MANAGEMENT DISCUSSION & ANALYSIS Forward-looking Statements Statements in the Management Discussion and Analysis describing the Company's objectives, projections, estimate, expectations may be "forward looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those exbrssed or implied. Important factors that could influence the Company's operations include economic developments within the country, demand and supply conditions in the industry, input prices, changes in government regulations, tax laws and other factor such as litigation. Overview Network18 Media & Investments Limited is a leading media and entertainment company in India, with interests in television, internet, filmed entertainment, digital commerce, magazines, mobile content and allied businesses. It has an extensive outreach attracting an average of 229 million television viewers1 and an average of over 27 million unique visitors per month2 on its websites. Network18's digital content and commerce segment include the country's leading digital content properties such as moneycontrol.com, ibnlive.com, in.com, burrp.com, News18.com and firstpost.com It also operates digital commerce brands -HomeShop18 and bookmyshow.com, and publishes Forbes India, India's first local edition of a foreign news magazine title in collaboration with Forbes Media. In addition, Network18 has a brsence in the special interest publishing space through its magazines - Overdrive, Better Photography and Better Interiors. Through its subsidiary, TV18 Broadcast Limited, Network18 operates one of India's most popular television broadcasting networks comprising of channels such as CNBC-TV18, CNBC Awaaz, CNBC Bajar, CNBC-TV18 Prime HD, CNN-IBN, IBN7 and 10 regional news channels under the ETV bouquet. Apart from the regional news channels, TV18 also operates five regional entertainment channels through its subsidiary. TV18 also has joint ventures with Viacom - Viacom18 for entertainment channels and film business; A+E Networks - History TV18 for factual entertainment; and the Lokmat group - IBN Lokmat for a Marathi regional news channel. TV18 and Viacom18 have formed a strategic joint venture called IndiaCast, a multi-platform 'content asset monetisation' entity mandated to drive distribution, placement services and content syndication. Key Highlights Television Business The Company's television business showed sustained growth during the year across genres. Network18 retained its leadership ranking across general and business news, with one new channel (CNBC Bajar) augmenting its strength in the business news genre. Innovative content and revamped programmes helped the Company maintain its rankings in the general news genre, gaining in popularity across national, regional and global audiences. At the regional level, the ETV news channel bouquet made major strides in viewership with the addition of five new channels (Odia, Gujarati, Haryana/ Himachal Pradesh, Kannada and Bangla). Regional entertainment channels under the Colors brand also showed exemplary growth, in line with the growth posted by Colors Hindi entertainment channel. MTV once again led in popularity in the music genre, while Vh1 and Comedy Central lured audiences with their new shows and entertaining content. The kids' genre also recorded high growth on the back of various initiatives to strengthen audience engagement. In keeping with the Group's uptrend, IBN7 and History TV18 were no exceptions and also showed exemplary growth during the year. Film Business Network18's film business continued to expand its offerings with a stream of critically and commercially successful films across Hindi, Hollywood and regional categories. With films like 'Queen', 'Mary Kom' and 'Manjunath', Viacom18 Motion Pictures made an indelible mark in the business, as many of these films went on to win several top-ranking awards during the year. Through its strategic alliance with Paramount Pictures, the studio also released several international blockbusters, which set the box-office ringing in the Indian market. Digital Business The digital sweep in the country has opened up major avenues for growth for established players like Network18. During the year under review, the Company leveraged its brand and content strength to grow across websites, mobile applications and e-commerce business. Several groundbreaking initiatives across media platforms enabled the Company to grow its market share in the digital business, as endorsed by the number of visitors and downloads on web and social media, as well as mobile platforms. The e-commerce business continued to pick up momentum across the pioneering HomeShop18 television channel and bookmyshow.com portals. Homeshop18 has strategically scaled down its digital home shopping business to leverage the potential in the TV home shopping segment, which it dominates with its innovative initiatives. Print/Publications In a strategic move aimed at consolidation of its print business, Network18 closed down 13 loss-making publications during the year. The Company's four key niche publications -Forbes India, Overdrive, Better Photography and Better Interiors continued to enjoy excellent response from readers. Industry Structure, Developments & Outlook* Media & Entertainment Industry The Indian media and entertainment industry is poised to grow at a CAGR of 13.9 per cent -from Rs. 1,026 billion in 2014 to Rs. 1,964 billion by 2019. The projected growth rate is almost double that of the global media and entertainment industry. Investors and global players alike are looking to the Indian market for growth on the back of its significant consumer market base, along with its increasingly favourable macro-economic and regulatory environment. The scenario is conducive for the growth of Indian players, going forward, as they surge ahead with tailored content strategies for audiences (global, national or local), and a strong focus on building the relevant digital and physical touch points to enable easier and more open/interactive access. The year 2014 saw several key initiatives, including new spectrum for mobile and ongoing digitisation in cable, creating a robust platform for future growth. The Indian Television Industry Estimated at Rs. 475 billion in 2014, India's television industry is expected to grow at a CAGR of 15.5 per cent to reach Rs. 975 billion in 2019. Subscription revenue growth, at an annualised growth rate of 16 per cent, is expected to outpace the growth of advertising revenue (14 per cent) on account of improving monetisation due to digitisation. With the number