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With Hindi news channels taking the free-to-air (FTA) route, subscription revenue is drying up for news broadcasters.
Zee Media Corporation Ltd (ZMCL), the largest pay TV revenue earner, is facing this inevitable trend. The company’s subscription revenue, which stood at Rs 102.39 crore (Rs 1.02 billion) in FY16, could shrink almost half this financial year.
The impact has been felt immediately since ZMCL’s flagship Hindi news channel Zee News went FTA. In the fiscal second quarter ended 30 September 2016, subscription income fell 39.9% to Rs 16.37 crore compared to Rs 27.24 crore a year ago.
The drop in the preceding quarter ended 30 June was also sharp. ZMCL, which runs a clutch of regional-language news channels, reported subscription income of Rs 17.89 crore, down 37.6% from Rs 28.67 crore a year ago. Incidentally, Zee News went FTA in the first quarter of the fiscal.
ZMCL’s subscription income in the first half of FY17 stands at Rs 34.26 crore compared to Rs 55.91 crore a year ago.
“Zee News was the main channel in ZMCL’s bouquet which could drive subscription revenues. Since it has gone FTA, there is no other channel that can make up for the loss in subscription revenue. It will be interesting to see how ad revenue climbs after having widened Zee News’ reach,” said a media analyst who has been tracking the company.
With top-tier Hindi news channels such as India TV staying FTA right from launch, there was pressure for competitors to renounce their pay TV status. NDTV India, Zee News and News18 India (formerly IBN7) went FTA this year.
TV Today Network, which operates channels like Aaj Tak and India Today, has also felt the pinch. The company’s quarterly subscription revenue has fallen to around Rs 5 crore versus Rs 8 crore earlier, according to market estimates.
Incidentally, Aaj Tak, the leader in the Hindi news genre, has joined Prasar Bharati’s subscription-free direct-to-home (DTH) platform DD Freedish. Though it is still a pay channel, it has had to renegotiate subscription deals after bidding Rs 6 crore to join Freedish.
“After Aaj Tak went on Freedish, the quarterly subscription revenue loss for TV Today Network is estimated to be in the region of Rs 3 crore. But by being on Freedish, the channel’s rural viewership share has increased and it is in a position to negotiate better terms with advertisers,” said another media analyst.
However, the impact on NDTV Ltd will be minimal as NDTV India is not the driver channel in the bouquet, and it used to collect very little subscription income. Out of NDTV’s annual subscription income of Rs 60 crore, the contribution of NDTV India is miniscule. In fact, the company’s pay TV revenue could actually increase marginally to around Rs 70 crore in FY17 due to channel launches on different platforms overseas.
“Our subscription revenue has not been impacted after we turned our Hindi news channel NDTV India FTA. In fact, we could see a marginal rise in pay TV income as we increased the global presence of our channels by tying up with more distribution platforms,” a senior executive said.
Subscription revenue drying up for news broadcasters with Hindi news channels going FTA | TelevisionPost.com
Zee Media Corporation Ltd (ZMCL), the largest pay TV revenue earner, is facing this inevitable trend. The company’s subscription revenue, which stood at Rs 102.39 crore (Rs 1.02 billion) in FY16, could shrink almost half this financial year.
The impact has been felt immediately since ZMCL’s flagship Hindi news channel Zee News went FTA. In the fiscal second quarter ended 30 September 2016, subscription income fell 39.9% to Rs 16.37 crore compared to Rs 27.24 crore a year ago.
The drop in the preceding quarter ended 30 June was also sharp. ZMCL, which runs a clutch of regional-language news channels, reported subscription income of Rs 17.89 crore, down 37.6% from Rs 28.67 crore a year ago. Incidentally, Zee News went FTA in the first quarter of the fiscal.
ZMCL’s subscription income in the first half of FY17 stands at Rs 34.26 crore compared to Rs 55.91 crore a year ago.
“Zee News was the main channel in ZMCL’s bouquet which could drive subscription revenues. Since it has gone FTA, there is no other channel that can make up for the loss in subscription revenue. It will be interesting to see how ad revenue climbs after having widened Zee News’ reach,” said a media analyst who has been tracking the company.
With top-tier Hindi news channels such as India TV staying FTA right from launch, there was pressure for competitors to renounce their pay TV status. NDTV India, Zee News and News18 India (formerly IBN7) went FTA this year.
TV Today Network, which operates channels like Aaj Tak and India Today, has also felt the pinch. The company’s quarterly subscription revenue has fallen to around Rs 5 crore versus Rs 8 crore earlier, according to market estimates.
Incidentally, Aaj Tak, the leader in the Hindi news genre, has joined Prasar Bharati’s subscription-free direct-to-home (DTH) platform DD Freedish. Though it is still a pay channel, it has had to renegotiate subscription deals after bidding Rs 6 crore to join Freedish.
“After Aaj Tak went on Freedish, the quarterly subscription revenue loss for TV Today Network is estimated to be in the region of Rs 3 crore. But by being on Freedish, the channel’s rural viewership share has increased and it is in a position to negotiate better terms with advertisers,” said another media analyst.
However, the impact on NDTV Ltd will be minimal as NDTV India is not the driver channel in the bouquet, and it used to collect very little subscription income. Out of NDTV’s annual subscription income of Rs 60 crore, the contribution of NDTV India is miniscule. In fact, the company’s pay TV revenue could actually increase marginally to around Rs 70 crore in FY17 due to channel launches on different platforms overseas.
“Our subscription revenue has not been impacted after we turned our Hindi news channel NDTV India FTA. In fact, we could see a marginal rise in pay TV income as we increased the global presence of our channels by tying up with more distribution platforms,” a senior executive said.
Subscription revenue drying up for news broadcasters with Hindi news channels going FTA | TelevisionPost.com
