1. Vol. 40, 18th May – 31st May 2012
Mediatainment Track
Fortnightly Update on Indian Media & Entertainment
Industry
In the Spotlight Content
FY13: Re-invent, Re-grow Content
Private Equity 2
India’s GDP has declined to reach a 9 year low. With ad
revenues’ dependency on GDP, FY13 looks like another tough
year for the media industry. Mergers & Acquisitions 2
Listed leader Zee has been optimistic about FY13 outlook Corporate Developments 3
despite 12% decline in Q4 ad revenues. Zee forecasts industry
to grow at 8-10% in FY13 while it aims to grow faster by News Update 4
increasing market share of its own channels, and the
increasing subscription revenues. The second listed player
Sun TV had a tough FY12, due to political issues. It is likely to Stock Market Update 5
face further headwinds in FY13.
Financial Benchmarking 5
Regional media and retail advertising have done better on
the whole as compared to the national. Print players have About Four-S 7
grown by geographic expansion but were hit by higher
newsprint costs due to Rupee’s fall. In its earnings call, DB
Corp revealed that while retail advertising grew over 20%,
corporate advertisement remained a concern. Radio leader
ENIL is confident of over 10% revenue growth for FY13.
Indian M&E sector is re-inventing itself from a corporate
advertising model to more robust multiple revenue streams
model. Players are expanding geographically and digitally to
make the most of local and digital media consumption and
retail advertising. The regulatory support in form of
Digitisation, Spectrum decisions, Radio Phase III auctions has
been laid out by the Government. We would see new growth
through changing business models in FY13.
About Four-SIndia is getting increased focus in the
Meanwhile,
Services
online/mobile segment. Nimbuzz is relocating their
Four-S Services is India's leading provider of Research, Financial Consulting and Investment Banking services with offices in Gurgaon, Mumbai and
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Education, Financial Services, Infrastructure, M&E, IT-ITeS, Auto and Auto ancillaries, Retail, Real Estate and Textile etc
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2. FOUR-S Mediatainment Track
Investment Activity
st
Private Equity deals in M&E and Mobile VAS till 31 May, 2012
Date Investors Target Stake % Amount $mn Business Stage
9-Ma y IndoUS Ventures Ma gzter NA NA Di gi tal Publ i s hi ng Ea rl y
Mumba i Angel s . Bl ume Ventures , Indi a
26-Apr Venture Pa rtners (Ma uri tius ) a nd Uni ted Mobi l e Apps NA 1.0 Mobi l e Apps Ea rl y
Chri s topher Prei nz a nd As s oci a tes (EU)
18-Apr Future Ventures Ama r Chi tra Ka tha (Ack) 9.8 NA Publ i s hi ng Late
27-Ma r Ni rva na Ventures Advi s ors Ga mes 2wi n 10.0 NA Ga mi ng Late
13-Ma r Provi dence Equi ty, Ma cqua ri e Ba nk Ha thwa y Ca bl e 17.3 72.0 Ca bl e opera tor Late
20-Feb Oja s Venture Pa rtners Bri zzTV Medi a La b NA NA Di gi tal medi a Early
17-Feb Upda ta, Wes tBri dge & Intel Ca pi tal Jul y Sys tems NA 15.0 mVAS Late
15-Feb Ci s co Sys tems Qyuki 17.0 5.5 Di gi tal medi a Early
8-Feb Indi a n Angel Network Ga mi a na Di gi tal Ga mi ng NA 1.0 Ga mi ng Early
31-Ja n Oja s Ventures Venturenet Pa rtners Pvt Ltd NA NA Di gi tal Ra di o Early
27-Ja n NA InRev NA NA Soci a l medi a product Ea rl y
19-Jan CCube MyAdCorner.com NA NA Online ad booking Early
19-Ja n Sequoi a Ca pi tal Knowl a ri ty Communi ca tions NA 6.6 mVAS - Cl oud Tel ephony Growth
2012 has seen 13 deals for more than $101.1mn till date.
