Viacom18 aims for long-term growth with Rs 15,000 crore investment

Mumbai: Network18 Media and Investments Ltd announced on Tuesday the results for the financial year (FY) 2021-2022 and for the fourth quarter ending on 31 March.

The company reported consolidated operating revenue of Rs 5,880 crore a 25 per cent increase year-on-year (YoY). Its profit after tax (PAT) stood at Rs 838 crore up by 53 per cent YoY despite the impact of Rs ~140 crore higher tax provision. It reported its highest ever operating earnings before interest, tax, depreciation and amortization (EBITDA) at Rs 1,080 crore up by 36 per cent YoY driven by robust financial performance in all three verticals - TV news, entertainment, and digital news.

For the fourth quarter, the company reported earnings of Rs 1,621 crore up by 15 per cent YoY. However, consolidated operating EBITDA stood at Rs 266 crore, a five percent decline YoY.

Partnership with Bodhi Tree

On 27 April, Viacom18 announced a strategic partnership with Reliance and Bodhi Tree Systems, a platform of James Murdoch’s Lupa Systems and Uday Shankar. As part of the deal, Rs 15,145 crore will be infused by Bodhi Tree Systems and Reliance combined. Bodhi Tree will invest Rs 13,500 crore whereas Reliance Projects and Property Management Services Limited (RPPMSL), a wholly owned subsidiary of Reliance, will infuse Rs 1,645 crore. In addition, the JioCinema OTT app, currently owned by RPPMSL, will be transferred to Viacom18.

The media conglomerate also announced that Paramount Global will continue to supply its premium global content and launch Paramount+ in India in partnership with its subsidiary Viacom18. “Paramount Global, formerly ViacomCBS, reaffirmed its commitment to the partnership as a strategic partner in Viacom18,” said the company statement. "This partnership between Reliance, Paramount Global and Bodhi Tree Systems, will enable Viacom18 to transform into one of the largest TV and digital streaming companies in India," the company said.

The infusion of Rs ~15,000 crore in Viacom18 will enable the company to make an investment in high growth businesses namely digital, sports and regional entertainment and set it on a long-term growth path, said the statement.

“The media and entertainment industry in India has a long runway for growth and has attracted the interests of global players as well as spurred mergers and acquisition activity from Indian peers,” said the statement. “Digital business models are still evolving for all players as the Indian digital ecosystem continues to mature every year, however, still some time away from being a positive contributor to the bottom line. To be a meaningful player in this landscape, where consumers are spoilt for choice, one has to invest in content, distribution and technology.”

Viacom18 will use the cash infusion to scale up its content offering for both digital and TV and strengthen its competitive position across markets. The strategic arrangement to access Jio’s 400 million strong mobility and fiber consumer base will enable Viacom18’s digital platform to access the consumers of Jio and catapult its reach. It will enable the utilisation of a large smartphone and JioPhone user base for advertising and driving subscription revenue for premium content. JioCinema will also bring its critical partnerships with marquee content producers for content and OEMs (original equipment manufacturers) for distribution.

The transaction is expected to close within six months and is subject to customary closing conditions and approvals.

Sports business

Viacom18 forayed into the sports genre and launched three sports channels including one free-to-air channel last month. During the year, the company acquired the television and digital rights to sports properties like NBA and FIFA World Cup, two of the most watched sports properties in the world, as well as major footballing leagues La Liga (Spain), Serie A (Italy) and Ligue 1 (France), Cinch Premiership (Scotland), and other sporting events like ATP Masters Tennis, WTA, top BWF World Tour events like All England Open Badminton Championship, World Boxing Championship, Abu Dhabi T10 Cricket, and Road Safety World Cricket Series, among others.

“Viacom18 believes that sports, especially live sports, will help strengthen the value proposition of the network to consumers and will complement the current entertainment offering,” said the statement. “The network will continue to add more events and properties to its catalogue and will strive to be India's most-coveted sports network by providing fans easy access to a comprehensive bouquet of international and premium sports content.”

The company’s TV network maintained an all India viewership share of 10.7 per cent. The share of entertainment networks in the non-news genre was 11.2 per cent with Colors being the top second primetime channel in the Hindi general entertainment genre. The channel launched ten fiction and five impact shows to strengthen its viewership share in the genre. Colors Kannada and Colors Marathi were amongst the top three channels in their respective markets with kids and English portfolios were leaders in their genres.

As per Broadcast Audience Research Council (Barc) ratings which resumed on 17 March, TV18 news portfolio was #22 in terms of reach and #32 in terms of viewership share. The network maintained leadership in English business news (CNBC TV18) and had strong positions in English and several regional markets.

“FY22 was a remarkable year, not only from the perspective of numbers, but in terms of building a strong foundation on which the business can continue to grow for the foreseeable future,” said Network18 chairman Adil Zainulbhai. “The financial performance has vindicated our decision to invest in new businesses a few years ago which have started showing encouraging positive results. In a similar vein, we have set ourselves an ambitious target to become a leading player in the digital space while strengthening our core TV offering. We will continue to solidify our ‘Digital First, TV Always’ proposition, leveraging our existing strengths to grow in segments where we are present and breaking ground in new markets with new and innovative offerings. The strategic partnership we have struck for Viacom18 is a big step in this direction which will help set the Company on a long-term growth trajectory and create one of India’s leading content company.”