Fiscal 2016-17 for the Media & Entertainment (M&E) sector was a mixed bagcomprising exciting opportunities like continuing growth in the rural markets andincreasing online consumption of our content on the one hand and the impact ofdemonetization uncertainty around impending GST and the new TRAI Tariff order on theother.
Standout feature of the year was the increasing penetration of digital ecosystem intothe average Indian's day-to-day lives which has opened up new avenues of consumption ofour content although revenue models still remain to be developed.
For the Company it was a showcase of our ability to retain and improve profitabilityeven as short-term disruptions impeded business growth. The total revenue (standalone)during the year under review increased by about 5.52% over the previous year.
The operating profit margin for the year was extremely healthy at 32.43%. Advertisementrevenue during the year increased by 10% despite the impact of demonetizationparticularly in the third quarter which demonstrates the dominance of Aaj Tak andincreasing popularity of India Today TV.
The performance has been quite satisfactory. While right investments have been madeparticularly towards technology content and talent; we have continuously drivenefficiency in our business operations which we believe will have a positive impact ongrowth prospects over the medium term.
Television remains amongst the most important entertainment mediums in the country. Theincreasing disposable income in the hands of the average Indian is fueling aspirations -driving demand for branded products and services television being a part of this basket.Credible estimates suggest that India's TV households will reach 203 million by 2021implying a total TV penetration of 67% - majority of the additions are expected to be inrural India.
To expand our reach in the rural market we entered the Free Dish platform with ourflagship AajTak channel in November 2015. This has helped us maintain and expand our leadover our competitors and hence improve advertising yields.
Our English channel India Today which was rebranded in May 2015 continues to grow andimprove its market position as expected. Sizeable investments made towards this in theareas of content marketing and distribution have helped the channel get to enhancedviewership and revenues. Channel's advertising yields are expected to strengthen furtheralthough the English news television space is witnessing severe competitive pressures.
Your Company made an application to Ministry of Information and Broadcasting (MIB) formigration of its three FM radio stations located at Delhi Mumbai and Kolkata from PhaseII policy regime to Phase III policy regime applicable to private radio broadcasters. InApril 2017 the Company received an offer from MIB for the said migration subject tointer-alia the execution of Grant of Permission Agreement (GOPA) and payment of migrationfee and other charges including interest.
The Company paid migration fee and other charges including interest and executed theGOPA on May 23 2017. Consequently the three FM radio stations of the Company have nowbeen migrated to Phase III. The radio channels were rebranded as Radio ISHQ' andsuccessfully re-launched.
Looking at the current year there is considerable apprehension as India rolls out itsmost significant tax reform since independence - Goods and Services Tax (GST). While theintroduction of GST is likely to have varied levels of impact across the various mediasegments on an overall basis the impact on Media & Entertainment industry is notexpected to be significant- primarily due to the availability of input credit across theboard.
However the GST rules appear complex particularly from administrative anddocumentation point of view. The Company has and will continue to take advice in thismatter and optimize the impact to the best extent possible.
It is expected that in 2017 there could be an initial adverse impact on advertisingspend as organizations across the board focus their energies on realigning businesssystems and processes to the requirements mandated by the GST law. However in themedium-term with the formalization of the economy and the widening of the tax base GSTshould have a positive impact on the country's GDP and consequently on advertising spends.
The TRAI Tariff order is expected to have a significant impact on economics ofdistribution of Television channels .
All competitors of AajTak are Free To Air (FTA) channels. Implementation of the Tarifforder is likely to pose a challenge for the Company and will have an impact onsubscription revenue as well as distribution related costs.
I would like to thank the employees at all levels for their commitment and remarkablecontribution in the Company's success. I appreciate the valuable guidance provided by mycolleagues on the Board. I also heartily thank our shareholders for their cooperation andsupport.