[Investors Please Listen] Media Times - March-09

"Media Times Report"

 

Broadcasting/TV content

                  Colors unveils armoury for 2009 - second season of 'Fear Factor' Khatron ke Khiladi; India's Got Talent; kids comedy reality show Chhote Miyan Bade Miyan; Koi Aane ko Hai under the socio-horror genre; Is Des Na Aana Laado based on the issue of female feticide; Mere Ghar Aye Ek Nanni Pari that celebrates the girl child and her rights.

                  New Hindi GEC, Real, to go on air on March 02, 2009.

 

TV distribution

                  Sun, Star and Discovery agree to air via Arasu cable.

                  TRAI plans guidelines for cable TV services in non-CAS areas.

 

Print

                  Government exempts customs duty on newsprint by 3% and by 5% on light weight coated (LWC) paper.

                  Wall Street Journal gets nod for facsimile edition in India.

 

Movie production/distribution

                  Cosmo Films to invest INR 2.6 bn, aims over INR 45 bn turnover.

                  PPC to invest INR 1 bn in horror flicks.

 

Exhibition

                  IPL matches could be shown at multiplexes in the tournament's second season.

                  Adlabs Films to invest INR 100 cr in digital screens to convert 300 of its existing 425 movie screens into digital format in the next 18-24 months.

 

Outdoor/internet/other

                  Shilpa Shetty, Raj Kundra pick up 11.7% in Rajasthan Royals.

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“Media and Entertainment - channel checks: Ad-agencies’ outlook on ad-spends; sector update ”

Channel checks: Outlook on ad-spends cautious; not pessimistic Our interaction with media planners leads us to believe that the outlook on advertising expenditure across media categories is benign over the medium term. Post September 2008, industries such as real estate, automobiles, and BFSI, significantly reduced their ad-expenditure. With FY09 nearing end, most contracts are being re-negotiated, which may have an impact on the prevailing ad-rates. In television, the overall supply of inventory significantly went up in 2008 as new channels commenced operations, further reducing the bargaining power of broadcasters. In the face of a fragmented television space, print has emerged as a more expensive medium for advertising. This could translate into losses for newspapers, making cheaper alternatives such as internet and television more preferable. However, since 1999, the ratio of total ad-spends growth to nominal GDP growth has touched a low of 1.0x, which surely does not indicate a pessimistic scenario.   Outlook over the next 12 months - cautious Over the next year, we expect the overall advertisement expenditure to grow 8-10%. Television is likely to grow 9-11%, whereas print at 6-8%. Internet and radio are expected to grow at 35% and 20%, respectively, but from a low base. In the current scenario, television emerges as a safer bet for advertisers because of its reach and impact. Broadcasters who own leading channels in various genres are expected to attract the lion's share of overall ad-spends.    Colors established as No. 2 GEC; Aaj Tak maintains leadership Colors has successfully established itself as the No. 2 player in Hindi general entertainment category (GEC) in a small time frame, and poses tough competition for Zee TV. In the coming year, Colors is poised to generate strong advertisement and subscription revenue traction because of its robust performance since launch. However, Zee TV still has 14 shows in the top 100 compared with 10 shows of Colors. Moreover, ZEEL  offers a stronger bouquet of channels with a 33% market share in the Hindi movies genre and a consistently performing sports channel, Ten Sports. TV Today is also expected to report better performance, since Aaj Tak has maintained its leadership position in the Hindi news genre.   Lackluster Q3FY09 results expected We expect to see signs of ad-revenue slowdown in Hindi GECs, indicating challenging times in future. ZEEL's flagship channel, Zee TV, conceding its spot to Colors would also affect the company's bargaining power with advertisers. Moreover, TV-18 is expected to report a weak set of numbers due to a significant slowdown in ad-revenues fuelled by reduced spending from industries such as banking and financial services, autos and real estate. TV Today is also expected to be impacted by the slowdown, but the festive season and continued leadership of Aaj Tak would enable it to report decent revenues. The company's profit margins may however dampen due to high carriage fees and employee costs. Zee News is expected to report robust revenues growth, but margins may dampen on cost incurred for launching Zee Tamil.

