The media and entertainment industry seems to have had a disappointing quarter as only a select band of movies did well at the box office. Ad revenues remained flat as advertisers continue with their wait-and-watch policy, according to Emkay Global Financial Services.

“While overall collections were 4 per cent lower on a sequential basis, PVR-Inox is likely to report revenue uptick owing to a better mix of movies, advertisement revenue is likely to remain flat as advertisers continue with their wait-and-watch policy,” it said in a report.

Jinesh Joshi, Research Analyst at Prabhudas Lilladher Private Limited, pegged the net box office collections (NBOC) at about ₹1,800 crore in the first quarter.

“Broadcasters are not likely to see any uptick in their advertising revenue this quarter at least, even as intent to spend has started turning positive,” Emkay Global said in its report.

Subscription revenue should see a small uptick, as benefits of NTO 3.0 (new tariff order) start taking effect, though the full upshot should be seen by the second half of 2023-24.

Box office collections

In the first quarter, box office collections continued to reflect the inconsistent movie performance, visible post-Covid. The national box office collections (NBOCs) for Bollywood and Hollywood genre (excluding regional movies) declined 14.6 per cent year-on-year to ₹960 crore in the first quarter.

“While Adipurush was the highest-grossing movie in this quarter, it fell well short of expectations. The Kerala Story was the sleeper hit of the quarter, while Ponniyin Selvan-2 and Kisi Ka Bhai Kisi Ki Jaan were the other Indian movies that collected over ₹100 crore each,” it said.

“While overall box-office collections saw a slight decline on a sequential basis, PVR is likely to report better performance, with a more favorable mix of Bollywood and Hollywood movies,” it felt.

Ad revenue for PVR Inox is not likely to show any improvement, with advertisers staying away as inconsistency persists.

There is no good news for broadcasters as well. Broadcasters are unlikely to see any meaningful ad revenue growth yet. New-age companies continue to pull back on their ad spends, restricting growth. Given the new IPL rights (2023-27) being sold at a significant premium to previous cycle rights, Sun TV’s revenue will be much higher than that in previous years. While Zee’s market share is likely to be stable, weaker ad revenue coupled with elevated investments should result in record-low margins.

Jinesh Joshi said that PVR-Inox would mimic the performance of earlier quarter with footfalls of 33 million (30.5 million) in the fourth quarter of 2022-23. “ZEEL’s performance is likely to be impacted by continued weakness in ad environment and higher investment in content. We expect domestic ad revenues to decline by 2.5 per cent year-on-year to ₹900 billion with an EBITDA margin of 6.3 per cent,” he said.

Related Topics
comment COMMENT NOW