NETWORK18 MEDIA AND INVESTMENTS LIMITED
ANNUAL REPORT 2011-2012
DIRECTOR`S REPORT
Dear Members,
Network18 Media & Investments Limited
Your Directors are pleased to present their 17th Annual Report together
with the audited Statement of Accounts for the Year ended March 31, 2012.
Financial Results:
The key financial figures on standalone basis of your Company for the year
ended March 31, 2012 is summarized below:
Amount in Rs.
2011-12 2010-11
Profit/ (Loss) before interest and
depreciation (51,71,76,967) 11,78,52,719
Interest and finance charges 1,30,68,01,367 81,64,93,300
Depreciation 8,81,50,795 51,35,605
Net operating profit before tax (1,91,21,29,130) (70,37,76,186)
Provision for taxes/ deferred taxes 71,76,267 (1,25,00,000)
Net profit/ (loss) after tax (1,91,93,05,397) (69,12,76,186)
Operational Results:
During the year under review, the Company recorded a turnover of Rs 264.65
Crs. (Pr. Yr. 67.22 Crs.) and recorded EBDIT of Rs. (51.72) Crs. (Pr. Yr.
11.79 Crs.).
Dividend:
In view of the losses for the year ended March 31, 2012 and accumulated
losses, the Board of Directors of your Company is constrained to recommend
any dividend for the year under review.
Transfer to Reserves:
The Company has not made any transfer to the reserves during the financial
year ended March 31, 2012.
Deposits:
Your Company wishes to inform you that the Fixed Deposits Scheme under
Section 58A of the Companies Act, 1956 launched by your Company is well
supported by public and Shareholders. Your Company had a total of Rs.313.91
Crs. under the Fixed Deposit Scheme as on March 31, 2012.
There was no failure by the Company in repayment of interest due on Fixed
Deposits. Your Company has sent reminders to 2,999 Deposit Holders, who
have not claimed repayment of their fixed deposits, which became due on
March 31, 2012, amounting to Rs. 18.73 Crs.
Scheme of Arrangement:
The Board of Directors of the Company, on July 7, 2010, announced and
approved a Scheme of Arrangement ("the Scheme") between your Company,
Infomedia Press Limited (formerly known as "Infomedia18 Limited")
("Infomedia") and their respective shareholders and creditors with the
appointed date being April 1, 2010. The Scheme has been approved by the
Hon`ble High Court of Delhi and has been made effective on June 1, 2012
("Effective Date").
As per the Scheme, Demerged Undertaking comprising of:
* publishing business including publication of business directories, yellow
pages & city guides;
* publication of special interest publication/ magazines;
* search business including web properties such as www.askme.com,
www.askme.in and www.burrp.com and any other business except printing Press
Business.
being carried on by Infomedia on a going concern basis, along with all
related assets, liabilities, rights and obligations stand transferred to
the Company as on the Appointed Date, while the Printing Press business
continues to remain with Infomedia. Your Company has altered the object
clause of the Company to include aforesaid business, vide postal ballot
resolution of the shareholders dated February 24, 2012.
In consideration of the demerger of the Demerged Undertaking of Infomedia
with the Company, on June 19, 2012, the Company had issued and allotted
36,79,356 equity shares to the shareholders of Infomedia at par on a
proportionate basis in the ratio of 7:50 i.e., seven fully paid-up equity
shares of Rs 5/- each of the Company has been issued for every fifty fully
paid-up equity shares of Rs 10/- each of Infomedia. Further no equity
shares were issued in respect of the equity shares held by the Company in
Infomedia.
The Company has not issued shares against fractional entitlement. These
fractional shares have been consolidated and issued to separate trustee
nominated by the Company. The Trust shall sell such shares at the
prevailing market prices in due course of time and distribute the net sale
proceeds (after deduction of tax, if applicable) to the respective
allottees in proportion to their fractional entitlements.
RIGHTS ISSUE OF 2,700 CRORES EACH BY COMPANY AND ITS SUBSIDIARY AND
PROPOSED ACQUISITION OF ETV AND CONTENT LICENSING AGREEMENT.
The Board of Directors, at their meeting held on January 3, 2012 decided to
raise Rs. 2,700 Crores by issuing Equity Shares on rights basis, inter alia
for (a) Investment in our subsidiary, TV18 Broadcast Limited (b) repayment/
prepayment of certain loans, redemption of Secured Optionally Fully
Convertible Debentures, redemption of Preference shares and repayment of
public deposits and (c) general corporate purposes. The Draft Letter of
Offer ("DLOO") for the aforesaid Rights Issue has been filed with
Securities and Exchange Board of India and the necessary approval is
awaited. However, terms and conditions of the proposal of rights issue,
including the possible issue price and size and other relevant details
shall be decided by the Board, subject to necessary approval of "SEBI" and
Stock Exchanges and other appropriate authorities, in consultation with,
inter alia, the Lead Manager, Legal Advisor and other experts. The issue
price shall not exceed Rs. 60/- (Rupees sixty only) per equity share which
will be fixed keeping in view the then prevailing market conditions and in
accordance with the applicable provisions of laws, rules, regulations and
guidelines.
During the year, our subsidiary company namely TV18 Broadcast Limited
(TV18), entered into binding agreement with companies effectively wholly
owned by Reliance Industries Limited (RIL), for acquiring stake in various
ETV channels being operated and managed by Eenadu Group. Completion of this
acquisition is subject to receipt of necessary regulatory approvals and
completion of the proposed rights issue of Company and TV18.
In this regard the Board of Directors of TV18 at their meeting held on
January 3, 2012, have approved issues of equity shares of TV18 on a rights
basis for an amount aggregating to Rs. 2,700 crores, inter alia for
acquisition of ETV channels and repayment of certain loans. The draft
letter of offer for the rights issue of TV18 has also been filed with SEBI
and the necessary approval is awaited.
Further Infotel Broadband Services Limited (`Infotel`), a subsidiary of
RIL, has entered into a content license agreement with the Company and
TV18, under which Infotel shall have preferential access to (i) the content
of all the media and web properties of the Company and its associates and
(ii) programming and digital content of all the broadcasting channels of
TV18 and its associates on a first right basis as a most preferred
customer.
Redemption of the preference shares:
The Company has 10,284,379 outstanding Preference Share of Rs. 150 each
(the Preference Shares). The Preference Shares shall be, subject to
profitability and at the discretion of the Board of Directors, entitled to
a cumulative annual dividend @5%. These preference Shares carries
preferential right in respect of dividends and also that it carries
preferential right in regard to repayment of capital in case of winding up.
The Company`s liability to the Preference Shareholders towards their rights
including for payment of dividend or otherwise shall stand extinguished
from the date of redemption, in all events and on the Company dispatching
the redemption amounts to the Preference Shareholders. Preference Shares
are redeemable at the end of five years from May 15, 2008, (the allotment
date) at Rs. 150 per share.
Change in Capital Structure:
The Company`s shares are listed on the National Stock Exchange (NSE) and
Bombay Stock Exchange (BSE) and are actively traded.
During the year under review and upto the date of this report, the paid up
equity share capital has increased from Rs. 5,944.78 Lakhs to Rs. 7,327.96
Lakhs. The details of the same is mentioned hereunder:
Particulars No. of Shares
issued
Shares allotted pursuant to exercise of ESOP 2,89,231
Shares allotted pursuant to Scheme of Arrangement between 2,36,95,044
Television Eighteen India Ltd, TV18 Broadcast Ltd & others
with the Company.
Shares allotted pursuant to Scheme of arrangement between 36,79,356
inter alia Company and Infomedia Press Limited formerly
Infomedia18 Limited).
Further in view of the current market scenario and the future requirements,
to accomodate shares issued pursuant to the aforesaid Scheme and in order
to accommodate the proposed rights issue of the Company, your Company has
increased the authorized share capital from existing Rs. 306,00,00,000/-
(Rupees Three Hundred and Six Crore only) to Rs. 531,00,00,000/- (Rupees
Five Hundred and Thirty One Crores only) and again to Rs. 936,50,00,000/-
(Rupees Nine Hundred Thirty Six Crore Fifty Lacs only) and was further
increased to Rs. 2736,50,00,000/- (Rupees Two Thousand Seven Hundred Thirty
Six Crore Fifty Lacs only).
Employee Stock Option Plan:
Human Resource is the key to the success of any organization. The Company
has always valued its human resources and had tried to adopt the best HR
practices.
During the year 4,22,736 options were granted to employees of erstwhile
Television Eighteen India Limited, which has merged into your company and
employees thereof have been transferred to the Company. The Company has
allotted 2,89,231 equity shares against the exercise of options by the
employees.
The Particulars of options issued under the Employee Stock Option Plans as
required by SEBI (Employee Stock Option Scheme and Employee Stock Purchase
Scheme) Guidelines, 1999 are given in Annexure-I and form part of this
report.
The Company has implemented the Employees Stock Options Schemes in
accordance with the SEBI Guidelines and the resolutions passed by the
shareholders. Certificate(s) confirming the same shall be placed before the
Annual General Meeting for inspection.
Corporate Governance:
Corporate Governance is about commitment to values and about ethical
business conduct. It stems from the culture and mindset of a management;
hence, measures of Corporate Governance should be more by self-discipline
than by legislation and regulation.
Your Company strives for excellence with the objective of enhancing
shareholders` value and protecting the interest of shareholders. Your
company ensures the practice of the Principles of Good Corporate
Governance. Decisions are based on a set of principles influenced by the
values, context and culture of the organization. All functions of the
Company are discharged in a professionally sound, competent and transparent
manner.
The detailed Corporate Governance Report of the Company in pursuance of
Clause 49 of the Listing Agreement forms part of the Annual Report of the
Company.
Directors:
During the year under review, Mr. Sanjay Ray Chaudhuri was appointed as an
additional director of the Company w.e.f. January 3, 2012. Mr. Sanjay Ray
Chaudhuri holds office up to the date of the forthcoming Annual General
Meeting. The Company has received notice from a member of the Company under
section 257 of the Companies Act 1956 proposing the candidature of Mr.
Sanjay Ray Chaudhuri for the Directorship. The Board recommends his
appointment.
Further Ms. Subhash Bahl, director of the Company shall retire by rotation
at the forthcoming Annual General Meeting of the Company. However, being
eligible she has offered herself for re-appointment. Accordingly the Board
recommends her re-appointment.
Mr. Raghav Bahl is Director of the Company since December 10, 2003 and was
appointed as a Managing Director on September 1, 2006. His current tenure
as a Managing Director expires on September 30, 2012. He has contributed
significantly in the growth and development of the Company. Accordingly, in
view of his contribution as well as rich and extensive experience in the
media and entertainment sectors, he has been re-appointed as the Managing
Director of the Company for a period of three years starting from 1st
October 2012 to 30th September 2015. Such appointment is subject to
necessary approval of the Shareholders of the Company and the Central
Government.
Brief resume of aforesaid Directors, proposed to be appointed, the nature
of their expertise in specific functional areas and name of Companies in
which they hold directorships and chairmanship/ memberships of Board
Committees as stipulated under Clause 49 of the Listing Agreement with the
Stock Exchanges in India are provided in the `Report on Corporate
Governance` forming part of this Report.
Mr. Ravi Chandra Adusumalli has resigned from the Directorship of the
Company w.e.f. December 1, 2011. The Board hereby records its appreciation
for the services rendered by him during his tenure.
Consolidated Financial Statements:
In accordance with the Accounting Standard AS-21 on Consolidated Financial
Statements read with Accounting Standard AS-23 on Accounting for
Investments in Associates and AS-27 on Financial Reporting of Interest in
Joint Ventures, the audited Consolidated Financial Statements are provided
in the Annual Report.
Subsidiaries:
The Ministry of Corporate Affairs, Government of India vide its Circular
no. 51/12/2007-CL-III dated February 8, 2011 has granted general exemption
under section 212(8) of the Companies Act, 1956 from attaching the
Directors` Report, Balance Sheet, Profit & Loss Account and the Report of
Auditors of the Subsidiary Companies with the Balance Sheet of the Company.
The annual accounts of these subsidiary companies and the related detailed
information will be made available to the shareholders seeking such
information at any point of time. The annual accounts of the subsidiary
companies shall also be kept for inspection by any investor in its
registered office and that of the concerned subsidiary companies. The
Company shall furnish a hard copy of details of accounts of subsidiaries to
any shareholder on demand.
A statement of your Company`s interest in its Subsidiary Companies is
attached as Annexure - II to the Directors` Report in terms of the
provisions of Section 212 of the Companies Act, 1956.
Directors` Responsibility Statement:
Pursuant to the provision of Section 217 (2AA) of the Companies Act, 1956
as amended, your Directors confirm:
i) that in the preparation of the annual accounts for the financial year
ended March 31, 2012, the applicable Accounting Standards have been
followed;
ii) that the Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of the
Company at the end of the financial year and of profit or loss of the
Company for the year under review;
iii) that the Directors have taken proper and sufficient care for
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of the
Company and for preventing and detecting fraud and other irregularities;
iv) that the Directors have prepared the accounts for the financial year
ended March 31, 2012 on a `going concern` basis.
Auditors & Auditors` Report:
The Statutory Auditors, M/s Walker, Chandiok & Co, Chartered Accountants,
New Delhi retire at the forthcoming Annual General Meeting and are being
eligible for re-appointment as such. The Board recommends the re-
appointment of M/s Walker, Chandiok & Co, Chartered Accountants, New Delhi
as the statutory auditors of the Company, who have given their consent to
act as such and a certificate to the effect that their appointment, if
made, will be within the limits specified under Section 224 (1B) of the
Companies Act, 1956.
Cost Auditors:
Pursuant to the Cost Audit Order as notified by the Ministry of Corporate
Affairs (Cost Audit Branch) vide circular dated May 2, 2011 read with Cost
Accounting Records (Telecommunication Industry) Rules 2011 as notified by
the Ministry of Corporate Affairs vide GSR 869(E) dated December 7, 2011,
the Company has appointed, M/s Pramod Chauhan & Associates, Cost
Accountants, as the Cost Auditor of the Company for the financial year
2012-13 for conducting the audit of the Cost Records of the Company.