st
Merger & Acquistions in M&E and Mobile VAS till 31 May, 2012
Date Acquiror Target Stake (%) Amount ($ mn) Business
23-May ValueFirst Messaging Way2SMS NA NA mVAS
19-May AV Birla Group India Today 27.5 NA Publishing
17-May Trivone Digital Chakpak NA NA Online portal
26-Apr CA Medi a , Zodi us Advi s ors Onl y Much Louder NA NA Event
26-Apr CA Media Endemol India 49.0 NA Content Production
25-Apr Eros International Plc B4U Television Network 76.0 53.1 Broadcasting
24-Apr Publicis Groupe Indigo Consulting NA NA Digital Agency
5-Apr Tyroo media, Inflection Digital DGM India 94.6 0.7 Ad network
2-Apr Jagran Prakashan Nai Dunia Media Pvt Ltd NA NA Publishing
30-Mar Gujarat Fluorochemicals/ Inox Fame India 18.7 18.2 Exhibition
30-Mar Affle, D2 Communications MobiMasta NA NA mVAS - Advertising
21-Mar Gruner + Jahr NetworkPlay 70.0 NA Digital Ad Network
15-Mar Ver Se Innovation Eterno Infotech NA NA Mobile Media platform
13-Mar Pubmatic MobiPrimo 100.0 NA mVAS
29-Feb Komli Media AdMax Network NA NA Ad Network
10-Feb GigaOM NA
Guardian News & Media - PaidContent, other assets NA Content
3-Feb Persistent Systems Openwave Location Business 100.0 NA mVAS - Location services
2-Feb Walt Disney UTV Software NA 430* Broadcasting, Production
25-Jan Gujarat Telelinks V&S 51.0 0.2 Distribution - MSO
19-Jan Reliance Strategic Investments DEN Networks 1.1 NA Distribution - Cable
4-Ja n Wa y2Onl i ne 160by2 100.0 NA Onl i ne portal - mes s a gi ng
3-Ja n Network 18 Group Eena du NA 395.0 Broa dca s ting
2-Ja n Undi s cl os ed buyer Ba l a ji Tel efi l ms - educa tion/ mobi l e NA 1.6 Content/ Medi a educa tion
*estimated value
2012 has seen 23 acquisitions happening in the segment, worth more than $899mn.
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3. FOUR-S Mediatainment Track
Corporate Developments
ValueFirst acquires Way2SMS Magzter raises Series A from Indo-US
In the first deal in the messaging space this year, Magzter has raised a Series A funding from Indo-US
ValueFirst messaging has acquired Way2SMS in an all cash Venture Partners. While the amount was undisclosed,
deal. While the deal amount was not disclosed, it is news report put it in the range of $3mn-$5mn.
pegged to be around $30mn by some news reports. Magzter is a digital magazine store and news stand for
Way2SMS was in the news in late 2011 when it had mobile devices which allows users to browse, buy and
acquired another Person2Person online portal 160by2. read digital editions of select magazines and periodicals. It
The combined entity had a market share of 95% in P2P has apps for iPhone, iPad and Android devices. The 11
online SMS business with over 33mn registered users. month-old company is based in New York and Chennai. It
ValueFirst messaging is a leading Enterprise Messaging claims to have 2.5mn registered users, including 0.6mn
service provider. It is also into SMS advertising network, iPad users from India, and has 1,000 transactions per day.
SMS content publishing and content alerts. It has raised a It has over 400 magazines on its platform at present. It
total of $21mn till date in two rounds from Headland Asia plans to add newspapers and increase magazines
Ventures and NEA. It has been acquiring companies to catalogue to over 10,000 from across the world in next 18
increase its breadth of services. Earlier acquisitions months. The company is looking for another funding
include SMS Social network Tagg.in, telecom products round of over $10mn.
company PacketShaper, VAS firm CellNext. ValueFirst is
expected to achieve turnover of $50mn this year. Seed Funding deals: Innoz, iDubba
This acquisition will increase ValueFirst’s presence in In two seedfunding deals of the month, mobile search
consumer space. Post acquisition, ValueFirst will have company Innoz and TV guide iDubba raised seed funding.
over 50mn opt-in subscribers. Innoz has raised series-A funding from Seedfund. It offers
mobile search service on the shortcode 55444. It charges a
Aditya Birla Group acquires 27.5% in India Today rate of one rupee per serach and also has a subscription
In another case of an Indian corporate house increasing option at thirty rupees per month. The company had a
presence in media space, Aditya Birla Group has acquired turnover of $1.2mn in FY11 and it receives over 33mn
27.5% in India Today Group – Living Media India, for an queries in a month. More than 80% of Innoz’s traffic
undisclosed amount through its Private Investment arm. comes from Airtel. Innoz positions itself as a good data
The India Today Group has presence across all media mining platform for telcos for customer insights.
verticals – publishing, television, radio and events. Its iDubba has raised angel funding from a group of angel
listed group company TV Today Network Ltd closed FY12 investors. iDubba is an Online and Mobile TV Guide and
with a turnover of Rs. 3,084mn and a PAT of Rs. 105mn. based in Noida. It offers interesting services around TV
Commenting on the investment, Chairman of Aditya Birla programme information, like recommendations and
Group termed the media industry as a sunrise sector. alerts.
