Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.

Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
TV Media- Ways to ride the story - Views on News from Equitymaster
  • E-MAIL
  • A  A  A
  • Nov 19, 2007

    TV Media- Ways to ride the story

    There are various ways to participate in the television media growth story. The industry is divided into broadcasters, content providers and the distributors. One can invest in these different players to participate in the media growth story. Hence, let us see how these different sub-segments of the television media stack up against each other.

    Broadcasters: Robust growth in the Indian economy has led to a surge in the ad spends of India Inc., thereby increasing the topline of the major broadcasters. Rollout of CAS and DTH services would increase the penetration of cable and satellite television and also increase the average revenue per user. Thus, regulatory bottlenecks notwithstanding, the subscription revenues are expected to be the major growth driver.

    The major listed broadcasters are Zee Entertainment, NDTV, TV18, Sun TV. The TRP's of Zee Entertainment's various channels have increased over the last year, helping the company to increase its advertisement revenues by 30% YoY. However, Zee Entertainment's flagship channel 'Zee TV' would face intense competition from the new entrants '9X' and 'NDTV Imagine'. The content and the employee costs are also expected to increase. The new channel 'Kalaignar TV' launched by Raj TV is providing tough competition to Sun TV. TV 18's flagship channel is far ahead of its competitors and its viewership base is also expected to increase with the growing interest in the Indian equity markets. However, a downturn in the stock markets would negatively impact its advertisement and subscription revenues. NDTV, which is currently offering only news channels and a niche channel is launching a Hindi General Entertainment channel and also plans to launch more city centric news channels and niche channels. Though the company would face intense competition, a successful foray in the Hindi General Entertainment space could create enormous shareholder wealth.

    Content providers: It is rightly said that content is 'king'. Any channel to succeed needs to have the right content. The major content producers are Balaji Telefilms, Creative Eye Limited and Red Hats Production. The foray of broadcasters NDTV, UTV, Viacom-18 in the Hindi GEC space has increased the demand for quality content. The content providers would be able to increase their revenues by increasing their programming hours and also their realizations per hour. However, it is not an easily scalable business with Balaji Telefilms proving to be the only exception.

    Distributors: The distributors are the MSOs, the local cable operators and the DTH operators. Digitisation would check the malpractice of underdeclaration of subscribers by the local cable operators. It is expected that the share of the MSO's in the total subscription revenues would increase from the current 5% to 30% on the implementation of CAS. (Source: Zee Entertainment Presentation August 2007).WWIL, the largest MSO in India, is present in more than 43 cities and operates through more than 4000 local franchisee operators. WWIL is rolling out the Headend in the Sky (HITS) technology, which would enable it to provide high quality digital services to a pan India audience. Though the company currently is incurring an operating loss of 12%, it could be a major beneficiary of the strong growth expected in the sector. There are expected to be 89 m homes connected to cable by 2011 (except DTH). The ARPU is expected to be Rs 470 and the operating margin is expected to be 25%.

    DISH TV, with a gross subscriber base of 2.4 m and a market share of 68% of the pay DTH industry, is the largest private sector DTH operator in India. Competition for Dish TV is on the rise with Tata Sky offering marketing and consumer subsidies. Entry of new players such as Sun TV, Reliance and Bharti would increase the competition further and put further pressure on the ARPU's. The current ARPU at Rs 126 (incremental subscriber ARPU is Rs 210) is very low. However, the ARPUs are expected to increase substantially going forward as the ARPUs in India are very low compared to developing and developed countries.

    We feel that the broadcasters who are able to sustain high TRP ratings and achieve high levels of distribution, the content providers who are able to deliver quality content consistently and scale up their operations and distributors who offer high quality services and have a pan India presence would succeed.



    Equitymaster requests your view! Post a comment on "TV Media- Ways to ride the story". Click here!


    More Views on News

    Zee Ent: GST Short term Negative but Long term Positive (Quarterly Results Update - Detailed)

    Aug 14, 2017

    The management believes that GST will aid the advertising spends in the long-run.

    S Chand and Company Ltd. (IPO)

    Apr 26, 2017

    Should you subscribe to the IPO of S Chand and Company Limited?

    GTPL Hathway Ltd. (IPO)

    Jun 21, 2017

    Should one subscribe to the IPO of GTPL Hathway Ltd?

    Zee Ent: Advertising drives revenues (Quarterly Results Update - Detailed)

    Aug 1, 2016

    Zee Entertainment has announced its results for the first quarter of the financial year 2016-17 (1QFY17). The company has reported 18.5% YoY growth in sales and a 13.7% YoY growth in profit after tax.

    Zee Ent: Taxes, lower other income mar bottomline (Quarterly Results Update - Detailed)

    Feb 3, 2016

    Zee Entertainment has announced the third quarter results of financial year 2015-2016 (3QFY16). While the topline grew by 17% YoY, bottomline fell 11% YoY during the quarter.

    More Views on News

    Most Popular

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    The Most Profitable Investment in the History of the World(Vivek Kaul's Diary)

    Aug 8, 2017

    'Yes, it looks like a bubble. And, yes, it's like buying a lottery ticket. But there's something happening that has never happened before. It's an evolutionary leap in money itself.'

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    Bitcoin Continues Stellar Rise(Chart Of The Day)

    Aug 10, 2017

    Bitcoin hits an all-time high, is there more upside left?

    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms


    Aug 21, 2017 09:14 AM