of TV households in India increasing to 168 million in 2014, TV penetration stands at 61 per cent, while the number of Cable and Satellite (C&S) subscribers increased by 10 million in 2014, reaching a total of 149 million. The TV home shopping market, which is still in nascent stages in India, is valued at US$ 525 million, with multiple factors steering growth and boosting credibility. Growing at 40-50 per cent year-on-year, the industry generated gross merchandise volume (GMV) sales of Rs. 32 billion in FY14, with leading product and service brands beginning to utilise the services of TV shopping players. The industry is challenged by low credit card penetration and poor logistics infrastructure, and sales are largely driven by cash on delivery (COD), especially in smaller towns. Return rates are as high as 20-30 per cent of the total transactions and adversely impact the business economics of TV home shopping companies. Film Industry The Indian film industry is projected to grow at a CAGR of 10 per cent to touch Rs. 204 billion in 2019, a lower forecast than last year (which brdicted Rs. 219.8 billion by 2018). However, domestic theatrical revenues are expected to continue to dominate the overall pie. Indian films further expanded their reach during 2014 through increase in the number of prints and also the addition of new geographies such as Lebanon, Iraq and Burma to the distribution portfolio. This augurs well for the growth of the industry in the long run. Digital Media New/digital media continued on its steady growth path during 2014 as India became the second largest country in terms of number of internet users. The 'Mobile- First' phenomenon of internet adoption and innovative business models with 'Mobile-First' strategies boosted internet usage, which also got a fillip from the government's Digital India Program. The programme saw the launch of multiple initiatives during the year, the major ones being the advent of 4G services, healthy growth in number of 3G subscribers and continued adoption of 2G by the masses in the hinterland, among others. Going forward, it is estimated that the number of internet users in India will cross the 300 million mark, dethroning the US as the second largest internet-enabled market after China. It is estimated that 52 million new internet users will login to the digital world by mid-2015. India is expected to reach 640 million internet users by 2019. In fact, the number of internet users is expected to grow much faster than TV viewers in the next five years. With smartphone penetration in India currently at a mere 10 per cent, there is significant potential for a considerable upside. In 2014, digital ad spends accounted for 10.5 per cent of the total ad spends of Rs. 414 billion in India, as digital media advertising in India grew around 45 per cent. Growing faster than any other ad category, digital media advertising spend is estimated to be around 20 per cent of the total media ad spending in India by 2019. Mobile ad spends will contribute around 3 per cent of the total media spend in this period. Operational Overview A consumer-driven business model is at the heart of Network18's operations and the Company is steered by the zeal to provide consumers with the best-in-class media and entertainment offerings that set new benchmarks in creative excellence, fair journalism and audience engagement. Network18 has an array of exciting brands and products designed to delight viewers across genres, age groups and geographies. Segment Wise Performance - FY15 Television Business Network18's bouquet of 30 plus television channels offers a unique mix of national and regional channels, catering to diverse genres like English, Hindi and regional entertainment; general news in English, Hindi and regional languages; business news in Hindi, English and Gujarati languages and music, kids, comedy and infotainment. Business News CNBC-TV18 & CNBC Prime HD 2014 marked the 15th year of CNBC-TV18's leadership as India's No. 1 TV channel in the English business news genre in terms of viewership. The channel dominates the genre with a market share of 54 per cent3 . The channel is targeted at English speaking consumers, investors, business leaders, B-school students and other professionals, and it provides 24-hour coverage of corporate news, financial markets, industry news and expert perspectives on investing and management. The CNBC-TV18 newsroom now provides news updates through social media, and important economic events like The Union Budget, Investor Summit and Indian Business Leadership Awards are streamed live on YouTube. On December 8, 2014, CNBC-TV18 celebrated its 15th anniversary and opened the markets by ringing the NSE bell and closed the markets with the BSE gong from the CNBC-TV18 headquarters in Mumbai. This was the first time in the history of India that the stock markets opened and closed from outside the exchanges. On January 9, 2015, CNBC-TV18 launched a unique initiative called the 'Indian Business Icons', where the endeavour was to identify India's top 15 business icons of the past 15 years through public voting. It proved to be a stupendous success with close to 20 lakh votes coming in over a period of 45 days. CNBC-TV18 also hosts a number of industry benchmark awards and initiatives, such as the 'India Business Leader Awards', 'Investor Summit', 'Emerging India Awards', 'Overdrive Awards', 'Financial Inclusion Agenda' and 'Healthcare Awards', amongst others, to recognise excellence in business leadership across sectors. Some of the most popular programmes on CNBC-TV18 include the 'Bazaar Morning Call', its daily market opening show, followed by 'Street Signs', 'Halftime Report' and the 'Closing Bell'. CNBC TV18 is also available in HD as CNBC Prime HD, which is now accessible in approximately two million households in India4. The year marked the completion of 10 illustrious years of industry leadership for CNBC-Awaaz. The anniversary celebrations were a grand affair, with CNBC-Awaaz committing itself to the cause of financial literacy by launching a new flagship property called A.C.T. - Action, Collaboration, Transformation. The A.C.T. for Growth Summit, chaired by the Honourable Finance Minister Shri Arun Jaitley, and the A.C.T. for Good Governance Summit, chaired by Shri Amit Shah, laid out the blueprint for India in the coming years. Some of the biggest names from business, economy and politics in the country participated in these summits. Another key event was the launch of the 'Gift a Prosperous Future' initiative by Shri Arun