Explanation to Auditor`s Comment: In regard to reservations/qualifications
in the Auditors` Report, the relevant notes on the accounts are self-
explanatory and therefore do not call for any further comments of
Directors. However, your Directors wish to offer the explanations in regard
to note no. 5 of the Auditors Report. It is clarified that the Central
Government has partially accepted the Company`s application for approval of
the remuneration paid to the Managing Director and the Company has filed a
representation for reconsideration of the matter and approval is awaited.
Particulars of Employees:
In terms of the Provisions of Section 217(2A) of the Companies Act, 1956
read with the Companies (Particulars of Employees) Rules, 1975, as amended,
the name and other particulars of the employees are set out in the Annexure
to the Directors` Report. However, having regard to the provisions of
Section 219(1)(b)(iv) of the said Act, the Annual Report excluding the
aforesaid information is being sent to all the Members of the Company and
others entitled to receive the annual report of the Company. Any members
interested in obtaining such particulars may write to the Company at its
Registered Office.
Conservation of Energy, Technology Absorption and Foreign Exchange Earnings
and Outgo:
Pursuant to Section 217(1)(e) of the Companies Act, 1956 read with the
Companies (Disclosures of Particulars in the report of the Board of
Directors) Rules, 1988 the following information is provided:
a) Conservation of Energy:
Your Company is not an energy intensive unit, however regular efforts are
made to conserve the energy.
b) Research and Development:
The Company continuously makes efforts towards research and developmental
activities whereby it can improve the quality and productivity of its
programmes.
c) Foreign Exchange Earnings and Outgo:
The foreign exchange earnings and expenditure appear in Notes No. 40 and 41
of the `Notes to the Accounts` forming part of the Audited Annual Account.
Acknowledgement:
Your Directors take this opportunity to place on record their deep
appreciation for the continuous support extended by all the employees,
Shareholders of the Company, various Government Departments and Bankers
towards conducting the operation of the Company efficiently.
For and on behalf of the Board
Place: Noida Chairman
Date : August 4, 2012.
Annexure "I" to the Directors` Report:
Information regarding the Employees Stock Option Schemes/ Employees Stock
Purchase Plan as on March 31, 2012 in terms of Regulation 12 and 19 of SEBI
(Employees Stock Option and Employees Stock Purchase Scheme) Guidelines,
1999.
(a) Options granted:
Name of Scheme No. of options granted
Network18 Employee Stock Option Plan 2007 422,736
(b) Pricing Formula:
The Exercise Price shall be decided by the Compensation Committee, provided
however, that the Exercise Price shall not be less than the par value of
the Shares of the Company and shall not be more than the price prescribed
under Chapter XIII of SEBI (Disclosure and Investor Protection) Guidelines,
2000. The relevant date will be the date of Grant. In case of a fall in
market value of Shares between the Offer Date and the date of Exercise, the
Compensation Committee may re-price the Options that have not been vested
while ensuring such re-pricing is not detrimental to the interest of the
Grantees.
(c) Options vested during the year 703,959
(d) Options exercised during the year 289,231
(e) Total no. of shares arising as a result
of exercise of options 289,231
(f) Options lapsed during the year 65,952
(g) Variation in terms of options Exercise price has been
modified on 03-November
-2011 for 1,010,539
options and on 29-
December-2011 for
1,039,023 options to
Rs.63.85 and Rs.37.55
respectively.
(h) Money realised by exercise of options
(Rs. in lakhs) 24.19
(I) Total no. of options in force 1,513,951
(j) (i) Options shares granted to key
managerial persons
Name of key managerial persons No. of
options
granted
Ajay Chacko 24,934
Lakshmi Narasimhan 1,300
N. Dilip Venkatraman 3,250
Senthil Chengalvarayan 58,478
B. Saikumar 59,952
Anil Uniyal 3,250
Total 151,164
(ii) Other employees who have been granted
5% or more , of the options during the year
Name of employee No. of
options
granted
Anuradha Sengupta 19,464
Menaka Doshi 19,464
Shereen Bhan 22,497
Udayan Mukherjee 94,228
Total 155,652
(iii) None of the employees were granted options during the year, equal to
or exceeding 1% of the issued capital of the Company at the time of grant :
Nil
(k) (i) Basic Earnings per share (in Rs.) (13.11)
(ii) Diluted Earnings per share (in Rs.) (13.11)
(l) Computation of employee compensation cost and
effect on profit and EPS
(i) Method of calculation of employee compensation
cost used by the Company :Intrinsic Value
(ii) Difference between the employee
compensation cost so computed at (i) above and
the employee compensation cost to P&L account if
the Company had used fair value of the Options
(in Rs. lakhs) (33.74)
(iii) The impact of this difference on the
profits and EPS of the Company (33.74)
Profit after tax (Rs. in lakhs) (19,193.05)
Less: Additional employee compensation cost
based on fair value (Rs.in lakhs) (33.74)
Adjusted Profit after Tax (Rs. in lakhs) (19,159.31)
Adjusted Basic EPS (13.09)
Adjusted Diluted EPS (13.09)
(m) Weighted average exercise price and fair
value of the stock options granted:
Weighted average Weighted
exercise price average fair
value
- Where exercise price exceeds the market
price of the stock (Rs.) 142.55 19.17
- Where exercise price is equal to the
market price of the stock (Rs.) - -
- Where exercise price is less than the
market price of the stock (Rs.) 32.77 81.60
(n) Description of the method and significant assumptions used during the
year to estimate the fair value of the options, including the following
weighted average information:
The company has adopted the Black Scholes valuation model for computing the
weighted average fair value considering the following assumptions
As on modified As on modified
As on Grant Date date 03-Nov-2011 date 29-Dec-2011
Risk free rate of
interest (in %) 8.26% 8.49% 8.33%
Expected life of the
options from the
date of grant (in
Years) 1.32 0.85 0.69
Expected volatility
(in %) 39.93% 56.74% 55.40%
Dividend yield (in %) 0.00% 0.00% 0.00%
Management Discussion And Analysis Report
Industry Status`
The Indian M&E industry grew from INR 652 billion in 2010 to INR 728
billion in 2011, registering an overall growth of 12 percent. Backed by
strong consumption in Tier 2 and 3 cities, continued growth of regional
media and fast increasing new media businesses, the industry is estimated
to achieve a growth of 13 percent in 2012 to touch INR 823 billion. Going
forward, the sector is projected to grow at a healthy CAGR of 14.9 percent
to reach INR 1,457 billion by 2016.
Overall Industry 2007 2008 2009 2010 2011
size (INR Bn)*
(For Calendar
Years)
Television 211.0 241.0 257.0 297.0 329.0
Print 160.0 172.0 175.2 192.9 208.8
Film 92.7 104.4 89.3 83.3 92.9
Radio 7.4 8.4 8.3 10.0 11.5
Music 7.4 7.4 7.8 8.6 9.0
Out of Home 14.0 16.1 13.7 16.5 17.8
Animation & VFX 14.0 17.5 20.1 23.6 31.0
Gaming 4.0 7.0 8.0 10.0 13.0
Digital
Advertising 4.0 6.0 8.0 10.0 15.4
Total 514 580 587 652 728
Overall Industry Growth 2012P 2013P 2014P 2015P 2016P CAGR
size (INR Bn)* in 2011 (2010-15)
(For Calendar over
Years) 2010
Television 10.8% 380.0 435.0 514.0 618.0 735.0 17%
Print 8.3% 226.0 246.8 270.0 294.9 323.4 9%
Film 11.5% 100.0 109.7 121.1 134.5 150.3 10%
Radio 15.0% 13.0 16.0 20.0 24.0 29.5 21%
Music 4.7% 10.0 11.3 13.1 15.4 18.2 15%
Out of Home 7.6% 19.5 21.5 23.6 26.0 29.0 10%
Animation & VFX 31.2% 36.3 43.0 51.1 61.0 69.0 17%
Gaming 30.0% 18.0 23.0 29.0 37.0 46.0 29%
Digital
Advertising 54.0% 19.9 25.8 33.5 43.7 57.0 30%
Total 11.7% 823 932 1076 1254 1457 14%
Industry Growth - Fundamental Drivers
The Indian media and entertainment industry has benefited from some
fundamental growth drivers, which have facilitated its double digit growth
in the past decade. They are categorized and summarized as follows:
* Evolving socio-economic environment in India - Led largely by a
combination of two key macro factors, India has emerged as a growth engine
for discretionary consumption products and services, especially media and
entertainment. The first one is the favorable demographic composition of
the nation, commonly referred to as the `demographic dividend`, which
essentially implies that a large proportion of the country`s populace is
young and in the working age group, thus allowing for greater future
consumption upside. Second, since liberalization, the country has witnessed
rapid economic growth, which has corresponded with the influx of foreign
capital and brands as well as stronger integration with the global socio-
economic environment. This has led to the emergence of an ever increasing
large consuming class, with rising disposable incomes, which is globally
aware and acquisitive in nature.
* Digitization - This is the process of converting analog information into
digital formats. This has been a defining trend in the global media
industry especially in TV, music and films and now it is becoming evident
in India as well. From an enhanced consuming experience for the end-user to
greater addressability and monetization potential for the content provider;
digitization can be a great value creator across the value chain. Many
digital platforms, ranging from digital cable, DTH, IPTV to digitization of
films, print and online sales of music now exist. Digital technology
continues to revolutionize media distribution - be it the rapid growth of
DTH and digital cable, or increased digitization of film exhibition - and
has enabled wider and more cost effective reach across diverse and regional
markets, and the development of targeted media content. There has been
increased proliferation and consumption of digital media content - be it
newspapers and magazines, digital film prints, and online video and music
or entirely new categories such as social media. For example, the print
players are increasing becomingly available on the digital platforms in
order to establish a connect with current readers as well as to establish a
relationship with new readers. Accordingly, online advertising spends have
seen a spurt in growth vis a vis spends on traditional media. At the same
time, the ability to develop models that get consumers to pay for online
content is still limited. Currently, advertising is the primary source of
revenue online but new revenue models are likely to emerge as the payment
infrastructure develops and consumers begin to pay for content. Going
forward, the adoption of 3G and 4G services could further fuel broadband
penetration and offer opportunities for scaling digital media businesses.
The cable television industry in India is poised for one of its most
significant developments in the last decade - a transformation to the
Digital Addressable System (DAS) for television distribution. Cable
operators in a DAS regime would be legally bound to transmit only digital
signals. Subscribed channels can be received at the customer`s premises
only through a set-top-box equipped with a conditional access card, and a
subscriber management system (SMS). In a nut-shell, each user in the
network would be uniquely identifiable to the service provider. Digital
television is expected to provide the consumer access to a higher number of
TV channels, customized tariffs, availability of broadband and other value-
added-services, and enhanced user experience through better viewing quality
and consumer service.
* Regionalization - This is another one of the most significant growth
drivers for the industry. Regional television and print continued its
strong growth trajectory owing to growth in incomes and consumption in the
regional markets. National advertisers are looking at these markets as the
next consumption hubs and local advertisers are learning the benefits of
marketing their products. In order to tap the increasing regional budgets
of the national advertisers and growing interests of local advertisers,
media players are in expansion mode to increase their footprint in these
regions.
* Growing importance of new media - Another key trend is the convergence
and multi-platform presence of media services in the country. Over the past
years, consumers as well as content providers have ensured that the same
content is increasingly deployed across platforms, from television to
online to mobile and beyond. Whether its e-papers or online streaming of
shows or mobile based applications, the convergence of content across key
"screens" is a defining phenomenon in the industry. Considering the growth
in India`s telecom and IT markets especially mobile and wireless market,
this wave of convergence is bound to be strengthened. Availability of
infrastructure and appropriately pricing content across these new media
platforms will be critical success factors for the Indian market.
* Pay led Revenue Models - The Indian media & entertainment industry
continues to be highly advertising dependent, especially from the content
owner`s perspective i.e. television and radio broadcasters, print and
online publishers. Advertising spends are expected to grow at a CAGR of 14
percent to reach INR 586 billion in 2016. The media industry`s ad revenue
dependence is expected to continue for some time, largely due to the
relatively low ARPUs on account of hyper competition and lower price
elasticity of consumers. Advertising spends across all media accounted for
INR 300 billion in 2011, contributing to 41 percent of the overall M&E
industry revenues. Advertising revenues witnessed a growth of 13 percent in
2011 as against 17 percent observed in 2010. However, with digitisation and
the growth in addressable media, revenue models based on end-user revenues
are gaining traction. Audiences are becoming more willing to pay for
content and value added services. Technology has enabled convenience and
superior quality offerings to consumers who have responded positively. The
growth in ticket prices of movies at multiplexes, increasing number of Pay-
TV subscribers, increasing penetration of DTH with its user-friendly
interface and technology, and introduction of Value Added Services (VAS) by
media players are some examples of pay markets gaining importance.
* Narrowcasting - Over the past years, the media industry has witnessed the
emergence of niche plays. These niche offerings are highly focused
channels, shows and formats which seek to segment audiences and deliver
unique offerings to them based on their preferences. This has in turn
allowed advertisers to reach out to their consumers more effectively.
Narrowcasting is inextricably linked to the growth of addressable media in
the country and the digital wave.
* 360 degree connect with consumers - As consumers evolve and with India`s
growing young population, there is a heightened need to engage with them
across platforms and experiences. There is a greater need for integration
and innovation across traditional and new media, with changing media
consumption habits and preferences for niche content. Media companies today
have no choice but to provide more touch points to engage with audiences.
* Other Key Enablers - Apart from the above, there are other important
factors such as gradual de-regulation in industry policies, easier
availability of institutional capital for funding growth and the opening up
of global markets for Indian media content that have facilitated growth.
Opportunities, Growth Drivers and Concerns2
The Indian Entertainment and Media Industry has shown structural shifts in
its move towards convergence with consumers increasingly taking control of
their media consumption. With the evolution of the Industry, growth is
increasingly being driven by increasing consumer spending which has a large
impact on revenue streams. Knowledge of evolving consumption trends will be
a critical success factor in this scenario. The growth has been evident in
varying proportions across the different segments of the Indian
Entertainment and Media Industry i.e. Television, Print and Internet
(Digital) being the major media in terms of size and growth rates apart
from other segments such as radio, out of home, mobile.