Trivone acquires Chakpak.com Punjab Kesari to expand, looks for PE funding
Trivone Digital Services has acquired Chakpak.com for an Hindi Daily Punjab Kesari plans to enter new markets of
undisclosed amount. Chakpak is an entertainment portal UP and Uttarakhand in this year. It has already acquired
mostly focussed on South Indian film news. It had raised a land and is setting up facilities in Noida, Meerut,
$5mn funding from Accel Partners. Flipkart had acquired Ghaziabad, Lucknow, Dehradun, Bareilly and Agra. There
rights to Chakpak’s digital catalogue that included 40,000 will be two main editions, one for each state, and many
filmographies and over 10,000 movies. sub-editions.
Trivone owns and manages four other portals – Punjab Kesari has editions in Punjab, Haryana, Jammu and
techtree.com, CXOtoday.com, Supportbiz.com, and Kashmir, Himachal Pradesh and Chandigarh. It also plans
Channeltimes.com. Chakapk, its fifth portal will get it into to increase itds reach in Rajasthan where it already has
entertainment segment. It also plans to launch sports and one edition. It plans to raise $30mn via PE funding route
auto portal. Trivone also has Accel Partners as investors. It for the planned expansions.
had raised a Series A from Accel in December 2011.
4. FOUR-S Mediatainment Track
The Foreign Investment Promotion Board (FIPB) has
News Update approved proposal of Bloomsbury India UK to carry out
publishing business in India for an investment of upto
TRAI: TV Advertisement to be capped at 12minutes/hour $1.876mn.
The Telecom Regulatory Authority of India (TRAI) has
issued regulations regarding ‘Duration of advertisements Percept’s IPL5 Scorecard
in television channels’ to all broadcasters, to enhance TV An analytical study done by Percept Media shows that ad
viewing experience for subscribers. It had earlier released volumes for IPL5 dropped by 19% and number of
a consultation paper in March for the same inviting advertisers dropped by 41%. In this IPL season, the rate
comments from all stakeholders including consumers. per single 10 second slot was hiked to ~Rs. 0.51mn from
There were complaints on the increasing duration and Rs. 0.45mn in IPL4, a hike of ~13%. For audience, average
distracting formats of TV ads. The new regulations include GRPs per match dropped marginally to 32GRPs. The study
maximum duration of TV ads to be capped at 12minutes also confirmed that General Entertainment Channels are
per clock hour with no carry forward of unconsumed slowly reinstating the female viewership.
duration. This will include promotional ads as well. In case Online streaming of IPL5 done by Indiatimes in
of live sporting events, ad breaks to coincide with breaks partnership with YouTube reported a 55% increase in
in the actual event, Time gap in consecutive ad breaks in a combined page views over last IPL to reach 113mn
program to be a minimum of 15 minutes, Part-screen and pageviews. IPL’s CEO claimed that the pageviews at official
drop-down advertisements will not be allowed, and audio IPL site increased by 355% this year.
level of ads not to be higher than the program. Mobile viewing also went up with 0.6mn viewers in the
first week itself. Apalya had tied up with Indiatimes for
Chrome Dii R2: Carriage fee increases $60mn in FY12 mobile streaming of IPL matches.
According to the Distribution Investments Index (Dii) study
on Carriage fee released by Chrome Data Analytics and Copyright Bill Amendment passed
Media, carriage fees paid by broadcasters in FY12 The Copyright Amendment Bill 2012 has been approved
increased by $60mn to reach $380mn. In MSOs, DEN leads by the Parliament. The legislation will now be presented
in premium commanded as it has a 18% share in C&S before the President. The bill essentially recognizes
households across Chrome reported markets. DEN’s artistes as the owners of of copyright rather than
carriage fees in FY12 increased 44% for UHF-band and producers. Hence, broadcasters will be mandated to pay
22% for S-Band. royalty to owners of copyright everytime their work is
On a national level, the cost per contact per household for broadcasted.
a new player has increased by 43% for S-Band to Rs 26 and The Indian Broadcasting Federation (IBF) has appaluaded
by 42% for UHF band to Rs 17. For existing players, the the move as a significant and positive step for the
increase has been 39% and 37% respectively. A reason for industry.
increase in cost per contract is that number of households
have decreased due to increasing DTH subscribers. Mobile TV Spectrum to be located
South is the only market to show a decline in carriage The Information and Broadcasting ministry is in talks with
fees, as a result of Government’s control on Cable. the Department of Telecommunications (DoT) for a
Chennai’s market share in South has decreased from 56% regulatory framework to allocate mobile TV spectrum. The
to 37%. North remains the most expensive area. framework will include spectrum identification within the
recommended band, service area licences, number of
CCI nod to Reliance – TV18, FIPB nod to Bloomsbury UK providers, as well as TRAI recommendations on bidding
CCI has approved Reliance’s stake acquisiton in TV 18 and for mobile TV licenses.
