How did we spend our lockdown, apart from fighting with the pandemic? Most of them sailed through the feeling of loneliness by binge-watching web series or TV series. The virtual world has opened rooms to virtual stories with ample choices to suit the taste buds like fantasy, horror, crime, thriller, romance, sci-fi, and comedy. OTT platforms started trending. People grabbed discounts offered on long-term Subscriptions of OTT platforms be it Amazon Prime, Netflix, or Hotstar. Digital Media & entertainment industry made its presence felt stronger across the globe. Web series become our daily addictions or rather obsessions, it’s obvious that the digital media industry has gained strong ground for itself.
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Digital Media Addiction
The way digital media is holding its footprints is amazing. Right from kids to teenagers, to adults to senior citizens, digital content is crafted for everyone. The whole thing became serious when Governments were forced to call out for lockdowns due to contagious pandemics across the globe. People had to be confined to their homes. Had this lockdown lasted for days, people would have survived it, but the unfortunate part was not knowing when things would go back to normal. Thus being confined to homes had left people with little option to divert their minds from catastrophic pandemic news, deaths, and no vaccines. The only source of distraction was digital media.
There started a revolutionary spike in digital media content consumption be it in the form of web series, tv series, vlogs, blogs, etc. People paid for online streaming videos and ott platform subscriptions to keep themselves engaged. This led to digital media addiction with long hours of watch time either on TV or mobiles, or laptops. This slowly shifted the TV binge-watchers to Web Series addicts. Waiting for the next episode or sacrificing your sleep or work for one more episode became normal. Being glued to the idiot box left people with little time to peep into their personal lives. Living in the virtual story world left them with lingering thoughts of what would happen next in the story.
Digital media Addiction helped ott platforms like Netflix, Amazon Prime to multiply their revenues in no time. Web series like Money Heist, Lucifer, broke world records. Youtubers became popular stars. Vlogs became the new short binge-watching trend. Random online videos made by people became trending. People gained popularity overnight. This changed the world of so many struggling actors, singers, dancers, or just anyone who posted a random video with probably no marketable skill. Who would have known that this shift to Digital media would benefit so many?
Digital media has been a pioneer in setting trends and leaving people with the lingering thoughts of wanting more. Pandemic acted as a catalyst to spike the demand for Digital media, now it is a booming industry. Let us study taking an example of a Digital Media Industry company of India as to how will this digital media revolution carve the future for this company.
Digital Media Industry Analysis in India (Case Study)
IndusInd Media & Communications Ltd is one of India’s leading integrated multi-system cable and broadcast operators with a presence in all the States and Union Territories of the country, with more than 1000 locations covering more than 750 cities. The company has a subscriber base of over 4 million and close to 97 percent of its customers are on prepaid payment mode.
It belongs to the Hinduja group which has its roots spread across 30 countries. Thus IMCL has strong parent background and having a strong parent means not to worry about investment infusions. Though media is a loss-making business, a diversified parent group can absorb these losses without much impact. Let us increase our Financial Quotient on Media & Entertainment Industry in India taking the example of IndusInd Media & Communications Ltd (IMCL).
Financial Analysis of IMCL:
- IndusInd Media & Communications Ltd (A subsidiary of Hinduja Ventures Limited) is one of India’s largest integrated media companies.
- Hinduja Ventures Ltd has a 77% stake in IndusInd Media & Communications Ltd.
- Incorporated in 1995, it is in the business for 24 years.
Financial analysis based on 2019 financials
- Tangible Networth is negative $23.3M.
- Revenue is $85M, Net loss $53M as per 2019 annual report.
- Working Capital is negative $(67M), Debt Equity ratio (D/E) is 5.36 and Current Ratio is 0.40.
- No adverse news was found.
- No Credit rating was found for 2021.
Financial analysis based on 2018 financials
- Tangible Networth is negative $(2.4M), Revenue is $76M, Net loss $32M as per the 2018 annual report.
- Working Capital is negative $(82.4M), Debt Equity ratio is 29.07 and Current Ratio is 0.37.
- No adverse news.
- Credit rating as per SMERA is stable.
Financial credentials of Hinduja Ventures Limited/NXTDIGITAL Ltd:
Hinduja Ventures Limited, the listed holding company of integrated digital platform IndusInd Media & Communications Ltd, has been renamed as ‘NXT DIGITAL Limited’.
- The nature of business is Media, Real estate, and Investments.
- Global Investments, With the convergence of technology and communication.
Financial analysis based on 2019 financials:
- Tangible Networth is $20.8M, 30% of Tangible Networth is $6.2M.
- Annual Revenue $144M.
- Loss year over year has been reduced by 77%.
- Cash generated from operating activities is positive, total cash flow from operations is also positive.
However, with changing environment, new subsidiaries might join this group. This parent group is highly diversified and it will be able to endure covid season, post which it will grow substantially.
Covid and Post covid Impact on this Digital Media Company
The Parent company NXT Digital previously named Hinduja Ventures has evolved strongly post covid.
Below are some of the financial highlights:
- As of 31st March 2021, FY’21 EBIDTA Grew by 6.16% over FY’20 while Q4 EBIDTA grew by 167% over FY’20.
- As of May 2021, NXT Digital collaborated with SITI Network to share infrastructure in MSO space.
- The potential market for these infrastructure sharing services in India is estimated at over 60 million cable TV subscribers.
- SITI Networks Limited is a part of the Essel Group or ZEE group providing services in analog and digital mode, with the technical capability to provide features like Video on Demand, Pay per View, OverThe-Top content (OTT), Electronic Programming Guide (EPG), and Gaming through a Set-Top Box (STB).
- Recently Zee Entertainment and Sony Pictures Networks India have merged, with Sony Pictures Entertainment with a 52.93% stake and will infuse USD 1.575 billion in the merged entity.
The collaborations and acquisitions suggest that this company has a bright future with the growing demand for digital media.
As per CRISIL Indian Media & Entertainment Industry would grow at the rate of 27% in FY22 – $18.92Bn.
Let us know your thoughts on how has Digital Media impacted you recently?
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