We are a media and entertainment company in India, with interests in
television, internet, filmed entertainment, e-commerce, magazines, mobile
content and allied businesses. We broadcast television channels across
genres such as news and general entertainment, primarily in English and
Hindi. We entered the Internet industry in June 2000 and have since
established a number of digital and mobile properties offering digital
content and e-commerce, including home shopping and online ticketing. We
also publish special interest business-to-consumer and business-to-business
magazines and have a presence in film production and distribution. Through
our subsidiary TV18 Broadcast Ltd, we operate one of India`s popular
television broadcasting networks. We operate CNBC-TV18 and CNBC Awaaz, CNN-
IBN, IBN-7, and IBN-Lokmat, (a Marathi regional news channel in partnership
with the Lokmat group). We have recently launched CNBC-TV18 in high
definition i.e. CNBC-TV18 Prime HD. Viacom18, a joint venture of our
Subsidiary TV18, also operates general entertainment channels - COLORS,
Colors HD, MTV, VH1, Nick, Sonic, Comedy Central (through Viacom 18 a joint
venture with Viacom Inc.) and a factual entertainment channel HistoryTV18
(through A+E Networks|TV18, in which TV18 holds 51% interest and the
remaining 49% interest is held by A+E Television Networks LLC). We also
operate filmed entertainment business through Viacom18 Motion Pictures. Our
news and entertainment segments are engaged in the programming, production
and broadcasting of news, general entertainment and the acquisition,
production, syndication, marketing and distribution of films. Our digital
and e-commerce segment offers a collection of digital and mobile properties
catering to a wide range of interests and services, including teleshopping,
news, music and entertainment, markets and finance, social networking,
consumer information, local search, online shopping and ticketing, and
mobile phone services and applications. We operate digital, publishing and
e-commerce assets including the web content properties such as
moneycontrol.com, ibnlive.com, in.com and firstpost.com. We also operate e-
commerce properties - HomeShop18 and bookmyshow.com, and publish Forbes
India, India`s first local edition of a foreign news magazine title and the
world`s most influential business brand, in collaboration with Forbes
Media. In addition, we operate Newswire18, which is a real time financial
information and news terminal services, and Network18 Publishing, which is
in the special interest publishing space as well as E18 and Sport18, our
event and sports management ventures.
The Indian Television Industry3
Television is the largest medium for media delivery in India in terms of
revenue, representing around 45 percent of the total media industry. The TV
industry continues to have headroom for further growth as television
penetration in India is still at approximately 60 percent of total
households. India continues to be the third largest TV market after USA and
China with 146 million television households. Cable and Satellite (C&S)
penetration of television households is close to 80 percent, with DTH
driving a significant part of the growth in the last 12 months. With the
impending digitization of all analog cable subscribers imminent,
penetration level of digital households is expected to increase
significantly, going forward. The overall television industry was estimated
to be INR 329 billion in 2011, and is expected to grow at a CAGR of 17
percent over 2011-16, to reach INR 735 billion in 2016. The share of
subscription to the total industry revenue is expected to increase from 65
percent in 2011 to 69 percent in 2016.
Through our subsidiary TV18 Broadcast Ltd, we operate one of India`s
popular television broadcasting networks. We operate CNBC-TV18 and CNBC
Awaaz, CNN-IBN, IBN-7, and IBN-Lokmat, (a Marathi regional news channel in
partnership with the Lokmat group). We have recently launched CNBC-TV18 in
high definition i.e. CNBC-TV18 Prime HD. Viacom18, a joint venture of our
Subsidiary TV18 with Viacom Inc., operates general entertainment channels -
Colors, Colors HD, MTV, VH1, Nick, Sonic, Comedy Central. We operate a
factual entertainment channel HistoryTV18 (through A+E Networks|TV18, a JV
in which TV18 holds 51% interest and the remaining 49% interest is held by
A+E Television Networks LLC). We also operate a filmed entertainment
business through Viacom18 Motion Pictures.
Key trends & growth drivers for the Indian Television Industry4:
Following are the key trends that are likely to impact the television
industry in the medium to long term:
+ Significant potential for growth, based on TV penetration levels:
India was estimated to have around 146 million TV households in 2011, which
implies a TV penetration of approximately 60 percent. In 2016, TV
penetration is estimated to rise to approximately 70 percent, which still
offers potential for penetration-led growth (post 2016) as income levels
rise, based on TV penetration levels in other mature as well as emerging
economies.
+ Digitisation - A paradigm shift:
The cable television industry in India is poised for one of its most
significant developments in the last decade - a transformation to the
Digital Addressable System (DAS) for television distribution. Cable
operators in a DAS regime would be legally bound to transmit only digital
signals. Subscribed channels can be received at the customer`s premises
only through a set-top-box equipped with a conditional access card, and a
subscriber management system (SMS). In a nutshell, each user in the network
would be uniquely identifiable to the service provider. Digital television
is expected to provide the consumer access to a higher number of TV
channels, customized tariffs, availability of broadband and other value-
added-services, and enhanced user experience through better viewing quality
and consumer service. The impact of DAS implementation will be fundamental
to the growth of the industry. In a nutshell, the following trends are
expected:
* Broadcasters to benefit from increased subscription revenues:
Addressability is expected to increase the revenue share of broadcasters,
leading to a significant increase in subscription revenue uptakes for
broadcasters. For mature broadcasters, a significant share of subscription
revenues is expected to flow to the bottom line. While broadcasters re-
align their revenue model, decreasing dependence on advertisement revenues,
sustaining strong subscription revenues may require broadcasters to
reengineer their offering and deliver high quality content to the consumer.
Digitization provides an opportunity for the number of channels go up and
the niche channels to increase their offerings.
* Carriage fee has increased significantly over the last few years.
Broadcasters as well as MSOs expect a decline in carriage fee after the
implementation of the first phase of digitization. However, there is a lack
of consensus on the movement of carriage fee in the medium term. A shift to
digital removes the bandwidth constraints of analog cable, and the number
of channels that may be carried increases significantly. Digitization will
alter the existing skewed revenue model of MSOs - increased subscription
revenues will lead to lower reliance on carriage fee, thus providing an
impetus for rationalization of carriage per broadcaster. However, placement
is expected to remain crucial even on a digital platform, and a decline in
the carriage fee may be offset to some extent by an increase in the
placement fee.
+ Slowdown impacts advertising revenues, Long term growth healthy:
2011 has been a challenging year for the television broadcasting industry.
Advertising rates faced pressure from the global and domestic economic
slowdown, resulting in a lower than expected increase in advertising
revenues, particularly in the second half of the year. At an aggregate
level, the total TV advertising market is estimated to have grown around 12
percent in 2011. Advertisement spends are expected to grow in 2012 at
similar levels as experienced in 2011. In the long term, however, India
continues to be a growth market, and the advertisement market is expected
to grow at a CAGR of 15 percent over 2011-16.
+ Regional & Niche channels:
Regional markets form a sizable portion of the total TV pie - after Hindi
GECs, the regional GEC genre is the largest in terms of viewership.
Regional channels accounted for approximately 33% of the all India CS4+
television viewership, with Bengali and Marathi channels gaining viewership
along with the South Indian channels. Regional advertising markets have
grown at a higher rate than the national market, registering a growth of
15% percent in 2011. (Source: FICCI KPMG Report 2012). They appear to have
been more insulated from the current economic slowdown than national
channels. Digitization will also open up avenues for broadcasters to launch
subscription driven, specialty channels in India and also provide an
opportunity to insert localized content and advertising, translating into
premium advertisement rates. Growth in the number of niche and regional
channels will have an inclusive and expansionary impact on the television
sector. The emergence of targeted and focused channels will allow
advertisers to derive maximized value and at the same time increase the
participation of local and regional advertisers, thus impacting sector
revenue growth.
+ Potential in HD and premium viewing:
Buoyed by increasing LCD and Plasma TV sales, expected to grow at a CAGR of
22% over 2011 to 15, broadcasters and DTH players have expanded their HD
offerings this year. With an increasing uptake of affordable HD TVs,
consumers may be willing to pay a premium for a better viewing experience
on these television sets. While HD penetration amongst the existing
subscribers is low, this is expected to increase significantly going
forward. The demand for HD channels amongst consumers has gone beyond
specific events, sports and movies.
+ Increasing penetration of TV`s and C&S homes:
Even today, a large number of Indian households do not have access to
television, especially in the rural areas. With strengthening distribution,
easing of hardware prices and growing awareness levels, the country`s
television footprint is set to expand further. With the increase in
consumption power, many households are now opting for multiple television
sets expanding the market further. Environmental factors such as increasing
access to electricity (especially in rural areas) and the continued
delivery of quality content are further enablers of greater penetration in
the Indian television industry.
+ Emergence of multi-screen TV content consumption:
Indian consumers are beginning to consume television content on non-TV
devices like smart-phones, tablets, and personal computers. India is
reported to have a subscriber base of one million active users of mobile
TV, while six million active subscribers have access to 3G services.
Key risks & challenges for the Indian Television Industry5:
+ Implementation of the mandatory digitisation regime:
While digitisation has been planned in a phased manner, its successful
implementation is critical for the long term growth of the television
industry. All Industry stakeholders will need to ensure that issues ranging
from infrastructural (Availability of boxes, customer support etc) and
funding to customer education are addressed strongly in every successive
phase, starting with the first phase in metro cities.
+ Advertising Environment risks:
As an industry, the television sector continues to be substantially
dependent on advertising revenues. However, these revenues are in turn
strongly linked to changing economic sentiment and thus run the risk of
volatility. In recent times, due to the domestic environment and global
pressures, advertising growth has been muted considerably.
+ Competition from other media:
Owing to multiple factors, including the mass nature of television, some
proportion of advertising revenue is also moving away and into media such
as internet, mobile and radio which are relatively cheaper, more measurable
and have greater local connect.
+ Content costs for channels:
As a result of the clutter and competitive pressures in the market, there
has been a high degree of volatility in content costs which is a cause for
concern.
+ Regulation:
The Indian broadcast industry is heavily regulated across a multitude of
areas including distribution, taxation etc. Policy changes can have a
material impact on the economic and strategic direction of the Industry.
The Indian Digital Media Industry6:
New media continued its growth trajectory in 2011, with estimated growth in
advertising revenues in excess of 40% over last year. Coming in at
approximately INR 15.4 billion in revenue in 2011, digital adspend reached
approximately 5 percent of total media and entertainment industry
advertising revenue. This share is expected to continue to grow over the
coming years, driven by significantly higher growth rates in online
advertising spend compared to traditional media. (Source: FICCI KPMG Report
2012). The digital media ecosystem in India is evolving rapidly. Continued
growth in internet penetration and access to mobile devices is expected to
drive consumption. This will further drive adoption by advertisers and
developments in the payment ecosystem to facilitate better monetization,
and hence revenue growth.
+ Mobile connectivity will drive the next phase of growth:
The next phase of growth in Internet usage will largely be driven by mobile
and wireless connections. The number of internet connections in India was
estimated to be approximately 88 million in 2011 and is expected to grow to
over 400 million by 2016. By then, wireless connections are expected to
constitute about 90 percent of all internet connections. The number of
broadband wireline connections are expected to grow 25 percent annually
from 14 million today to 43 million by 2016.
+ Smartphones and tablets will drive online media consumption:
A large number of these mobile internet users will access the internet
using smart phones and tablets and will have access to a wide range of
content online. In 2011, there were about 10 million internet enabled smart
phones in India. The balance mobile internet users accessed content over
feature phones. Annual shipments of smart phones are expected to reach 301
million by 2015. Using these estimates, the installed internet enable smart
phones could reach approximately 264 million by 2016.
+ Online advertising:
Today, the primary means of monetization in the digital world continues to
be advertising. As mentioned earlier, the online ad market (excluding
mobile) in India stands at about INR 14 billion currently, and is expected
to grow at a 30 percent CAGR to reach INR 57 billion in 2016 Mobile
advertising currently accounts for a small share of the market, estimated
at INR 1 billion but is expected to grow significantly over the coming
years.
+ Video:
India saw a growth of 21 percent in unique viewers across video sites in
India from 2010 to 2011. Not only are the number of users increasing on
video sites, they are spending more time watching videos online. In India,
television viewers spend an average of 77 hours a month watching TV. In
comparison, users in India spent 7.6 hours per user per month watching
videos online in 2011 compared to 4.8 hours per viewer per month in 2010.
+ Social networking:
Social networking sites reached 95 percent of the web audience, and
accounted for 24 percent of time spent online in India in December 2011.
Multiple features like mail, instant messaging, music, videos and games
contribute to the stickiness of social networks causing a significant jump
of over 20 percent in the user base from December 2010 to December 2011.
Other digital trends include stronger opportunities in areas such as online
classifieds, vernacular internet and search.
+ E-Commerce:
India`s e-commerce market is slated for an accelerated growth to build a
full-fledged e-consumption economy. In the next five years i.e. by 2016,
India`s e-tail market is expected to be over USD12bn from the current
USD590mn (2011). This would still imply less than 2% of overall retail
sales and 3.5% of per capita income of every transacting user. In this non
travel segment, categories such as apparels and lifestyle products, books,
consumer electronics and computer hardware, software and peripherals are
likely to be major revenue grossers. The growth of this market will be
driven by: 1) An increase in online transacting users, 2) Shift in buying
patterns i.e. online consumption driven by mass marketing by e-commerce
players, 3) Online adoption by traditional brick-and-mortar retailers and
4) Developing trust for online shopping.
Though the non travelling market is rising, its growth is not as fast as
the travel industry`s growth. However, as there has been a surge in multi
product e-commerce portals that provide goods and services in a variety of
categories, growth in this segment is set to accelerate. Today, the Indian
online user is spending much more time online and is involved in different
activities compared to a year back indicating the changing usage pattern
and online activity. As secure payment interfaces are provided by most
websites coupled with the ease of online purchase, the number of online
transactions has picked up significantly. A combination of customer pull
and business push factors is clearly driving the increase in the number of
the transacting users online. In addition to this, the key tipping point in
Indian e-commerce has been the Cash-On-Delivery mode of payment. (Source:
India Internet Report, Dec 2011, Edelweiss)
Key risks & challenges for the Indian Digital & E-Commerce Industry:
+ Mass access to the Internet, Strengthening of infrastructure:
With approximately 100 million internet users, there`s a considerable
opportunity for growth in this audience base in the future. However, in
order to achieve this, deployment of broadband on a mass-scale and
inexpensive access to data services will be critical. Availability of power
supply, mobile connectivity, tariffs, hardware and device prices are other
infrastructural factors that will impact growth in digital media in the
country.
