Tv18 Broadcast Ltd. - Consolidation over after 7 years ?

‘TV18 Broadcast Limited’ is a subsidiary of Network18 Media & Investments Limited,
one of India’s most diversified media conglomerates engaged in news, entertainment, digital content,
filmed entertainment, e-commerce, magazines and allied businesses. TV18 owns and operates the largest network of channels – 49 in India, spanning news and entertainment. We also cater to the
Indian Diaspora globally through13 international channels.

∆ Widest portfolio in the industry :-

TV18 is the only player in the Indian Media & Entertainment space with a
portfolio spanning News, Entertainment, Infotainment and Digital across both

national and regional markets.

∆ Through an equal-partnership joint- venture with Viacom Inc. named Viacom18, TV18 operates an array of entertainment channels. The entertainment portfolio comprises Hindi general entertainment
channels, English entertainment, movies, youth and musical entertainment, kids genre and six regional entertainment channels as well. This includes leading properties like Colors, MTV and Nickelodeon. The group has a presence in the movie business too, which it operates through Viacom18 Motion Pictures. It has also launched OTT video platform VOOT in FY17. 

TV18’s Infotainment joint venture with A+E Networks operates factual entertainment
and lifestyle channels named History TV18 and FYI TV18 respectively. TV18 and Viacom18 have also formed a strategic joint venture called IndiaCast. This multi-platform content asset monetisation
entity drives domestic and international channel distribution, placement services and content syndication for the group’s channels and for other broadcasters as well.

∆ From general to business to regional news, entertainment and digital, TV18’s family encompasses a complete range of broadcast offerings for people in various parts of the country and outside. TV18’s bouquet includes marquee brands such as CNBC-TV18, CNN News18 (formerly CNN IBN), Colors, MTV, Nickelodeon, and many others.

∆ Re-imagining Television :- 

Unleashing our imagination to capture new opportunities in the television industry, we initiated a series of measures and launched several new channels/platforms to improve our ranking and performance across genres during the year.

∆ News18 is transforming into the umbrella
brand for all general news from the TV18 bouquet, across English, Hindi and Regional

languages.

∆ Strategic initiatives :-

∆ Complete revamp of English general news channel CNN-IBN – The channel was rebranded as CNN-News18, with a fresh logo, a completely new look and a new philosophy. The primetime band of 8 pm to 11 pm was also transformedunder the banner of ‘Primetime 2.0’

∆ Hindi General News channel IBN7 was refreshed as News18, with new shows and talent, and a more pertinent tagline– Danke ki chot par, with the idea to challenge the status quo.

∆ ETV regional news channels are being transitioned to the News18 umbrella brand.

∆ Integration of regional entertainment portfolio into Viacom18 has been completed with merger of Prism TV with Viacom18.

Improved rankings:-

∆ CNN-News18 ranking moved up to #2 post rebranding; settled in top 4 channels .

∆ CNN-News18 was #1 channel during US Presidential Elections result coverage

∆ Nickelodeon ranked #1 in Kids category

∆ Colors was a close #2 in the GEC genre;and ranked #1 in social media buzz.

∆ History TV18 ranked no.1 in FactualEntertainment genre in mega cities.

∆ Investments :- Across its portfolio, TV18 group made investments to the tune of ` 380 Crore      in FY17.

∆ Re-aligning Strategy :-  At the root of an organisation’s growth lies its ability to connect with its consumers at A DEEPER LEVEL. The transforming Television industry landscape in India has led to the emergence of regional channels as a vital bridge between viewers and media organisations.

At TV18, we have successfully embarked on this change by expanding more aggressively into regional markets as part of our strategy to realign ourselves with the changing needs of the viewers. We continued to sharpen this focus during the year through regional channel
launches (3 news, 1 entertainment and 3 HD feeds).

∆ Exploiting synergies :- Simplification of our corporate structure facilitated our transformation as we moved proactively to bring in greater operational synergies across our Television 

network. We completed the merger of Prism, which handles the regional entertainment portfolio, into Viacom18. We also propose to merge Panorama Television Pvt. Ltd., our 100% subsidiary handling regional news, into parent TV18. These integrations help in driving better realisation of synergies, improved cash flow management and accentuated

’network effect’ benefits.

∆ Establishing umbrella brands :-TV18 is in the process of phase-wise re-launching of all the ETV-branded channels of Panorama under the News18 brand. The 5 ETV regional entertainment channels were similarly re-launched under the Colors brand last year. The intent is to grow these flagship brands for general news (News18) and general entertainment (Colors) by gaining more mindshare and leveraging the power of umbrella branding.

∆ Revitalising growth :-With our eyes on growing our presence across the country, we invested substantially into new regional channels. Early successes despite a tepid market endorsed the strength of our strategy. Moving forward, we shall continue to revitalise regional growth to further boost TV viewership and rankings of our channels across genres.As the demand for vernacular content increases and regional advertising markets deepen further, we shall further augment our presence across the country. With our ability to feel the pulse of the viewers and our national platform to bank upon, we are ideally positioned to grab a large chunk of the vernacular opportunity pie.