Network 18. The multi-layered deal has already seen Mobile TV requires spectrum in UHF Band V (585-698
Network 18 Group acquiring Reliance’s stake in Eenadu MHz), however there is not enough spectrum available in
for $395mn. Reliance, through its Independent Media this band at present. This has been a big roadblock in
Trust, will provide funding through optionally convertible launch of mobile TV services so far.
debentures to Network18 Media and Investments Ltd and Mobile has become an increasingly important screen in
TV18 Broadcast Ltd. Network 18 and TV 18 have targetted Media sector. Indian Cellular Association (ICA) has said
to raise $800mn in total including promoter’s that mobile handset demand in India was 180mn in 2011,
contributions. Reliance will get access to Network 18’s a YoY increase of 20%. It predicts demand for mobile
media content as a part of the deal. handsets to increase to 250mn by 2014.
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5. FOUR-S Mediatainment Track
Stock Market Update (Returns)
Stock MCap (May31) Price (May31) 15 days 1m 3m 6m 1 yr P/E (TTM)
Zee Entertai nment 1,26,222 131.7 6% 4% 4% 7% -4% 21.4
Sun TV Network 94,167 239.0 -9% -17% -23% -9% -39% 13.6
Di s h TV 61,470 57.8 -5% -4% 6% -10% -26% NM
DB Corp 35,745 195.0 -3% -6% -4% -11% -19% 17.7
Ja gra n Pra ka s ha n 29,255 92.5 5% -6% -13% -12% -28% 16.4
HT Medi a 25,946 110.4 -2% -14% -23% -9% -31% 15.7
Ha thwa y ca bl e 23,421 164.0 -1% 5% -1% 59% 47% NM
Eros Interna tiona l 15,196 165.7 0% -11% -11% -26% 12% 10.3
Den Networks 12,416 95.2 3% -12% -9% 56% -8% 85.2
ENIL 10,235 214.7 8% 3% -9% -13% -12% 18.2
TV 18 Broa dca s t 6,608 18.3 -20% -32% -40% -51% -80% NM
Pri me Focus 6,089 43.9 -2% -9% -19% -9% -20% 6.1
Decca n Chroni cl e 5,736 27.5 -17% -31% -37% -39% -60% 9
Onmobi l e 4,744 41.3 -17% -23% -42% -37% -63% 5.7
PVR 3,952 152.6 5% 2% 7% 12% 39% 15.5
Rel i a nce Broa dca s t 2,880 36.3 -17% -28% -31% -35% -48% NM
Ba l a ji Tel efi l ms 2,380 36.5 6% -19% -13% 7% 4% 11.6
Rel i a nce Medi a works 2,292 49.7 -22% -33% -40% -41% -63% NM
Ni fty 4924.3 1% -6% -9% 2% -11%
Sens ex 16218.5 1% -6% -9% 1% -12%
Market Cap in `mn
Financial Benchmarking - Quarter 4, FY’12 Results
st
Quarter ending 31 March, 2012
Revenue EBITDA PAT
Q4FY11 Q4FY12 YoY Q4FY11 Q4FY12 YoY Q4FY11 Q4FY12 YoY
Zee Entertai nment 7,954 8,691 9% 2,222 1,600 -28% 1,968 1,602 -19%
HT Medi a 4,673 4,941 6% 862 482 -44% 529 220 -58%
Di s h TV* 4,330 5,248 21% 902 1,442 60% -371 -490 NM
Sun TV Network* 4,605 4,270 -7% 3,639 3,282 -10% 2,083 1,590 -24%
DB Corp 3,174 3,606 14% 796 758 -5% 450 454 1%
TV 18 Broa dca s t 2,058 5,120 149% 72 -458 NM -132 -334 NM
Ja gra n Pra ka s ha n* 2,826 3,104 10% 714 659 -8% 421 428 2%
Den Networks 2,821 3,216 14% 231 305 32% 81 48 -41%
Eros Interna tiona l 1,143 2,068 81% 134 342 156% 136 297 118%
Decca n Chroni cl e 3,349 2,195 -34% 68 397 481% -466 61 -113%
Rel i a nce Medi a works 1,392 1,760 26% -641 -392 NM -1,735 -1,262 NM
Pri me Focus 768 1,891 146% 380 597 57% 102 209 105%
Onmobi l e 1,333 1,776 33% 309 413 33% 269 48 -82%
Ha thwa y ca bl e* 1,235 1,355 10% 187 233 25% -175 -68 NM
PVR 898 1,177 31% 190 47 -75% -11 -132 NM
ENIL 822 935 14% 326 329 1% 180 196 9%
Rel i a nce Broa dca s t 678 687 1% -120 -185 NM -197 -307 NM
Ba l a ji Tel efi l ms * 433 369 -15% 2 -16 NM -11 15 NM
* Standalone results Figures in Rs.`mn
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7. FOUR-S Mediatainment Track
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