+ Localisation of content and services:
Growth in new media is inextricably linked to the localisation of content
and services. Publishers, e-commerce players and service industry players
are focused on developing an ecosystem of such offerings, the acceptance of
which will drive the rate at which digital media option occurs in India.
+ Piracy7:
Digital piracy remains a major threat to the monetization of content on
digital platforms. Digital piracy has long impacted music, and is
increasingly becoming a problem in other sectors:
* Globally, India ranks 4th in terms of illegal movie downloads.
* Academic book piracy has been a major concern for years. It is now
beginning to impact the consumer books sector as well. The relatively small
file size of digital books and with no clear digital rights management
(DRM) standards makes piracy relatively easy in this sector.
* Console/PC gaming companies estimate software sales of pirated games to
be at least as large as the legitimate markets in volume terms.
Piracy is not new to this industry; however, the advent of digital
technologies has resulted in making piracy a lot more widespread. There are
several anti piracy tools at the disposal of companies. Besides working
with enforcement agencies and educating consumers on the impact of piracy,
the industry also needs to evolve strategies that involve development of
quality content suited to the medium available online with appropriate
security measures. Historically, it is the strength of this content that
has determined success in this industry, this is likely to hold true in the
digital world.
+ Security and Payments eco-system:
The rise of a `digital economy` is fundamentally contingent on the
robustness of the online payments infrastructure in the country. The e-
commerce industry, which has largely been dominated by the travel segment
so far, will be the primary beneficiary of this trend as use of net
banking, credit cards and wire transfers increases over time. However,
strong risk management measures including data theft and anti-phishing
controls, e-transaction support and security processes, m-commerce and
strong regulatory oversight will be necessary for this to be a truly mass
phenomenon in the country.
+ Driving advertiser acceptance:
The Indian new media industry, especially web publishing, has shown strong
growth in recent years especially with rise in social networking and e-
commerce. This growth has been evident both in traffic as well as revenues
for the industry. However, TV and Print continue to be the mass media of
choice in India given the relatively limited reach of the internet. New
media players will need to capitalise further on the measurability and
interactivity of the internet, in order to garner a great share of the
advertising spends in India.
The Indian Film Industry8:
The Indian film industry was estimated to be INR 93 Billion in 2011
indicating a growth of 11.5 percent vis-a-vis 2010.Quality content combined
with the revival of Hindi films with mass connect improved the occupancy
rates which in-turn increased domestic box-office collections. Competitive
bidding by broadcasters for large budget films resulted in 26 percent
growth of cable and satellite rights. Albeit on a small base, ancillary
revenues such as licensing and merchandising, in-cinema advertising and pay
per view also displayed strong growth in 2011. With several high budget
Hindi releases lined up across the year, 2012 is expected to sustain the
growth momentum witnessed in 2011. The Indian film industry is projected to
grow at a CAGR of 10.1 percent to touch INR 150 Billion in 2016. The
industry expects domestic theatrical revenues to continue dominating the
overall pie. However, C&S rights and overseas theatricals revenues are
expected to increase their share. Strong marketing of films in the
International market could further accelerate the growth of overseas
theatricals revenue.
Size of Indian 2007 2008 2009 2010 2011 CAGR
Industry Flim (2007-11)
Industry
(INR Bn)
Domestic Theatrical 71.5 80.2 68.5 62 68.8 -1.0%
Overseas Theatrical 8.7 9.8 6.8 6.6 6.9 -5.5%
Home Video 3.3 3.8 4.3 2.3 2 -12.0%
Cable & Satellite
Rights 6.2 7.1 6.3 8.3 10.5 14.0%
Ancillary Revenue
Streams 2.9 3.5 3.5 4.1 4.7 12.3%
Total Industry Size 92.7 104.4 89.3 83.3 92.9 0.1%
Size of Indian 2012P 2013P 2014P 2015P 2016P CAGR
Industry Flim (2010-15)
Industry
(INR Bn)
Domestic Theatrical 73.5 80.2 88 97.2 108 9.4%
Overseas Theatrical 7.5 8.3 9.2 10.2 11.5 10.5%
Home Video 1.7 1.4 1.2 1 0.9 -15.0%
Cable & Satellite
Rights 12 13.7 15.6 17.8 20.3 14.2%
Ancillary Revenue
Streams 5.4 6.2 7.2 8.3 9.6 15.4%
Total Industry Size 100 109.7 121.1 134.5 150.3 10.1%
Source: KPMG in India analysis and industry interviews
Key risks & challenges for the Indian Film Industry9
+ Reliance on Theatrical revenues:
While non-theatrical revenue streams, especially cable & satellite, are
showing strong signs of growth for the industry, the industry`s reliance on
pure theatrical revenues continues to be very high. Considering the
inherent discontinuous nature of the film business and competing
entertainment choices available to consumers, theatrical revenues can be
highly volatile. In context of growing competition, costs of production and
marketing, it`s critical that appropriate risk mitigation strategies are
adopted to manage the theatrical volatility.
+ Release schedules:
Typically, any given week during the rest of the year has about three Hindi
releases, one regional release, one Hollywood release and some films
running from previous weeks. As a result at any point in time about 7-10
films are jostling for screen space. With all three major festival weekends
of Diwali, Id and Christmas falling in the last quarter of the year, the
industry continues to have a large share of big budget releases during this
period. All three top grossing films in last year were released in this
period. Given the volatile supply levels in the Industry, apart from a
variety of other entertainment options available to consumers, scheduling
has become a critical determinant of box office viability and there are a
multitude of factors that can impact this process.
+ Tax rationalisation critical:
With theatre viewing limited to 3-5 percent of the Indian population, the
film industry stands to gain immensely by increasing the overall size of
the addressable market. Firstly, India is a severely under-screened market
(12 compared to 31, 81 and 131 in China, Europe and USA
respectively).Though there have been recent attempts to improve this
scenario, the process is capital and time intensive and return on
investment cycles may drag on with higher real estate prices and stagnant
occupancy rates. There is a lack of standardization across the country with
entertainment being a state subject. Rationalization of the tax structure
across the country may increase the total pie of cinema going audience,
avoid distortion in theatre density and support the overall growth of the
film industry especially for national theater chains and pan-India film
production houses.
+ Lack of quality shooting infrastructure:
Despite being a huge film-producing nation, there are only four major film
cities in the country which are located at Mumbai, Hyderabad, Noida and
Chennai. A rapid growth in broadcast and advertising requirements has
exerted strong pressure on each of these cities. Though there is a clear
potential for absorbing additional floor space, high real estate prices
have made this option increasingly difficult.
The Indian Publishing Industry10:
In the calendar year 2011, the INR 209 billion print industry grew by 8.4
percent from INR 193 billion in 2010. The growth in advertisement revenues
has been at a CAGR of 8.7 percent, whereas circulation revenues have
displayed a CAGR of 3.7 percent between 2007 and 2011. The advertisement
revenues continued to be the main source of revenue for the print industry,
contributing 67 percent to industry`s revenues.
The magazine industry was valued at INR 13 billion in 2011. Some of the key
trends observed in the magazine space include:
+ Entry of international titles: With the easing of entry norms for
international magazines, foreign publishers are entering the Indian
magazine market, which has expanded despite the global economic recession.
This trend has been most visible in the premium segment of the magazine
market.
+ Strengthening of cover prices: Most publishing groups increased the cover
prices of their magazines. The trend is more dominant in the English
language category than in any other language.
+ Diversification of revenue lines: Till recently, a majority of magazine
revenues were generated from advertising. However, the industry is
observing magazine players moving towards alternate revenue sources such as
events, activations, online lead generation and digital media platforms.
The last year saw expansion of niche category magazines in the regional
markets.
Key risks & challenges for the Indian Publishing Industry11:
+ Scaling operating costs:
Managing volatility in key operating costs such as printing & raw
materials, distribution, marketing is key for the industry, both from the
perspective of dailies and magazines.
+ Digital frontier:
With the spurt of technological advances, the channels of consumer
engagement are rapidly evolving. While Internet penetration is still low in
India (2 percent) as compared to the mature markets such as Hong Kong (41
percent), France (35 percent), US (29 percent), etc., the next phase of
technological progress is stimulating the industry. As broadband, smart
phones and tablets proliferate, the print medium, must prepare to meet this
challenge head on. The future of the industry depends on effectively
exploiting the digital opportunity as well as improving efficiency by
employing innovative business models.
+ Advertiser proposition:
With rapid evolution in the media choices and consumption patterns, the
publishing industry will need to re-examine its proposition from the
advertiser perspective. Apart from a new media presence, delivery of 360
degree solutions to clients will be critical in the future including areas
such as events, brand activation etc which are focused on specific
communities and interest groups.
+ Talent:
The industry will need to attract editorial and production talent that is
multi-media ready and can manage a `digital newsroom` environment.
BUSINESS OVERVIEW:
We are a leading media and entertainment company in India, reaching an
average of approximately 192.2 million television viewers in the last
calendar year (Source: TAM; Cs 4+ yrs; Market All India, All day parts, 1
Jan `11 to 31 Dec `11) and an average of 30.8 million digital unique users
each month globally in the year ended December 31st, 2011 (Source:
ComScore). We have interests in television, internet, filmed entertainment,
e-commerce, magazines, mobile content and allied businesses. We broadcast
television channels across genres such as general news, business news,
Hindi general entertainment, kids, youth, English entertainment, factual
entertainment and teleshopping, primarily in English, Hindi and key
regional languages. We entered the Internet industry in June 2000 and have
since established a number of digital and mobile properties offering
digital content and e-commerce, including home shopping and online
ticketing. We also publish special interest business-to-consumer and
business-to-business magazines and have a presence in film production and
distribution. We also are present in service areas such as events and sport
management and financial data terminals.
Through our subsidiary TV18 Broadcast, we operate one of India`s leading
television broadcasting and distribution assets. We operate business news
channels CNBC-TV18, CNBC Awaaz & CNBC-TV18 Prime HD and general news
channels - CNN-IBN, IBN7, and IBN-Lokmat, one of the leading Marathi
regional news channels in partnership with the Lokmat group. Our
subsidiary, TV18 Broadcast also operates general entertainment channels -
Colors, Colors HD,MTV, VH1, Nick, Sonic,Comedy Central (through Viacom18, a
joint venture with Viacom Inc) and a factual entertainment channel
HistoryTV18 (through A+E Networks|TV18, a joint venture with A+E
Networks).We also operate a filmed entertainment business through Viacom18
Motion Pictures. Our news and entertainment segments are engaged in the
programming, production and broadcasting of business and general news,
general entertainment, kids, music, factual entertainment, teleshopping
television channels and the acquisition, production, syndication, marketing
and distribution of films.
Our digital and e-commerce segment offers a collection of digital and
mobile properties catering to a wide range of interests and services,
including news, music and entertainment, markets and finance, social
networking, consumer information, local search, online shopping and
ticketing, and mobile phone services and applications. We operate digital,
publishing and e-commerce assets including one of India`s largest internet
players, Web18 which houses the country`s leading web content properties
such as moneycontrol.com, ibnlive.com, in.com and firstpost.com. We also
operate one of the leading e-commerce properties - HomeShop18 and
bookmyshow.com, and publish Forbes India, India`s first local edition of a
foreign news magazine title and one of the world`s most influential
business brands, in collaboration with Forbes Media. In addition, we
operate Newswire18, one of the leading real time financial information and
news terminal services, and Network18 Publishing, one of the leading
players in the special interest publishing space as well as E18 and
Sport18, our events and sports management and marketing ventures. According
to Comscore, we are one of the most popular Indian digital media companies
on a worldwide basis (Source: Comscore Dec 2011) attracting an average of
approximately 30.8 million unique visitors globally per month for the year
ended December 31st, 2011. Unique visitors to our sites grew to 27.4
million in December 2011, and in the period ended December 31st, 2011, we
recorded over 92.3 million total visits to our sites, according to
Comscore. HomeShop18 is India`s most popular India-based home shopping
network with an average market share of 64% amongst 24-hr home shopping TV
channels (Source: TAM, TG: CS 4+, Markets: All India, Time Period:Wk 33-
53,2011) and reaching over 11.3 million TV audiences (Source: TAM, TG: CS
4+, Markets: All India, Time Period: 01st January- 07th January `12). Our
allied businesses segment primarily publishes business and consumer
directories, such as Yellow Pages, and special interest publications, such
as Overdrive, Chip, Forbes India. It also operates ancillary businesses,
including event management and sports marketing, which we believe
complement and provide special support services to our other businesses. We
hold significant investments, such as those in Yatra Online Inc., an
Internet-based travel booking company.
Financial Performance Summary:
Consolidated revenues for the full year 2011-12 stood at Rs. 1943.1 crores
on a reported basis, a growth 31% over last year. Consolidated revenues
from our consolidated operations stood at Rs. 1784.9 crores, a growth of
21% over last year.
Network18 Consolidated Summary
for Continuing Operations*
All figures in INR crores FY12 FY11
Revenues 1784.9 1477.9
News 629.4 566.1
Entertainment 635.1 549.2
Digital Content and eCommerce 233.8 198.2
Allied Businesses 474.5 295.7
Less: Inter Segmental Revenues (187.8) (131.3)
Operating Profit (150.6) 40.2
News 50.3 74.4
Entertainment 33.3 61.0
Digital Content and eCommerce (126.3) (51.5)
Allied Businesses (118.8) (46.0)
Less: Inter Segmental Operating
Profit 10.9 2.3
Television Business:
I. We successfully launched five channels during the year - History TV18,
Comedy Central, Sonic, Colors HD and CNBC TV18 Prime HD. History TV18 has
emerged as the No. 2 channel in the genre and is challenging the leader.
II. Our continuing operations for our television business (excluding
discontinued operations and new launches) continued to perform well in the
backdrop of an extremely challenging macro-economic environment for the
industry. Consolidated revenues from continuing operations stood at Rs.
1251.7 crores, a growth of 12% over previous year. Our operating profit
from continuing operations stood at Rs. 83.6 crores.
