2010

Prateek Shrivastava PGPM/0911/031

2009-2011

NDTV Ltd

International

Academy

of

Management

&

Entrepreneurship

1

Introduction

NDTV Ltd

NDTV (New Delhi Television Limited), founded in 1988, is a private television company in

India. It was founded by Prannoy Roy, an eminent journalist and current chairman and

director of NDTV Group. NDTV currently has more than 1,000 employees producing news

from over twenty plus locations in India.

NDTV is among India's top broadcasters and has twenty-three offices and studios across the

country. Its three national news channels NDTV 24/7, NDTV India and NDTV Profit form the

core of the company. With its foray into infotainment channels like NDTV Imagine and NDTV

Goodtimes, the company has become a full-fledged media player and has seen a

transformation from the days when it used to produce a solitary but pioneering show 'The

World This Week'. NDTV has set-up NDTV Worldwide (Media Consulting), NDTV

Convergence (Digital Media), NGEN (Media Process Outsourcing) and NDTV Labs (Media

Software & Technology).

It is India's first and largest private producer of news, current affairs and entertainment television. It is home to the country's best and brightest reporters, anchors and producers; 23 offices and studios across the country host India's most modern and sophisticated production and news-gathering facilities. As an organization, NDTV is totally committed to one cause: to use its extensive expertise, experience, technology and reach to create unparalleled coverage of the latest in domestic and international news and entertainment for viewers at home and around the world

In 2007, the company broke new ground, formulating a strategy to build a global business.

NDTV Networks Plc, a subsidiary of NDTV was formed to seize opportunities in areas

‘beyond news’. The Company launched NDTV Imagine (for general entertainment), NDTV

Good Times under NDTV Lifestyle Company (for lifestyle content), NDTV Convergence (triple

play; to exploit the synergies between television, internet and mobile), NDTV Labs (to

develop media software and technology for captive use), NGEN Media Services (outsourcing

of media post-production services) as 50:50 joint venture with Genpact and Emerging

Markets BV that has helped launch channels in Indonesia, Malaysia and the Middle East.

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Nature of the business

The Indian Media and Entertainment (M&E) industry is poised to enter a golden era. One of the largest markets in the world, the industry is seeing strong growth and has the potential to garner US$ 200 billion by 2015. The Indian entertainment and media (E&M) industry has outperformed the Indian economy and is one of the fastest growing sectors in India. The E&M industry generally tends to grow faster when the economy is expanding. The Indian economy has been growing at a fast clip over the last few years, and the income levels too have been experiencing a high growth rate. Above that, consumer spending is also on the rise, due to a sustained increase in disposable incomes, brought about by reduction in personal income tax over the last decade. All these factors have given an impetus to the E&M industry and are likely to contribute to the growth of this industry in the future. The idea is focus on understanding the audience & providing crisp, relevant news. Rightly enough, analysts agree that in a country of a billion people where a large Section is still unable to read or write the significance of having a variety of independent news media cannot be overstated. The overall business of NDTV ltd can be categorized as –

1. News & Entertainment business

2. Media Marketing

3. Media Consulting

NAME OF THE OTHER GIANTS OF THIS INDUSTRY

NDTV ltd. Aaj Tak Zee News Star News INDIA TV IBN 7 CNN Sahara Samay CNBC TV18 DD News BBC World

Organizational Structure Dr. Prannoy Roy, Chairman and Wholetime Director Mrs. Radhika Roy, Managing Director Mr K.V.L Narayan Rao, Wholetime Director Mr N R Narayana Murthy, Non-Executive Independent Director Mr Amal Ganguli, Non-Executive Independent Director Mrs. Indrani Roy, Non-Executive Independent Director Mr.Vijaya Bhaskar Menon, Non-Executive Independent Director

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Turnover of the company

The effect of cost-cutting and layoffs announced at the and of FY09 by media company NDTV is evident in this quarters financial results: personnel expenditure was down 9.89 percent from Q1 2008-09, and 51.38 percent quarter on quarter on a standalone basis. On a consolidated basis, personnel expenditure was down 6.65 percent year-on-year. The company reported a 8.97 percent year on year reduction in total expenditure, and plans to reduce costs further over the next few quarters. At Rs. 800.9 million, Operating Income was 14.86 percent higher than in Q1-09, though 4.8 percent lower than the Rs. 841.3 million registered last quarter.

A Rs. 80.5 million EBITDA profit indicates a significant improvement over a Rs. 100.8 million EBITDA loss reported for Q1 last year.

Consolidated Results

NDTV’s consolidated revenue for Q1-10 grew by 9.45 percent to Rs. 1306.9 million compared to Rs 1194.1 million for the same quarter last year. EBITDA loss, declined by 37.3percent to Rs. 576.6 million, from Rs. 918.8 million in the same quarter last year. The company reduced expenditure by 32.67 percent, and grew revenues by 5.99 percent quarter on quarter. On a consolidated basis, NDTV reported a Net Loss of Rs. 834.1 million, down from a 5266.4 million profit reported for the same quarter last year, but an improvement over the Rs. 1603.6 million loss reported for Q4 2008-09.

