MPA predicts robust growth for Star, Sony, Zee

MUMBAI: Revenue growth for the Big Three of Indian broadcasting --- Star India, Sony Entertainment TV India and Zee Telefilms --- are likely to remain robust over the next year. These are the findings put out in a new study by research and publishing firm Media Partners Asia (MPA).

According to the Hong Kong-based company, in terms of revenue, Star India will continue to remain the key driver for News Corp's Star Group. MPA forecasts indicate that the Star Group's EBITDA could reach $109 million for its FY 2005 (year ending June 30 2005) period with turnover growing 16 per cent year on year to $475 million.

As far as Star India is concerned the dominant programming property for the coming year is the second and final season of Kaun Banega Crorepati, which launches 5 August on Star Plus. A few other shows are also expected to launch during the next few months with which Star hopes to extend its lead in the market.

The MPA report quotes market estimates as indicating that KBC2 could realise at least $55 million in advertising revenue over its 85-week run with profit margins running over 65 per cent. The MPA numbers tie in well to the figures thrown up in an exclusive report filed by last month that had pegged total ad sales revenue expected to be generated solely from KBC2 at Rs 2,550 million with actual profits standing somewhere around Rs 1,700 million. (Rs 2,550 million is equivalent to $ 56.7 million at a $ 1 = Rs 45 exchange rate).

Star has also won government approval for its 20 per cent directly held DTH JV with the Tatas in India. The JV requires a total investment of $370 million, which includes the funding of STB subsidies and operating losses.

Star's principal rivals in the market - Zee and Sony - are also expected to grow significantly. Zee's 20 per cent-owned Dish TV (one million subscribers target by March 2006) will be facing stiff competition from the Star JV but the company expects its recent rebound in advertising and improvement in ratings to continue and boost earnings through its FY 2005 period (year ending March 2006) with turnover potentially growing by 14 per cent to $366 million and EBITDA also up 14 per cent to $115 million, a 31 per cent margin.

For the same period, turnover for Sony Entertainment Television (SET) India is expected to grow by 25 per cent year on year to $245 million (fuelled by advertising growth and solid distribution gains) while EBITDA could reach $74 million (12 per cent year on year growth), a 30 per cent margin.

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