Reeling
under recession and intense competition in the genre, news broadcasters looked
at 2009 as a year when they had to correct their business models. The chief executive
officers of these companies came out with harsh prescriptions: cut jobs, reduce
news gathering costs and exit from non-core businesses.
The measures,
some of which were really painful, are beginning to improve the health of their
balance sheets. These companies are still not out of the woods but they are surely
on recovery path. While revenues grew slowly during the fiscal ended March 2010,
operational efficiencies have improved and net losses have narrowed.Revenue
rebounds but growth path still slow The
combined turnover of seven listed news broadcasters stood at Rs 16.53 billion
in FY’10, up 7.01 per cent over the earlier year, as the advertising market
eased and the recovery became stronger in the last two quarters.
IBN18
(CNN-IBN and IBN7) and TV Today (Aaj Tak, Headlines Today Tez and Delhi Aaj Tak)
grew their topline by 16 per cent and 12 per cent respectively while NDTV saw
a modest 5 per cent increase in its income.
BAG Films and Media, which
runs News24 and E24, and IBN Lokmat showed a revenue growth of over 121 and 258
per cent respectively, albeit on a lower base.
TV18, however, should
be worried. The company, which runs business news channels CNBC-TV18 and CNBC
Awaaz, saw its revenue dip marginally by 2.35 per cent as competition in the genre
put pressure on ad rates.
Companies
tighten costs Companies
continued to focus on cost-cutting drives, the main corrective step taken after
being on an expansion overdrive. Expenses dropped to Rs 14.48 billion, from Rs
16.41 billion in FY09, falling by 11.81 per cent between the fiscals.
BAG
Films, a new entrant that was going through an investment phase in FY’09,
really clamped down on costs and brought it down by almost 66 per cent.
Other
players who were on an austerity drive were TV18, which cut costs by 27 per cent,
and NDTV (22 per cent). Only Zee News Ltd’s expenses saw a miniscule 0.01
per cent increase.
At the operational level, the news broadcasters had
a remarkable turnaround story between the two fiscals as operating profit rose
378.33 per cent in FY’10 over the year-ago period. The FY’10 operating
profit stood at Rs 2.59 billion as compared to operating loss of Rs 930.82 million.
The companies who had the highest operational efficiency in the fiscal are
Zee News Ltd (Rs 812.1 million), TV18 (Rs 648.1 million) and TV Today (Rs 415.89
million).
News
broadcasters stare at losses Despite
a drastic improvement in operational efficiencies, news broadcasters still stare
at losses. The loss leaders during the fiscal were IBN18 (Rs 820.99 million),
TV18 (Rs 597.3 million), IBN Lokmat (Rs 210.88 million) and NDTV (Rs 205.2 million).
Zee News Ltd and TV Today, however, stayed profitable.
In FY’11,
most news broadcasters expect to be in the black amid restructuring, cost-cuts
and operational efficiencies. |