Business Performance

DTH, IPTV & Mobile NDTV Profit & NDTV Good Times have been launched in the US on DirecTV, USA’s largest DTH network and NDTV 24×7 has also been launched on the mobile platform in the Middle East through DuMobile, a content aggregator. The Network has also tied-up with Bharti to make NDTV the preferred News channel for any Bharti powered TV in Indian airports. NDTV GoodTimes is now available on IPTV in Singapore on Sing Tel.

NDTV Convergence

No financial details regarding NDTV Convergence, yet again, but the company claims that pageviews rose by over 50 percent over the previous quarter. 50 percent increase in pageviews in just a quarter is quite dramatic, particularly for an established media site like NDTV. A 50 percent increase in pageviews? We’ve written to NDTV requesting information on the source of that data, and perhaps a chart depicting the same. Remember that NDTV launched a new site for NDTV.com earlier this year, and the last quarter has seen two significant events: the Indian Elections, followed by the Indian Budget, which NDTV streamed live online.

Television NDTV claims that their English News channel was 24×7 emerged as the clear leader with 53

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percent viewership on Election Day according to the GfK-Mode survey of the top 13 cities in India, and that NDTV India is among the top 4 Hindi News channels according to “some sources”. According to TAM data, NDTV HINDU, launched this May, has garnered an 8.2% market share, over the last 8 weeks in Chennai city, overtaking channels like Headlines Today, NewsX and BBC World in the English News genre. The company claims that the TV show ”Rakhi Ka Swayamvar” had a record breaking opening of 4.1 TVR, taking NDTV Imagines’ weekly GRPs to 138.

Milestones and Revenue generation NDTV’s revenues from operations for Q3 FY‘10 were at Rs 84.98 crores as compared to Rs 82.46 crores for the same quarter of the previous year.

EBITDA has greatly improved from a negative of Rs 4.54 crores in the same quarter, previous year, to a positive of Rs 9.8 crores in the current quarter.

Improved efficiency in operations has resulted in the company containing its net losses to Rs 1.66 crores compared to a net loss of Rs 17.48 crores for the same quarter of the previous year.

Operating expenditure for Q3, FY 10 has come down by as much as 13.10 % from Rs 87.13 crores in the same quarter previous year to Rs 75.71 crores for the current quarter.

Result Highlights (NDTV Consolidated)

NDTV’s consolidated income from operations for Q3, FY10 at Rs 167.06 crores was 28.78 % higher compared to Rs 129.72 crores for Q3, FY 09.

Increase in income & significant cost savings resulted in positive EBITDA for Q3, at Rs 86.18 crores compared to a negative EBITDA of Rs 93.78 crores for Q3, FY 09.

Net Profit for Q3, FY 10 at Rs 74.10 crores compared to a net loss of Rs 120.80 crores for the same quarter of the previous year.

RESTRUCTURING

This quarter has been a momentous one for the NDTV Group.

The buyback of NBC Universal’s 26% indirect stake in NDTV Networks Plc gave NDTV the opportunity to look for investors in its non-news verticals.

The repurchase of the US$ 100 Million Step up Coupon Bonds due 2012 for US$ 72.4 Million has allowed the Group to significantly reduce its outstanding borrowings and also cut down on its interest burden. NDTV was also freed from the undertaking to provide a $ 40 million guarantee to the bond-holders. Most importantly, all restrictions and covenants that came with the bonds were removed.

This period also saw the company entering into a strategic alliance with Scripps Networks Interactive, a leading developer of lifestyle-oriented content for television and internet in the United States. The transaction will result in Scripps Networks Interactive acquiring 69% of NDTV Lifestyle ltd on a fully diluted basis for US$ 55 Million.

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The Group also entered into an agreement with Turner Asia Pacific Ventures, Inc for the sale of most of its stake in NDTV Imagine Ltd for a total transaction value of USD 117 Million, involving a sale of 92% of NDTV Imagine on a fully diluted basis for a consideration of USD 67 Million together with the subscription to fresh shares in Imagine by Turner Asia Pacific Ventures for USD 50 Million.

BUSINESS PERFORMANCE

NDTV 24x7 is the clear leader in the English News space as clearly established by the recent Neilsen UMAR survey which showed that the channel was the most watched with over 60% viewership.

NDTV 24x7 won the Best News Channel award given by the Indian Television Academy(ITA).

NDTV announced the first ever Right to Information (RTI) Awards in association with Public Cause Research Foundation (PCRF) to acknowledge those who have displayed exemplary commitment to the RTI Act in a ceremony held on December 1, 2009 in Delhi.

NDTV India, the group Hindi News channel improved its ratings and is widely recognized as India’s most credible Hindi News Channel.

NDTV Profit Business Leadership Awards ceremony was held in Mumbai in the month of October, 2009 to acknowledge the most dynamic Indian organizations & best business leaders.

In the Indian Television Academy (ITA) Awards ceremony, held in Mumbai on 1st December 2009, NDTV 24x7 won the award Best Mini-Series – Born Wild: Out of Africa (Swati Thyagarajan). NDTV Good Times won three awards at the same event – Best Lifestyle Channel, Best Lifestyle Show – Spectacular Spas for Men (Arun Thapar) & Best Travel-Based Show – No Big Deal (Devika Anand & Neha Dixit). We the People, hosted by Barkha Dutt, was adjudged as the Best Talk Show in Asia at the Asian Television Awards 2009.