∆ Tv18 launched three regional news channels during FY17, as part of the News18 bouquet, in Kerala, Tamil Nadu and Assam/ North-East, to add to the five already launched over the previous two  years.

∆ To hammer home our existing advantage in the Kannada market, where we are already #1, Tv18 launched Colors Super as the second GEC in Karnataka, along with an HD feed for primary GEC Colors Kannada.

∆ Exploring & owning niches :- As we move proactively towards content rejuvenation to drive growth, we continue to look for new niches that we can own to enhance our offerings for the consumers.
The launch of the lifestyle channel ‘FYI TV18’ was in line with this philosophy. This factual entertainment channel focusses on lifestyle, with eight shows marking its launch. The success of the channel could
be gauged from the fact that it ranked #2 on several occasions soon after launch, and went on to be ranked #1 in the genre in ‘All India All 2+’ and ‘Mega Cities All 2+’,with a market share of 29.6%.

∆ Plugging white spaces :- 
As a relatively new entrant in the entertainment arena, it is our constant endeavour to fill the gaps in our content bouquet and reach out to the masses. The launch of Rishtey Cineplex - a free-to-air movie channel, followed by launch of MTV Beats - a free-to-air 24x7 Bollywood Music channel, was aimed at plugging such white spaces. The two channels packaged
Bollywood content in new avatars for mass audiences and have been very well received.

∆ Media & Entertainment industry will stand to benefit from GST implementation in the long run, as entertainment tax will fall under its ambit, and input credits will be available to all segments across the board.

∆ Growth Drivers :- Some recently announced government policies will have a lasting impact on the M&E industry especially over the long term.

∆ Goods and Services Tax (GST) –  “Remove barriers for the consumer” The GST regime that kicked-in from July 1, 2017 will have varied levels of impact across different segments of the industry. However, in general, M&E will stand to benefit as entertainment tax will fall under the ambit of GST and input credits will be available to all segments across the board. From an industry stand-point, the removal of tax
barriers between states could also set in motion a virtuous cycle of improvement in consumption levels. Further, a shift towards the organised sector can potentially increase advertisement revenue in the medium term.

∆ Cable Digitisation – “See your consumer” - The paradigm shift in the overall operations of the television sector brought about by digitisation is expected to continue flowing in gradually, once the teething troubles get sorted out. Addressability shall not only provide improved revenue due to reduction in issues of under-reporting in the short-run, but also improve consumer analytics and hence the monetisation potential of advertising inventory in the long-run.

∆ TRAI Tariff Guidelines – “Empower the consumer to choose”  -The TRAI’s guidelines on tariff and interconnect will alter the operating dynamics between stakeholders. While TV channels are typically sold as a bouquet today, the guidelines mandate à la carte pricing of channels at the retail level to give the customer complete control over channel subscription. However, industryparticipants have cited multiple issues, including pricing regulation on content, lack of infrastructure for marketing and billing on an individual channel at the retail level, niche channels facing reach problems, etc. Further clarity is awaited as the matter is sub judice.

∆ Rise in Digital Consumption of Content :-The launch of 4G by a number of telecom companies and the price wars that have ensued have resulted in considerable reduction in data tariffs. The free data use
period offered by Reliance Jio between September 2016 and March 2017 further encouraged the use of both mobile internet and data. This, in turn, has led to an increase in online usage and interaction
on digital platforms. As competition in the telecom sector has risen sharply and 4G roll-outs have picked up pace, a substantial drop in data tariffs and debottlenecking of bandwidth has been witnessed. The digital revolution has received a further fillip by government and private initiatives to 

create public wi-fi zones and a faster roll-out of broadband services.These trends have the following implications for the media sector :-Higher content consumption, especially video, enabled by cheaper data and launch of multiple OTT platforms and services .Smartphones gaining ground as a second screen along with TV, especially as prices in India have dropped and 4G phones have become mainstream Growing affinity towards on-the-move 

viewership of content through mobile phones.

These trends will put advertising spends in this segment on a higher trajectory and they are expected to grow at a CAGR of 30.8% by FY'21.

∆ Small Towns and Rural Areas Display Robust Consumption Small towns and rural markets continued to demonstrate steady capacity for consumption of more traditional forms of content in a phenomenon that the KPMG – FICCI Report, 2017, refers to as the ‘Bharat’ story. In the print segment, despite competition from digital media, regional markets displayed growing demand. Film exhibition also saw an expansion in the number of multiplexes across small towns. The footfalls and revenue realisations also received a boost as major operators commenced business in Tier II cities. The television segment, however, offered
most apt instance of the strength of the ‘Bharat’ story. The high levels of television impressions and viewing time in rural India caught the attention of broadcasters and advertisers alike. The obvious reaction to this was an increase in the number of advertisers on rural-focussed television channels, and broadcasters focussing on regional content. Going ahead too, TV viewership is slated to be significantly
catapulted by rural India, as urban markets begin to saturate.

