No festival boost, media companies witness dip in ad revenue in Q3FY25

This comes after media companies reported a decline in their traditional advertising revenue in Q2 (July-September) of FY25

Economy’s weak spell outweighed the expected festival fillip for the media companies during the third quarter of financial year 2025 (Q3FY25) as most firms saw their advertisement revenue dip.

 

This comes amid the ongoing churn, as more and more advertisers’ budget is shifting to digital media from the traditional platforms like newspapers.

 

Media companies had reported a decline in their traditional advertising revenue in Q2 (July-September quarter) of FY25 with hopes that the festive season would help revive their advertising revenues. 

 

“Q3FY25 was a soft quarter for advertising growth, wherein broad consumption slowdown outweighed festive season pickup,” said Mukund Galgali, deputy chief executive officer (CEO) and chief financial officer (CFO), Zee Entertainment Enterprises (ZEEL) in the company’s analyst call.

 

“While we did see some pick up in October closer to Diwali, the momentum quickly cooled down in November and December,” he said.

 

He said that from ZEEL’s perspective, the impact of consumption weakness and the resulting slowdown in FMCG (fast-moving consumer goods) ad spending has been more significant in urban areas and in the Hindi heartland. In contrast, the South cluster and other language markets are still holding relatively better.

 

ZEEL reported an 8 per cent drop in its advertising revenue to ₹940.6 crore on a year-on-year (YoY) basis in Q3FY25. However, the company saw its advertising revenue pick up by 4 per cent on a sequential basis.

 

“During this period (Q3FY25), brands have an increased focus on performance-driven marketing strategies rather than broad, awareness-based campaigns, impacting revenue for traditional media channels,” said Abheek Biswas, assistant vice president, consumer insights, Dentsu India.

 

He explained that with consumers spending more time on digital platforms, the impact of TV and print ads has diminished, leading advertisers to shift budgets away from traditional media.

 

Similarly, Reliance Industries-backed Network18 Media and Investments reported an 11 per cent Y-o-Y decline in its advertising volume for its TV news business in the third quarter, putting pressure on its revenue growth.

 

With the fourth quarter (Q4) of FY25 having the Indian Premier League (IPL), Biswas added that segments like luxury, automotive and BFSI (banking, financial services, and insurance) have scaled up their investments with their willingness to pay premium prices for IPL ad slots.

 

Kalanithi Maran-owned Sun TV Network also reported a 6.5 per cent Y-o-Y decline in its advertising revenue to ₹332.17 crore for the quarter ended on December 31.

 

On the other hand, Shemaroo Entertainment, a content creator, aggregator, and distributor, struggled to monetise its growth in viewership across its digital and traditional platforms due to a weak advertising market environment in Q3FY25.

 

“This quarter, we experienced a subdued festival season advertising trend, marking one of the lowest levels in recent years due to sluggish consumer demand,” said Hiren Gada, CEO, Shemaroo Entertainment in the company’s earnings call. “Both digital and traditional advertising revenues continued to face significant pressure.”

 

The company’s revenue from traditional media decreased by 5.8 per cent YoY to Rs 93.5 crore in Q3.

 

But HT Media, a print and digital media company, defied this trend. It reported an overall increase in its print advertising revenue by 9 per cent Y-o-Y to ₹309 crore for Q3.

 

“The volume in the advertising market this quarter was not very robust,” said Anna Abraham, CFO, Hindustan Media Ventures and head, investor relations, HT Media Group in its earnings call.

 

“So, it is pricing and mix that has helped in the revenue growth. This is a festival quarter, so, we also had a lot of initiatives and events during this quarter as well which also helped us garner our additional revenue.”

 

According to Parveen Sheik, head of business intelligence, GroupM India, the boost to consumer spending through tax benefits and incentives introduced in the Union Budget 2025-26 is expected to increase ad expenditures, but it will be reflected in the first quarter of the next financial year.