Advertisement Growth in Media & Entertainment Industry

Adgrowth in Media

We expect a massive advertisement & revenue growth in different segments of Media & Entertainment Industry in current financial year 2019.

Television

TV advertising spend has taken a hit recently, due to the TRAI’s tariff order implementation; as medium-term growth prospects remain intact.

Zee Entertainment & Sun TV are expected to report advertisement growth of 12% & 8% YoY, respectively, as spend was held back on implementation of TRAI tariff order which impacted viewership share of most channels. SUN TV is likely to outperform on subscriber revenue growth, led by positive impact of digitization in Tamil Nadu whereas Zee is expected to report healthy subscription revenue growth of 15% YoY.

PVR

Overall Box Office (BO) revenue growth is estimated to be at 45% YoY as content performance has been strong, led by performance of movies, such as Simmba, Uri, Gully Boy, Total Dhamaal & Kesari. Medium-budget movies, such as Lukka Chuppi & Badla, too have done well to drive BO collections.

Exhibitors are likely to report strong box office revenue growth as Hindi BO collections surged 46% YoY to INR 11.71bn, led by the success of big budget movies.

Inox Leisure

Inox is estimated to report revenue growth 44% YoY during the quarter , which will lead to 45% BO revenue growth; the reason for flattish ATP growth is on the back of reduction in ticket prices due to GST cut (from 28% to 18%).

Radio: Advertisement growth under performs despite elections  

The radio segment has reported a mild negative surprise this quarter, despite it being an election year & government ad spend is relatively high.  Growth in the radio segment is estimated to be 8% YoY.

Revenue growth in FY19 is estimated to be 10% YoY, which is a below par performance despite H2FY19 being supported by election ad spend, which is not a yearly recurring event.

ENIL & Music Broadcast (RADIOCIT IN; MBL) are estimated to report low double digit revenue growth at mere 4% YoY.

Digital content: strong double-digit growth 

The digital content segment has strong growth on the back of increased smart phone penetration and cheaper data prices.

Shemaroo Entertainment expected to report revenue growth of 13% YoY, led by out performance in the digital media segment.

Exhibition 

Regional movies too can be a key trigger due to dubbing in Hindi languages and can further drive BO revenue. The F&B and advertising segment is expected to report healthy growth too, which may drive profitability for exhibitors.

Karan Taurani

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