MUMBAI: The new tariff order implemented in the beginning of the year has not only affected the revenue of broadcasters but also of content creators and distributors. Content powerhouse Shemaroo Entertainment witnessed slower revenue growth for traditional media in the second half of FY 19 due to the impact of the new price regime which kicked in the middle of last quarter.
Shemaroo Entertainment CEO Hiren Gada said in an earnings call after Q4 result that the regulatory framework left industry-wide impact towards the end of FY19, especially post January. Gada also mentioned that multiple changes happened towards the end of the year leading to “a certain level of question or activity” particularly in the timeframe of February, March. The traditional business of the company is growing at roughly about eight to ten per cent while its aspiration is to grow at two per cent higher than the industry growth.
“Ultimately, the new tariff order is transitionary. Currently, we do not know the timeframe in which this will come back and we feel that it should be back in a couple of quarters overall because there has been a lot of change at the cable operator level, DTH level etc. BARC issued an advisory to all advertisers not to use ratings literally and there was a rating embargo for almost two months period. So, in that sense, we believe that it is a transient impact,” he commented.
On the other hand, digital media witnessed 31 per cent in the FY 19. Gada also shared the break-up of digital revenue under which YouTube stood at roughly about between 20-25 per cent of the total, syndication was around 35 per cent and telco business, which earlier was a bit more than 50 per cent, came down to below 40 per cent.
ShemarooMe, the newly launched over-the-top (OTT) platform, has not yielded any revenue yet as it was launched during the last quarter. Although it is too early right now, the company is optimistic that there will be some revenue in FY20. However, the company is focusing more on the distribution front to make it available on as many platforms available.
“Actually we are not really competing with virtually anyone because our focus on ShemarooMe, in terms of the segmentation that we have done, most of the segments are virtually uncontested or not really occupied by any of the existing players. Secondly, the strategy or the focus we have maintained is that for that content or that segment where we do not have the complete strength or 100 per cent strong market position, we are willing to work with all partners,” Gada spoke on the competition.
While asked if ShemarooMe was a strategic investment or experiment, he answered that it started as an experiment but as the business fared they realised it is going to be one of the ways to monetise content. However, he did not give any clarification on whether it would be the only digital play of the company.
While the company has seen a downward trend in EBITDA, Gada explained the reasons behind it. He shared that the company has been investing in people along with various other things leading to growing operating expenses. The company is putting efforts to maintain EBITDA in the range of 26 to 30 per cent.
