deep-pocketed big brands, as it and Google Inc., increasingly take the lion’s share of the fast-growing mobile advertising market says a Wall Street Journal report. (http://www.wsj.com/articles/facebook-revenue-rises-39-1438200350). Please refer to Fig A below.

    TR in the current quarter improved by 38.9 per cent to $4042 million as compared to the $2910 million in the corresponding year ago quarter and increased 14 per cent as compared to the $3546 million in Q1-2015, which had seen q-o-q revenues dip. 

    A digression here – over the past few years, Facebook revenues (led by Ad revenue) trend to dip in the first quarter of the year. This could potentially lead to advertisers asking for, and with a higher chance of Facebook accepting/offering discounts in the first quarter of each year.

    For the six month period ended 30 June, 2015 (6M-2015, YTD), TR increased 40.2 per cent to $7586 million as compared to the $5412 million in 6M-2015. Ad revenue in 6M-2015 was up 45 per cent to $7147 million (94.2 per cent of TR) as compared to the $4941 million (91.3 per cent of TR) in the corresponding year ago period.

    Mobile Ad revenue share has been increasing in Facebook’s Ad and TR. Mobile Ad revenue represented approximately 76 per cent of advertising revenue for Q2-2015, up from approximately 62 per cent of advertising revenue in Q2-2014 and approximately 73 per cent in the immediate trailing quarter. Please refer to Fig B below.

    User Data

    Daily active users (DAUs) – DAUs were 96.8 million on average for June 2015, an increase of 17 per cent y-o-y.

    Mobile DAUs – Mobile DAUs were 84.4 million on average for June 2015, an increase of 29 per cent y-o-y.

    Monthly active users (MAUs) – MAUs were 1.49 billion as of 30 June, 2015, an increase of 13 per cent y-o-y.

    Mobile MAUs – Mobile MAUs were 1.31 billion as of 30 June, 2015, an increase of 23 per cent y-o-y.

    “This was another strong quarter for our community,” said Facebook founder and CEO Mark Zuckerberg. “Engagement across our family of apps keeps growing, and we remain focused on improving the quality of our services. Users now spend more than 46 minutes a day on average on Facebook and its other properties, including Facebook Messenger and photo-sharing app Instagram “.

    The company’s income however did not keep up with the growth in revenue. Operating Income declined 8.4 per cent to $1273 million (31.5 per cent margin) as compared to the $1390 million (47.8 per cent margin) in Q2-2014, but improved 36.34 per cent q-o-q from $933 million (26.3 per cent margin) in the immediate trailing quarter.

    Net income in the current quarter also declined 9.1 per cent to $719 million (17.8 per cent) as compared to the $791 million (27.2 per cent margin) in Q2-2014, but improved by 40.4 per cent as compared to the $512 million in the immediate trailing quarter. Please refer to Fig C below.

  • Q1-2016: Zeel’s 25% spurt in y-o-y ad revenue ups PAT by 16%

    Q1-2016: Zeel’s 25% spurt in y-o-y ad revenue ups PAT by 16%

    BENGALURU: The Subhash Chandra led content and broadcast player Zee Entertainment Enterprises Limited (Zeel) reported a 25.4 per cent hike in advertisement revenue in the quarter ended 30 June, 2015 (Q1-2016) to Rs 779.93 crore (58.21 per cent of Total Revenue or TR) as compared to the Rs 622.10 crore (57.3 per cent of TR) in the corresponding quarter of last year. This is also 16.5 per cent more than the Rs 669.66 crore (49.7 per cent of TR) in Q4-2015.

     

    Profit after Tax (PAT) in Q1-2016 increased by 15.8 per cent to Rs 243.76 crore (18.2 per cent of TR) as compared to the Rs 210.57 crore (19.4 per cent of TR) in Q1-2015 and 5.6 per cent more than the Rs 230.77 crore (17.1 per cent of TR) in Q4-2015.

     

    Note: 100,00,000 = 100 lakh = 10 million = 1 crore

     

    Zeel’s PAT was affected by lower q-o-q subscription revenue and other sales and service income. Subscription revenue in Q1-2016 was at Rs 462.53 crore (34.5 per cent of TR) just 4.5 per cent more than the Rs 442.77 crore (40.8 per cent of TR) in Q1-2015 and 9.4 per cent lower than the Rs 510.77 crore (37.9 per cent of TR) in the immediate trailing quarter.

