India's Network18 reports loss on higher expenses, advertising slowdown (updated)

Network18 Media & Investments

18/10/2022 13:40

(Adds Network18 statement, details on investments, expert
comment)
       BENGALURU, Oct 18 (Reuters) - India's Network18 Media &
Investments  NEFI.NS  reported a loss for the second quarter on
Tuesday, as advertisers spent less and the media conglomerate
backed by billionaire Mukesh Ambani poured funds into new
television channels and shows.
    Viacom18, a joint venture in which Network18 is a 51% owner,
has launched three new sports channels having won digital
streaming rights of the lucrative Indian Premier League cricket
tournament for the subcontinent, which it expects to help
attract viewers.
    YouTube  GOOGL.O  and Netflix  NFLX.O  have proven to be a
big challenge for the already crowded Indian television industry
as cheap internet plans have helped video streaming websites
compete with TV channels.
    Businesses ranging from startups to conglomerates are also
rethinking their advertising spending as they are already having
to deal with higher raw material and labor costs.
    "The opening up of the economy set high expectations for
2022. However, ... a high inflationary environment (is) forcing
advertisers across categories to reduce spends," Mihir Shah,
vice president of research firm Media Partners Asia said.
    Consolidated loss attributable to owners of Network18
widened to 364.9 million Indian rupees ($4.44 million) for the
three months ended Sept. 30 from 33.2 million rupees in the
previous quarter.
    "The profitability of the (entertainment) business was
impacted as the advertising revenue lagged expectations despite
content investments helping us strengthen our ratings in certain
markets," Network18 said in a statement.
    For Network18, which incorporates a spate of media houses
including channels CNBC-TV18 and Colors, quarterly expenses
increased nearly 34% to 15.92 billion Indian rupees due to
higher operational and promotional expenses.
    Network18's revenue from operations still increased nearly
12% to 15.49 billion rupees.
    The company had posted a profit of 390.2 million rupees in
the September quarter a year ago.
    ($1 = 82.2740 Indian rupees)
 (Reporting by Praveen Paramasivam in Bengaluru; Editing by
Shinjini Ganguli)
 ((Praveen.Paramasivam@thomsonreuters.com; https://twitter.com/PraveenR_P
 ; +91 867-525-3569;))