Could look at changing subscription prices in future, says TV18 MD Rahul Joshi

To discuss the numbers and the business plans going ahead, we spoke to Rahul Joshi, managing director of TV18 and Network18 and Sudhanshu Vats, managing director of Viacom18.

Here are the edited excerpts from the interview:

Joshi: Yes, it is largely because of the new tariff order. If you look at the big picture for the full year, we were doing exceptionally well in terms of relative share and rankings across the board, across all our 20 news channels.

We were the number 1 news network in the country with a formidable 12 percent share. We had increased our lead over our nearest rival. So, that was looking good. In the first three quarters we did well, we grew almost 20 percent, we grew our national news revenues well, we grew our regional revenues well, it was all looking up but in the fourth quarter with the implementation of the new tariff order, the advertisers did pull back spends owing to some confusion over data. There was a blackout period that was there, so because of that in this transition, all broadcasters lost out - both news and entertainment. So, as a result of that, it has been a flat quarter versus the last quarter in the corresponding year and as a result, we have just grown 14 percent.

The very good news for news business is that despite the implementation of the new tariff order - we are a bouquet of pay channels and many large groups are still free to air in the news space and despite that, we still maintain our number one position at an overall level with a market share of 9.4 percent.

Joshi: Yes, that impacted the business news numbers.

Joshi: The tariff order will take a couple of months more to stabilise but the good news is that in this quarter, the first quarter, we have the general elections, so that means good news for the news business overall. We will have two budgets - one in the second quarter and one in the fourth quarter hopefully, so that is good news for the business news category which has not been growing in the last couple of quarters for us. Overall the picture looks goods, we are off to a decent start but let's keep our fingers crossed.

Joshi: It is still early days, but there are some sectors, like you said, auto - they are clearly showing some signs of a pull-down and I think there is a pullback in advertising there but on the other hand elections are around the corner, let us see what happens, the results will also have a large part to play.

Vats: Yes. If I have to sum this up, it has been a tough quarter. However, if I was to break it up into three things - one is that we had Padmaavat in the base and Padmaavat is one of the few tent-poles, we do not do such kind of tent-poles every year, every quarter, so that has a bearing, it was very big.

The second thing for us was also that last year we have done one or two one-time properties. We had also done the Sri Lanka and India Tri-Series, so that had a bearing, that was a sports property which had run on our channels, that was our first pilot on cricket and that was very successful, that was also in the base.

Finally, as Rahul said, there was an impact of the new tariff order. So, it is a combination of these three that this quarter had been very tough. However, the good news is that at the full year level, we have held on to numbers as you have seen for entertainment. So, it is flat it has not fallen and within that, there are silver linings which are very interesting, which may not be here, in the regional portfolio, we have grown at about 36 percent which I would argue might be one of the highest if not the highest in the industry. We have shown good growth on kids which continues to be in mid to high teens. Finally, our digital business has doubled and in doing all of this with all the initiatives we have taken, within entertainment, we have actually continued our discipline on profitability. So, our EBITDA despite all these investments has come incomparable to the previous year and those are the things which are good. However it has been a tough last quarter, there is no debate on that.

Vats: Digital is very important. So what we are doing is Voot which is our digital platform, by the way, we completed 3 years and we did 100 billion video minutes of watch time on Voot in the previous fiscal which has gone by, so that is good news. March month was the best ever month in terms of monthly active users. It crossed well over 55 million now.

However, coming to your question on Netflix, I think the way India will pan out - it’s going to be a hybrid country. It’s a country where some Indians will be behind a paywall and some of them will pay as high the amount as what Netflix is asking for, but a vast majority of Indians will be on free service which is our Voot Ad-Supported Video on Demand (AVOD). We are also introducing a Freemium where we will be able to offer a better experience and additional content.

Joshi: I think it is a dynamic market and depending on how things move we are also learning with this new tariff order in place. As things change we could look at our pricing but the point to note here is that we are a pay channel and despite that, we are number one. Many of them out there are free and still behind us. So I think the consumer is making a choice, the News18 brand is well established. We have marque brands like CNBC, CNBC Aawaz and our entire bouquet CNN-News18, I think it augurs well for us. I think for now we will stay with this. We have taken a long time to arrive at this kind of pricing but the market place is dynamic and we will change with the time.

Joshi: We have 20 news channels which are doing well. I think the most important point is that our regional news channels are growing well. We have been able to reduce our losses substantially and we should look at sweating these assets in the coming year and hope to become profitable even in the regional space. So that would be our priority.

On the digital side, we have 6 very good properties – Moneycontrol, Firstpost, News18.com, In.com, CNBCTV18.com, CricketNext.com. I think the first 3 big properties - Moneycontrol, Firstpost, News18.com, we will really make them grow well this year. The other 3 which we have launched in the course of last year, we will double down on them as well. So we have an interesting portfolio.

Joshi: We will continue to invest behind news, broadcast and a substantial part of the investment this year in the news will go in digital without a doubt.

Vats: From our point of view we will continue to invest in digital and I spoke about that and I shared that with you. We will continue to drive our portfolio on regional including regional films. So that’s the piece which you will see and finally we have converted our 2 channels into pay channels which is Colors Cineplex and Colors Rishtey. We will invest behind these in original content, in films premiers and all that.

Vats: The beginning of the year we will be cautious because as you rightly pointed out, auto, I also think partly in some parts of FMCG - there is some softness as we enter this year and therefore first part of the year and with elections around the corner there is some amount of wait and watch for some time, but I am quite hopeful that as time progresses and hopefully with a decisive mandate and government in place we should be able to catch up as we go forward.