Subscription-based digital platforms to drive broadcasters’ revenue growth in FY25: Ind-Ra

New Delhi: India Ratings and Research has projected a stable rating outlook for broadcasters for FY25, noting that subscription-based digital platforms created by broadcasters will command a greater share of revenue growth.
It further stated that the media and entertainment sector will see a similar growth in advertisement revenue as in FY24. 

“The credit profile of media and entertainment (M&E) players is likely to remain comfortable in FY25,” added India Ratings. 

The over-the-top platforms are expected to co-exist as an alternative entertainment medium; the agency, however, opined them to be no near-term threat to multiplexes. “The operating environment for multiplexes, broadcasters, print and multi-system operators (MSOs)/cable companies is expected to remain stable in FY25, with multiplexes likely to see pick up in ATP and SPH, broadcasters and newsprint companies likely to continue to see improvement in advertisement revenue and MSOs likely to continue diversifying into broadband services,” said Priyanka Bansal, Associate Director, Ind-Ra.

The reliance of print companies on advertising revenues remains high, as revenue from advertisements constitutes 60%-70% of the total revenue for major print companies. 

While the industry has seen some recovery in advertisement and overall revenue for print companies, Ind-Ra believes that this segment is likely to report single-digit growth in FY25 with the emergence of alternative mediums for news such as digital applications and social media.

The agency believes given the synergies available between the cable TV business and the broadband business, MSOs will increasingly bundle their offerings with broadband services which ride on the same infrastructure. The agency expects cable MSOs to continue to leverage their existing network and offer higher-margin broadband services in a bundled form to mitigate the impact of margin pressures in the cable business. 

“MSOs are also expected to increasingly diversify their geographical presence in the short to medium term, to minimise the impact of subscriber erosion driven by competitive intensity,” stated the agency. 

Multiplexes have started showing growth in both revenue and profitability for the past one to two years, supported by a consistent increase in the number of films being released and a meaningful increase in the average ticket price (ATP) and spend per head (SPH). That being said, the admits and occupancy levels still lag behind the pre-covid levels. The agency expects the occupancy levels to pick up in FY25 to support the growth in the revenue and profitability of these companies.