The real list of top companies shows how the pecking order has changed

Which is India’s second-largest media company?

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This among other things is what a list put together for a book by this reporter shows. It tells you the story of growth and diversification in the Indian media and entertainment (M&E) business — not just in the last five years but in the coming five. There are lots of small things to notice like the many new entrants — Hathway, Tata Sky, UTV, Reliance and Den. Or the fact that the largest firm, The Times Group, remains heavily print dependent.

On the big picture front, there are three identifiable trends.

One, some of the sharpest spurts of growth have been in companies that have diversified the most — Network18, Sun and Reliance. The growth of these three companies came from diversifying across segments. Growth also came from diversifying within a segment, either geographically or across genres like Jagran Prakashan, DB Corporation or The Times Group did.
 

Two, distribution and pay revenues are finally beginning to improve. Look at the film and cable firms making their way into the list. These two industries are heavily pay dependent. Their entry suggests that all the investment going into building India’s media infrastructure is showing some results. It is helping plug revenue leakages, in theatres through multiplexes and digital screens and in TV broadcasting through digitisation. That is what the growing toplines of firms such as Hathway or Tata Sky suggest. Even Zee's growth has been led, in large parts, by increasing pay revenues from the Indian (cable, DTH) and international operations.

Many analysts may not agree with trend three, but we will stick our neck out anyway. Content firms, across the board are finally finding scale. The only example on the entertainment side is UTV, which has done a great job of scaling up across media and genres — in films, gaming and TV — to hit Rs 676 crore in revenues largely in the last three years. Except perhaps for Balaji (Rs 299 crore) and Yashraj Films (estimated at Rs 500 crore), nobody has reached this kind of scale with any success in entertainment content, a fragmented and difficult to discipline business.

On the news side of course there are broadcasters such as NDTV or newspaper companies such as The Times Group, DB Corporation (Dainik Bhaskar) or Kasturi & Sons (The Hindu) that survive by producing content on a large scale. The difference between UTV and the newspaper companies is that the latter produce, largely, advertiser-funded content. The other difference is that in newspapers once you have a leadership position — in circulation, readership, revenues and profits — it holds for a long time like it has for The Times Group or ABP. And investors pay a premium for that steadiness.

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