TV18 Consolidated Summary for
Continuing Operations*
All figures in INR crores FY12 FY11
Revenues 1251.7 1115.0
News 629.4 566.1
Entertainment 635.1 549.2
Less: Inter Segmental Revenues (12.8) (0.3)
Operating Profit 83.6 135.4
News 50.3 74.4
Entertainment 33.3 61.0
Operating Margin 7% 12%
News 8% 13%
Entertainment 5% 11%
III. Our subscription revenues from our television business stood at
Rs.189.9 crores for the full year growing by over 50% over last year.
IV. News and Infotainment:
Our revenues from our news business stood at Rs. 629.4 crores for the full
year growing by 11% over last year.
a. Our Business News Channels - CNBC TV18 and CNBC Awaaz continued to be
market leaders during the year.
b. Our General News Operations - CNN IBN, IBN7 and IBN Lokmat performed
particularly well in a highly competitive market and our revenues for the
full year grew by 16%. Our national news operations are now break-even.
News Summary
FY12 FY11
Revenues 629.4 566.1
General News 302.8 260.3
Business News 326.6 305.8
Operating Profit 50.3 74.4
General News (4.3) (13.6)
Business News 54.7 88.0
Operating Margin 8% 13%
General News -1% -5%
Business News 17% 29%
c. History TV18 was launched in October 2011 and met with unprecedented
success. It is already the No. 1 in its genre in the six metros, and at a
national No. 2 is challenging the leader. It is available in 9 languages
now.
V. Entertainment:
Our revenues from our continuing operations of our entertainment business
stood at Rs. 635.1 crores for the full year growing by 16% over last year.
Our profits from our continuing operations stood at Rs. 33.3 crores.
a. Colors turned in another steady year in the Hindi GEC space against the
backdrop of a highly competitive market environment. The channel continued
to deliver ratings across programming categories: Fiction, Reality and
Movies.
b. MTV is a leader in the youth genre. It has emerged as one India`s
largest platforms to build and engage youth over various channels.
c. Nick, our kids channel and Sonic - the channel for the action loving
generation launched on December 20th 2011 continue to be market leaders in
their genre and innovate continuously.
d. The world`s largest comedy channel Comedy Central was launched in India
during the year and has been a runaway success - it is now the No. 1
channel in its genre.
e. Viacom18 Motion Pictures had a steady year. We released the highly
successful and critically acclaimed movie - `Kahaani` and other successful
movies like `Pyaar ka Punchnama`, `Shaitan`, etc. during the year.
Digital Content and eCommerce:
Network18 is one of the largest Indian digital media companies in the world
in terms of unique visitors as per Comscore. Our revenues for the year for
the segment stood at Rs. 233.8 crores, registering a growth of 18%, over
the last year on a proforma basis.
Digital Content and eCommerce Summary
All figures in INR crores FY12 FY11
Revenues 233.8 198.2
Web18 (including Bookmyshow) 99.4 86.9
HomeShop18 89.6 71.4
Newswire18 44.8 39.8
Operating Profit (126.3) (51.5)
a. Web18 (Content Operations + Bookmyshow) recorded revenues of Rs. 99.4
crores. Moneycontrol.com continues to grow rapidly consolidating its
leadership position. It had more than 7.8 MM unique visitors in March.
Ibnlive.in.com and firstpost.com continued to provide breaking news and
views to digital audiences and are among the Top10 sites in the news
category. In.com continued to build on its content offerings.
b. Bookmyshow.com continued on a strong growth trajectory during the year
and is now a profitable operation.
c. Newswire 18 delivered revenues of Rs. 44.8 crores for the year
registering a growth of 25% over the previous year.
d. HomeShop18 had another great year scaling rapidly across all key
operating parameters while delivering `customer service excellence` across
touch points. HomeShop18 recorded revenues of Rs. 89.6 crores for the year,
revenues grew at 26% over the previous year. Orders executed during the
year grew by over 126% YOY. www.homeshop18.com continued to exhibit strong
growth momentum and launched India`s largest book store with over 10
million titles.
Allied Businesses:
Our revenues for the year from our Allied Businesses stood at Rs. 474.5
crores.
a. Forbes India continued to build on its impressive market leadership. We
launched Yellow Pages in eBook format which can be downloaded from our site
www.yellowpages.co.in. Our magazines division continued to grow well.
b. Ask Me - our local search engine was launched in Mumbai during the year
and has been received well.
c. Capital18 investee companies exhibited strong growth momentum over the
year and most of the portfolio companies are now break-even or better.
d. Sport18 and E18 continued to build and innovate in their respective
niches.
* The above summary is for continuing Operations only excluding new
launches at both Viacom18 and AETN18 and discontinued operations - TIFC and
Hindi Movie Channel. One-time losses amounting to Rs. 127.0 crores during
the full year were incurred with respect to our discontinued operations -
deferment of the Hindi movie channel and TIFC. Rs. 52.6 crores was incurred
during the year with respect to costs towards our new channels - Sonic,
Comedy Central and Colors HD. Only 50% of these losses at Viacom18 are
reported above. We also incurred operating losses amounting to Rs. 48.3
crores for the full year FY12 towards the launch costs of our new channel
History TV18.
Consolidated segmental numbers are on a proforma basis and not audited.
OUR STRENGTHS:
We believe that we have the following competitive strengths:
One of India`s leading media and entertainment companies:
We are one of India`s leading media and entertainment companies, with an
integrated cross-media portfolio that attracts a wide spectrum of economic
sections and demographic groups in India. We hold leadership positions in
our news, entertainment and digital and e-commerce business segments. We
are one of the leading news networks in India, operating news television
channels: CNBC-TV18, CNN-IBN, IBN7, CNBC Awaaz, IBN-Lokmat, CNBC-TV18 Prime
HD. We also operate entertainment television channels: Colors, Colors HD,
MTV India, Vh1, Nick, Sonic, Comedy Central and HistoryTV18. We also hold
and operate market-leading digital and e-commerce assets, including
moneycontrol.com, ibnlive.com, firstpost.com, in.com, homeshop18.com and
bookmyshow.com
We believe that the scale of our platform permits us to leverage our
existing media properties through cross-media marketing of our brands and
exercise increased bargaining power with our advertisers and other business
partners. We believe that the reach of our cross-media platform and strong
brands have established us as an important media network for advertisers,
and agencies acting on their behalf, to reach their target audiences. For
example, we believe our English and Hindi language television news
channels, including those affiliated with CNBC and CNN, and
moneycontrol.com enable us to target Indian business leaders, investors and
affluent Indians, which are attractive audiences for advertisers in India.
As a television network, we reached an average of approximately 192.2
million television viewers in the last calendar year (Source: TAM; Cs 4+
yrs; Market All India, All day parts, 1 Jan `11 to 31 Dec `11) . According
to Comscore, we are one of the most popular Indian digital media companies
on a worldwide basis (Source: Comscore Dec 2011) having attracted an
average of approximately 30.8 million unique visitors globally per month
for the year ended December 31st, 2011.
Strong portfolio of market-leading brands:
We have well-established brands across all the key segments we operate in
including television, digital and print publishing, e-commerce etc. Colors,
our Hindi general entertainment television channel, was among the top
ranking television channels in its genre in terms of viewership with a 20%
market share (Source: TAM, Avg. Weekly GRP`s, Period: wk 1 - 53 (Jan-Dec)
2011, CS 4+, HSM) and a 5.12% viewership market share amongst all TV
channels in the year 2011. (Source: TAM; TG: CS 4+; Market: All India;
Period: wk 1-53 2011, All Days, 0000-2400 hrs). In the financial year 2011-
2012, it was the 2nd ranked television channel in its genre in terms of
viewership with a 19% market share (Source: TAM, , Period: 1st Apr `11 -
31st Mar `12, CS 4+, HSM) and a 6.8% market share amongst all TV channels
in the fiscal year 2011. (Source: TAM; TG: CS 4+; Market: HSM; Period: 1st
Apr `11 - 31st Mar `12, All Days, 0000-2400 hrs). In fact, within a few
weeks of its launch, Colors had become the No.2 GEC in India (Source: TAM
CS4+, HSM, September 28-October 11, 2008 GRPs) and within 9 months from its
launch it became India`s No.1 Hindi GEC for the first time in the week
ended April 11, 2009, (Source: TAM CS4+, HSM, April 5-11, 2009).
CNBC-TV18 and CNBC Awaaz, our business news television channels, were
leaders in the English and Hindi business news genres with a 57% combined
market share in the year ended December 31st, 2011, according to
TAM.(Source: TAM; TG : CS AB Males 25+, Market: All India (excl Jharkhand
0.5mn), Period: 1st Jan-31st Dec 2011, All Days, 0600-2400 hrs). CNN-IBN,
our general English news television channel, was the market leader in the
general English news genre with a market share of approximately 35% in the
English General news genre (Source: TAM Market Share, Market: All India,
Period: Wk 47 `11 - Wk 01 `12, Time Period: 0600-2400, All Days, TG: CS AB
Male 15+), in the 8 weeks ending Jan 7th, 2012. We believe that the
strength of our brands in the business and general news genres has
benefited from our brand licensing alliances with CNBC and CNN, which we
believe provide us with a competitive advantage in the India media and
entertainment industry. Nick, our entertainment television channel in the
kids category, was the market leader in its genre with a market share of
approximately 20% in the year 2011, according to TAM. (Source: TAM Period:
Wk 1-53 (Jan-Dec) 2011, 4-14 ABC All India 07:00 - 22:00). In the financial
year 2011-2012, Nick was a leader in reach with 35% in the kids category
(Source TAM 4-14 ABC All India 07:00-22:00 Apr`2011-Mar`2012). MTV, our
music channel, also was a market leader in its genre with a 24% market
share (Source: TAM Market Share, Period: Wk 1-53 (Jan-Dec) 2011, 15-24 SEC
ABCD, HSM 07:00 - 22:00). In the financial year 20112012, MTV India with
23% market share was the most preferred youth channel in India with a mix
of music & youth content in the youth genre (Source: TAM, Period- FY2011-
2012 i.e. Apr 2011-Mar 2012, 15-24 SEC AB, HSM, 07:00 -22:00).
According to Comscore, moneycontrol.com is India`s most popular non-bank,
financial services portal, attracting approximately an average of 5.1
million unique visitors per month globally in the year ended December 31st,
2011, and in.com is one of India`s leading India-based news and
entertainment portal, attracting approximately an average of 25.1 million
unique visitors per month globally in the year ended December 31st, 2011.
HomeShop18 is India`s most popular India-based home shopping network with
an average market share of 64% amongst 24-hr home shopping TV channels
(Source: TAM, TG: CS 4+, Markets: All India, Time Period:Wk 33-53,2011) and
reaching over 11.3 million TV audiences (Source: TAM, TG: CS 4+, Markets:
All India, Time Period: 01st January- 07th January `12). Our ticketing
brand bookmyshow.com is a leader in the entertainment ticketing space in
the country. It provides online booking for movies, plays, sporting events
and shows across India and its services extend to 100 cities across India.
As of December 31st, 2011, bookmyshow.com had approximately 2.7 million
registered users and recorded an average of 2 million unique visitors per
month in the year ended December 31st, 2011, according to Google Analytics.
In December 2011, bookmyshow.com recorded approximately 5.5 million total
visits, which represents growth of 58% from approximately 3.5 million
visits in December 2010, according to Comscore. We sold an average of over
1,000,000 tickets per month on bookmyshow.com in the in the last nine
months ended December 31, 2011.
We believe our market-leading brands allow us to cross-promote our brands
through our television channels, digital and mobile properties and
publications, attracting an increased number of users and greater
advertising and subscription revenues. Further, based on our reputation and
market-leading brands, if we choose to enter any other complementary media
segments or genres, we believe we will be able to grow our advertiser and
user bases more quickly than many of our competitors. We have invested in,
and continue to promote, our brands through a focus on quality content and
the use of various promotional and marketing tools.
Experienced management team:
Our management team comprises industry executives with a significant number
of years of experience in the Indian media and entertainment industry
across various functions. For example, our founder and Managing Director,
Mr. Raghav Bahl, has been named `Media Person of the Year` by the All India
Management Association in 2011 and `Entrepreneur of The Year for Business
Transformation` by Ernst & Young in 2007. Our management`s expertise and
knowledge of the Indian media and entertainment industry allows us to
create products and platforms in response to audience preferences and
industry drivers and trends. For example, during the past few years, we
successfully built and launched HomeShop18, India`s most popular India-
based home shopping network with an average market share of 64% amongst 24-
hr home shopping TV channels (Source: TAM, TG: CS 4+, Markets: All India,
Time Period:Wk 33-53,2011) and reaching over 11.3 million TV audiences
(Source: TAM, TG: CS 4+, Markets: All India, Time Period: 01st January-
07th January 2012). Another example is Colors, our foray into the highly
competitive Hindi general entertainment genre, which was launched in July
2008.Within a few weeks of its launch, Colors had become the No.2 GEC in
India (Source: TAM CS4+, HSM, September 28-October 11, 2008 GRPs) and
within 9 months from its launch it became India`s No.1 Hindi GEC for the
first time in the week ended April 11, 2009, (Source: TAM CS4+, HSM, April
5-11, 2009).
If we choose to enter a new media segment, or develop a business in one of
our existing segments, we believe our management and experienced editorial
staff will be well-positioned to successfully implement our strategic
plans.
Ability to collaborate strategically with global and local media companies:
We have an established track record of entering into successful strategic
alliances with leading global and Indian media companies. We have forged
alliances with several leading global media players including Viacom in
entertainment, CNN in English general news, CNBC in business news, Lokmat
in Marathi regional news, A+E Networks in factual entertainment, and Forbes
in publishing. We believe that we derive substantial benefits from the
association with our partners and that our partners recognize the value we
bring to these ventures which is demonstrated by their willingness to
collaborate with us for extended periods. We believe that our alliances
with partners provide us with greater market visibility, significant
synergy upsides through sharing of strengths, reputational benefits and
will assist us in continuing to build our businesses, both in India and
internationally.
