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Zee Entertainment Enterprises Ltd
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Ladies and gentlemen, good day, and welcome to the Q1 FY '23 Earnings Conference Call of Zee Entertainment Enterprises Limited. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Mahesh Pratap Singh. Thank you, and over to you, sir.
Thank you, Stephen. Hello, everyone, and welcome to Zee Entertainment's Q1 FY '23 Earnings Discussion. We have with us today our Managing Director and CEO, Punit Goenka, along with senior management team. We'll start with opening remarks of Mr. Goenka, followed by commentary on operating and financial performance by Mr. Rohit Gupta, our Chief Financial Officer. We will subsequently open the floor for questions-and-answer session.
Before we get started, I'd like to remind everyone that some of the statements made or discussed on today's conference call will be forward-looking in nature and must be viewed in conjunction with risks and uncertainties we face. The company does not undertake to update any of these forward-looking statements publicly.
With that, I'll hand the call over to Mr. Goenka. Thank you.
Thank you, Mahesh. Good evening, everyone. I hope all of you are doing well. Thank you for joining us today to interact with me and my team members on the company's performance in the first quarter of the financial year 2023.
As you all must have observed, the media and entertainment sector is at the cusp of higher structural growth with numerous opportunities to capitalize. But on the other hand, the industry is also facing near-term challenges emerging from the macroeconomic factors, leading to high volatility in the overall advertising industry.
That said, these challenges are also an opportunity to build stronger and agile business models. Amidst this scenario, the tenacity displayed by the company has enabled us to continue making good progress on the strategic priorities set across the business.
We are witnessing significant investments being made across the industry, which is a firm testament that the sector will continue to be hugely attractive proposition in the Indian growth story. This phase of evolution needs a different approach and a longer-term investment focus to win over the empowered consumer, who has a multitude of consumption platforms at her disposal. We are well poised to capitalize on the next wave of growth by taking service-related steps, and that will further strengthen our market position.
But before we delve into each of these segments and the company's performance in detail, I would like to share a quick update on the overall merger process. As you all would have noted, we have recently received the approvals from the Bombay Stock Exchange and the National Stock Exchange. We are pleased to move forward in this process. And the teams at both ends continue to work independently towards seeking the necessary legal and regulatory approvals as per law. We remain committed to bringing this merger to fruition and unlocking the numerous value-accretive possibilities it has to offer.
Turning back to the company's performance, I would like to share some key pointers pertaining to the quarter gone by while our CFO, Rohit Gupta, will discuss the financial and operating metrics with you in detail. Like I mentioned before, the start of the fiscal has been soft for the sector as anticipated due to the macroeconomic headwinds impacting overall growth. But I remain optimistic of high growth levels returning soon for the industry.
We are currently going through a phase where we are focusing on building value in the long term and are persisting with our investments -- investment theme given our strong positioning and an attractive market opportunity ahead.
We have always followed a prudent cost discipline, and we have reaped the benefits of this in the past on the back of stronger revenue growth driving superior margins. But due to the overall macroeconomic environment and inflationary pressures impacting the advertising revenues during the quarter, we saw revenue headwinds getting accentuated flowing through the operating margins.
That said, the current market scenario is a temporary and transitionary phase. And it does not structurally change the growth thesis and the long-term revenue potential.
In terms of the advertising revenue outlook, TV continues to remain a powerful proposition for brands, providing massive reach at the most competitive price points. As you would have noted, large FMCG players grew a positive correlation between advertising and promotional spend and volume growth during the quarter.
But presently, the FMCG segment is weathering inflationary headwinds with commodity prices rising to decadal highs and suppressed consumption, leading to minimal volume growth for the sector at large.
As this segment is dynamic and at a significantly higher spending potential, there has been an impact on our advertising revenues as well. We do remain hopeful of a quick recovery. And as the tide turns, we will reap the benefits of the higher market-wide advertising and promotional spend.
At the moment, we are focusing our energies towards further sharpening our content offerings and strengthening our viewership share, we'll be well positioned to capitalize on this upgrade.
The impediment on the subscription revenue growth due to the embargo on channel pricing continues to affect the sector. The Telecom Regulatory Authority of India, pushing the implementation deadline to 30th November 2022, we will have to wait and see how the implementation schedule and subsequent scenario plays out.