Jaitley to drive the agenda for financial inclusion in India - the first such attempt by any media outlet in the country. On the critical Budget Day 2015, CNBC-Awaaz was head and shoulders above its competitors, with 61 per cent market share5 . Its popular shows continued to delight viewers through the year. Apart from investors, the core DNA of the channel comprises entrebrneurs. Year after year the channel has covered some of the most interesting stories about entrebrneurs across the nation through its show 'Masterbrneur'. Last year, CNBC-Awaaz partnered with Google for the show 'Internet Heroes' and captured the stories of SMEs who made a difference in their business, be it revenues or outreach, with the help of technology. CNBC Bajar CNBC Bajar is the latest addition to Network18's arsenal of business channels. CNBC Bajar is India's first Gujarati business news channel in the language of Business. This channel is aimed at the affluent and business-minded Gujarati community, reaching 3 million viewers6 . The channel was launched in July 2014 and was endorsed by the Honourable Prime Minister Shri Narendra Modi and promoted across all media on a nation-wide scale. Since its launch, the channel has made deep inroads into Gujarati viewership through its in-depth coverage of the money markets, additionally providing a local perspective on Gujarati commodities, property and retail markets. The on-ground investor education initiative -Investor Forum saw throngs of Gujaratis across Gujarat and Mumbai rush to get meaningful and reliable investment advice from the channel's star anchors. General News CNN-IBN Further endorsing its leadership position, CNN-IBN started 2015 as the No. 1 English news channel with 33 per cent market share7 . With highly interactive and clutter breaking programming involving in-depth coverage and data-analytics through CNN-IBN-Microsoft Election Analytics Centre, CNN-IBN successfully covered the General Elections 2014. With a market share of 37 per cent, CNN-IBN was the most watched English news channel throughout the General Elections period8, as well as the clear No. 1 English channel across all polling days with a consolidated market share of 36 per cent9. In line with evolving market and consumer dynamics, CNN-IBN also revamped its shows and re-jigged its content with innovations like a break-free 'Good Afternoon India', 'Bullet News' - a fast paced half-hour round-up of the day's most important news, and other special shows, including extensive coverage of the Indian Super League, ICC Cricket World Cup 2015, the Railway and Union Budgets, International Women's Day, the 81st Academy Awards, Clean India Campaign and Neelabh Toons, to name a few. According to a survey conducted by IMRB, amongst those who claim to watch English news, CNN-IBN is clearly ahead of key competitors across multiple audiences, especially SEC A segment and metro residents10 . During the year, CNN-IBN introduced the 'Popular Choice' category to its flagship initiative CNN-IBN Indian of the Year 2014, with public voting through social media and interactive voice response (IVR). The initiative was marked by a first of its kind partnership with Facebook. In the lead up to US President Obama's historic second visit to India, Network18, in association with The Observer Research Foundation (ORF), organised 'The India-US Dialogues' to explore the past, brsent and future of the Indo-US relationship. The 'Power of 49' campaign, that aimed at highlighting women issues and sensitising political parties about such issues ahead of the General Elections 2014, won numerous brstigious awards at Emvies 2014 and the Creme de la Creme Media Award at the WPPED Cream Awards 2014. The channel's coverage of the Clean India Movement and India's victory at the Blind Cricket World Cup was also lauded, especially by Prime Minister Narendra Modi. In the fiercely competitive Hindi news genre, IBN7 has emerged as the 3rd most viewed channel11 amongst those viewers who claim to watch Hindi news. Launched in 2006, IBN7's average weekly reach grew by 6 per cent during FY15 over FY1412 . The channel re-launched with a new tagline - 'Hausla Hai', several new shows like '8 Baje', 'India 9 Baje', 'Desh Din Bhar', 'Rajdhani Exbrss', 'Crime News', and a clean look to ensure that IBN7 stands out in the cluttered Hindi news genre. Led by a team of senior anchors, including Sumit Awasthi, and accomplished editors, the channel is committed to constantly innovating and creating traction amongst viewers through quality content. and Football World Cups, ISL, Budget programming, PM Modi's various visits abroad including to the United States, 100 days of the Modi Government, programming on Maharashtra, Haryana and Delhi elections, Neelabhtoons- a satirical rebrsentation of news and current affairs by caricature artist Neelabh, US President Obama's India visit and special campaigns on road safety, missing children, Clean India, as well as special coverage of a village in Greater Noida, Uttar Pradesh, having very high incidence of cancer and surrogacy, to name a few. News18 India News18 India is designed to give global audiences a 'Window into India'. The channel is brsent in key South Asian diaspora markets that include the UK, Singapore and the Middle East. In FY15, the channel was launched in the US on Dish, Dishworld and Sling. The channel also introduced local programming from UK on the weekly show called 'The UK Edition' that featured top newsmakers from the UK including UK's Prime Minister, David Cameron. News18 India also brought to its viewers 10 days of extensive live coverage of Prime Minister Narendra Modi's visit to the US, with the Indian as well American perspective. IBN-Lokmat On April 6. 