HT Media bets on digital, AFE to offset print declines

New Delhi: The contribution of print revenue in the overall HT Media operations has fallen below 70%, despite the segment being the core of their business. 

According to Piyush Gupta, CFO, HT Media, the publication is heavily investing in its digital extensions, including OTTplay, Shine, and Mosaic Digital. In addition to this, the publication is currently relying on its AFE (Ad For Equity) business to extend the life of the print business.

Answering BestMediaInfo.com's query about the growth of the print business during the investors' call, Gupta said, “Looking back 8-10 years, print revenue comprised approximately 85% of our total revenue. Today, it's below 70%, although print remains a substantial portion of our consolidated revenue.

Our diversification into digital, radio, and other digital properties like OTT, Shine, and Mosaic Ventures is gaining traction. We are investing with the expectation of diversifying our revenue streams. Print has been under pressure for a long time and will likely remain so. However, it currently remains the core of our business.”

In line with the recently released advertising report by dentsu, the print vertical is slated to decline to 15% of the total share in the Indian adland. “We agree with the report's findings regarding declines. Whether we outperform or underperform these projections remains to be seen,” Gupta said.

Explaining the AFE (Ad for Equity) arm that is being used to keep the print business buoyant, Gupta said, “Regarding our AFE business, we receive deposits from prospective advertisers in which we then take an investment position.

These AFE deals result in security deposits, like the one shown in the September balance sheet. These assets are not for captive consumption and are held for the long term. A typical characteristic of the AFE business is that most of these assets are not for sale.”

The increase in ad revenues in the print segment was driven by a combination of both volume and pricing, said Anna Abraham, CFO, Hindustan Media, a subsidiary of HT Media. 

“Advertising market volumes were weak this quarter. Revenue growth was driven by pricing and mix. The festive quarter also included numerous initiatives and events that generated additional revenue,” she said.

Anna further mentioned that a boost in the revenue also came from the special initiatives and events in the current quarter. Throwing light on the same, Gupta said, “These off-air activities include on-ground events in both English and Hindi markets, such as the Leadership Summit, and initiatives like those on HD online, which occurred this quarter.”

Speaking on the sectors that did well in contributing the ad revenue, Anna said, “Most other sectors performed well, including auto, real estate, and retail. We only highlighted the sectors that underperformed.” The underperforming sectors include BFSI, FMCG, and industrial, as per the company’s filing on the stock exchange.

On Tuesday, HT Media reported a profit of Rs 6.57 crore, with the revenue from operations jumping to Rs 285.7 crore, on a standalone basis. 

On a consolidated basis, the company has announced a total revenue of Rs 530 crore this quarter, as compared to Rs 486 crore in the corresponding quarter of the previous year. Reflecting a 9% y-o-y growth, on an on-quarter basis, this growth in revenue is at 11%. 

Shobhana Bhartia, Chairperson and Editorial Director, HT Media, said, “On a consolidated basis, we reported growth in revenue and an improvement in operational profitability compared to last year as well as sequentially. Print advertising revenues have on the back of price/mix seen improved revenue growth.