Four of NDTV’s leading journalists – Sreenivasan Jain, Nidhi Razdan, Swati Thyagarajan and Umashankar Singh - won the Ramnath Goenka Awards for Excellence in Journalism.

NDTV Worldwide and Beximco Group, the largest private sector industrial conglomerate in Bangladesh which also manages the leading publication, The Independent, have come together to launch a 24 hour news and current affairs channel in Bangladesh, Independent Television.

Ndtv.com crossed the 100 million page view mark for the first time in the month of December, 09.

NDTV Social – a portal to connect NDTV journalists and anchors with viewers – was launched during the quarter. This is the first time anywhere in the world a media group has integrated its anchors, presenters, programmes and content into the social stream.

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Achievements

Padma Shri Award

Barkha Dutt

Vinod Dua

Indian News Television Awards

Lifetime Achievement Award

Dr. Prannoy Roy

Best Hindi News Channel

NDTV India

Best TV News Anchor – English

Barkha Dutt, NDTV 24X7

Best TV News Anchor – Hindi

Vinod Dua, NDTV India

Best TV News Reporter – English

Shaili Chopra, NDTV Profit

World Economic Forum (WEF)

Young Global Leaders for 2008

Barkha Dutt

Indy’s Award

Best Fashion & Lifestyle Channel

NDTV Good Times

Airtel Indian News Broadcasting Awards 2008

Trusted News Anchor 2008

Dr Prannoy Roy

Intelligent News Show Host 2008

Barkha Dutt

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Innovative News Producer 2008 for “Sach ka School”

Ravish Kumar

Devna Dwivedi

Commonwealth Broadcasting Award (CBA)

CBA-Thomson Foundation Journalist of the Year

Sutapa Deb

CBA for Innovative Engineering

NDTV Labs - nX Paint software

NT Awards

Best Popular English News Channel

NDTV 24X7

Best Sports Show Presenter English

Sonali Chander

Numero Uno Business News Channel of the Year

NDTV Profit

Best Business News Presenter English

Shivnath Thukral

Best Auto Show English

Car and Bike Show

Best Lifestyle and Fashion News Show English

Business on Course

Numero Uno Hindi News Channel of the Year

NDTV India

Best TV News Anchor Hindi

Pankaj Pachauri

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News Channels run by NDTV group - 1. NDTV 24*7

2. NDTV India

3. NDTV Profit

4. NDTV Good Times

5. NDTV Imagine

6. NDTV Lumiere

7. NDTV Imagine Showbiz

8. NDTV Hindu

Value Chain o Target Audience – Traditional but progressive from the “heart of India”. o Values – Integrity, credibility, truth & speed. o Style – 100% conversational Hindi, colloquial, simple, direct & hard hitting. o Music – Pulsating, energetic & hummable. o Strong powerful content – Latest, unbiased & editorially uncompromising.

Financial Analysis

Competitors Evaluation

Company Name

Last Price Market Cap. Sales

Turnover Net Profit Total Assets

Sun TV Network

364.75 14,374.24 1008.20 437.11 1,792.51

Zee Entertainment

247.80 10,754.70 1,209.26 248.59 2,513.96

DB Corporation

231.65 4,204.79 _ _ _

Deccan Chronicle

147.80 3,580.05 814.93 140.07 1,517.82

Jagran Prakashan

118.65 3,573.39 823.37 91.63 701.38

HT Media 138.10 3,245.64 1,336.00 85.23 1,271.47

Dish TV India 37.20 2,909.51 737.69 -476.28 507.07

Den Networks 173.95 2,269.87 - - -

IBN 18 Broadcast

97.30 1,767.47 181.26 -68.22 428.24

UTV Software 471.85 1,613.51 262.17 25.82 1,403.14

NDTV 124.15 778.65 309.61 -73.18 331.62

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Note – Amt. In Crore Source – Moneycontrol.com

Distribution Network

The distribution network of NDTV runs across the country. The idea being penetration & dispersion across several regions. The channels are distributed by a very experienced teams who ensure the channels reach every nook and corner. The Channel is a part of a bouquet of channels like Sony. Today, the channel has 100% reach & connectivity in Delhi & NCR region with all Cable operators airing the channel. If there is any fault in connection or transmission An immediate feedback is sent to the distribution team to take corrective action. It is important to know that mere availability of a channel to cable operators is not Enough. There is need to position or tune the channel within the viewership range i.e. In case of India 30 channels. It is most often seen that beyond this range viewership is Minimal. The task of the distribution team is manifold. Not only do they have to keep In mind the reach, they also have to keep conducive relations with the operators and Ensure that any problem at any time is duly reported not affecting the service of the Channel.

BIBLIOGRAPHY

Books

o Marketing Management, by Philip Kilter

Manuals

o Agency fans

Websites

o www.ndtv.com o google.co.in o yahoo.com o moneycontrol.com