AROON PURIE
Chairman
Dear Shareholders,
THE YEAR 2023-24 for India in several ways. It hosted the 18th
meeting of the G20, conducting nearly 200 events across more than 60 venues, showcasing
India's potential to many who matter, and extracting so much from the forum in terms of
achieved objectives. This show of strength mirrored India's resilience in the
international arena, where global growth fell to 3.2 per cent in 2023 from 3.5 per cent in
the previous year, challenged by restrictive monetary policies of central banks,
protracted geopolitical tensions and a sluggish recovery in China. Amidst these headwinds,
India grew 7.6 per cent in FY 2023-24, up from 7 per cent in the previous fiscal. This
also marked three successive years of over 7 per cent growth. A major driver of this has
been the government's high spending on infrastructure, which spurred investment in related
sectors. However, Foreign Direct Investment (FDI) has lagged. In FY 2023-24, FDI inflows
were near-stagnant at $70.9 billion, compared to $71.4 billion in FY 2022-23 and $84.8
billion a year before that. This underlines the need to align our businesses to global
value chains by pursuing new trade agreements and bringing about administrative and
judicial reforms to improve the ease of doing business in the country.
Meanwhile, private consumption demand fell to 3 per cent in FY 2023-24
from 6.8 per cent a year ago, as higher prices of goods and the uncertainty on the jobs
front throttled consumer spending. The Achilles heel for the government continues to be
unemployment rate. This calls for more ways to spur job creation, including higher thrust
on the MSME (Micro, Small and Medium scale Enterprises) and construction sectors, as well
as in manufacturing. Another area of concern is India's merchandise exports, which
declined from $451 billion in FY 2022-23 to $437 billion in FY 2023-24. The ongoing
Russia-Ukraine war, coupled with the Red Sea crisis and the Israel-Hamas conflict has made
the international trade scenario much tougher for the Indian exporters.
The Indian Media and Entertainment (M&E) industry, meanwhile, has
continued its growth trajectory, growing 8 per cent to touch Rs.2.32 lakh crore in the
calendar year 2023, according to a FICCI-EY report published in March this year. However,
the growth was half in value compared to 2022, mainly due to headwinds in advertising
during the first half of the year. While television remained the largest segment, digital
media is expected to overtake it in 2024, says the report. The M&E sector is expected
to grow 10.2 per cent to reach Rs.2.6 lakh crore by 2024, and further to Rs.3 lakh crore
by 2026.
The tectonic shift in favour of new media (digital and online gaming)
is already showing. New media grew the most, from a 20 per cent share in the M&E
segment in 2019 to 38 per cent in 2023, garnering Rs.12,200 crore in the process. The
share of traditional media (television, print, filmed entertainment, live events, OOH,
music and radio) stood at 57 per cent of M&E sector revenues in 2023, down from 76 per
cent in 2019.
The growth in advertising revenue, however, has been sluggish. India's
nominal GDP expanded by 9 per cent, whereas advertising only grew by 7 per cent.
Currently, advertising accounts for 0.33 per cent of India's GDP, significantly lower than
in major developed markets, where the ratio ranges from 0.6 per cent to 1 per cent.
News TV witnessed 11 per cent growth in viewership last year, yet it
remains over 30 per cent lower than its 2020 levels. News consumption has significantly
moved to multiplatform, with the reach of digital news at 456 million as of December 2023.
By 2026, online news reach is expected to grow to over 500 million.
Not surprisingly, new media (digital and online gaming) has already
emerged as the front-runner in growth, doubling its contribution to the M&E sector
from 19 per cent in 2019 to 38 per cent in 2023.
The surge in digital media consumption has been fuelled by an
increasing hybrid work culture, improved internet connectivity and the proliferation of
connected devices. In 2023 alone, Connected TVs (CTV) saw a remarkable 50 per cent growth,
reaching over 3 crore households. Smart TV sets constituted over 90 per cent of television
sales during this period.
Consequently, digital advertising revenue has exponentially increased,
accounting for 52 per cent of the total share. It's likely to increase to 57 per cent by
2026. For news publishers, the primary challenge stems from large tech platforms that
disproportionately reap the benefits of digital advertising due to their expansive user
bases, advanced targeting capabilities, and sophisticated data monetisation strategies.
Furthermore, these platforms retain the lion's share of advertising revenue, leaving
minimal portions for broadcasters and publishers.
The subscription models are yet to consolidate consistent loyal
viewership or readership. In the West, some news brands have experimented with
subscription models but economic uncertainties, changes in audience behaviour and new
waves of platform disruption pose serious challenges.
Your Company anticipated the exponential growth of digital media and
invested heavily in creating 31 digital-first brands. There has been significant growth in
our digital advertising, and it works well for the future.
Your Company with over 3 billion video views per month across all
platforms, stands out as the most engaged page/channel across social media platforms.
India Today's follower count continues to be highest on Facebook and Instagram amongst the
English channels. Aaj Tak also remains the Most Searchable News Source, outpacing the
Times of India by an impressive margin of 2X. Aaj Tak maintained the top spot in FY24,
boasting an average of 41.5 million monthly video views. It experienced the highest
absolute growth among competitors, with a remarkable increase of an average monthly 14.5
million CTV video views from FY 2022-23 to
FY 2023-24. India Today continues to lead the pack as the top news
channel in CTV videos in FY 2023-24. Aaj Tak has become India's number one channel on
WhatsApp.
New technological innovations such as Artificial Intelligence (AI) can
work as force multipliers increasing scale and reducing costs. AI is poised to inject
Rs.45,000 crore into India's M&E sector by 2027. However, the injudicious use of AI
can compromise the credibility of a news brand. Your Company has been a global frontrunner
in making smart and effective usage of AI tools for news dissemination and making sense of
data. The key here is the integration of technology with human judgement, not replacing
it.
Continuing our legacy of staying ahead of the curve, we made multiple
innovations last year, launched fresh products and delivered satisfactory financial
results. What, however, doesn't change is the basic philosophy— the accuracy and
relevance of the content we deliver to our end-users are non-negotiable.
Awards and recognitions
In the last year, the Company won over 180 awards across all platforms.
Aaj Tak remains the most followed News channel on YouTube and the only News channel with a
Custom button in the world. The channel achieved a milestone with 2 million concurrent
users on live stream on YouTube during the consecration of the idol of Ram Lalla in
Ayodhya.
Despite intense competition, these achievements have yielded financial
returns. The Company has achieved revenue growth during the year backed by better
advertisement volumes and yield. Profit before exceptional items and tax stood at Rs.81.98
crore. Considering our investments for the future, external factors, and the industry's
performance, your Company's financial results are satisfactory.
Conclusion
Taking this opportunity, I would like to thank the Board of Directors
for their patronage in steering the Company in the right direction. The Company's
foundation rests on the unswerving support of our shareholders. They are the driving force
behind every incremental step that we take. Finally, on behalf of the Board and the
shareholders, I would want to express my gratitude to every employee of the Company for
making TV Today one of the world's most trusted news brands. It's their commitment,
credibility and courage that have helped us achieve this incredible feat.
| Warm Regards, |
| Aroon Purie |