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Star India trims FY20 losses by 60% thanks mostly to IPL

On the back of higher revenues and lower advertising and promotional expenses, Star India considerably narrowed its net losses to Rs 488.85 crore in FY20 against net losses of Rs 1,216.13 crore a year ago. During the year, Star’s total revenue from operations increased 16.73% to Rs 14,337.46 crore, according to the company’s RoC filings sourced from business intelligence platform Tofler.

Revenues from advertising, which was up 8% at Rs 7,901.30 crore, accounted for the bulk of the share of the revenues earned.

Subscription revenues rose to Rs 5,262.81 crore in FY20 from Rs 4,069.44 crore in FY19. Revenues from licensing of content rights rose by 35.67% to Rs 693.68 crore while revenues from theatrical distribution of films increased by 22.73% to Rs 479.67 crore during the year.

Occurrence of the cricket World Cup and Indian Premier League (IPL) in 2019 shored up ad revenues for the broadcaster, industry experts said. Star India earned over Rs 2,000 crore in advertising revenues from IPL in 2019, higher than revenues of Rs 1,800-2,000 crore it earned in 2018. The IPL TV ad rates for a ten-second slot shot up to Rs 11-12 lakh in 2019 from Rs 10 lakh in 2018. The rates rose to as much as Rs 15 lakh for the IPL 2020 season. Star India, which had made a whopping Rs 16,347-crore bid to win the consolidated broadcasting rights of IPL in 2017, managed to earn higher-than-estimated ad revenues from the tournament in a pandemic year ? pegged at nearly Rs 3,300 crore as home-bound consumers turned to sports. The Cricket World Cup fetched the firm close to Rs 1,500 crore in ad revenues.

Star India’s GECs (general entertainment channels) are among the most viewed channels in the segment. As per a report by ICICI Securities, Star’s Hindi GEC prime time viewership during the July-November period last year was 260 million average impressions. Its closest competitor, Sony had 261 million average impressions during the same period.

The company’s total expenses increased by 9% to Rs 15,262.69 crore in FY20. However, advertising and promotional expenses declined to Rs 1,029.48 crore in FY20 from Rs 1,161.6 crore in FY19.

In the filings, Star India said that the lockdown-led suspension in shooting of TV shows, closure of theatres and temporary halting of sporting events worldwide due to the pandemic impacted the operations of the group. However, “since the easing of the restrictions, the shoot of shows have resumed, sporting events have commenced, some of the movies and original content are releasing directly on the group’s OTT platform…thus, the group is expecting to go back to normalisation in a phased manner”.

The group’s OTT platform, now rebranded as Disney+Hotstar, makes up nearly 30% (along with Disney+Hotstar Indonesia) of the 94.9 million global subscribers of Disney+. Disney+Hotstar that competes with global players Netflix, Amazon Prime Video and a clutch of homegrown services, including Zee5, AltBalaji and Voot Select, in India offers content in seven regional languages and churns out 17,000 hours of local programming annually. The platform was among the first to enable direct to digital film releases, including Laxmii and Dil Bechara, last year. Financial Express

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