TRAI's New Tariff Order impacted Q1 ad revenue: ZEEL

ZEEL’s consolidated advertising revenue took a hit, growing just 3.6 per cent y-o-y, while domestic advertising revenues grew by 4.2 per cent Rs 1,132.2 crore.

Published: 27th July 2019 11:02 PM  |   Last Updated: 28th July 2019 11:09 AM   |  A+A-

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Broadcasting market regulator Telecom Regulatory Authority of India’s (TRAI) recently implemented New Tariff Order for the television industry has affected both viewership and advertising revenue during the first quarter of the current financial year, according to media major Zee Entertainment Enterprises Ltd (ZEEL). The company posted a sharp increase of over 63 per cent in net profit during the quarter, but said that the NTO had a negative impact on advertising revenue.

However, it believes the NTO will be beneficial in the long run. “We delivered another quarter of strong performance despite the operational challenges faced by the industry due to the implementation of TRAI tariff order,” said Punit Goenka, managing director and CEO, ZEEL, adding that the company has seen a strong uptake of its channels reflected in the 47 per cent growth in domestic subscription.

The company’s consolidated subscription revenue grew by 36.7 per cent to Rs 708.8 crore during the quarter, with domestic subscription revenue growing 46.7 per cent and international subscription revenue declining 9.2 per cent. “The implementation of the new tariff order has led to better monetization of our viewership which explains the step jump in domestic subscription revenue growth… The order has allowed us to price our channels in line with their popularity, leading to a sharp improvement in subscription revenues, especially in the southern markets,” the company said. 

But, ZEEL’s consolidated advertising revenue took a hit, growing just 3.6 per cent y-o-y, while domestic advertising revenues grew by 4.2 per cent Rs 1,132.2 crore. this number, according to Goenka, was considerably lower than the growth in past quarters.

“This is primarily on account of the decision to convert our two leading FTA channels to pay, which significantly impacted the ad growth for the quarter. Additionally, the implementation of the new tariff order in the previous quarter negatively impacted reach and viewership of most entertainment channels, leading to a temporary shift in some of the ad spends from entertainment to sports,” the company’s chief executive noted. 

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