MPA Survey says India to drive Star Group's revenues
India is driving Star Group's revenues in Asia, the group's revenue is likely to grow by 25 per cent to $555 million for the year ending June 2006. The operating profit margin is estimated at 25 per cent, implying more than $140 million in operating income, according to latest estimates by Hong Kong based Media Partners Asia (MPA), a publishing and research firm. The growth for the group will be driven by the Indian venture, says the study.
As per the estimates, advertising and subscription revenue growth, mainly from India, boosted the group's earnings during the quarter ended December 31, 2005. Revenues have grown by 30 per cent year-on year to more than $140 million for the quarter ended December 2006 with operating income up 43 per cent year-on-year to about $42 million, a 30 per cent margin.
The advertising gains were led by weekend programming initiatives at flagship Hindi channel Star Plus in India and from growth at new channel Star One. For the first half of fiscal year 2006 that ended in December 2005, the group's revenue grew 25 per cent year-on-year to more than $270 million with operating income rising 12 per cent yearn-year to $57 million. Margins contracted from 24 per cent to 21 per cent on account of higher programming and distribution costs, particularly in India. Having obtained a domineering position among the Hindi channels, the group is looking at some regional strategies for India.
In an interview recently Michelle Guthrie, CEO, Star Group said, "We are looking at strategies based around our existing content but we're wary about the lack of advertising in the regional markets as pricing power is limited and the overall pie remains small."
Talking specific about some channels within the Star bouquet she added that Star One, a general entertainment channel targeted at the younger audience, is "Starting to work and build on the leadership position we have with Star Plus. But it still has a long way to go."
The indicators for Star's financial's point to the television network rapidly closing in on Bennett, Coleman & Co (the Times Group) as the largest media group of the country. It is also well known that Star India is the jewel in Rupert Murdoch's Asian operations. MPA estimates that Star India contributes around 69 per cent to Star's overall revenue.
A reasonable guesstimate is that Star India is currently sized at $385 million or around Rs 1,725 Crores. On the other hand, the Times Group is likely to close the financial year at a little above Rs 2,000 Crores. This brings Star India within striking distance of India's largest media conglomerate. Star India continues to outperform the advertising market, its advertising revenue is growing by around 25-30 per cent per annum as against 10-15 percent market growth.
As per the estimates, advertising and subscription revenue growth, mainly from India, boosted the group's earnings during the quarter ended December 31, 2005. Revenues have grown by 30 per cent year-on year to more than $140 million for the quarter ended December 2006 with operating income up 43 per cent year-on-year to about $42 million, a 30 per cent margin.
The advertising gains were led by weekend programming initiatives at flagship Hindi channel Star Plus in India and from growth at new channel Star One. For the first half of fiscal year 2006 that ended in December 2005, the group's revenue grew 25 per cent year-on-year to more than $270 million with operating income rising 12 per cent yearn-year to $57 million. Margins contracted from 24 per cent to 21 per cent on account of higher programming and distribution costs, particularly in India. Having obtained a domineering position among the Hindi channels, the group is looking at some regional strategies for India.
In an interview recently Michelle Guthrie, CEO, Star Group said, "We are looking at strategies based around our existing content but we're wary about the lack of advertising in the regional markets as pricing power is limited and the overall pie remains small."
Talking specific about some channels within the Star bouquet she added that Star One, a general entertainment channel targeted at the younger audience, is "Starting to work and build on the leadership position we have with Star Plus. But it still has a long way to go."
The indicators for Star's financial's point to the television network rapidly closing in on Bennett, Coleman & Co (the Times Group) as the largest media group of the country. It is also well known that Star India is the jewel in Rupert Murdoch's Asian operations. MPA estimates that Star India contributes around 69 per cent to Star's overall revenue.
A reasonable guesstimate is that Star India is currently sized at $385 million or around Rs 1,725 Crores. On the other hand, the Times Group is likely to close the financial year at a little above Rs 2,000 Crores. This brings Star India within striking distance of India's largest media conglomerate. Star India continues to outperform the advertising market, its advertising revenue is growing by around 25-30 per cent per annum as against 10-15 percent market growth.
posted by TPI Company at 11:10 AM
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