|Pre Budget 2012-13||Friday, March 09, 2012 20:02 Hrs IST|
PRE BUDGET REPORTS
Media: Give required push to digitalization
The current fiscal started off on a positive note for Media and entertainment sector companies. However slowdown in the economy and high inflationary environment resulted in slowdown in ad revenue. The sector witnessed a significant slowdown in advertising revenue in Q3FY12 as FMCG companies reported dismal ad spend growth in Q3 FY12 at 4% as against 20% growth in Q3 FY11. To compensate for lower ad growth, media companies shifted focus to subscription revenues, with broadcasting companies gaining from digitization whereas print companies resorted to higher cover prices.
The media & entertainment sector is taking the next leap with digitization coming to its fold. As more than 70 mn analog TV homes in the country get digitized by 2014, a drastic turnaround in the business fortunes of the MSO businesses and also expect DTH to latch on to half of these subscribers. The digitalization will also see jump in subscription revenue of broadcaster, which till now mostly depend on ad revenue for its growth. For successful implementation of the digitalization, the government will announced major steps, as it is utmost necessary for successful implementation of digitlization.
Stocks to watch
Dish TV, Den Network, Hathway Cable
The Budget is expected address the issues of digitization, as the country shift from analog cable TV to digital. Steps for smooth transition along with reduction of duty on set-top boxes are expected. The budget assumes greater significance in the light of the digitization mandate proposed by the government, which has a timeline of July 2012 for the metro cities. From digitalization the government may generate additional revenues of Rs 80 crore as the under-declaration of cable TV revenues decrease and analog cable TV subscribers come under the addressable digital medium. The coming budget looks promising for media and entertainment sector.