1. Structured growth for Viacom18

Structured growth for Viacom18

The challenge is to balance and build the portfolio to reduce dependency on Colors. Vats highlights that five years ago when he took over the reins of the network, 80% of ad revenue came from Colors.

By: | Mumbai | Published: November 19, 2017 5:06 AM
Over the last 10 years, Viacom18 has attained a sizeable share in the Indian television space. (IE)

Over the last 10 years, Viacom18 has attained a sizeable share in the Indian television space. With a 44 channel bouquet (14 overseas) and five businesses, the company has had to take some disrupting decisions, some of which have paid off. “We have grown about 40 times in the last 10 years,” says Sudhanshu Vats, group CEO, Viacom 18 Media, “We are very highly dependent on advertising, so its share tends to be around 80%.” As per the financial statement of subsidiaries disclosed by Network18, the holding company of TV18 (which owns 50% in Viacom18), Viacom18 had booked a net profit of Rs 30.6 crore in the financial year ended March 31, 2017, on a consolidated revenue of Rs 3,036.5 crore. The revenue saw about 8% increase over the previous fiscal.

The gestation losses on launch of OTT platform Voot, Hindi movie channel Rishtey Cineplex and Kannada GEC Colors Super pulled down the net profit, which was at Rs 141.5 crore in the previous year. But Viacom18 needs to up its game to compete with brands like Star India, Sony Pictures Networks and ZEEL. The challenge is to balance and build the portfolio to reduce dependency on Colors. Vats highlights that five years ago when he took over the reins of the network, 80% of ad revenue came from Colors. That number has now come down to about 52%. Rohit Dokania SVP, research, IDFC Securities states, “Media is a scale business and Viacom’s TV broadcast portfolio has few gaps which could be filled over a period of time.” And the magic word for Vats is segmentation. The second thrust is to plug white spaces. While Viacom18 will enter Tamil early next year with Colors Tamil, it will alongside work on strengthening the channels in Bangla, Odia and Marathi. The belief is that regional is highly under indexed on every medium, and the need is to drive regional films, and on Voot, regional originals and user experience.

The network has visible gaps is the English cluster as well. While Comedy Central and Colors Infinity perform decently in a relative context, Viacom18 is missing an English movie channel in its portfolio. Vats admits that although the company did come very close to launching an English movie channel three-four years back, “that was one of our misses”. Now, Viacom18 Motion Pictures will be an important piece of the network’s growth story.

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