2014, IBN-Lokmat completed six glorious years of empowering people. The channel is known for its fearless journalism, incisive reporting and combrhensive coverage. It was also the No. 1 Marathi news channel during the swearing-in ceremony of the new government and ministers at the Centre13. The channel had an extremely successful year, bagging 15 awards at NT Awards 2014, 4 brstigious Ramnath Goenka Excellence in Journalism Awards and three Laadli Gender Sensitivity Awards. During the year, IBN-Lokmat telecast various exclusive shows. The Lok Sabha elections special 'Ladhai Loksabhechi' gave complete coverage and analysis of the General Election 2014. Exclusive shows,such as 'Vishara Netyana', 'Jantecha Jahirnama' and 'Youngistsan Zindabad', where 'Ladhai Maharashtrachi' brought a complete update on the state assembly elections. These, along with its exclusives 'Kaul Maharashtracha' and 'Maze Mat Maze Sarkar' were some of the highlight programmes of the year. An exclusive outdoor, print and radio campaign across the state promoting IBN-Lokmat election specials was undertaken. The channel introduced new shows round the year. Some of these are 'Jagachya Pathivar' (exclusive international news updates), 'Gavakadchya Batmya' (exclusive news from rural Maharashtra), 'Ekla Chalo Re' (inspiring stories of people who work relentlessly for social causes) 'Teen Chehare' (an exclusive entertainment show), 'Fitness Funda', 'Man Kara Re Prasanna', 'Thalak Batmya', 'Speed News', 'Khabar Maharashtrachi'. IBN-Lokmat also raised burning issues through high impact campaigns like 'Kadhi Milnar Madat' on farmer suicides and rehabilitation in Maharashtra, as well as 'Railway Mantri Laksh Dya' (campaign on western and central railways in Mumbai), amongst others. IBN-Lokmat has a strong social media brsence with over one million Facebook fans, 9,600 plusTwitter followers and 19,700 plus subscribers on YouTube. The IBN-Lokmat brand also got a new face, as it entered its 8th year on the occasion of Gudhi Padwa. The channel's new avatar, which is more contemporary and trendy, encompasses a change in content based on viewer research and brand tagline transformation from 'Chala jag Jinkuya' (Let's conquer the world) to 'Maharashtracha Mahachannel' (Maharashtra's maha channel). The channel also acquired a new logo and look. Regional News ETV News channels ETV News network witnessed strong growth on account of expansion of its bouquet of regional news channels with the launch of 5 new news channels - ETV News Odia, ETV News Gujarati, ETV News Haryana/ Himachal Pradesh, ETV News Kannada and ETV News Bangla. With this expansion the ETV News network has further strengthened its position in the regional markets. ETV News network, with its bouquet of 10 regional news channels, now covers all of north India and most of south India. To further strengthen its foothold in the regional markets, ETV News Kannada, Gujarati and Bangla moved their transmission to newly built state-of-the-art offices in Bengaluru, Ahmedabad and Kolkatta. The ETV News network is today the largest regional news network in terms of its geographical reach and the number of languages its covers. The technical upgradation work across all the ETV channels has also been taken up with great rigour, to produce better quality content for viewers. Hindi General Entertainment Colors A challenger brand, Colors is today synonymous with entertainment in India. With an engrossing line-up of distinctive and meaningful programming, Colors continued to entertain audiences across all demographics. It continues to be a strong No. 2 in the Hindi general entertainment genre and also dominates the weekend prime time slots. While 'Comedy Nights with Kapil' got India laughing along with it, the 'Bigg Boss' finale fetched viewership of 8.7 million14 and 'Khatron Ke Khiladi' season 6 opened to a staggering 8.6 million15 viewers. The historical magnum opus - 'Chakravartin Ashoka Samrat' was sampled by 96 million16 viewers across India in its first four weeks. Other successful on-ground and on-air initiatives included 'Got Talent World Stage Live' that garnered viewership of 6.2 million17, and 'Sansui Colors Stardust Awards' that entertained 8.3 million18 viewers, ensuring Colors brsence as a brferred entertainment choice of viewers and consistent performance across the board. Rishtey Rishtey is Viacom18's second mass entertainment offering in India. A free-to-air channel, Rishtey India features the choicest shows from the existing Colors content library-from fiction, non-fiction and reality shows to live events, blockbuster films, and lifestyle programmes. The shows are curated keeping in mind the demographic and psychographic brferences of viewers. Some of the shows that can be seen on the channel include popular series like 'Balika Vadhu', 'Swarg' and 'Na Aana is Desh Laado', amongst others. MTV India MTV is the universe of the young - an iconic youth brand that is irreverent, fun, innovative, passionate and optimistic, encouraging and inclusive. Leading the genre in youth and music categories through the year, MTV's viewership grew by 24 per cent in FY15 and stands at 6.8 million (week 13'15), up from 5.5 million last year (week 14'14). The brand continues to have formidable social media brsence. The MTV India app crossed 2,85,000 downloads across Android and iOS platforms, indicating the channel's growing popularity among its target group. MTV India also launched new apps/games including 'MTV Catastrophe' and 'Football Rampage', amongst others. The launch of MTV Indies, as a segmented offering for music lovers, further augmented growth for the channel. MTV Indies is the world's largest platform for independent sub cultures and has been built in collaboration with a collective of artists and supporters of the independent scene. Led by music, MTV Indies also reflects other subcultures like independent films, art, comedy and more, thereby taking these alternative art forms into the homes of millions. Tapping into this pulsating, dynamic and fresh subculture, MTV Indies is designed to bring together the vibrant potential of Indian youth. MTV Indies is an 'always on' platform available across TV, mobile, web and live events. The channel seamlessly integrates into the digital world with a unique mobile app called Pepsi MTV Indies. English Entertainment Vh1 Vh1 is India's only 24-hour International entertainment channel that provides viewers with their daily dose of International music, Hollywood, pop culture and lifestyle. Since its inception in January 2005, Vh1 has grown tremendously. The channel recently celebrated 10 years of building English music authority in India. A genre leader, Vh1 India has grown the English music audience by 180 per cent in the last 5 years. The channel has pioneered the heady combination of programming content and live on-ground engagements. Vh1 has been committed to bringing to Indian audiences the best of International music genres like EDM, punk, rock, reggae, hip hop, pop, jazz etc. and world awards like the 57th Grammy Awards, Brit Awards and Golden Globe, and CatFish. Through their international properties like 'Rock Rules', 'Jazz Masters', 'Hip-Hop Hustle' and 'Handpicked', Vh1 has successfully brought down to the Indian audiences artistes such as Anoushka Shankar, Wyclef Jean, Kardinal Offishall, Mobb Deep, Flipsyde, Jazz legend Herbie Hancock and