Subscription revenue growth shows the new tariff order is beneficial to broadcasters, says TV18 MD Rahul Joshi

Managing Director of TV18 and Network18 Rahul Joshi and Viacom18 Managing Director Sudhanshu Vats speak about the financial performance of the company and the future outlook.

Edited excerpts:

Joshi: I think the fact that subscription revenues have gone up shows that the new tariff order has been beneficial to the broadcasters. Looking after the news business, I feel very happy that we are not free to air. Our customers, our viewers are paying for the news that we dish out, which is very good news for us. So it is a good development for us from news and from an entertainment point of view.

Joshi: We definitely see green shoots in October. This month has been much better than the last two months. We have really seen some tough economic conditions in the second quarter. This month, while it has been good, I might add a caveat. I think it is not as good as the October of last year. So there is definitely the impact of slowdown that is being felt.

I think the consumption story – I do see some challenging months ahead as well. So I think advertising, display advertising, will remain under some kind of pressure though October as a festive month has really picked up for us.

Joshi: I don’t really think so. In a slowdown, advertising is the first thing that goes out. Also, it is very often the last thing that comes back. So we have to be careful but at an overall level, the subscription revenues are sustainable. This new tariff order and its implementation has helped the broadcasters -- that is definitely a good news.

Joshi: Absolutely. There has really been a good check on the costs in the last quarter. We have been doing this over the course of the last year and the benefits are now beginning to show. I think these will also show in the subsequent quarters; because of that we have been able to maintain our profitability, our regional news is well on its way to profitability and breakeven. That is the good news. I think we have also grown in regional and Hindi news. It is the English, the business piece, which has not interrupted.

Joshi: That is right.

Joshi: I think the Q3 will continue to remain tough given the conditions. I think the Q4 is usually good for news because we have a budget in that quarter, we have a lot of branded content properties that all stack up into the Q4. So it’s typically the second half. Hopefully the sentiment will also pick up. I think the government is taking some measures, they are seized of the problem and they acted in the past. So the next two quarters, I look forward to them with hope and optimism but I would definitely like to say that the conditions are tough; we have seen a very, very tough quarter and things while they may be easing up, I would say that we should also be careful in the coming two quarters.

Vats: As far as we are concerned, just building on what Rahul was saying, I think Q2 has been, from a revenue point of view, a mix story; advertising has been under pressure and we talked about that but subscription has been really good and that’s a good thing. Therefore, overall if you look at the end of first half, we are sort of, on revenue, holding on but importantly because of cost control one thing which is very heartening and this is the process we spoke about just now as well. In entertainment we are beginning to now make solid movements as far as profitability is concerned. So because of all the cost controls which we have brought in place. So the fallout of a tough year has been that as we exit FY20 we are likely to nearly double the profitability of our entertainment business.

Vats: Across the board, the point is that we have tightened everywhere on different lines. The second interesting thing which is the fallout of this tough year is that we are making rapid strides in digital, to very specifically your question on Voot. I think Voot now is beginning to deliver over 30-34 million daily active users which is a very good thing and with Bigg Boss now come in, we are now looking at between our own numbers and our partnerships and a monthly active user base in October which we are projecting of upwards of 80 million. And if you remember, I had talked about this number earlier. So it’s a rapid improvement about 50-60 percent. So these two are very important. Our strategic shift towards building a strong digital portfolio and considerable substantial improvement in profitability are two really good news in this overall slightly dark cloud of the previous quarter.

Vats: You are absolutely right. This is where we are going to further build our digital portfolio. So, Voot Kids has now gone live, behind paywall. Our payment systems are currently working more on iOS, we do not have those many functionalities on Android, but our first set of this thing is extremely good.

We are going commercial launch with Voot Kids which is our kids’ platform in this quarter. So, you will see that hopefully a month down the line. We are doing our beta launch of our paywall service for adults. So, basically our Voot paywall service where originals will come, where you will have to come behind paywall and there will be three functionalities there, there will be originals, there will be good international content, and there will be linear channels and ad-free video-on-demand (VOD) which is available. So, I think that proposition is also looking good.

Vats: In future I think. So we are building a strong foundation on digital with advertising-led products, subscription-led product and kids’ product. All three are coming into play.

Joshi: We have invested in digital over the last couple of years thinking that it will pay off in the long run and I am happy to report that we have indeed done well in this year where there has been a problem with advertising.

I think Moneycontrol has launched a very successful subscription product called Moneycontrol Pro. It is doing exceptionally well for us. As these subscription products go, people are not even getting subscribers in tens or thousands, we have 85,000 subscribers and counting; that is just in five months. So, I think that is a big story.

We have launched News18.com in 11 languages in the last one year. On mobile, in languages we are number one. In most of the regional languages in News18.com we are in the top three.

Our overall television share (of TV18 Broadcast's viewership) has also grown from 10.1 percent to 10.9 percent after the new tariff order. I think that is also good news. So, overall the health of the business is good. I think we are waiting for better times ahead to be able to monetise some of these assets.

Joshi: We all hope that it will happen because I think we are opening new revenue streams like subscription revenues even in digital like MC Pro, Voot as Sudhanshu was saying is going to go live next month. So, I think there are new revenue streams coming up and we are hopeful that if the health of the business is there, if our ratings are good, if our numbers hold, if our traffic grows, I think we will sooner or later monetise these products.