I firmly believe that there is enough headroom for growth of pay TV in the country. India still has about 90 million households who are yet to own their first TV sets, which represents a long runway for TV subscription revenues, unlike other global markets where TV penetration has saturated.
On the digital side, it is gratifying to note the healthy growth of Zee5 across all usage and engagement metrics. The platform consistently ranked among the top players in terms of recall, value, content appeal, frequency of usage and time spent. Our efforts and investments towards offering a robust content slate and our user experience reflecting the positive growth momentum displayed by the platform.
During the quarter, we also inaugurated our technology and innovation center in Bengaluru, taking another firm step towards our digital transformation journey. The team's efforts are directed towards creating path-breaking and innovative solutions that will enhance our technological capabilities and sharpen data interpretation and analytics.
We are building a strong tech foundation for the company, and this tech center will be instrumental in augmenting our offerings in the future. We are certain that going forward, the targeted investments being made into the business will aid mid- to long-term growth.
As our overall revenue growth recovers, we remain confident that the margin recovery will be equally [indiscernible]. As we focus on building robust long-term value, we are also taking significant steps to balance our near-term profitability and growth levels.
We have recalibrated our investments wherever possible, and we'll continue to do so while making room for long-term growth aspirations. I remain optimistic about the choices we are making as we navigate this phase.
On that note, I would now request Rohit to deep dive into the final details. I look forward to interacting with you during the Q&A session. Thank you. Over to you, Rohit.
Thank you, Punit. Welcome, everyone. I hope you had an opportunity to review our quarter 1 results, which have been uploaded on our as well as the website of stock exchanges. I will focus my remarks on providing more context to our Q1 financial performance and share our outlook.
As discussed during our last earnings call in May, FY '23 was commencing on a challenging note, and particularly the first half of the year was anticipated to see immediate impact of withdrawal of Zee Anmol from DD Free Dish, coupled with a difficult macroeconomic backdrop of heightened inflation, weak volume growth for brands and resulting pressure on ad revenues.
Given all that set up, quarter 1 FY '23 performance was soft along the expected lines. However, there are encouraging bright spots across all key segments as well. And these give us confidence in the gradual recovery as we progress through the year.
We continue to be India's strong #2 TV entertainment network, and our viewership share is showing early signs of stability and recovery. The viewership share for the quarter stood at 16.1%. And while that's 100 bps lower quarter-on-quarter, adjusted for Zee Anmol FTA withdrawal, we have gained viewership share in quarter 1 FY '23 compared to previous quarter. In our assessment, our quarter-on-quarter FTA adjusted viewership gain is ahead of every other TV network, reflecting early results of our focused efforts to gain market share.
During the quarter, we launched 26 new shows. We have further strengthened our leadership position in Kannada, Telugu and Bangla markets. Our key markets of Hindi, Marathi and Tamil GEC has series of launches and interventions planned throughout FY '23 in order to improve our network share. And we feel enthused about our move and strategy in those markets.
On digital side, Zee5 is making steady progress in operating as well as financial metrices. Our global MAUs and DAUs as on June 2022 stood at 103.3 million and 11.3 million, respectively, with average watch time of 196 minutes per viewer per month. All of these usage and engagement metrices are up year-on-year, strongly opening our investments in content, technology and marketing.
There is some moderation in MAUs on a quarter-on-quarter basis, and that's a result of us driving more focus on stickiness of the platform and optimizing our overall performance marketing spend for better ROIs. Our Zee5 platform stickiness has further improved as evident in higher DAUs quarter-on-quarter. Our Q1 FY '23 DAUs are highest ever.
During the quarter, we released 38 shows and movies, including 8 originals and are proud to be delivering real and relatable stories in line with our content strategy. A case in point, The Broken News series, which premiered on June 10, marking Zee5 and BBC India's first collaboration, went on to become the most viewed original series of 2022 on and Zee5 clocked 100 million-plus streaming minutes and 6 million-plus views in a week since its premier.
Several independent third-party data sets also continue to place Zee5 in top quartile of OTT apps in the country when it comes to installed usage, stickiness, et cetera, which is another testimony of our market leadership and strong momentum [invites]. Zee5 has clocked a revenue growth of 43% year-on-year during quarter 1 of FY '23, reflecting healthy traction and adoption.
Zee5's quarter-on-quarter revenue is flat as we have some B2B revenues trailing off, marginally impacting our revenues. As we scale Zee5, we are keeping a high bar on how best we monetize our content and what kind of subscribers are more value accretive in the long run for us.