chart topper Simon Webbe. Comedy Central Comedy Central was launched in 2012 and is India's first 24-hour English language comedy channel. The channel was launched with a powerful programming line-up of hit TV series- 'Saturday Night Live', 'The Office', 'Seinfeld', 'The Wonder Years', 'That 70s Show' etc. Shows like 'Suits', 'Anger Management', 'About a Boy' and 'Brooklyn 99', in addition to non-fiction properties like 'Impractical Jokers', 'Tonight show with Jimmy Fallon' and 'Penn & Teller Fool Us' continued to capture the viewer's mind space through the year. The channel also forayed into locally produced comedies with shows like 'The Other Week that Wasn't' and 'The Living Room'. Credited as the country's first 24-hour channel dedicated to English language comedy, Comedy Central is today available in over 70 million households across the country. Kids Entertainment Nick Nick, the ultimate kids entertainment destination where the funny rules, reigned at No.1 in its genre during FY15, with hit shows like 'Motu Patlu' and 'Ninja Hattori', through interactive engagements and 360 degree communication campaigns such as 'Nick be the Boss' and 'Comedy Elections'. Large-scale on-ground engagement including School Contact programmes such as 'Class Mein Blast' were conducted, reaching out to over 500 schools and lakhs of children across multiple cities pan India. Keeping pace with the digital revolution sweeping the industry, Nick World app was launched on iOS and Android platforms to deliver Nick shows on the go. The channel continues to maintain its leadership position with the flagship characters being a part of every child's daily life. Sonic Sonic is a 24-hour paid action, adventure and animation channel in the entertainment space in India, targeted at young adults, from 10-17 years of age, totalling an annual viewership of millions. Sonic maintained its lead over competition19 with shows such as 'Pakdam Pakdai', 'Supa Strikas', 'Idaten Jump' and 'Power Rangers'.It boasted of a highly engaging and interactive online community through www.sonicgang.com with more than 1.7 million monthly page views and 1.4 lakh fans on Facebook. Nick Jr. / Teen Nick Nick Jr. is 'the smart place to play' that believes in 'education' and 'entertainment' going hand-in-hand and is aimed at young parents and br-schoolers. The channel strengthened its audience engagement through on-ground and tactical activations. Its internationally acclaimed shows like 'Dora the Explorer', 'Bubble Guppies', 'Go Diego Go' foster motor, memory, maths and language development in a child and have emerged as an integral part of every br-schooler's life. The channel also caters to teenagers in the latter half of the day with the Teen Nick block which showcases international sitcoms such as 'iCarly', 'Victorious and Drake' and 'Josh'. Nick Teen, in a path-breaking innovation, launched the first of its kind virtual house party, where social media and television came together to connect with the teens on TV and on their digital hangouts. The channel aims to continue its successful run in 2015 as well, with a line-up of exciting new shows and seasons. Regional Entertainment Regional entertainment genre in India is fast expanding and the Group has a significant share of the pie. TV18 has 50 per cent interest in the ETV general entertainment channels. During the year, Colors, through a brand licencing agreement, rebranded the 5 ETV regional general entertainment channels. With this brand licensing, ETV Marathi, ETV Gujarati, ETV Kannada, ETV Bangla and ETV Oriya have now donned the Colors identity as Colors Marathi, Colors Gujarati, Colors Kannada, Colors Bangla and Colors Oriya. The Colors regional bouquet continued to showcase their key strength of attracting and retaining loyal viewers who are regular viewers of quality content. Colors Marathi Colors Marathi is a family entertainment channel that mirrors the cultural ethos and spirit of Maharashtra through a range of unique differentiated content created to redefine the family viewing experiences. Pioneers of the Marathi mass entertainment genre, the channel's new journey began with the telecast of the grandest Marathi films, theatre awards "MICTA".The success continues, with its flagship shows like 'Kamla', 'Tu Mazha','Saangai', 'Mazjhe Mann Tujjhe Jhale' etc. continuing to capture the hearts of the people of Maharashtra. Colors Gujarati Colors Gujarati is the only Gujarati general entertainment channel that reflects the kaleidoscopic tastes distinctive to the Gujaratis. It echoes the traditions of the vibrant state of Gujarat through its innovative and differentiated content. Colors Gujarati launched an all new exciting programming line-up resonating the ethos of - 'Dilthi Gujarati'. The refreshing line-up, including 'Preet Piyu Ane Pannaben', 'Kanho Banayo' 'Common Man' and '1760 Saasumaa' upped the entertainment quotient, adding to the viewership and reach of the channel. Colors Kannada Colors Kannada is the successor of the rich legacy of Kannadiga culture. The qualitative and innovative programming offers an entertainment destination for the entire family. The channel has witnessed sustained growth during the year, emerging as a strong No. 2 GEC in Karnataka, driven by its innovative and engaging content spanning top rated fiction shows like 'Agnisakshi', 'Laxmi Baramma' and 'Kulvadhu', non-fiction formats like 'Super Minute', 'Dancing Star' and 'Maja Talkies'. The channel's signature events like 'Anubandha Awards' and 'Serial Santes' have gone on to enhance the family viewing experience for the Kannadigas. Colors Bangla Colors Bangla matches the distinctiveness of the rich Bangla culture with qualitative and contemporary programming. In a fiercely competitive market, Colors Bangla was the fastest growing GEC in the genre in FY15. Its relative market share amongst Bengali GECs grew 2 per cent from the brvious year (8 per cent to 10 per cent). Average viewership grew 32 per cent over the brvious year20, while channel reach grew from 32 per cent to 41 per cent. Signature new show launches in FY15 included iconic mythological 'Maa Durga' and 'Byomkesh Bakshi' and non-fiction properties 'Rannaghar e Rockstar' and 'Great Music Gurukul'. Colors Oriya Colors Oriya is Odisha's first native language mass entertainment channel. Enthralling audiences whilst reverberating with the rich cultural tradition of the Oriya people, the channel proves its mettle with quality programming, brsentation and widesbrad reach. Colors Oriya plays a pivotal role in introduction of new concepts in