OUR BUSINESS:
We are a leading media and entertainment company in India with interests in
television, internet, filmed entertainment, e-commerce, magazines, mobile
content and allied businesses. Through our subsidiary `TV18 Broadcast Ltd.`
[BSE: 532800, NSE: TV18BRDCST], the group operates news channels - CNBC-
TV18, CNBC-TV18 Prime HD, CNBC Awaaz, CNN-IBN, IBN-7 and IBN-Lokmat (a
Marathi regional news channel in partnership with the Lokmat group). TV18
also operates a joint venture with Viacom, called Viacom18, which houses a
portfolio of popular entertainment channels - Colors, Colors HD, MTV,
SONIC, Comedy Central, VH1 and Nick - and Viacom18 Motion Pictures, the
group`s filmed entertainment business. TV18 has also forayed into the
Indian factual entertainment space through A+E Networks | TV18 (Joint
venture between A+E Networks and TV18 Broadcast), which has recently
launched a new channel - HistoryTV18. Through `Network18 Media &
Investments Ltd.` [BSE: 532798, NSE: Network18], the group operates its
digital, publishing and e-commerce assets including moneycontrol.com,
ibnlive.com, in.com and firstpost.com. `Network18` also operates e-commerce
properties like HomeShop18 and bookmyshow.com and publishes Forbes India,
the nation`s first local edition of a foreign news magazine title and one
of the world`s most influential business brands, in collaboration with
Forbes Media. In addition, through `Network18`, the group operates
Newswire18, providing real time financial information and news terminal
services, and Network18 Publishing, a player in the special interest
publishing space as well as E18, the group`s event management venture and
Sport18, its sports management and marketing venture. `Network18` has
investments in Yatra, DEN Networks and other Capital18 portfolio companies.
TELEVISION BROADCASTING:
We have television channels in news and entertainment genres, including
general news, business news, Hindi general entertainment, kids, factual
entertainment, youth, English & factual entertainment genres and 1
additional 24-hr home shopping channel. Our TV Network reached an average
of approximately 192.2 million television viewers in the last calendar year
(Source: TAM; Cs 4+ yrs; Market All India, All day parts, 1 Jan `11 to 31
Dec `11)
NEWS:
We operate one of India`s leading television news networks. Our business
news channels are CNBC-TV18, CNBC Awaaz, CNBC-TV18 Prime HD and our general
news channels are CNN-IBN, IBN7 and IBN-Lokmat. Our long term brand
licensing arrangements with CNBC and CNN have helped us strengthen our
brand recall with Indian audiences. We believe that our strong branding,
local programming, award-winning journalists and national news gathering
infrastructure have established us as one of India`s respected and credible
news networks. Our guiding editorial philosophy is to provide coverage of
both Indian and global news with a balanced perspective, in-depth analysis
of critical issues and investigative reports in compelling presentation
formats.
Business News:
CNBC-TV18 & CNBC Awaaz are pioneers of business news broadcasting in India
and have been acclaimed as leaders in the business news genre on Indian
Television. The Network18 Group launched its business news operations in
India with the launch of CNBC-TV18 in December 1999. In January 2005, the
reach was expanded into Hindi-language business news with the launch of
CNBC Awaaz. CNBC-TV18 and CNBC Awaaz, our business news television
channels, were leaders in the English and Hindi business news genres with a
57% combined market share in the year ended December 31st, 2011, according
to TAM.(Source: TAM; TG : CS AB Males 25+, Market: All India (excl
Jharkhand 0.5mn), Period: 1st Jan-31st Dec 2011, All Days, 0600-2400 hrs).
The majority of our business news programming is researched, produced and
edited by our local editorial teams and in-house studios, although we
supplement this programming with CNBC`s global content through our
agreement with CNBC-AP.
The audience for CNBC-TV18 and CNBC Awaaz is highly diversified comprising
of key groups such as business leaders, professionals, retail investors,
brokers and traders, intermediaries, self employed professionals, high net
worth individuals, students and even homemakers.
We believe CNBC-TV18 and CNBC Awaaz attract a considerable level of out-of-
home viewership, particularly in corporate offices, public marketplaces and
other business areas. Thus, we believe that our viewership in the English
and Hindi business news genres is higher than the viewership reported by
TAM, which measures only in-home viewership. As evidence of this and the
reach of these channels to affluent business leaders in India, the
advertising power ratios of our business news television channels are
higher than those of our entertainment television channels. Amongst all
television genres, English General News and English business news enjoy the
highest power ratios (ad revenue percentage to viewership percentage ratio)
of 8.95 and 8.06 respectively as per FICCI KPMG Frames Report 2011. Our
channels, due to their leadership, command a significant proportion of ad
revenues in their respective genres.
CNBC-TV18: CNBC-TV18 is India`s No.1 English language business news
television channel in terms of viewership, with 49% market share in the
English business news genre (Source: TAM, Period: 1st Jan-31st Dec 2011, TG
: CS AB Males 25+, All India (excl Jharkhand 0.5mn), 0600-2400 hrs). It is
a pay channel targeted at English speaking consumers, investors, business
leaders and other professionals and provides 24-hour coverage of corporate
news, financial markets, industry news and expert perspectives on investing
and management. CNBC-TV18 also airs programs that focus on the economic,
governmental and cultural drivers that shape business in India. We operate
this channel through an agreement with CNBC that gives us non-exclusive
rights to distribute, re-transmit and exhibit, whether directly or through
third party distributors, CNBC content within India. CNBC-TV18 is
integrated across digital platforms and also provides news headlines, live
streaming video feeds and financial market information via its website,
moneycontrol.com, and mobile applications. CNBC-TV18 hosts a number of
industry benchmark awards, such as the `India Business Leader Awards`,
`Emerging India Awards`, `CFO Awards` to recognize excellence in business
leadership. Some of the popular programs on CNBC-TV18 include `Bazaar
Morning Call`, our daily market opening show, and `India Business Hour`,
which is a recap of the day`s key business news. We also broadcast targeted
special interest programs, such as `Young Turks`, a show on young
entrepreneurs and achievers, `Storyboard`, an advertising and marketing
program, `Indianomics`, a weekly program on India`s place in the global
economy, `The Firm`, a weekly show on corporate law, `Overdrive`, an
automobile program, and `Tech Toyz`, a weekly program showcasing new
consumer gadgets and technology. Over the years, CNBC-TV18 has received
numerous awards including:
- Across the years, multiple `Best Business Channel` citations for CNBC-
TV18 at leading forums like the Indian Television Academy Awards, Indian
Telly Awards, News Television Awards (NT Awards).
- Awards for CNBC-TV18`s leading programs such as `Young Turks` (`Best
Business Talk Show`, NT Awards 2007 & 2008), `India Business Hour` (Daily
primetime news cast, NT Awards 2010), `What`s Hot`( `Best Talk Show on News
& Current Affairs` 2005), `Tech Toyz` (Technology show, NT Awards 2010),
`Storyboard` (`Best Business News Show English`, NT Awards 2007),
`Overdrive` (`Auto show`, NT Awards 2010)
- Awards for CNBC-TV18`s leading journalists like Udayan Mukherjee (`Best
Business News Anchor`, NT Awards 2007, 2010 & 2011, Ramnath Goenka
Journalist of the Year(Broadcast) 2012 )
- CNBC-TV18 has been rated as `India`s No.1 English News Channel` by the
Exchange4media `Pitch Brandometer Survey` 2009 & 2010
- Awards for numerous channel promos and creative work at acclaimed
platforms such as Rapa, Promax & Promax BDA, News Television Awards.
CNBC Awaaz: CNBC Awaaz is India`s No.1 Hindi business news television
channel in terms of viewership, leading with 65% market share in the Hindi
business news genre (Source: TAM, Period: 1st Jan-31st Dec 2011, TG : CS AB
Males 25+, HSM (excl Jharkhand 0.5mn), 0600-2400 hrs). CNBC Awaaz is a pay
channel aimed at Hindi speaking consumers, retail investors and business
people and provides 24-hour coverage of subjects such as stock markets,
mutual funds and commodities. It also offers a variety of personal finance
programs covering topics such as financial literacy, shopping trends,
service and product launches and personal taxation. Among CNBC Awaaz`s
popular programs are `Stock 20-20`, a pre markets opening show, `Aaj Ka
Karobaar` a daily evening program and leading feature shows like `Tech
Guru`, `Property Guru`.
* `Numero Uno Business Channel` (NT Awards 2008)
* Awards for programming such as `Pehla Sauda (`Live telecast show`,NT
Awards 2010),`Awaaz Entrepreneur` (`Business Features Show`, NT Awards
2010), `Tax Guru` (`Best Business Talk Show`, NT Awards 2009), `Kaun Rahega
Crorepati` (`Best Business Talk Show`,NT Awards 2008) etc
General News:
We operate 3 general news channels, namely CNN-IBN, IBN7 and IBN-Lokmat (In
partnership with Lokmat Group). Through the `IBN Network` of general and
regional channels, we have established a strong presence in English, Hindi
and regional news categories in the country. In the last few years, CNN-
IBN, IBN 7 and IBN-Lokmat have come to represent a new credo in journalism
epitomized by the values of `Whatever it takes` and enlightened citizen
activism.
CNN-IBN: CNN-IBN was launched in December 2005 as a 24-hour English news
channel in India and has since become one of India`s leading English
language news and current affairs channels, capturing a genre leading 35%
market share (Source: TAM Market Share, Market: All India, Period: Wk 47
`11 - Wk 01 `12, Time Period: 0600-2400, All Days, TG: CS AB 15+).It is a
pay channel that provides 24-hour coverage of national and international
news relating to politics, business and financial affairs, sports and
entertainment. CNN-IBN, we believe, is regarded for its editorial
integrity, high production standards and unbiased, issue based coverage of
news and current affairs. The channel has transcended television, and
reaches its viewers through various other media like Internet, mobile and
voice. Among CNN-IBN`s popular programs are `India at 9`, `Face the Nation`
and `Good Evening India`, our daily primetime news programs. CNN-IBN also
pioneered the concept of inclusive journalism in India with its program,
Citizen Journalist and airs various news-driven specials from time to time.
CNN-IBN is also integrated with the digital media businesses of Network18.
Audiences can watch live streaming video feeds, access our live news
updates and connect and interact with our news editors through our website
www.ibnlive.com, our mobile applications and various communities.
Ibnlive.com provides streaming video feeds, downloadable tickers and
breaking news alerts on cell phones.
Key Awards for CNN-IBN:
- Across the years, multiple `Best English News Channel` awards for CNN IBN
at leading forums like the Indian Television Academy Awards, Indian Telly
Awards, News Television Awards (NT Awards)
- Multiple Awards for Rajdeep Sardesai, Editor-in-chief for IBN channels
and other leading journalists
o Rajdeep Sardesai: `Best News Anchor`, ITA Awards (2006 to 2011), News
Television Award (2007,2008,2010,2011), Ramnath Goenka Excellence in
Journalism award (2006-2007)
o Karan Thapar: Asian Television Awards (2007,2010), News Television
Award 2011, Indian News Broadcasting Awards (2008)
- Awards for CNN IBN`s leading programs such as `Citizen Journalist Show`
(Asian Television Awards 2010, 2011, Indian Television Academy Awards,
Indian Telly Awards 2006,) `India at 9` (Asian Television Award 2010, NT
Awards 2007), `Secret Kitchen` (Best cookery show Indian Television Awards
2008,2011), `State of the Nation` (NT Awards 2008,Indian Telly Awards 2006)
IBN7: IBN7, launched in March 2005, is a 24-hour Hindi language general
news television channel. IBN-7 is emerging as one of the leading Hindi news
channels in the country leading peers such as Zee News, News24, NDTV India
in the Hindi general news genre with a market share of 9.71% (Source: TAM
Channel Share, Market: HSM, Period: Wk 47 `11 - Wk 01 `12, Time Band:0600-
2400, TG: CS Male 25+ yrs). IBN7 provides 24-hour coverage of national and
international news relating to politics, business and financial affairs,
sports and entertainment. IBN7 also provides its news broadcasts; streaming
video feeds, downloadable stock tickers and breaking news alerts for
cellular phones via its website, khabar.ibn.in.com. Key IBN7 Awards:
- Multiple Awards for IBN7`s leading program `Zindagi Live` (`Best News
Talk Show`, NT Awards 2008, 2009,2010), Indian News Broadcasting Award
(2010), Indian Television Awards (2010), Laadli Award (2009 & 2010)
- Awards for numerous channel promos and creative work at acclaimed
platforms such as Promax & Promax BDA, Indian News Broadcasting Awards.
IBN-Lokmat: IBN-Lokmat, a joint venture launched with Lokmat Newspapers
Private Limited, is one of India`s leading Marathi language general news
and current affairs television channels, with a market share of 32% in its
genre (Source: TAM; TG: CS 15+; Market: Maharashtra; Period: 1st Jan-31st
Dec 2011, All Days, 0000-2400 hrs). IBN- Lokmat provides 24-hour coverage
of national and international news relating to politics, business and
financial affairs, sports and entertainment. IBN-Lokmat was the recipient
of 10 Indian News Television Awards in 2011, including the best daily
primetime news show in the Marathi category.
GENERAL ENTERTAINMENT:
We operate a network of general entertainment television channels i.e.
Colors, Colors HD,MTV India, Vh1, Sonic, Nick and recently launched Comedy
Central through Viacom18, a 50-50 joint venture between MTV Asia, a wholly-
owned subsidiary of Viacom International Inc. and TV18 Broadcast Ltd. Our
general entertainment television channels reach approximately an average of
132.2 million viewers across Hindi Speaking Markets and approximately an
average of 156 million viewers across All India every month, according to
TAM (Source: TAM; CS 4+ Yrs; 1st Jan`12 - 31st Mar`12). Viacom18 was also
named one of the best places to work in the media and entertainment
industry by the Great Places to Work Institute in 2012.
COLORS: COLORS is Viacom18`s flagship brand in the mass entertainment space
in India and one of India`s leading 24-hour Hindi entertainment channels in
terms of viewership. A combination of `emotions` and `variety`, COLORS
offers an entire spectrum of emotions to its viewers. From Fiction shows to
format shows to reality shows to blockbuster movies - the basket contains
all `Jasbaat Ke Rang`. `COLORS` is dedicated to promoting `Cohesive
viewing`, through programmes like Balika Vadhu, Uttaran, Na Aana Is Des
Laado, Sasural Simar Ka, Na Bole Tum Na Maine Kuch Kaha amongst others.