Zee5 offers a very compelling proposition for subscribers and has taken 2 price hikes from INR 499 to INR 599 in mid-March '22, and a second price hike from INR 599 to INR 699 in mid-July, a total increase of 40%. We continue to evaluate B2B deals opportunistically and periodically. When some of these deals conclude, it can cause a quarter-on-quarter valuation on some of the Zee5 business. Our underlying Zee5 business momentum is very strong, as captured in our Y-on-Y performance.
Now specifically coming to the financial performance. Total revenues for quarter 1 FY '23 grew by 4% year-on-year to INR 18,457 million from a low rate of COVID-impacted quarter 1 FY '22. Our revenues are lower by 20.5% compared to previous quarter, impacted by lower revenues across key drivers of ad revenues, subscription revenues and theatrical businesses. This is something we had alluded to in our previous earnings call, and let me cover this in a bit more detail so you have a better context.
Our ad revenue for the quarter grew 5.4% year-on-year, but were lower 12.8% quarter-on-quarter. Quarter-on-quarter drop was a function of 2 key items. First was the Zee Anmol FTA withdrawal from 1st April 2022, where we lost complete ad revenues from this channel. And second was weak macroeconomic environment impacting ad spend by brands in our key target customer sectors like FMCG where the sector is seeing minimal volume growth and still navigating a relatively high commodity prices and elevated CPI inflation.
While this is something we had called out in our previous earnings call, as the quarter progressed, we have seen this trend intensified. And ad spend environment has turned out weaker than we had anticipated. Our ad sales teams are focused on garnering higher shares from active spending categories, solution-led deals and other levers such as right plant mix to minimize the impact through the sale. We are hopeful for ad spending to revive in the second half of the year as domestic demand picks pace, both monsoon and with the onset of festive season.
Subscription revenues for the quarter was lower by 5.1% year-on-year and 9.7% quarter-on-quarter. There are 2 factors here. As discussed in the past, in the absence of a clear way ahead of NTO 2.0, near-term outlook for subscription growth remains subdued.
Secondly, our quarter 1 FY '23 subscription revenue is also impacted by timing of our B2B deals and renewals across digital and other businesses. And that's why Q4 versus Q1 delta is higher. B2B revenues by nature tend to be lumpy, and we expect some of the accretive subscription deals to convert in due course, which will help soften the pressure on subscription revenues [trending] somewhat.
On TV subscription revenue outlook, in June 2022, TRA has proposed a new schedule of NTO 2.0, and this has been the implementation by November 2022. We will continue to monitor NTO 2.0 guidelines, and we'll be prepared to implement the same for improved longer-term revenue outcome.
Zee Music Company saw 45% year-on-year growth in the video view to 21.3 billion, highlighting strength of ZMC music catalog and library. YouTube subscriber base of ZMC increased to 85.3 million from 75 million in the last 12 months. ZMC continues to be #2 music channel and has a very young and new age catalog with very high consumption.
Coming to the movie business. During the quarter, Zee Studios released 6 movies, 2 Hindi and 4 regional. Compared to quarter 4 FY '22, which had big box office hits like The Kashmir Files, Valimai, Bangar Raju, et cetera, quarter 1 FY '23 was muted quarter for theatrical business driving much lower quarter-over-quarter revenue for other sales and services. In the quarters to come, we have a strong pipeline of movies under different stages of production.
Switching gears on cost and profitability. As we navigate these revenue headwinds I spoke about, we are driving even sharper focus on prudence and optimizing our overall cost and investments and while creating room for investment in content, technology and marketing for new launches and initiatives. Quarter 1 FY '23, our EBITDA margins came in at 12.8%, lower by 660 bps year-on-year and 820 bps quarter-on-quarter.
This is primarily a result of lower revenues flowing through, given nature of our cost structure and operating leverage we have in the business. It's primarily a revenue less softness. And we are confident that as and when the macroeconomic environment and ad spends improve, we will also benefit in equal measure.
Zee5 EBITDA losses for the quarter stands at INR 2,352 million. Losses were high Y-on-Y and quarter-on-quarter as we continue to invest in strengthening our Zee5 value proposition in line with our investment strategy.
The external expenses incurred during the quarter is towards DSRA liabilities wherein we had estimated and accounted additional liability to the tune of INR 150 million in quarter 1.