the Oriya television space like telefilms and events. The channel viewership grew by 3.7 per cent over last year. Factual Entertainment History TV18 History TV18's acclaimed show 'Pawn Stars' continued its imbrssive performance in primetime by leading the genre with 50 per cent market share21 . The year witnessed the launch of the channel's third big-ticket local production 'Vital Stats of India', tracing India's story through exciting facts. The show was greatly received by audiences and critics alike and was a runaway hit on social media. From an advertiser's perspective, the channel pioneered unique, tailormade brand innovations like 'The Great India Collectors' Ride' with olx.in. The show was an out-of-the-box sponsor driven initiative that integrated the channel's factual proposition with the client's product positioning of being the ultimate destination for buyers and sellers. The concept added a unique dimension to the channel's efforts in bringing sponsor-led concepts to provide for engaging viewership. History TV18 also dominated on social media, leading with the maximum number of followers in its genre on Twitter (2.1 lakh). Holding true to the belief that the future belongs to platform agnostic content, the History TV18 app crossed half a million downloads and captivated viewer interest through exciting new features like video on demand, live streaming and interactive notifications. The channel was the first in the category, and among the first in the business to brmiere the multiple Emmy-award nominated show 'The World Wars', one week before its TV launch, on the History TV18 app. The History TV18 app was recognised as the best application on both Android and Windows platforms at the MOBBYS Awards 2014. In its fourth year, History TV18's path-breaking partnership with CBSE for its annual 'Heritage India Quiz' saw participation from over 1,100 schools in 42 quizzes across the length and breadth of the country. The initiative not only provided for great content but also helped increase brand saliency among students, seen as an important constituency among audiences in the genre. Film Business Viacom18 Motion Pictures Viacom18 Motion Pictures has been credited with shaping the new Indian film industry through differentiated and concept driven cinema. The studio has emerged as a force to reckon with by delivering a series of critically and commercially successful films such as 'Queen', 'Mary Kom', 'Manjunath', 'Rahasya', and many more. The FY15 line-up won accolades across film awards including the coveted national award for 'Queen' and 'Mary Kom' and the brstigious Ramnath Goenka Award for Manjunath. The studio also distributed in India a stellar line-up of Paramount movies like 'Transformers', 'Hercules', 'Teenage Mutant Ninja Turtles', 'The Sponge Bob Movie', 'Sponge out of Water', amongst others. Viacom18 Motion Pictures was also awarded the Dadasaheb Phalke Film Festival Award for the Best Studio, reinforcing the stellar success of the studio. Content Asset Monetisation IndiaCast monetises content/programmes from TV18, Viacom18 and other broadcasters, across territories and platforms. IndiaCast reaches Indian diaspora across the globe with its brmiere offering - Colors channel, covering in excess of 72 countries. With a rich content library of 15,000 hours across genres, IndiaCast syndicates content from the Group in nearly 125 countries in over 25 languages (including Hebrew, Russian, Serbian, Bosnian, Albanian, Macedonian, Kazakh, Swahili, and English, among others). With access to content across genres, IndiaCast also manages digital initiatives of the Company and also both linear and non-linear channel distribution, along with subscription video on demand (SVOD)and audio video on demand (AVOD) revenues for the Company. It distributes channels to online sites, OTT platforms, and value added services (VAS) players for mobile consumption. As bandwidth and online connectivity improve, IndiaCast is well-positioned to deliver content seamlessly across devices and geographies. IndiaCast UTV, a wholly owned subsidiary of IndiaCast, manages domestic distribution of the channels of Viacom18, TV18, and other broadcaster across various platforms. It also manages carriage and placement services for various broadcasters in India with distribution platform operators to manage reach and penetration of the channels to optimise monetisation. Digital Business Network18's digital content and commerce segment includes a diversified portfolio of brands catering to a wide range of interests and services, including news and entertainment, markets and finance, online shopping and ticketing, and mobile phone services and applications. Its digital content and commerce segment encompasses: (a) the content business that spans websites and mobile applications covering general and business news, entertainment, technology and sports; and (b) the digital commerce business that includes online and out-of-home shopping and ticketing. Digital Content Moneycontrol.com Multiple new initiatives were taken on the web front, including 'Personal Finance Content', 'F&O Enhancements/BSE Equity Derivatives' and 'Portfolio Upgrade', during the year. The mobile app achieved spectacular growth over the brvious fiscal in terms of unique visitors (92 per cent growth), pages viewed (153 per cent growth), visits (131 per cent growth) and downloads (50 per cent growth). Moneycontrol.com also completed 15 years of excellence during the year. Firstpost.com With a digital newsroom powered by expert writer-editors across the country and the globe, Firstpost has a competitive edge in breaking views on real-time news. With a strong focus on politics, sport, business, technology and entertainment, it has now transformed its image from a niche portal to a more youthful, social, opinion-led destination, with considerable strength in social and shareable content. IBNLive.com IBNLive (English & Hindi) recently underwent a web revamp to impart a modern, flexible interface to the website and upgrade of the backend to latest technology. The site registered 4.33 million22 unique visitors per month with 64 million page views23, and average time spent per visit on the website grew from under 3 minutes to 4.9 minutes24 - a testimony to its quality content offering. The site's social media brsence continued to grow with over 3.2 million Facebook followers and more than 1.3 million Twitter fans. Extensive retooling of the Citizen Journalist platform to empower users is also in the pipeline. Users can also access IBNLive.com on