Network18 operating revenue rises 49.4% in FY24 amid ‘soft advertising environment’

The annual report of Network18 has revealed that the group reduced its original television programming hours in the entertainment segment owing to the soft advertising environment, resulting in flat advertising revenue for the segment in the financial year 2023-24. Meanwhile, its news business delivered strong growth in advertising revenue, “powered by the strong position of the channels across markets and increased advertising spends in the run-up to the general elections.”

In the digital segment, both entertainment and news businesses delivered growth. This was led by JioCinema. Entertainment revenue saw a sharp jump as sports and digital revenues scaled up.

With this, the operating revenue of the group increased by 49.4%, reaching Rs 9,297 crore. The operating expense increased by 63.7%, driven by high costs of premium sports rights and increased investments in the digital segment. Continued investments in growth verticals, sports and digital, led to a decline in the group’s profitability.

In line with its outlined priority of establishing leadership in the digital segment, it continued to make investments to scale up these products, both in the news and entertainment genres. 

“These investments have affected the profitability of our business. However, we recognise the importance of maintaining a strong presence in the digital segment, which will be crucial for driving the company’s long-term growth. India’s media industry has a long runway for growth, and Network18, with its strong portfolio, is in the prime position to leverage this opportunity,” the report added.

The report notes that the demand growth for FMCG products, the biggest advertising segment, remained subdued for most of the year. While some of the FMCG brands increased advertising spends during the year to spur consumer demand, new-age clients (e-commerce, D2C brands, etc.) continued to reel from the impact of the slowdown in funding and soft consumer demand and stayed away from increasing advertising spends, especially on television.

“Commodity prices rationalised from the peak levels of the previous year, leading to green shoots of growth in the second half,” it noted.

Macroeconomic issues continued to persist in FY 2023-24 on account of a weak advertising environment. Advertising sentiment continued to be subdued as consumer demand did not pick up meaningfully during the year. Furthermore, a ban on certain categories of advertisers and a slowdown in start-up funding impacted growth. 

“Despite the challenges, our news business delivered industry-leading advertising growth, and the performance would have been even better if the macroeconomic conditions were more favourable,” it states. 

Looking forward, the report predicts that the television segment is expected to grow, albeit at a slower pace compared to the historical trend. Growth in digital is expected to be led by advertising, with subscriptions aiding overall growth as the market continues to evolve. 

According to the report, JioCinema was the fastest-growing OTT platform in the country. “In FY 2023-24, it was the #2 broadcaster-OTT in terms of total watch time and MAUs,” it states.