     

    The company said that during the quarter, domestic subscription revenues in Q1-2016 stood at Rs 368 crore, which was 13.7 per cent more than the Rs 323.8 crore in Q1-2015, but 11.9 per cent lower than the Rs 417.5 crore in Q4-2015. International subscription revenue stood at Rs 94.5 crore in Q1-2016, which was 20.5 per cent lower as compared to the Rs 118.9 crore in Q1-2015 but 1.3 per cent higher than the Rs 93.3 crore in Q4-2015.

     

    While y-o-y other sales and service income more than quadrupled (was up 367.6 per cent) in Q1-2016 to Rs 97.4 crore (7.3 per cent of TR) as compared to Rs 20.83 crore (1.9 per cent of TR) in Q1-2015, it was 41.5 per cent lower than the Rs 166.62 crore (12.4 per cent of TR) in Q4-2015.

     

    The company’s y-o-y operating EBIDTA (Earnings before interest, depreciation, tax and amortisation) increased fractionally by 0.7 per cent in Q1-2016 to Rs 311.20 crore (23.3 per cent of TR) from Rs 309.17 crore (28.5 per cent of TR) in Q1-2015 and was 14.9 per cent more than the Rs 270.75 crore (20.1 per cent of TR) in Q4-2015.

     

    Other results reported by Zeel for Q1-2016:

     

    TR in the current quarter increased 23.4 per cent to Rs 1339.86 crore from Rs 1085.70 crore in Q1-2015, but was 0.5 per cent lower than the Rs 1347.05 crore in the immediate trailing quarter.

     

    Total Expense (TE) in Q1-2016 at Rs 1045.47 crore (78 per cent of TR) was 31.3 per cent more than the Rs 796.10 crore (73.3 per cent of TR) in the corresponding year ago quarter, but 4.4 per cent lower than the Rs 1093.70 crore (81.2 per cent of TR) in Q4-2015.

     

    Zeel’s operating cost increased 40.7 per cent to Rs 610.76 crore (45.6 per cent of TR) in Q1-2016 as compared to the Rs 434.02 crore (40 per cent of TR) in the corresponding year ago quarter, but fell 1.5 per cent from the Rs 620.09 crore (46 percent of TR) in Q4-2015.

     

    Other expense in Q1-2016 fell 20.6 per cent to Rs 183.24 crore (13.7 per cent of TR) from Rs 230.80 crore (21.3 per cent of TR) in Q1-2015 and was 9.7 per cent lower than the Rs 202.86 crore (15.1 per cent of TR) in Q4-2015.

     

    Employee Benefit Expense increased 23.5 per cent to Rs 138.01 crore (10.3 per cent of TR) in Q1-2016 from Rs 111.71 crore (10.3 per cent of TR) in Q1-2015 and was 10.6 per cent more than the Rs 120.89 crore (nine per cent of TR) in Q4-2015.

     

    Advertisement and Publicity expense was 20.3 per cent more in Q1-2016 at Rs 96.65 crore (7.2 per cent of TR) as compared to the Rs 80.37 crore (8.4 percent of TR) in Q1-2015, but 27 per cent lower than the Rs 132.46 crore (9.8 per cent of TR) in Q4-2015.

     

    Company speak

     

    Zeel chairman Subhash Chandra said, “The Indian Media and Entertainment Industry is making strides in the economy, backed by rising advertising revenues and consumer payments. 61 per cent of all households in India are now equipped with a television making us the second largest TV viewership market after China. With digitization, subscription revenues in urban and rural areas are growing , resulting in a healthy impact on the industry.”

     

    Chandra added, “Zee has recorded a satisfactory performance during the first quarter. Our investments have resulted in organic growth, which is in line with our expectations. We continue to build Zee’s presence in this highly competitive space by creating compelling content across genres and by pursuing new opportunities that will yield long term growth.”

     

    Zeel managing director and CEO Puneet Goenka said, “We continue to experience growth in both advertising and subscription revenues through the launch of new and innovative programming. We believe that by delivering excellent content we can benefit from monetizing revenues from an advertising and subscription standpoint.”