Negative credit outlook for film production, print media, television broadcasting: ICRA

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The rating agency said on Thursday that the credit outlook for the film production and exhibition, print media and television broadcasting segments was negative due to the impact of the coronavirus pandemic, while that they were stable for distribution platform operators and over-the-top platforms. Observing that the impact of COVID-19 on the Indian media and entertainment (M&E) industry is a mixture of pain, hope and opportunity, he said the pandemic has had an impact on the industry. varied way.

The sector includes the segments of film production and exploitation, print media and television broadcasting (TV), in addition to distribution platform operators (DPO) and over-the-top platforms (OTT ).

ICRA said it has a negative credit outlook for the film production and exhibition, print media and television broadcasting segments of the Indian M&E industry.

“Besides the direct impact in the form of lost sales due to the closing of theaters, given the negative impact on the overall economy, a sharp reduction in advertising spending was observed in April and May 2020, and is expected to continue over the short term.

“This, in turn, will dampen the revenues and profit margins of the aforementioned segments of the Indian M&E industry in FY2021,” he said.

CIFAR Deputy Vice President Sakshi Suneja said: “Movie theaters were the first to close, even before the lockdown began, and are expected to be among the last segments to see easing. This segment will therefore experience a total loss of revenue in the first quarter. FY2021. ”

Even after theaters resume operations after the lockdown, occupancy is expected to remain below average as consumers, as a precaution, are likely to stay away from crowded locations, she added.

ICRA has said it expects credit metrics for players in the film production and exhibition segments to weaken significantly.

For the print media segment, broadcast revenue was negatively impacted by around 40% year-on-year in April 2020, amid distribution issues due to ongoing foreclosure restrictions.

In addition, advertising revenue, which was already under pressure in fiscal 2020 amid a sluggish economy, declined by around 60-70% year-on-year in April 2020. Advertising revenue was also negatively affected for the TV broadcast segment in April 2020, ”he said.

On the other hand, the rating agency said it has a stable outlook on DPOs and OTT platforms.

“The impact of the pandemic on DPOs will be limited as subscribers should keep their current subscription packages. Acquisitions of new subscribers have, however, been impacted as very few new installations are carried out by DPOs, although there are some. or the same should resume once the locking restrictions are relaxed.

“The prolonged lack of fresh content on the part of television broadcasters, however, may increase the churn rate of subscribers to DD Free Dish,” he added.

He further said that the current lockdown has resulted in increased consumption of OTT platforms while consumers stay at home.

“While currently OTT platforms have a business model dominated by advertising revenue, the current crisis offers an opportunity to increase the proportion of paid subscriptions, led by the new habit of watching OTT at home”, a- he declared.

Additionally, with movie theaters closing and the expected aversion to outdoor movie viewing, OTT movie producers (especially large platforms) are being considered for their movie releases.

A shift in advertisers’ preference to online versus linear platforms is also expected, as they try to capture more attention, especially after postponements and cancellations of various sports programs that were to be shown on TV.

“OTT platforms, however, are also facing a drying up of fresh, quality content. Platforms with a large content library are therefore better placed to increase subscriber numbers during the current crisis,” he said. he declared.


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