Also quickly touching upon the receivables from Dish and Siti. As you will recall, we had agreed a payment plan with Dish. And we have continued to get as per that schedule, receiving current collection along with receiving the part of the old outstanding. This outstanding has substantially reduced around INR 5.8 billion as on March '20 to INR 1.9 billion in June '22.
On Siti, as we have mentioned earlier, we have been recognizing revenues to the extent of collection on a conservative basis. On account of a pending legal proceeding, amounts aggregating to INR 352 million are yet to be collected and accounted for, of which INR 155 million is deposited in court by Siti.
Tax for the quarter came in at INR 1,066 million. The cash and treasury investments of the company as of June '22 stand at INR 11.3 billion. The cash and treasury investments include bank balance of INR 4.5 billion, fixed deposit of INR 6.5 billion and NCDs worth INR 304 million.
To sum up, while we had a challenging quarter 1 along expected lines, we expect our financial performance to gradually improve as we progress through the year. As revenues scale up in subsequent quarters, we will expect margins to start inching up. Growth revival is our key focus. And while Q2 will see recovery from Q1 levels, H2 is where we expect pace of recovery to really gain momentum.
Back to you, Mahesh.
Thanks, Rohit. Stephen, we can open the questions and answers. Would you just instruct participants for Q&A?
[Operator Instructions] The first question is from the line of Abneesh Roy from Edelweiss.
My first question is on the FTA and market share. So because currently, there is a rural slowdown, is there a rethink on FTA? And are all the 4, 5 large broadcasters also following this? And are they also maintaining the discipline? Because in the past also, we have seen that the discipline gets broken.
And if the macro would not have worsened, when do you think the FTA Anmol removal would have been compensated by the subscription revenues? So I understand the macro has changed. But if you could answer all these questions.
So firstly, on the FTA side, we have taken a collective call as an industry. It's not about just 1 player or 2 players that we will support in favor of the subscription revenue growth that we want to see.
And as the renewal has been just about 4 months, still early to talk about the impact it would have had. In the normal circumstances, we had anticipated that at the end of 1 year, we could have recouped at least 40-odd percent from the subscription uplift that the DTH operators are estimating. And the balanced part of that would have to be recouped from the advertising piece.
And if I see, Punit, the market share ex of the Anmol impact of 100 bps, the market share has been stable last 3 quarters at 17.1% to slightly down 17.5%, 17.8%. So my question is, you have significantly invested in seeing this as a challenge, but it has not certified. So what is the issue? And you have, in the past, managed to address market share issue. This time, what is different?
I think it's just a matter of share implementation issues, Abneesh. We've not had as successful run this time around. But -- and also, there have been certain people issues that we have faced in the market. But rest assured, we are addressing them, and I'm pretty confident that this year is the year where you'll see the market share is an impact.
Sir, my second question is on the movie production business. So we have seen your Kashmir Files did really well in Q4. But as an industry also, we are seeing last 3 months, almost every Hindi movie well below expectation. Latest is, of course, Laal Singh Chaddha and whatever the reasons are.
My [questions is], you're saying you have a strong pipeline. But because either ticket pricing at the multiplexes is too high or content in Hindi has become too niche, South Indian movies are doing well because they may have a more mass appeal. So are you doing anything proactively so that this issue doesn't impact your strong pipeline either in terms of content, make it more mass or whatever it takes? So your analysis why 3 months of complete nonperformance of Hindi movies across the board?
I think it's a function, multiple things. As you rightly pointed out, one is ticket pricing. The second is the consumer also knows that rather than paying this heavy ticket price if the movie is not really -- doesn't get really good word of mouth, you can just wait for 4 to 8 weeks and then consume it on OTT or wait for television, right? So these are 2 reasons that I can talk about.
But third reason also is an oversupply of films. Today, every weekend, you get a plethora of new films being released. And therefore, the audiences are getting divided, and the performance is showing there.
I do not believe that South Indian films are doing any time better than Hindi films. There are equal fair share of loss-making films in the south also.
What we are doing from our strategy point of view, Abneesh, was from the day 1, we had taken a strategy that we will be a pan-India film production company. And therefore, our portfolio or our portfolio of films spans across 5 to 6 languages, so Hindi, Punjabi, Marathi, Telegu, Tamil and even Malayalam now we are entering. So we are trying to balance our portfolio out in a manner that we can be a pan-Indian player, just like we have been on television and our OTT business.