`COLORS` is a pay channel. Colors, our Hindi general entertainment
television channel, was among the top ranking television channels in its
genre in terms of viewership with a 20% market share (Source: TAM, Avg.
Weekly GRP`s, Period: wk 1 - 53 (Jan-Dec) 2011, CS 4+, HSM) and a 5.12%
viewership market share amongst all TV channels in the year 2011. (Source:
TAM; TG: CS 4+; Market: All India; Period: wk 1-53 2011, All Days, 0000-
2400 hrs). In the financial year 2011-2012, Colors was the 2nd ranked
television channel in its genre in terms of viewership with a 19% market
share (Source: TAM, , Period: 1st Apr `11 - 31st Mar `12, CS 4+, HSM) and a
6.8% market share amongst all TV channels in the fiscal year 2011. (Source:
TAM; TG: CS 4+; Market: HSM; Period: 1st Apr `11 - 31st Mar `12, All Days,
0000-2400 hrs). In fact, within a few weeks of its launch, Colors had
become the No.2 GEC in India (Source: TAM CS4+, HSM, September 28-October
11, 2008 GRPs) and within 9 months from its launch it became India`s No.1
Hindi GEC for the first time in the week ended April 11, 2009, (Source: TAM
CS4+, HSM, April 511, 2009). Colors is also available as a high definition
service, Colors HD, which is available on key digital platforms that
support HD broadcast. We believe that Colors` success has been driven by
the introduction of fresh concepts in Hindi GEC programming with reality
shows and serials such as `Fear Factor- Khatron ke Khiladi`, `Bigg Boss`,
`Balika Vadhu` and `Uttaran`. Since its rise to No.1, Colors has
consistently remained amongst the top 3 GEC channels. We believe that
Colors, with its consistent leadership in the important and lucrative Hindi
GEC segment, is well positioned to act as a key value driver for Viacom18
and our Company. Key Awards for Colors:
- Multiple Awards for numerous channel promos and creative work at
acclaimed national platforms such as Promax India
- Multiple awards for channel on platforms such as FICCI Frames Excellence
Awards 2010, Indian Television Awards (2009)
- Across the years, multiple awards for shows such as `Balika Vadhu`,
`Uttaran` at Indian Television Academy Awards (2009), New Talent Awards
(2009)
- Multiple awards for several actors: Avika Gaur, (`Child Prodigy`, GR8
Women`s Achiever Award 2009), (New Talent Award 2009),Sparsh Khanchandani,
(`GR8 Young Achiever`, GR8 Women`s Achiever Award 2010)
MTV India: MTV India with 23% market share is the most preferred youth
channel in India with a mix of Music & Youth content in the youth genre
(Source: TAM, Period- FY2011-2012 i.e. Apr 2011-Mar 2012, 15-24 SEC AB,
HSM, 07:00 - 22:00). Over 15 years it has become one of the country`s most
successful youth brands and is one of India`s leading brands in social
media. Globally MTV has been the number one destination across platforms
for young people. On social media, MTV has strong digital presence
connecting a 11 MM duplicated fan base across show pages on Facebook. MTV
India is primarily aimed at young adults aged 15 to 34, with a collection
of music programming, talk shows, fashion and style shows, Bollywood-style
humor shows and adventure shows. MTV India`s popular television programs
include the reality shows MTV Roadies and Splitsvilla. The brand also has a
strong presence in India through a consumer products division. Key Awards
for MTV:
- Multiple Awards for channel properties such as Indian Television Academy
2010 Best `Reality show` award for `MTV Stunt Mania`
- Multiple Awards for numerous channel promos and creative work, year on
year, at acclaimed national and international platforms such as Promax and
Goafest.
Vh1: Vh1 is a leader in the English music and lifestyle genre with a 17%
market share, ahead of all English Entertainment and Lifestyle channels.
(Source: TAM, Period: Wk 1-52 (Jan-Dec) 2011, Markets: 7 Metros TG :< 25
years SEC AB, Time Band: 7:00 to 24:00). The channel runs multiple reality
shows such as Saturday Night Live, Big Brother, Jersey Shore, Yo Momma and
Punk`d.
Nick: Nick is the leading kids` television channel in the country with a
market share of approximately 20% in the year ended December 31, 2011
(Source: TAM Period: Wk 1-53 (Jan-Dec) 2011, 4-14 ABC All India 07:00 -
22:00). In the financial year 2011-2012, Nick was the highest reaching
channel in the kids` category with 35% (Source TAM 4-14 ABC All India
07:00-22:00 Apr`2011-Mar`2012). It is a 24-hour pay channel in Hindi, with
the option of language audio feeds on some platforms including English and
Tamil. With an approach that puts `kids first`, Nickelodeon takes pride in
encouraging kids to be themselves - funny, messy and free-spirited. Being
true to its philosophy of connecting with kids wherever they are,
Nickelodeon gives kids a complete multi-platform brand experience. The
touch points range from on ground interactions, digital innovation and
consumer products to name a few. Nickelodeon has today become the preferred
comedy destination for kids in India, with shows like SpongeBob
SquarePants, Ninja Hattori, Perman amongst many others. Key Awards for
Nick:
- Multiple Awards for numerous channel promos and creative work, year on
year, at acclaimed national and international platforms such as Promax
India, Promax Asia, Promax Global, Asia Image Apollo Awards
- Across the years, multiple awards for channel properties such as `Let`s
Just Play` (WOW Silver Award for `Best Event Property by a Media Brand
2011`, `On ground brand association with a media brand for Horlicks Summer
Growth Carnival 2011`, Goa Fest Silver Award for `Best Use of Media -
Television`, (2009)
Sonic: Sonic, a new action, adventure and animation channel was launched on
December 20, 2011. Sonic is targeted at new young adults, from 10-17 years
of age. Sonic is a 24-hour paid channel that will reach out to over 40
million households in multilingual regional feeds. Sonic provides a
complete multi-platform brand experience from animation and live action
shows to blockbuster movies. Sonic broadcasts some of the popular shows
like `Shaktimaan`, `Supastrikas`, `Kung Fu Panda-The Legend of
Awesomeness`, `Mighty Morphin Power Rangers` & the` Jackie Chan` series
amongst others. Sonic, will also go beyond television to engage and
interact with its target audience by building the online community through
www.sonicgang.com.
Comedy Central: We have recently forayed into the 24 Hour English Comedy
space through Viacom18, by the launch of Comedy Central on January 23,
2012. We believe Comedy Central is the country`s first 24-hour channel
dedicated to English language comedy content.
FACTUAL ENTERTAINMENT
We have recently forayed into the Indian factual entertainment space
through A+E Networks|TV18, a joint venture between TV18 Broadcast and A+E
Networks, the global leader in factual entertainment. This venture recently
launched HistoryTV18 in October 2011. Within a few weeks of launch,
HistoryTV18 emerged as India`s No.1 factual entertainment channel with an
average weekly viewership share of 31% in 6 metros market cluster (Source:
TAM, CS 15+AB, 6 Metros, Week 42, 2011 - Week 13, 2012, 0600-2400 Hrs;
Average Weekly Market Share). HistoryTV18 reaches out to an average of over
22 million viewers every week across the country. (Source: TAM, CS 4+, All
India, Week 42`11-13`12). HistoryTV18 broadcasts award-winning original
non-fiction series and event specials that connect history with viewers in
an informative, immersive and entertaining manner across multiple
platforms.
FILM BUSINESS:
As part of the Viacom18 venture, under the brand name Viacom18 Motion
Pictures, we are involved in the acquisition, production, syndication,
marketing and distribution of full length feature films within India and
the distribution of Indian films in several international markets. Viacom18
Motion Pictures is India`s premier full-service motion pictures company,
with business spanning concept (or creative) development, production,
marketing, distribution, merchandising and syndication, worldwide. To
successfully explore newer genres, differentiated concepts and fresh
talent, Viacom18 Motion Pictures has launched a new banner - `Tipping Point
Films`, which focuses on execution of `clutter-breaking` projects. In
recent times, Viacom18 Motion Pictures has had an unparalleled release
slate with projects across genres, across scale and across talent. This
includes `Shaitan`, `Michael` and `Gangs of Wasseypur` (2 parts), `Buddah`,
`Kahaani` etc. Over the last 3 years, Viacom18 has had to its credit
(through Studio18) some of the biggest hits of the decade including Jab We
Met, Singh is Kinng, Welcome and Ghajini. We have also entered into an
alliance with Paramount Pictures International that gives Viacom18 Motion
Pictures the rights to distribute all Paramount releases in the Indian
subcontinent.
DIGITAL AND E-COMMERCE:
We are India`s most popular online media company, according to comScore
(December 2011), attracting an average of approximately 30.8 million unique
visitors globally per month for the year ended December 31st, 2011. Our
digital and e-commerce segment includes (i) our content business that
includes websites and mobile applications that cover business, sports and
general news, social networking and consumer information and (ii) our e-
commerce business that includes online and out-of-home shopping and
ticketing. Our digital and e-commerce segment includes some of the leading
Internet destinations in India. Our Internet and mobile properties deliver
easy-to-use, informative and interactive experiences to users. Unique
visitors to our sites grew from 23.9 million in December 2010 to 27.4
million in December 2011, and in the period ended December 31st, 2011, we
recorded over 92.3 million total visits to our sites, according to
Comscore.
DIGITAL CONTENT:
moneycontrol.com: According to comScore, moneycontrol.com, which we
acquired in June 2000, is one of Asia`s popular financial news and services
portals attracting approximately an average of 5.1 million unique visitors
per month globally in the year ended December 31st, 2011. It is also the
most popular financial services portal (excluding corporate banking
websites) in India, according to comScore. We leverage our strengths in
financial and business news and analysis in order to produce the content
for moneycontrol.com. It offers investors free access to the latest
business news and market updates, along with articles, independent analysis
of investment options and financial planning, among other services. During
India market hours, our message board, M3, is a popular destination for
traders to exchange views on market and stock movements. Among our popular
free applications is a live portfolio tracker, through which a user can
record, update and analyze his or her financial transactions in real-time.
We also offer a subscription-based service targeted at traders called
PowerYourTrade as part of our moneycontrol.com offering. We also stream
CNBC-TV18 live on moneycontrol.com. As part of our integrated business and
financial services digital offerings, we also offer commoditiescontrol.com,
a website targeted at commodity traders.
in.com: According to comScore, in.com, which we launched in 2008, is one of
India`s leading India-based news and entertainment portals, with
approximately an average of 25.1 million unique visitors per month globally
in the year ended December 31st, 2011. Through this portal we integrate and
aggregate content from our network of websites and popular third party
websites and engage with our users by offering communication and other
services, such as social networking and user-generated content. In.com
offers free content, including personalized communication services, such as
e-mail, and other popular features, such as videos, games, music and other
downloads.In.com also features live streaming video from our television
channels and content partners, in addition to a large collection of songs.
We believe in.com also builds loyalty through our news and opinion
offerings on ibnlive.in.com and our special interest community sites such
as cricketnext.in.com. Ibnlive.in.com is also one of India`s most popular
news destinations. We also work closely with our entertainment channels to
provide internet audiences with an integrated digital experience showcasing
popular programs.
Firstpost.com: According to comScore, Firstpost.com, which was launched in
2011, attracted approximately an average of 2.7 million unique visitors per
month globally in the year ended December 31st, 2011. Firstpost.com is an
exclusive online news and views website that is truly digital and
accessible across platforms and devices. Built on the fundamentals of
blogging and the quick post, user interaction, discussion and debate,
Firstpost presents a digital newsroom powered by expert writer-editors
across the country and the globe to capture what we think is a powerfully
shifting news and media consumption reality. Firstpost explores forms of
curation, opinion writing, long form and short form that will be defined by
sharp and insightful questions, strong commentary, breaking views and
skilful selection and analysis. Its apps are also available on the iPhone
and iPad.
IBNLive.com: According to comScore, IBNLive.com, which was launched in
2006, attracts approximately an average of 4.3 million unique visitors per
month globally in the year ended December 31st, 2011 IBNLive.com provides
not just news but `news with interactivity`. The portals unleashes an era
of true cross media convergence with podcasts and live streaming of with
definitive content. It gives instant updates on the latest happenings the
world over and brings in interactivity, transparency, goodwill and trust.
Users get access to Real Time coverage, sports updates, entertainment buzz,
anchor blogs & chats and Live TV for CNN-IBN, IBN7 and IBNLokmat. Users can
also access ibnlive on their smartphones via apps for iPhone, iPad,
Android, Nokia, BlackBerry and Windows phones and also on WAP.
Mobile applications: We have an integrated strategy across our digital and
mobile offerings. We have one of the largest mobile Internet user bases in
India, with an average of over 13 million visits and 110 million page views
each month in the year ended Dec 31st, 2011. (Source: Google Analytics) We
have built a subscriber base of over 4 million subscribers for more than 70
subscription services across SMS, WAP, IVR and used mobile platforms.
Further, we have mobile-enabled versions of some of our websites and
popular mobile applications, such as IBNLive, M3, and Markets on Mobile.
E-COMMERCE:
Homeshop18: Homeshop18 is India`s first and most popular India-based 24-
hour home shopping service, according to TAM. Through Homeshop18, we
facilitate the sale of various consumer products, including home
appliances, books, music, movies, cameras, mobile phones, jewelry and
watches, through a variety of interactive electronic media, such as
television, dedicated call centers and the Internet. HomeShop18 carries
over 340 brands in more than 20 product categories, which are delivered by
our third party distributors to customers` homes in over 1,600 towns and
cities in India. Each product sold is backed by a guarantee provided by its
manufacturer. In fiscal year 2012, more than 1.9 million transactions were
completed through Homeshop18`s website and telephonic sales by the end of
December 2011, representing a 116% increase during the same period in
Financial Year 2011. Homeshop18.com is one of the most popular India-based
e-commerce website in terms of unique traffic (as per Comscore, Dec 2011).
