India’s Network18 Media & Investments reported a third-quarter loss on Tuesday, as the billionaire Mukesh Ambani-backed conglomerate splurged to push up its share of television viewership, while advertisers pulled back on spending.
Network18 posted a consolidated loss of 76.8 million rupees ($938,875.31) in the quarter that ended Dec. 31, compared to a profit of 971 million rupees a year earlier.
However, losses narrowed from the previous quarter’s 364.9 million rupees.
The company’s shares slipped 3% in afternoon trading. They had shed a quarter of their value last year, compared to a 4% rise in the blue chip Nifty 50 index.
Expenses climbed 45% to 19.39 billion rupees as Viacom18, a joint venture in which Network18 is a 51% owner, ramped up its spending on new shows, movies and sports programming.
Viacom18, home to FIFA World Cup 2022 streaming in India, also launched sports channels ahead of the lucrative Indian Premier League cricket tournament, for which it owns digital streaming rights.
Network18 said the investments paid off, as its viewership share in the entertainment business rose 50 basis points sequentially to 10.5%. Its revenue from operations also increased 12% to 18.5 billion rupees.
However, the growth did not drive up its advertising revenue. Businesses, including funding-strapped startups and online brands, kept a lid on their marketing budgets due to high fixed costs.
“The continued softness in the macro-economic environment dampened advertising demand and impacted revenue, in contrast to the strong festive demand witnessed last year,” the company said in a statement.
Television impressions – a key metric used to quantify the number of views an advertisement gets – also declined with a fall in the reach of the news genre, Network18 added.
Video streaming companies YouTube and Netflix pose a threat to the already-crowded Indian television industry.