∆ Rural and Digital Coverage through Broadcast Audience Research Council (BARC) :-BARC India is the only government registered TV ratings service in India, which releases individual viewer ratings since June 2015 and rural viewership data since October 2015; thus covering India more holistically. Further, BARC has also announced a phased roll-out of Digital measurement platform ‘EKAM’
recently, which will help track the hitherto-unmonitored digital content consumption.

∆ KEY HIGHLIGHTS AND DEVELOPMENTS :- 

1- Free to Air (FTA) Channels Attract Advertisers :- Free-to-Air channels continued to build on the momentum they created in FY15. Some prominent channels went FTA, as a drive to increase viewership was implemented by some broadcasters, especially to latch onto the DD Free dish-led FTA market-growth. The viewership trends revealed through BARC’s rural measurement in FY16 endorsed the trends marked in FY15. Once again these
channels achieved high reach and viewership and as a result, advertising spends.

2- Consolidation across the Value Chain:- During FY16, leading players in the M&E
industry continued to consolidate their presence across genres and markets. While the number of mergers and take-overs were fewer than in previous years, the size of these transactions was higher. Even in the radio space, larger players expanded their footprint into non-metro cities and towns by acquiring smaller industry players. The consolidation drive permeated the film exhibition business too, albeit at aslower rate.

3- Advent of Video on Demand Services (VoD) :- Over the past year, there has been a surge in VoD services. Global OTT leaders Netflix and Amazon Prime have made an entry
into India, with significant war-chests and a subscription-driven model. Side by side, major domestic broadcast network backed platforms driven largely by advertising, such as VOOT (Viacom18), amongst others, also launched their bouquet of services. Telecom provider’s content aggregation platforms like Jio TV/Jio Cinema, Airtel Wynk, etc. too have gained ground. As of now, various models are being experimented with; as monetisation in OTT is a challenge given scalability concerns and lack of an established currency for advertising.

4 - Consumer Analytics:-  A Crucial Tool The M&E companies have begun to extensively use analytics as a basis for building and validating their business models. Even challenges in the business environment are being addressed based on the results of analytics. BARC viewership data offers broadcasters and advertisers fresh insights which are translated into
modifications in content, distribution and advertising strategies. As technology evolves, availability of data will only increase. This will enable organisations that ride this opportunity to optimise customer base.

∆ MAJOR INDIAN OTT PLATFORMS INCLUDING VOOT ARE ADVERTISING- DRIVEN, VERSUS THE SUBSCRIPTION- BASED MODEL OF GLOBAL PLAYERS LIKE NETFLIX AND AMAZON PRIME.

∆ Media Industry :-The Indian M&E industry is expected to grow at a 13.9% CAGR to reach ` 2,419 billion by FY21, from its estimated size of ` 1,262 billion in FY16, due to positive demographic trends,
improved connectivity driving reach and availability of segmented content offerings.

∆ The Indian Television Industry :The Indian Television industry stands at ` 588 billion in FY16, registering a growth of 8.5% over the previous year. It is expected to grow at a CAGR of 14.7% and double in size by FY21 to reach ` 1,166 billion. Both advertising and subscription revenue are expected to contribute to this growth. While advertisement revenues are expected to grow at a robust 14.4%, subscription revenue will lead with a stronger growth 

of 14.8%, on account of the benefits of digitisation that will accrue post FY17.There were 181 million television households in the country in FY16, translating into a television penetration of 63%. Within this universe, the Cable & Satellite (C&S) subscriber base stood at 169 million in FY16. By FY21, the number of television households is expected to reach 203 million, implying a TV penetration of 67%. The C&S subscriber base is slated to climb to 171 million by then. This rising trend in both TV penetration and increase in C&S base bodes well for the Indian television sector.

∆ The Indian M&E industry is expected to grow at a 13.9% CAGR to reach ` 2,419 billion by FY21, driven by positive demographic trends, improved connectivity boosting reach and availability of

segmented content offerings.

∆ If you look at the above mentioned charts of time technoplast after long consolidation between 2008 to 2016 time technoplast gives multi-year Breakout and started it's northward journey from 42 and made new 52 week high of 205  and giving massive 500% returns to investors in just 18 months.

∆ I think consolidation in tv18 is over in 2018 or sooner and tv18 also giving handsome returns in long term view of 3-5 years so patience investors accumulate tv18 at cmp around 40 and dips towards 35 if any, my conservative target price is 75+ all the best guys and happy investing.... [ Disclosure : holding from 43 levels hence my view maybe biased so kindly do your own research before taking any positions in tv18. ]

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