Den Networks, a prominent Indian cable feed provider that is now part of the Reliance Industries group, today reported a set of disappointing financial performance numbers, capping a year of pain and degrowth.
The company’s subscription revenue, which is overwhelmingly composed of the monthly subscription fees paid by cable TV subscribers, fell to 190 cr for the Jan-Mar quarter — their lowest in more than a year.
This caps a full year of continuous decline, coinciding with the COVID-19 pandemic.
Den’s quarterly subscription revenue had hit a peak of Rs 222 cr in the same quarter of last financial year (Jan-Mar 2020), but has fallen every quarter since then.
Subscription had fallen to Rs 201 cr in the third quarter of the year (Oct-Dec 2020) from Rs 206 cr in the quarter before that (Jul-Sep 2020), which was itself down from Rs 212 cr in the first quarter (Apr-Jun 2020).
The exact reason for the fall was not disclosed. But it is likely that people are cutting back on their media consumption — particularly that of high-end channels — in the wake of financial difficulties associated with the COVID-19 pandemic and the resulting lock-downs.
Given the declining prospects of the cable TV business, many cable operators have switched their focus to high-speed broadband. However, in case of Den Networks, the company is owned by Reliance Jio, which has its own high-speed broadband services.
In fact, Den Networks stopped sharing information about its broadband business from the second quarter of this year (Jul-Sep), possibly because that side of the business was increasingly being taken care of by the parent company under its Jio branding.
Den’s second major source of revenue — money paid by TV broadcasters in exchange for carrying their channels prominently — has also proven to be fluctuating during the last one year.
For the final quarter of the year (Jan-Mar 2021), the company’s placement/marketing revenue fell to Rs 87 cr from Rs 106 cr in the immediately preceding three months (Oct-Dec 2020). They were at Rs 96 cr and Rs 61 cr in the two quarters before that. In the fourth quarter of the previous financial year, they were at Rs 73 cr.
Declining revenue has also hurt profitability.
Den Networks’ pretax profit fell to Rs 33 cr in the final quarter of the financial year 2020-21 from Rs 57 cr in the immediately preceding quarter and Rs 37 cr in the quarter before that and Rs 59 cr in the first quarter. Ultra News