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Update :  Videocon d2h’s growth plans
Monday 27-July-2015, 10:38,
Videocon d2h’s growth plans
MUMBAI: Videocon d2h is planning to
launch a branded Hollywood channel on
its direct-to-home (DTH) platform as
it seeks to up its advertising
revenues.
The company is in the process of
finalising content for this proprietary
channel. It is in talks with content
owners and plans to launch the
channel in the second quarter of this
fiscal.
Videocon d2h currently runs 10
proprietary channels. In the quarter
ended 30 June 2015, the company
added three proprietary channels,
namely d2h Nursery Rhymes, d2h
Cinema HD and a music channel. It
also launched three ‘active’ services
—Active Kids, Active Games and Active
Learning.
“We recently set up an advertising
team to sell ad inventory on our
proprietary channels. We are
beginning to see encouraging response
from multiple advertisers,” said
Videocon d2h executive chairman
Saurabh Dhoot.
The company posted ad revenue of Rs
8.1 crore (Rs 81 million) in the
quarter ended 30 June 2015 and
expects to maintain this momentum as
it prepares to launch more proprietary
channels. In the full fiscal ended 31
March 2015, the company had reported
ad income of Rs 10 crore (Rs 100
million).
Outlook on carriage revenue
Videocon d2h is also planning to
increase its carriage revenue, which
stood at Rs 58 crore (Rs 580 million)
in FY15. In the fiscal first quarter,
carriage revenue was at Rs 18.4 crore
(Rs 184 million), up from Rs 14.5
crore (Rs 145 million) a year ago.
“We have bandwidth advantage and are
a leading player. Smaller niche
channels are always looking for
reach. We will see increase in
carriage revenue as new broadcasters
and new channels come up in India,”
Dhoot told media analysts.
Guidance on subscriber additions
The DTH arm of the Videocon Group
expects to add 1.3–1.4 million gross
subscribers in the first half of FY16.
As of 30 June 2015, total gross
subscriber base stood at 13.7 million.
Net subscribers are at 10.64 million.
Subscriber additions in the second half
of the fiscal are expected to be
stronger, with 31 December 2015 as
the deadline for Phase III
digitisation.
“We see great opportunity in Phases
III and IV of digitisation. Currently,
30–40 per cent of our gross
subscribers are from Phase I and II
markets,” said Dhoot.
HD subscribers
Videocon d2h continues to see a pick-
up in its HD subscriber base. One-third
of its incremental subscribers are
opting for HD and this is expected to
grow as the company plans to offer 50
HD channels by the end of this fiscal.
Currently, it offers 37 HD channels.
The company’s HD subscriber base
represents almost 10 per cent of the
total net subscribers.
ARPU expansion
The fiscal 2016 average revenue per
user (ARPU) is expected to be Rs 215
compared to Rs 196 a year ago. The
ARPU for the fiscal first quarter is Rs
205 compared to Rs 202 in the trailing
quarter and Rs 187 in the year-ago
period.
“The ARPU increase will be largely
because of the average 6 per cent
price increase that we took in
February. We are also planning to
increase our HD channel bouquet to 50
by the fiscal end. The HD component
has a long-term impact on ARPU,” said
Dhoot.
Content cost
With 90 per cent of the content
contracts with broadcasters sealed in
the second half of FY15, Videocon d2h
has a visibility of how it will behave in
the next 2–3 years. The company
expects it to decline by 100–150 basis
points in FY16. In the first quarter of
the current fiscal, content cost
comprised 37 per cent of the total
revenue. In the trailing quarter, this
segment of expense comprised 38.4
per cent of the revenue.
EBITDA
On the EBITDA front, the company has
maintained its guidance for the first
half of the fiscal. It expects 25–30
per cent YoY growth of EBITDA in the
first half.
Debt repayment
Interest cost declined mainly due to
repayment of $100 million. The
company plans to repay another $80–
100 million in FY16. The average cost
of debt is 13.5 per cent and is
expected to fall by 100–150 basis
points in FY16.
http://www.televisionpost.com/dth/videoc...wth-plans/
ANIL G
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