Both advertising and subscriptions grow

Zee Entertainment (Zee) continued to deliver ahead of market expectations, with both advertising as well as subscriptions growing at an attractive pace in the recent December quarter.

During the period, the company’s revenues grew 26.3 per cent over the same period last fiscal to Rs 938.8 crore, while net profits rose 40.5 per cent to Rs 193.3 crore.

The concerns of a slowing economy did not seem to have a significant impact on the company as advertising, which accounts for 54 per cent of Zee’s overall revenues grew 28.8 per cent over the same period last year.

Subscriptions (44 per cent of revenues) too witnessed a healthy improvement, with revenues from this stream growing 25.6 per cent. Both domestic and international subscriptions grew for the company.

Riding on viewership

The growth in advertising may be explained by the fact that many of Zee’s regional entertainment channels (Zee Bangla, Zee Marathi, etc) and its flagship Zee TV continue to be among the top 3-4 channels in terms of viewership. Advertising is generally concentrated among the top few players in these genres. Among Hindi movie channels too Zee Cinema continues to garner top eye balls.

In terms of subscriptions, the telecom regulator’s mandate to digitise all analogue cable networks in the metros has boosted revenues. While DTH operators continue to witness strong subscriber additions, large cable operators such as Den Networks and Hathway Cable too have witnessed steady traction in customer addition and benefited from the regulator’s dictum.

With other large cities too to be digitised over the next couple of years, the possibility of garnering more subscription revenues increases for players such as Zee.

The markets cheered the results of the company and the Zee Entertainment stock was up 5.4 per cent on Wednesday and closed at Rs 234.65 on the BSE.

venkatasubramanian.k@thehindu.co.in

(This article was published on January 23, 2013)
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