Homeshop18.com had over 2.1 million unique visitors in Dec 2011, which
represents growth of over 300% from approximately 0.53 million unique
visitors in December 2010. Homeshop18.com also recorded approximately 49
million page views as per comScore in December 2011.The awards won by
HomeShop18 include:
a) Sundeep Malhotra, CEO and Founder, HomeShop18 awarded for `Excellence in
Business Leadership` by Asian leadership award forum.
b) Most admired retailer of the year - Non Store retail-Images Retail Forum
c) E-Retailer of the Year award by Star Retailer at the Franchise
opportunity India Awards
BookMyShow: Bookmyshow.com, operated by Bigtree Entertainment Private
Limited, in which we acquired an interest in 2007, provides online booking
for movies, plays, sporting events and shows across India. It is India`s
leader in entertainment ticketing solutions, including online ticketing.
The website services approximately 100 cities and 1000 cinemas in India. As
of December 31st, 2011, bookmyshow.com had approximately 2.7 million
registered users and recorded an average of 2 million unique visitors per
month in the year ended December 31st, 2011, according to Google Analytics.
In December 2011, bookmyshow.com recorded approximately 5.5 million total
visits, which represents growth of 58% from approximately 3.5 million
visits in December 2010, according to Comscore. We sold an average of over
1,000,000 tickets per month on bookmyshow.com in the last nine months ended
December 31, 2011. In addition, BookMyShow is also the authorized
distributor for ticket management software developed by Vista
Entertainment, a New Zealand based company.
NEWS AND DATA TERMINAL SERVICES:
Newswire18: We also own and operate one of India`s leading real-time
financial news and data terminal services, Newswire18. Newswire18 is in the
business of providing real-time news and market data platforms under the
brand NewsWire18 WorkStation for different market segments such as fixed
income and foreign exchange, equities, commodities, mutual funds etc.,
including data and products from various exchanges, from Tenfore Pvt. Ltd.
(now Morningstar Plc) and from other third party data vendors . It also
provides data feeds for real-time financial and economic data and news
including corporate and macroeconomic data and related services.
ALLIED BUSINESSES:
We have entered various other businesses to strengthen our collection of
media offerings, expand our future growth prospects, and provide
specialized services to our other business segments, which we refer to as
our allied businesses segment.
PUBLISHING & LOCAL SEARCH:
Network18 Publishing: Pursuant to the scheme of demerger approved by the
honourable High Court of Delhi in 2011, Infomedia18`s publishing business
has been demerged and consolidated within Network18 under `Network18
Publishing`. The printing press business will continue to remain with
Infomedia18. Network18 Publishing will encompass three divisions of
Infomedia18`s publishing business - Business to Consumer (B2C) magazines,
Business to Business (B2B) magazines and Business Directories Division
(BDD).
* Business and Consumer Directories and Local Search: Our key asset in the
publishing segment is the Infomedia18 Yellow Pages, which has a database of
over 1.1 million businesses across 1,500 categories and an advertiser base
of 31,000 businesses generating 76,000 advertisements for the year 2011
(Source: Internal estimates). In Q1`2011, the Infomedia Yellow Pages was
estimated to have an average of approximately 7.4 million readers,
according to the Indian Readership Survey (source: IRS 2011 Q1). It was
conferred `Superbrand` status by International Superbrand Council in
2006/2007 and 2009/2010. Infomedia Yellow Pages directories are published
for 38 cities in India each year, including New Delhi and Mumbai. We sell
Yellow Pages to both corporate and retail customers, backed by a team of
sales people across the country. The Yellow Pages directory is also
available at exhibitions, on our recently redesigned portal
yellowpages.co.in, and by phone, SMS and email. The acquisition of the
brand "AskMe" and the domain name askme.com in 2008 has given us a strong
presence in the online business and consumer directory segment. The website
allows users to search businesses by industry and location, and call or SMS
such businesses for free. In June 2011, we launched askme.com, our
integrated voice and online local search product in Mumbai. We intend to
extend this product to other major Indian cities in a phased manner over
the coming year. In March 2009, we acquired burrp! a local information
website and recommendation engine. As a part of our new media division,
burrp! provides users an interactive website interface with directories of
information and recommendations on lifestyle activities, including
restaurants, nightlife, shopping, television and movies, across 12 major
cities in India. We also publish business directories in the business-to-
business segment, such as Machine Tool Guide, Indian Exporters Guide,
Construction and Interior Design Guide, Industries State Guide and Motor
Pumps and Valves directories.
* Special interest publications: We publish 20 special interest magazines,
11 of which are in the business-to-business segment and 9 of which are in
the business-to-consumer segment. Among our well-recognized business-to-
consumer publications are Overdrive, Better Photography, Better Interiors,
Chip and Entrepreneur. Our business-to-business publications target
specific industries and provide businesses and professionals in such
industries with information relevant to their industries. Among our well-
recognized business-to-business publications are Auto Monitor, Modern
Pharma, Chemical World, Search and Modern Medicine. We have a specialized
editorial team dedicated to our business-to-business special interest
publications and separate editorial teams for each of our business-to-
consumer special interest publications. Each magazine employs a staff of
both permanent and freelance writers and photographers for the production
of creative content. Our special and premium business-to-consumer
publications provide individuals information on various general and
specialized topics, including business news and analysis, the automotive
industry and interior design.
Forbes India: Among our key business-to-consumer publications is Forbes
India, which was launched in May 2009 in partnership with Forbes. Since its
launch, Forbes India has established itself as one of the leading business
magazines in India. Forbes India is available throughout India. In January
2011, we launched Forbes Life India, a quarterly English lifestyle magazine
targeting India`s affluent and influential individuals, under the Forbes
India umbrella. Pursuant to Digital18`s license agreement with Forbes, we
have the right to use Forbes content for publication in Forbes India and
forbesindia.com. We also share Forbes India content with our business news
channels, CNBC-TV18 and CNBC Awaaz, the services offered by Newswire18 and
our websites, moneycontrol.com.
Printing solutions: We are a commercial printer of business directories,
magazines, annual reports, books, product brochures and publicity
materials. Our integrated print services to our customers range from
providing creative artwork and design, sourcing and services to
procurement, printing, production and warehousing services.
EVENTS, SPORTS & ADVISORY:
Event management: E18, our event management division, conceptualizes and
stages various events such as concerts by international and Indian artists,
award functions, business conferences, product launches and seminars. E18
cross-sells our media platforms to magnify our reach and communicate our
message to a larger audience. E18 is present in Mumbai, New Delhi and
Bangalore and has recently launched L`Experience 18, a luxury experimental
marketing division to provide marketing solutions to the growing luxury
sector in India.
Sports marketing and solutions: Sport18 is our sports marketing team with
expertise in the creation of mass sports properties and rights management
that have synergy with our television and digital assets. We also provide
consultancy services to our clients in sports related areas.
Investment advisory and consultancy: Capital18 Media Advisors provides
investment advisory and consultancy services, such as searching investment
targets, valuation and investment due diligence and advice on structuring
investments and transactions related to consultancy and advisory services,
to clients in media and other industries in India. We also seek out
promising entrepreneurs and growth companies across the media, education
and technology industries to invest in the early and growth stages of these
companies.
Internal Control Systems:
Your Company has put in place a proper system of internal controls that
ensures the effectiveness and efficiency in all its operations and
compliance with applicable laws and regulations. As a part of its internal
control measures, an independent Internal Auditor scrutinizes the
financials and other operations of the Company. Diversions from set
standards are reported to the Board through the Audit Committee and
appropriate remedial measures are taken. The Internal Control Systems are
periodically reviewed and strengthened to meet the changing requirements of
the business. We also have a robust internal evaluation system for all
acquisition or investment opportunities based on well defined parameters of
financial performance, operating metrics and infrastructure requirements.
Each opportunity is evaluated by a cross functional team of senior
management, before being referred to our Board for further evaluation and
approval.
Human Resources and Development:
Your Company firmly believes and recognizes that competent workforce is the
key contributor to the success of the organisation and a significant part
of its success depends on the quality of its human resources. Your Company
continuously recruits skilled professionals from various streams to meet
its business requirements. This intellectual capital is reflected in the
quality of our programming and broadcasting, our business strategy, our
excellent customer relations and our financial health. Robust human
resource systems and processes have been implemented to provide an
enriching professional experience to employees. A culture of incentives and
pay-for-performance has been inculcated to ensure excellence in
deliverables.
Network18`s Human Resource team continues to make a concerted effort to
build Group`s strong brand equity, which enables your company to attract
the best talent in the industry. Network18 Group has ranked among top media
companies by the Great Place to Work Institute and the Economic Times as
the `Best Workplace in the Media Industry` in year - 2008, 2009 and 2011.
The comprehensive Performance Management System continues to help employees
recognize their strengths and areas of improvement. The HR team continues
to strive for creating learning organization through its efforts in the
field of employee training and development. The team along with the
external consultants formulate modules targeted at honing skills and
improving managerial capabilities of the team members. The Rewards and
Recognition Program continues to identify and reward the outstanding
performers for their contribution and excellence. HR teams are working
closely with different businesses so that there is rigor in the support. As
on March 31, 2012, 458 employees were on the payroll of the Company. Within
a span of just five years from the date of incorporation, your Company has
built a pool of talented work force that is versatile and inspired to
achieve the mission of the Company.
OUR STRATEGY:
Network18 is one of India`s leading media groups with a strong leadership
position in television broadcasting, filmed entertainment, digital media,
e-commerce, special interest publishing and allied businesses. The rapid
growth of the group over the years has been driven by an optimal
combination of organic ventures, inorganic acquisitions and strategic
alliances. We believe that our strong brand recognition and salience, our
leadership position in television broadcasting and digital media and
ability to leverage our cross-media ecosystem position us well to
capitalize on this promising and challenging growth opportunity ahead. The
following are the key aspects of the Group`s business strategy:
Leverage the network strength to enhance our media offerings through
organic and inorganic growth:
Our integrated cross-media portfolio, which includes television channels
and digital properties, attracts a wide spectrum of economic and age
demographics in India. The scale of our platform, we believe, positions us
as the focal point of a unique ecosystem of consumers, advertisers,
partners and talent in India. We believe we are well-positioned to
introduce a range of new offerings to our existing audiences and
advertisers, drawing upon insights we have gained from our previous
business launches and synergies with our existing operations. When we
launch new shows, products or services, we intend to use our experience and
cross-media platform to share audiences, advertisers, partnerships and
talent from our existing media and entertainment offerings, thereby
improving our effectiveness and reducing costs.
Enhance our television broadcasting platform
We believe that there is an opportunity to expand the current reach of our
television network by developing innovative content and entering new
television genres. Our current television channels are concentrated in
general news, business news, Hindi general entertainment, kids, youth,
English and factual entertainment and teleshopping genres. In order to
expand the reach of these current channels, we plan to experiment with new
programming concepts, show formats and marketing initiatives.
Our bouquet comprises of leading television brands across some of the
country`s most watches genres. This allows each of our channels to benefit
from the synergies that accrue as a result of being a part of a `network`.
We believe that as the television broadcast space continues to expand, with
new entrants and services being launched in a digitized environment, future
growth will greatly rest with `bouquets` and how well each exploits
available synergies. Within our existing bouquet, we continue to capitalize
on synergies, from both the revenue and content perspective. Our channels
continue to access each other`s content as per relevance and requirements
and partner each other regularly to capitalize on opportunities of mutual
interest. The channels also routinely share best practices and know-how
across the network, in order to enhance efficiencies in operations.
As the `digital eco-system` in India develops further, with imminent
broadcast digitization, improved broadband access and growth in mobility,
we believe, it`s critical for our content to be available across platforms.
Our television channels have strong presence across platforms including
online, mobile, on-ground, consumer products and social media and we
continue to build further on this. We believe that apart from content
delivery, these platforms help increase the engagement with our audiences
and advertisers and strengthen our brands immensely
Grow television subscription revenues and content monetization:
In contrast with some of our competitors in the television industry,
subscription revenues constitute a relatively small proportion of our total
revenues as we only recently established our leadership position in the
entertainment segment and hence were focused on building advertising
revenues and improving audience share. The increasing penetration of
direct-to-home television and digital cable in India, together with the
Indian government`s regulatory push for digitization, will further drive
growth of subscription revenues for our network. India`s television market
is currently primarily analog-based and the last-mile access to consumers`
homes is controlled by a large number of local cable operators. Under-
reporting of subscriber numbers is an industry practice in the Indian
analog television industry, which reduces subscription revenues for
broadcasters. We believe that the increased digitization of India`s
television market will enable broadcasters to increase their share of total
domestic subscription revenues, which will impact us positively. We expect
in the future to grow our subscription revenues substantially by leveraging
our distribution alliances and increasing the international distribution of
our channel offerings. We also intend to grow our subscription revenues
outside of India, through the continued expansion of our international
distribution network apart from exploiting opportunities to syndicate our
content on multiple platforms including online and mobile devices.
Continue to invest and strengthen our businesses in digital content, e-
commerce and publishing segments:
We intend to further strengthen our digital and e-commerce segment by
investing in our existing market-leading brands and additional related
areas that we view as growth opportunities. We believe that our position as
one of the most popular Indian digital media companies globally, will help
drive improved monetization of our digital assets as digital penetration in
India grows and advertisers increase their proportion of spending in the
digital medium. We believe that we have the opportunity to monetize our
diverse and extensive library of news and entertainment content through
emerging `digital` platforms. All our channels have a strong presence
online and on the mobile and we hope to further strengthen this in light of
the rapid changes occurring in the digital ecosystem, both in terms of
content & distribution. We plan to continue creating new offerings that
will leverage the introduction of 4G and broadband wireless access services
in India. We believe that going forward, apart from digital publishing,
print publishing will also evolve into a platform of agnostic services
where content will be available across newsprint, devices and websites. We
believe that we have a significant opportunity to expand the reach of our
publishing assets by focusing in areas such as new media, events and value
added services apart from print. We intend to also continue to grow our
ecommerce capabilities, in line with the rapid growth of non-travel
ecommerce in the country. We believe that our experience with electronic
and new media platforms will help us in expanding our share in the Indian
ecommerce space.
DISCLAIMER:
Statements in the Management Discussion and Analysis describing the
Company`s objectives, projections, estimate, expectations may be "forward-
looking statements" within the meaning of applicable securities laws and
regulations. Actual results could differ materially from those expressed or
implied. Important factors that could influence the Company`s operations
include economic developments within the country, demand and supply
conditions in the industry, input prices, changes in government
regulations, tax laws and other factor such as litigation and industrial
relations. |