Indian news brands haven’t escaped a global downturn in advertising revenues.
Flagships such as Hindustan Times, New Delhi Television (NDTV), and Zee have had quarterly profits squeezed even as persistently high inflation and aggressive interest rate hikes have compelled them to rein in costs.
NDTV, for instance, recorded a 97.6% plunge in quarterly profit due to weak advertising demand. HT Media posted $2.65 million in losses in the December quarter due to lower ad spends and high newsprint prices; it had recorded profits a year ago.
Reliance Industries-owned Network18 Media is feeling the heat, too.
Globally, Vice, BuzzFeed News, Vox, NPR, National Geographic, Washington Post, and others have announced layoffs amid a similar scenario. Vice is even headed for bankruptcy and BuzzFeed News is shutting down.
Tumbling stocks of Indian media and entertainment
BSE’s Nifty Media index, which reflects the performance of India’s media and entertainment sector, has slipped nearly 14% this year so far.
Zee Entertainment Enterprises and PVR account for half of its weightage, while TV18 Broadcast and Sun TV Network hold 9.08% each. Sun TV Network (8.95%), Network 18 (6.4%), and NDTV (1.6%) are among others constituting the rest.
Consumer prices softened marginally in the March quarter in India, though the economic sentiment remained weak. This impacted advertising revenues, Network18 said in its earnings release (pdf).
During the quarter, the advertising inventory—the total amount of space available for ads—in the news segment fell 10% from the same quarter in the previous year, it said.
Struggles in television advertising
Overall, the Indian media and entertainment sector grew 20% to $26.2 billion in 2022, which is 10% higher than the pre-pandemic levels, said a FICCI-EY report released yesterday.
With consumers moving to digital media channels, less funds are being earmarked for TV—in 2022, it grew by mere 2% as opposed to 30% in digital advertising.
“Subscription revenue continued to fall for the third year in a row, experiencing a 4% de-growth due to a reduction of five million pay-TV homes and stagnant consumer-end revenue,” the report said.
While online news subscriptions generated $14.7 million, newspaper ad revenues grew 13%. However, for many newspaper companies, it is still tough to generate ad revenues through digital channels, the report said.