Ad dollars shift to sports and news platforms from GECs in Q1FY25: Elara Capital

While Elara Capital expects ad revenue for general entertainment channels (GECs) to be subdued, it noted an uptick in GECs' subscription revenue, driven by a price hike

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New Delhi: According to an Elara Capital report, ad revenue growth for general entertainment channels is expected to be lower in Q1 of FY25 due to reduced FMCG ad spending, which was diverted towards cricket tournaments and general elections.

In a report, Elara Capital stated that the ad revenue of Zee Entertainment is estimated to be flat in Q1 FY25. Sun TV is also expected to be flat due to its failure to gain market share in other markets except Tamil. 

“However, 20% ad revenue growth is expected from TV Today owing to the positive impact of general election spending,” it wrote. 

While Elara Capital expects GECs ad revenue to be subdued, it highlighted an uptick in GECs subscription revenue. The report stated, "Zee and Sun TV’s subscription revenue is expected to grow by 7% (YoY) and 4% (YoY), respectively, driven by a price hike."

Zee may also witness a theatrical revenue of Rs 1,449 million, led by Maidaan and Mr and Mrs Maahi, the report mentioned. 

The report further revealed that Q1 FY25 has remained subpar for PVR Inox. Srikanth Munjya and Mr and Mrs Maahi performed better than large-ticket films, despite the size and cost of the film. 

Additionally, the box office collections of English and regional content have remained weak due to the absence of films. The report estimates that Hindi box office collections are likely to decline by 34% YoY. 

However, with releases including Stree 2, Bad Newz and Sarfira lined up for Q2 FY25, there may be a quarter-on-quarter improvement (QoQ).

Furthermore, 22% occupancy is expected due to muted footfalls. The report estimated that there would be a 12% revenue decline in PVR Inox’s box office collections, while food and beverage revenue would grow by 1.1%. 

Moreover, the average ticket price (ATP) may decline by 5% (QoQ), while spending per head (SPH) might grow by approximately 4.8% year-on-year. Interestingly, the report suggested that ad revenue might remain flat QoQ due to content performance issues during the quarter.

It is estimated that DB Corp’s consolidated revenue for Q1 FY25 would be Rs 6,040 million, a decline of 2.1% QoQ but an increase of 9% YoY, attributed to revenue models being adversely affected due to the Election Model Code of Conduct. 

Print ad revenue, radio ad revenue, and print circulation revenue are expected to grow by 8%, 14%, and 2% YoY, respectively, on a high base, the report concluded.

Elara has estimated Entertainment Network (ENIL IN) revenue growth of 50.0% YoY in Q1 FY25, due to a boost from the election campaigns and acquisition of Gaana. ENIL’s FCT revenue is set to grow 25.0% YoY, while the non-radio business is likely to rise 50.0% YoY. 

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