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While it ended FY14 on a high, the media sector is expected to get off to a moderate start this financial year. After a robust Q4 FY14, thanks to election spends on advertising across platforms, media entities might see slightly lower ad revenue growth at 12 to 14 per cent.
In case of advertising on television and print media, the ad revenues were impacted by the model code of conduct coming into force in the run-up to the elections.
Motilal Oswal predicts, “We expect double digit ad revenue growth of 11-16 per cent for all media companies barring Sun TV, which has been impacted by the YoY correction in the ad inventory and market share loss. While ad growth is expected to be particularly strong at Rs 16 per cent for Zee, growth momentum is also likely to remain healthy (9 per cent - 13 per cent) for print despite impact of lower government spends due to model code of conduct pre-election.”
Television on the other hand, is expected to register a growth of 10 to 11 per cent in advertising revenues. This comes mainly on the back of the launch of new channels and properties, adding to the total ad inventory up for sale. An example of this can be seen in Zee Entertainment Enterprises Limited, which launched its new general entertainment channel ‘Zee Zindagi’.
Costs for cable and DTH players are also expected to go up as they look forward to seeding of set-top boxes for Phase Three of digitisation. However, there is no clarity yet on whether the industry is on track to keep the September 30 deadline for the same, in which case, margins will continue to be under pressure as money from the customers will take a while to come in.
Media sector to have a moderate start this year | Business Standard News