Eco recovery to benefit media-ent sector in FY15:India Ratings

Likely economic recovery in the next financial year and the upcoming general elections will benefit the media and entertainment sector by way of higher advertising spends, India Ratings said today.
In this backdrop, the rating agency has revised its outlook on the sector from negative to stable for FY'15.
"We have revised the outlook on the media and entertainment sector to stable for FY15 from negative as we expect improvements in advertisement spending (ad spending) by corporates with a gradual economic recovery," it said.
It also expects the upcoming elections to contribute an increase in ad-spending in the fourth quarter of current financial year and first quarter of next fiscal.

Referring to print media, the agency said that high newsprint prices due to currency movements along with limited capacity to pass on cost increases to end-consumers could continue to impact the profitability of print media players dependent on imported newsprint in FY'15.
It, however, added that some comfort could be drawn from the expected improvement in ad revenue.

On the TV media, the rating agency said that increasing digitisation of cable TV distribution in FY15 would increase subscription revenue for broadcasters and multi-system operators with reduced dependence on cyclical ad revenue.
"However, we believe timely completion of the digitisation regime remains the key as the capex undertaken by cable operators and direct-to-home operators towards distribution of set-top boxes will be monetised fully once the digitisation drive is complete," the release said.

It also said the proposed rise in FDI in broadcasting sector, if implemented, could lead to increased investment in the sector.
"Investor interest would also be boosted by the digitisation impact," the rating agency said.
As per India Ratings, while print and TV media will continue to dominate the industry, commanding a major chunk of the ad spend over the medium term; online ad spend would be the fastest growing segment on the back of rise in Internet penetration and changing lifestyles.