Sure. My last question is on Zee5. So when I analyze a lot of data you're giving, one thing is coming out. Your DAU has seen a very consistent and good jump past few quarters from 9.6 million to 11.3 million, that's a good jump. Quarter-on-quarter also good jump.
But when I see MAU, it has remained stable in a very narrow band for the last 3 quarters. Quarter-on-quarter, some dip is there. Here my question is why monthly average user there is a fatigue factor and why that is not reflected in DAU?
You have explained that there is more stickiness, but why is that not reflected in MAU? Is it because mobility has come back so customer has less time at home, he is traveling, et cetera? Whatever the reason, I want to understand that.
And second is these B2B deals getting -- impacting your business. That is something which has happened earlier also. Is there something proactive you can do there? Or it's a part of life, you can't do much there?
So first of all, the MAU stabilizing is a strategically chosen thing that we have done. We are spending our marketing dollars purely on acquiring customers for the app. And we do not spend money for the progressive web app that exists there.
So our focus is to get maximum amount of consumption done on the app or the app downloads. And that's where the stickiness also comes into play because the app has far more stickiness than the web. So that's the second part.
We -- because we are a late entrant, the B2B deals are yet finding their own -- what is the right value to do the B2B deals, et cetera, for us, right, Abneesh? So it's a 2-way thing. We don't want to get into long-term deals when we know there are platform getting better day by day. And therefore, the B2B partners don't want to do short-term deals.
It's a kind of a negotiation that we are witnessing. Hopefully, once we have established our credibility, et cetera, we will find the right balance and the right price points in which we will be also happy and even the B2B partner will be happy.
The next question is from the line of Sanjesh Jain from ICICI Securities.
Two from my side.
Mr. Jain, if you can take the phone off speaker, please. You're sounding very distant.
Now is it good?
Yes.
So can you help us understand what was the ad revenue -- underlying ad revenue if one were to adjust for the FTA, which has hurt this quarter? So to understand what is the underlying growth.
And a related question to that is, can you help us understand the sub industry? We understand that FMCG was going through a trouble. But how has the other industry like auto, telecom, newcomers, how have they performed? Is there any very different ad spending behavior within the subsegments? So that would be my first question.
I'll take the second question and the first one, I'll let Rohit to answer to you. So in terms of advertising sectors, FMCG is the largest advertiser on television, and more so for a network like ours, which is a very [indiscernible] network. As you know, we don't have a sports bouquet in our portfolio. And therefore, our dependence on FMCG is far greater.
All the other sectors like auto, consumer durables, telecom, sorry, et cetera, are constituted anywhere between 6% to 8% of the total ad spend in the market. So they don't really skew the spending as much. And they have been in the same ballpark, maybe 100 bps plus/minus. But it is the FMCG sector that is the main cause, and that's why it is hurting us even more. Rohit, do you want to take the first one?
Yes. So we actually -- quite frankly, there is a seasonality factor in quarter 1 as well. And we have the macroeconomic headwinds also facing this quarter. So there is no specific number.
But like I mentioned in my opening remarks, had we not had the Zee Anmol withdrawal, our network share would have actually been -- gained. So really, the overall impact is about 100 bps of market share. And so you can calculate what that impacts on the revenue.
Fair enough. Second, on the subscription side on this particularly B2B first, it looks like -- what's the revenue recognition? It's a onetime or we had across quarters of the contract? And what is the general terms of the contract there? Is it 1-year contract or a 6-month contract? How does it really work?
We generally sign only 1-year contracts there's any B2B partner. And the revenue recognition is for the term between the monthly or quarterly, whatever that will be recognized in the business.
Got it. And one can say that the underlying ex of this B2B, we are flattish on the subscription revenue. Will that be a fair assumption, and majority of this decline has largely come from the B2B side of it?
No, no. On the Zee5 part you're asking or you're asking me on the...
No, no, no. I'm asking on the overall subscription revenue.
No, no. Overall subscription revenue, there is a decline.
There is an underlying decline ex of even this B2B category.
Yes, yes.
My last question is on the programming cost. I can understand this quarter hasn't been that great. Our critical release have not done that well. Is that one of the reasons why the revenue or costs are not matching and hence, margin could drastically improve going into Q2, Q3?