their mobile WAP and through apps for iPhone, iPad and Android platforms. Further, the CricketNext app has been updated with a faster scorecard. News18.com News18.com, the one-stop shop for hyperlocal content focussing on regional languages, continued to increase its footprint, launching Gujarati and Urdu offerings in addition to Hindi and English, and increasing its brsence to 12 states. The website clocked 3,10,000 unique visitors per month25 , with page views of 5 million26 who spend an average of over 4.1 minutes27 on the website. The English Facebook page has around 1,50,000 likes, the number for Hindi page being 64,000. News18.com touched 1,000 plus concurrent users with increase in content popularity. in.com Network18's aggregator platform, showcasing its content strength, provides a good window to all digital content of the Company. The portal averaged 5.77 million unique visitors per month28 with average page views of 49 million29 and average time spent per visit of 3.4 minutes30 . Mobile Application In addition to a huge subscriber base across SMS, WAP IVR and user-friendly mobile platforms, Network18 has mobile-enabled versions of some of its websites and popular mobile applications, such as IBNLive, M3, and Markets. Digital Commerce HomeShop18 HomeShop18 now has a cumulative customer base of over 14.9 million and has also reached the milestone of 2.5 million app downloads combined across Android, iOS and Windows platforms. HomeShop18's success is further validated by the fact that 30,000 transactions take place daily, of which 57 per cent are from repeat customers, and its call centre receives about 100,000 calls daily. HomeShop18 also received accolades like the Thought Leader Award 2014 in "Most Admired Change Management Programme in Telecom, Internet and E-commerce" category, "eRetail Leadership of the Year" at Indian eRetail Awards 2014 and "e-Retailer of the Year-Value for Deals" at the Indian eRetail Congress 2015. BookmyShow As of March 31, 2015, bookmyshow.com recorded an average of 42 million visits per month. Bookmyshow sold an average of over 4.5 million plus tickets per month on bookmyshow.com and its mobile application for FY15, clocking an imbrssive growth of 60 per cent over FY14. Bookmyshow is also focussed on building its mobile strategy and has close to 17 plus million gross downloads with over 50 per cent of sales through the mobile app. Bookmyshow also manages ticketing as well as on-ground operations for 6 out of 8 IPL teams. Print/Publication Business Network18 has a set of highly reputed publications which include 'Forbes India', 'Overdrive', 'Better Photography' and 'Better Interiors'. Forbes India FY15 saw new launches both in editorial (best 50 public companies and super 50) and in events ('The Entrebrneurship Summit' and 'CEO Dialogues'). Forbes India also has an imbrssive social media brsence, with 3.9 lakh plus likes on Facebook, 1 lakh plus Twitter followers (highest in its genre) and over 1.3 million Google plus followers. Overdrive With an experienced editorial team respected by both readers/viewers as well as the Auto Industry, Overdrive broadcasts on CNBC-TV18 and CNBC-Awaaz have gained immense popularity. During the year, Overdrive introduced a unique concept of 'Live Life in Overdrive' to further boost its engagement amongst its readers through events like 'Winter Drive' with Mercedes, 'Rise Above Ride' with Mahindra Centuro, 'Independence Quattro Drive' and '24 Hrs Performance Run' with Audi and 'India Superbike Festival'. Overdrive also successfully organised the 15th edition of the coveted CNBC Overdrive Awards in February 2015. Overdrive's social brsence spans 5.73 lakh plus likes on Facebook, with its Youtube channel generating over 30 million plus views to date. Better Photography Better Photography organised contests with Amazon.com and Godrej during FY15 to enhance its reach amongst photo enthusiasts. Better Photography announced the 7th edition of 'Wedding Photographer of The Year'. Goa Tourism partnered with the awards to host the face-off round in Goa. Better Photography's social brsence extends to over 1.84 lakh plus likes on Facebook. Better Interiors Better Interiors enjoys the respect of and shares a good rapport with leading industry firms, architects, designers, etc. and a roster spanning renowned clients like Godrej & Boyce, H & R Johnson, Hafele, Nitco, Pidilite, Whirlpool, Royale Touche, etc. Content Creation & Production Business Colosceum Colosceum has now produced over 2,000 hours of regional, national and international programming across media. During the year, Colosceum produced several popular TV shows across fiction and non-fiction categories. These included India's only cookery based reality TV show 'MasterChef India' and iconic youth reality TV shows 'Roadies' and 'Splitsvilla' in the non-fiction category. Under the fiction genre, Colosceum created popular regional shows such as 'Kotha Dilaam', and Hindi shows such as 'Bani - Ishq da kalma'. Human Resource Development The human capital today is one of the most decisive factors in the success of a company and thus Network18 strives for excellence in the entire employee life cycle. Network18 continuously recruits skilled professionals from various streams and undertakes several initiatives to retain the talent pool. The Company also places emphasis on development and enhancement of skills and capabilities of employees to brpare them for future challenges. The Company focusses on improved employee engagement through several enterprise level initiatives. Its detailed employee performance management system not only assesses individual performances, it also identifies areas where team members need training and development. The Company designs various training and development programmes to ensure that professionals associated with it continue to breach the productivity benchmarks by acquiring better skills and competencies. The rewards and recognition programmes 2015, at Network18 apbrciate outstanding performers for their professionalism, dedication and exceptional contributions. The Company has built a versatile and inspired pool talent that keeps looking for higher and bigger challenges. Its clutter breaking and innovative content is a result of its differentiated human capital. As on March 31, 2015 Network18 had 395 employees on its rolls. Opportunities India's media and entertainment industry is on the cusp of entering a new era of growth, riding the digitisation of television distribution, steady growth of regional media and fast emerging new media