Media - Better Days Ahead; Result Review Q2FY15:: Edelweiss

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Summary of key trends in Q2FY15

• Ad growth: Remained largely moderate across media segments like TV and print; radio outperformed. Ad spends by consumer goods companies increased by just 5.5% YoY (7.2% YoY in Q1FY15). Also, increasingly consumer goods companies are diverting their ad spends to other media and reducing their exposure to TV.
• DTH subscriber additions: DTH companies logged robust subscriber addition (up 38% YoY). Dish TV added 0.72mn net subscribers in H1FY15 alone versus 0.81mn net subscribers in FY14.
• DAS Phase 1 and 2: Except for marginal improvement for Siti Cable, there was very little progress in net realisation in DAS Phase 1 and 2 cities and gross billing for the other MSOs.
• DAS Phase 3 and 4: Deadline for Phase 3 and 4 has been postponed by 1 and 2 years, respectively. Hence, major surge in subscriber additions at least for the MSOs is unlikely in FY15.
• International revenue of broadcasters: ZEE`s like-to-like (LTL) international revenue growth stood in low single-digits, while Sun TV reported 5.2% YoY growth in international revenues.
• Carriage revenue: Grew 5.4% and 0.8% QoQ for Hathway and DEN Networks, respectively.
• Content costs: On YoY basis, content cost moved up ~42% for Hathway, ~20% for DEN and mere 3.4% for Dish TV.
• Broadband: All national MSOs - Hathway, DEN and Siti Cable - are focusing on expanding their broadband operations by offering high-speed Docsis3.0 services.
• Circulation revenue of print companies: Maintained trajectory with DB Corp, Jagran Prakashan, HT Media and HMVL clocking 15%, 9%, 12% and 11% YoY growth, respectively.
• Newsprint costs: Newsprint costs increased by 7%, 9%, 7% and 20% YoY for DB Corp, Jagran Prakashan, HT Media and HMVL, respectively.
• Multiplexes: Muted content resulted in double digit decline in LTL footfalls for both PVR and Inox.

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