“Media and Entertainment - channel checks: Ad-agencies’ outlook on ad-spends; sector update ”

Channel checks: Outlook on ad-spends cautious; not pessimistic Our interaction with media planners leads us to believe that the outlook on advertising expenditure across media categories is benign over the medium term. Post September 2008, industries such as real estate, automobiles, and BFSI, significantly reduced their ad-expenditure. With FY09 nearing end, most contracts are being re-negotiated, which may have an impact on the prevailing ad-rates. In television, the overall supply of inventory significantly went up in 2008 as new channels commenced operations, further reducing the bargaining power of broadcasters. In the face of a fragmented television space, print has emerged as a more expensive medium for advertising. This could translate into losses for newspapers, making cheaper alternatives such as internet and television more preferable. However, since 1999, the ratio of total ad-spends growth to nominal GDP growth has touched a low of 1.0x, which surely does not indicate a pessimistic scenario.   Outlook over the next 12 months - cautious Over the next year, we expect the overall advertisement expenditure to grow 8-10%. Television is likely to grow 9-11%, whereas print at 6-8%. Internet and radio are expected to grow at 35% and 20%, respectively, but from a low base. In the current scenario, television emerges as a safer bet for advertisers because of its reach and impact. Broadcasters who own leading channels in various genres are expected to attract the lion's share of overall ad-spends.    Colors established as No. 2 GEC; Aaj Tak maintains leadership Colors has successfully established itself as the No. 2 player in Hindi general entertainment category (GEC) in a small time frame, and poses tough competition for Zee TV. In the coming year, Colors is poised to generate strong advertisement and subscription revenue traction because of its robust performance since launch. However, Zee TV still has 14 shows in the top 100 compared with 10 shows of Colors. Moreover, ZEEL  offers a stronger bouquet of channels with a 33% market share in the Hindi movies genre and a consistently performing sports channel, Ten Sports. TV Today is also expected to report better performance, since Aaj Tak has maintained its leadership position in the Hindi news genre.   Lackluster Q3FY09 results expected We expect to see signs of ad-revenue slowdown in Hindi GECs, indicating challenging times in future. ZEEL's flagship channel, Zee TV, conceding its spot to Colors would also affect the company's bargaining power with advertisers. Moreover, TV-18 is expected to report a weak set of numbers due to a significant slowdown in ad-revenues fuelled by reduced spending from industries such as banking and financial services, autos and real estate. TV Today is also expected to be impacted by the slowdown, but the festive season and continued leadership of Aaj Tak would enable it to report decent revenues. The company's profit margins may however dampen due to high carriage fees and employee costs. Zee News is expected to report robust revenues growth, but margins may dampen on cost incurred for launching Zee Tamil.

Q3FY2009 Media earnings preview: January 06, 2009

Q3FY2009 Media earnings preview  We expect Q3FY2009 to be a bad quarter for most media companies as we expect the rate of the year-on-year (y-o-y) growth in their revenues to taper off substantially in the wake of a significant cut in the advertising spends in the key sectors, such as banking, financial services and insurance (BFSI), real estate and automobiles. Also, a general sense of rational advertisement spend (bang for the buck) and fragmentation across media verticals due to an increase in competition would lead to a slower revenue growth. Consequently, as the revenue growth lags behind the increase in costs, we expect media and entertainment companies to report subdued earnings for the quarter. Overall, we believe the media and entertainment industry is in for tough times as advertisers tighten their advertisement spends in a bid to control costs. Also, fragmentation across media verticals has led advertisers to evaluate "bang for the buck spent". We believe alternate media such as radio and out-of-home advertising are likely to face higher pressure compared with the other verticals. We maintain Zee News as our preferred pick in the sector.   Click here to read report:  Sharekhan Special

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Q3FY2009 Media earnings preview: January 06, 2009

Q3FY2009 Media earnings preview  We expect Q3FY2009 to be a bad quarter for most media companies as we expect the rate of the year-on-year (y-o-y) growth in their revenues to taper off substantially in the wake of a significant cut in the advertising spends in the key sectors, such as banking, financial services and insurance (BFSI), real estate and automobiles. Also, a general sense of rational advertisement spend (bang for the buck) and fragmentation across media verticals due to an increase in competition would lead to a slower revenue growth. Consequently, as the revenue growth lags behind the increase in costs, we expect media and entertainment companies to report subdued earnings for the quarter. Overall, we believe the media and entertainment industry is in for tough times as advertisers tighten their advertisement spends in a bid to control costs. Also, fragmentation across media verticals has led advertisers to evaluate "bang for the buck spent". We believe alternate media such as radio and out-of-home advertising are likely to face higher pressure compared with the other verticals. We maintain Zee News as our preferred pick in the sector.   Click here to read report:  Sharekhan Special

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Much more than email – don't miss out on the rest of the Windows Live™. Much more than email