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The festive season started late in FY11 shifting the festive linked growth to 3QFY11. While
1QFY11 saw an ad spend growth of 32% to USD6.7bn, 3Q numbers will be positive
backed by the increasing consumer spend during festive season.
The host of reality shows such as Big Boss, Kaun Banega Crorepati, Zhalak Dikhla Jaa, etc.,
led the current quarter; moreover, Cricket World Cup and IPL 4 will glue the customer to the
television set in coming quarters.
DTH subscriber base reaching new highs
With 3m subscribers added in Oct-Nov month, the new subscriber addition has already
crossed the 2.8m mark during 2QFY11. The growth momentum will continue in coming
months on the back of cricket season and increasing demand from customer for High Definition
(HD) TV experience provided by DTH.
Dish TV has maintained its leadership position in the DTH market and with a gross addition
of 1.7m in the last two months, the company is well positioned to cross its guided subscriber
base of 10m by FY11e end. The upcoming cricket season will spur the growth in subscriber
base in 4QFY11e and 1QFY12e.
Advertisement revenue to remain strong
The second quarter saw a strong advertising revenue growth of 10-15% and with festive
season revenue reflecting in this quarter we estimate a strong advertising revenue growth
for the broadcasting companies
Sun TV is expected to report a strong revenue growth backed by buoyant advertisement
spend and subscription numbers. The movie business which saw a lumpier growth in 2QFY11
will jump with Endhiran revenue. The revenue growth will drive the EBITDA which saw a
sequential dip due to higher other cost.
IBN18 has completed its restructuring, and with stronger bouquet of channels, the company
will see a turnaround in its advertising and subscription revenue. For 3QFY11, we have
estimated a revenue growth of 32% due to strong growth in Viacom business and EBITDA
will see sharp spike with general news business breaking even and Viacom delivering best
ever quarter.
Digitisation to benefit pay TV operators
The pay TV operators will continue to grow at a steady rate despite facing some competition
from DTH players. With increasing digitisation, the declaration rate is improving. The SAC
per subscriber is also decreasing due to falling STB cost and better vendor financing available
to the pay TV operator. The execution of digitisation will lead to a sequential growth in
profitability for Den and Hathway.
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