businesses. In this emerging media landscape, Network18, with its multi-platform portfolio, is geared to tap into new business opportunities to be unlocked by leveraging technology innovation and harnessing emerging trends. Threats Despite the large opportunity canvas, the industry's growth could be scuttled due to the various threats and challenges it faces. These include piracy, violation of intellectual property rights, lack of quality content, inability of companies to ensure good quality production and distribution infrastructure. Network18 is continuously tracking these threats and upgrading its operational, legal and financial strengths to successfully counter the same. Risk Management Network18 maintains a robust system of internal controls, commensurate with the size and complexity of its business operations. The system provides, inter alia, a reasonable assurance of protection against any probable loss of the Company's assets as a result of misuse of powers by those who are in a position to influence the working of the business verticals of the organisation. It ensures that the transactions of its business operation are recorded in all respects in a fair and transparent manner. The Company has an external and independent firm of Internal Auditors which scrutinises its financials and other operations. The Internal Auditors report their findings directly to the Audit Committee, which are in turn forwarded to the concerned departments/ business verticals for taking corrective measures. Internal audit also ensures that applicable laws are being complied with in true spirit. Key risks The Company faces a series of risks in its operations, including: Digitisation Regime Timely implementation of the government's phased digitisation regime is critical to the long-term growth of the television industry. With the completion of the process of seeding of set-top boxes for Phases I and II, the challenge now is to boost last mile billing and packaging, which will help multi-system operators (MSOs) increase the average revenue per user (APRU) and also benefit the broadcasters. In this scenario, channels with weak content could stand to lose out on account of poor consumer demand. Regulatory Environment The Indian broadcast industry is heavily regulated across a multitude of areas including distribution, taxation etc. Any policy changes can have a material impact on the economic and strategic direction of the industry and may restrict the Company's ability to do business. Competitive Forces The emergence of new age media, such as internet, mobile and radio, is causing a shift in part of the advertising revenue away from television. With their greater local connect and more measurable reach index, such media are drawing considerable advertising proportion from several sectors such as FMCG and BFSI. Advertising Revenue Advertising being a major source of revenue generation, any decline in advertising revenue could adversely impact the Company's revenue and operating results. Network18's primary revenue generation is linked with the sale of advertisements through television channels, which is dependent on the overall macroeconomic and industry conditions, market trends, public policy and government regulation, viewership, budgets of advertisers, among other factors. TV advertisement sales are also threatened by abrupt termination of contracts by advertisers, limits on advertising time, advertising shift to new media formats such as digital etc. Third-Party Relations/JV Partnerships The Company has relationships and JVs with external partners, whose long-term continuation it cannot assure. Sudden termination or deterioration of these relationships may materially and adversely affect the Company's operations and financial condition. The success of any future JVs and strategic relationships with third parties is also not assured, as every relationship comes with its own set of risks, including failure to recover the investment made in such initiatives. Brand Recognition and Popularity Network18's brand strength is one of its biggest assets and its success depends upon the popularity and recognition of its brands, as well as its ability to deliver original and compelling content and services that attract and retain viewers. Failure to sustain the brands, or excessive expenditure incurred in doing so, could seriously impact Network18's business and financial operations. Risk Mitigation Strategy Network18 has an exciting portfolio of quality content and is continuously working on strengthening its content bouquet to reap the benefits of digitisation. It has also put in place deals for rolling out in Phase III areas once digitisation in that phase takes place, thus minimising risk on net distribution business. Cognisant of the importance of remaining abreast of the changes in the regulatory environment, Network18 is constantly evolving its operational strategy to align it with the transforming dynamics of the industry in the context of the policy changes. Strong risk mechanisms are in place to ensure continued high levels of operational efficiency and effectiveness in the changed environment. The Company is also expanding its portfolio and focussing on other forms of revenue by expanding in the digital space. It is also strengthening its processes and systems to ensure cost effectiveness. The Company is further reducing its dependence on advertisement through sharp control on costs, especially during non-festive season. It is also continuously expanding its content basket to capture advertising interest and revenue. The Company is constantly enhancing in-house skills in order to reduce dependence on JV or strategic partners. It has in place a strong risk management system and stringent organisation policies, which its employees are required to adhere to at all times. This ensures that Network18's reputation remains protected and maintained, without in any way being compromised under any circumstances. Internal Control Systems & Their Adequacy Network18 has well laid-out and exhaustive internal controls systems that are aligned to its business requirements. The Company regularly monitors the risks and has in place focussed risk mitigation strategies. Internal and external audit teams continuously monitor the adequacy and effectiveness of the internal control environment across the Company and the status of compliance with operating systems, internal policies and regulatory requirements. The Audit Committee meets periodically to review the adequacy and efficacy of the internal control systems |