Despite implementation of TRAI's ad cap, TV industry's ad revenue grew by a decent 10% YoY in Q3FY14. Growth of print companies was even higher, spurred by election-related ad spends in four states, according to Edelweiss Securities.
''Most broadcasters, barring news and music genres, started abiding by TRAI's 12-minute ad cap from Oct. 1, 2013. While not all ad contracts have been renegotiated, broadcasters have gradually started passing on rate hikes. Net realization per subscriber was almost flat QoQ for MSOs. On the positive side, gross billing started in Delhi and some parts of Kolkata towards end December 2013.''
''Net realization per subscriber saw marginal uptick QoQ. KYC and packaging data collection gathered pace. While Q2FY14 saw robust increase in carriage revenues (10-20% YoY) for MSOs, carriage revenues were flat QoQ in Q3FY14,'' it said.
''Most print companies reported strong 14-18% YoY growth in circulation revenue. International revenues of ZEE and Sun TV reported strong growth (9.4% YoY and 27% YoY, respectively), largely aided by rupee depreciation. Due to renegotiation of existing deals in Phase 1 and 2 cities and entry into new territories, content costs for MSOs (especially Hathway and Siti Cable) spiked in Q3FY14,'' Edelweiss said.
''Newsprint prices have declined by Rs 1,500/tonne (4-5% YoY) since January 2014. However, due to existing inventory , there will be no material benefit in gross margins of print companies in Q4FY14.''it added.
''We expect media companies, especially print and radio, to benefit from election-related ad spends in H1CY14. Top picks are ZEE, Dish TV, DEN Networks and PVR,'' it opined.
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