Zee anticipates a boost in FMCG advertising spending with the monsoon in FY25

Punit Goenka, MD and CEO of the broadcaster, said that April and May are witnessing an increase in ad expenditure.   

In Q4 FY23, Zee Entertainment's advertising revenue was Rs 1,005.8 crore, whereas it was Rs 1,110.2 crore.

According to Zee, advertising income experienced some rebound in the March quarter after being under pressure throughout the previous fiscal year.

"FY24 remained muted as a result of the challenges posed by the macroeconomic climate and other outside variables. However, the company's MD and CEO, Punit Goenka, said during a Q4 FY24 earnings call that "the final quarter of the financial stood out by displaying positive levels of growth and we expected the momentum to continuing in the new fiscal as well."

According to him, the FMCG industry has been rebounding, and the improvement in rural mood has resulted in a solid rise in advertising revenue both annually and sequentially.

The potential recovery in some sectors, especially FMCG, has contributed to the strengthening of the green shoots seen during the quarter (Q4 FY24). This will keep the momentum going in FY25 when combined with a strong monsoon, according to Goenka.

In Q4 FY23, the broadcaster's advertising income was Rs 1,005.8 crore, whereas it was Rs 1,110.2 crore. According to the firm, the quarter's domestic advertising revenue increased by 10.6 percent YoY due to the FMCG customers' increased expenditure and the macro advertising environment's ongoing recovery.

Despite the fact that Zee and the industry faced many difficulties in FY24, we ended the year on a bright note and saw strong growth in Q4. The liner ad spending environment remained sluggish for the most of FY24 as a result of the delayed rate of recovery in FMCG firms' consumer demand, particularly because of the downturn in rural demand and the low spending among new age enterprises. But after the holidays, a few new trends appeared, with FMCG leading the way and increasing their advertising budget. General entertainment channel (GEC) advertising expenditure has been steadily increasing in Q4 of FY24, according to Rohit Gupta, the company's chief financial officer (CFO).

Revenue from subscriptions will increase

According to Goenka, there is a tendency toward increased ad expenditure in April and May. He anticipates robust, single-digit growth in the business for both advertising and subscriptions.

"Subscription income has also been growing steadily. Moving ahead, industry participants will concentrate on finding ways to expand the pay TV ecosystem in a sustainable way. We continue to believe that the introduction of NTO 3.0 and tariff expansion would fortify the pay TV industry and open the door for steady development in subscriber income," Goenka said.

According to an Ernst & Young (EY) 2024 report, the number of pay TV homes decreased to 118 million from 120 million in the previous year. The report attributed this decline to several factors, including the top end of the market's shift from cord-cutting to connected TVs, the rise of alternative entertainment options as well as digital platforms, and the availability of a sizable content bouquet for Hindi-speaking markets on free television.

"Everyone (in the TV industry) is focused on how for development the pay TV ecosystem," Goenka said.

Zee's subscription income increased from Rs 3335.5 crore in FY23 to Rs 3,666 crore in the most recent fiscal year.