Media analysts predict good turn for RBNL

Media analysts predict good turn for RBNL

Reliance Broadcast Network Limited (RBNL) released its first quarter figures ending June 2011 last week,announcing that...

Reliance Broadcast Network Limited (RBNL) released its first quarter figures ending June 2011 last week,announcing that it had posted its highest-ever quarter figures at Rs 72.5 crore in total income from its various businesses such as television,radio,out of home,intellectual properties and production house. The company has been in the news primarily for its television business over the past year in which it tied up with American broadcaster CBS and launched three non-GEC channels as well as forged a partnership with European entertainment network,RTL Group.

With two new channels set for launch in the current fiscal and a channel for the Hindi heartland already in place,the television business has been the most visible front of Reliance Broadcast Network Limited. The division reported a top line of Rs 16.4 crore with initial losses being attributed to expenses on the channels launched in the previous quarter viz.,Big Magic and Big CBS Spark. “I think the tie-ups (with RTL and CBS) helped the company. Even with the predicted slowdown coming to India,television will continue to do well,” Punitha Arumugam,Group CEO,Madison said adding that the company’s revenues could rise in the next fiscal,primarily due to its Hindi heartland channel Big Magic. “A lot of regional advertisers are looking at television to market their products. These same advertisers are also looking at establishing a national footprint for which television is the best medium,” she said.

The company’s FM radio station Big 92.7 also added to RBNL’s kitty,contributing Rs 49.5 crore,a growth of 22 per cent,most of which happened during this season’s IPL,according to the company. It is this segment of RBNL that has media analysts divided. According to Arumugam,the radio space is already crowded and expecting further revenues from the medium would be impractical. “There is a lot of competition in the radio business. Also,even after Phase 3 licences are in place,the only areas where radio can penetrate is small towns and villages. These places will not deliver the number of listeners that advertisers would like,” she reasoned. On the other hand,Hiren Pandit,Managing Partner,GroupM ESP said,“Right now,there is no differentiator between radio channels except for the RJs. However,once Phase 3 gives radio channels the power to distribute news,the landscape is bound to change. How Big 92.7 FM,and other rival channels,manage Phase 3 licenses will have a direct impact on revenues.”

Pandit said that while RBNL made a lot of news with its deals in the past fiscals,he would be “surprised if any significant money was made”. “These are still early stages for the company,” he said. Both Pandit and Arumugam declined to comment on whether RBNL would be able to keep up its current figures and how it would fare in the face of competition.