We've not had any big films in this quarter. So it's nothing relating to the theatrical business. But on the television content and the digital content, both, yes.
So see, quite frankly, I think the percentage of programming to revenue is also, I mean, in a stable business, the parameters have not changed. And as I said, our investment continue to be in the same proportion as we had done in the last few terms.
If you're comparing year-on-year, of course, last year same quarter was impacted by COVID so they are really not comparable. But on a stable side, there are no specific increase on the programming side. We continue to invest in our linear programming like as I said, 26 new shows were launched. So we have -- it's really in the same line.
Got it. Got it. One last bookkeeping question. The movies, what we are producing, now contribute close to 1,000 crores of the total inventory. Any ballpark number where you think this will peak out? Or do you think there is a few more addition to come in the investment as far as movies are concerned?
No. Actually, movie investment is -- I mean, there are some delays in the launches that we have seen in movies. And like I said, there is a good slate in movies we already have.
And this is all rotational business. So whatever investment that we make in movies come very quickly back, and the ROI is good. I don't expect any more investments going in movie unless there is an issue. So we'll probably remain at this level itself.
I think into Q2, Q3, where we will have more theatrical releases, this inventory should release, right?
Yes. Definitely. As the movie release happens, there will be a release of inventory in quarter 2 and the subsequent quarters. Let me just add that while we release on the theatrical side, there may be additions on the satellite side.
But that will be a very small portion of overall movie costs, right?
We have maintained that I believe we would like to amortize the inventory as much as we are during the year. I mean, there is -- this is right now an investment phase for digital. And therefore, there are some additions that are there.
But if you see overall, we have increased inventory by about 370 crores during the quarter. And out of that, about 250 crores is coming in from the print production, which is there in the IR pack.
The next question is from the line of Jinesh Joshi from Prabhudas Lilladher.
Yes. The subscription side, if I look at our revenue this quarter, it was down by about 7.4% year-over-year. But in the past few quarters, the decline has been in the range of about 1% to 3%.
I know you mentioned something about B2B deals not defined this time around. But apart from that, is there any other specific factor which we should ideally be looking into because the decline appears to be slightly steep vis-a-vis previous quarter?
No, nothing that we can point a finger to right now because it's too short a period. If we see any trend, we will certainly come back to you for guidance.
Sure. And secondly, with respect to inventories, I mean, I think this got addressed in the previous question. Despite a jump from about 6,300 crores to about 6,700 crores in this particular quarter, what I was trying to understand is that the cost of that, we typically get expensed immediately on theatrical release. So the question was, again, if you can just help us clarify that if only 6 movies are released, then once this release happens in the subsequent quarters, will we see inventory drop down substantially?
Inventory has multiple functions, inventory of the films that is introduced and released. So we write down the -- immediately the theatrical portion of the film. But when it moves to the satellite rights and digital rights, it gets capitalized there for, as a satellite or digital right.
But it's not only our own films that are getting released, right? We do buy films from outside as well, which are only for the purposes of satellite and digital and usage for our other verticals. So the 2 are not released entirely. The inventory would be -- is also for the reason we are buying films from some outside.
The next question is from the line of Vivekanand from AMBIT Capital.
I have a couple of questions. So one is the viewership share before also, we had taken challenge of Free Dish in FY '20, right, prior to COVID. At that time, our viewership share was around 18.5%, right? So to that extent, that number and the current 16.1%, are they comparable just to understand better? That's question one.
Secondly, if I look at Slide #5, it appears that the weekly impressions and weekly reach of TV have marginally declined. And this -- just wanted your perspective on this data and what should one [incept] based on this.
And then thirdly, in terms of the receivables that are outstanding from related parties, if you can give an update on that, that will be very helpful.
Sure. So on your first part on the viewership share pre-COVID and the current viewership share, the 2 are not comparable because the BARC universe keeps changing. And if I remember correctly, 2021, we had a reset in the BARC's universe where they had added based on the IRS survey that was conducted in 2019. But that data you can get from BARC as to when the universe changed, and therefore, you will get your answer from that.
On your second question about impressions, you're right that impressions have fallen this quarter, but it's largely on account of time spent and which is impacted due to the severe power shortage, a large part of the country has witnessed during this summer time. And we are hopeful that, that will correct over a period of time. And yes, receivables from...
