Richard Ginika Izuora
The media organizations in India are struggling over a global downturn in advertising revenues.
Already, flagships such as Hindustan Times, New Delhi Television (NDTV), and Zee have had quarterly profits squeezed even as persistently high inflation and aggressive interest rate hikes have compelled them to rein in costs.
The NDTV, for instance, recorded a 97.6 per cent plunge in quarterly profit due to weak advertising demand.
hT Media posted $2.65 million in losses in the December quarter due to lower ad spends and high newsprint prices; it had recorded profits a year ago.
Reliance Industries-owned Network18 Media is feeling the heat, too.
Globally, Vice, BuzzFeed News, Vox, NPR, National Geographic, Washington Post, and others have announced layoffs amid a similar scenario. Vice is even headed for bankruptcy and BuzzFeed news is shutting down.
The BSE’s Nifty Media index, which reflects the performance of India’s media and entertainment sector, has slipped nearly 14 per cent this year so far.
Zee Entertainment Enterprises and PVR account for half of its weightage while TV18 Broadcast and Sun TV Network hold 9.08 per cent each. Sun TV Network,,8.95 per cent Network 18, 6.4 per cent and NDTV, 1.6 per cent are among others constituting the rest.
Consumer prices softened marginally in the March quarter in India, though the economic sentiment remained weak. This impacted advertising revenues, Network18 said in its earnings release.
During the quarter, the advertising inventory the total amount of space available for ads in the news segment fell 10 per from the same quarter in the previous year, it said.
Overall, the Indian media and entertainment sector grew 20 per cent to $26.2 billion in 2022, which is 10 per cent higher than the pre-pandemic levels, said a FICCI-EY report.
With consumers moving to digital media channels, less funds are being earmarked for TV in 2022, it grew by mere 2 per cent as opposed to 30 per cent in digital advertising.
“Subscription revenue continued to fall for the third year in a row, experiencing a 4 per cent de-growth due to a reduction of five million pay-TV homes and stagnant consumer-end revenue,” the report said.
While online news subscriptions generated $14.7 million, newspaper ad revenues grew 13 per cent.
However, for many newspaper companies, it is still tough to generate ad revenues through digital channels, the report said.