Yes. So I actually covered this in my opening comment. If you're finding out more towards Dish and Siti, which actually are not related parties, I did mention that as far as Dish is concerned, there was an agreed payment plan, which they are adhering to. And there has been movement as per the payment plan. And therefore, everything is in line and current receivables are at INR 1.9 billion.
As far as Siti is concerned, we only recognize revenue on cash and carry. There are no other meaningful related party receivables.
This is helpful. Just one follow-up. So Punit, thank you for the perspective on the new renewal of the BARC incorporating the IRS data. So would you have a sense on what our like-for-like viewership share would be now versus pre-COVID pan-India share of entertainment viewership because, I mean, we are unable to make adjustment ourselves, given the change you described.
Yes. So we see, pre-COVID, the reasons for that, I would not be able to share with you right hand because if you look at the pre-COVID numbers, we were at 18.3%. And as we entered COVID, our viewership share fell almost to less than 16% and then started growing again.
But this is a function of how many households got added to the universe and then the consumption pattern. So for a deeper understanding of that, you would have to understand the BARC system. We can obviously help you with that. That's not a problem, but it's something we can take offline. Mahesh, you can probably do that.
Sure.
And maybe introduce them to somebody at BARC within...
Sure.
Okay. This is helpful. Just, Rohit, to your point on Siti, there were 2 sets of issues, right? One was the DSRA guarantee, and the other one was the receivables. In total, how much of the past -- in your past receivables and guarantee outstanding for Siti are unprovided for? We made certain provisions this quarter, I understand. But how much is net [indiscernible]?
So as far as Siti is concerned, to the extent what our DSRA guarantee was given, to that extent, the entire amount has been provided for. So there is nothing which is pending there.
And as far as receivables is concerned, like I mentioned, we had taken a provision. And it is mentioned in the [most of] account as well, about INR 199 crores provision we have taken on the opening side. After that, we have been only on cash and carry. And therefore, as collections come, we recognize revenue. So there is no outstanding from Siti, 0.
[Operator Instructions] The next question is from the line of Arun Prasath from Spark Capital.
[indiscernible]
Mr. Prasath, sorry to interrupt, but we are unable to hear you, sir.
So the decline is very high....
Sorry to interrupt, Mr. Prasath, but still we are unable to hear you. Maybe request you to change the mode of your device, please?
Is it better now?
Yes.
Yes, sorry. So Punit, I was asking about the subscription revenue decline even after adjusting for the growth in Zee5 revenue on Y-o-Y basis, there is a large decline on the linear TV. Is it an indication that cost cutting is acceleration in India?
And that means if more and more people are not subscribing to our channels, and this is probably the industry-wide phenomenon, because of the reach is also getting affected because of this? And this again, that will have a bearing upon the ad revenue book?
So if you look at the reach for the last 3 quarters has been pretty stable. There was a marginal drift 4 quarters back. Therefore, it is not -- we cannot attribute this to any cost cutting. It is basically less a consumption that's taking place, which means time spent is lower. People are not able to spend time in [indiscernible]. And the reason we have attributed to that is the majority power cuts that were witnessed in several cities and states of the country during the [April] as well as the whole power supply shortage.
So do we think -- do you expect this to bounce back in a couple of quarters?
Certainly, I don't see any reason why it would -- people will not change their habits just because of 1 quarter's nonavailability of TV.
Okay. And on this -- my second question on this is the FTA withdrawal. Although this is coinciding with the lower spend from the FMCG side on hindsight, it looks like we could have timed it better. But at what point of time in the future you will reevaluate your decision on this withdrawal and probably try to reenter this market? Or is it like a done case when it comes to rethinking about entry into this segment again?
So I think we have to give it a patient test of the trial, whether the pay TV market comes back or not, I don't know. You may have seen already a lot of the DPS operators have slashed their entry pack prices by anywhere between INR 50 to INR 75.
We do believe that this should see a revival in the pay TV households again. But we'll have to be bit patient. And if we realized that, that is not the case, and therefore, we will reevaluate to go back in the FTA space and in what way to go back in the FTA space. It does not have to be just reasons of our existing shows. We may have another strategy there.
Right. All right. And then my last question is on the IPL. Okay. The overall ecosystem level today, IPL is 3x bigger than the last previous cycle in terms of media rights and on. So in one way or another way, India as a whole, Indian audience as a whole has to shell out 3x more, whether in terms of advertisement or subscription revenue.
And we, as a company, are not present on both. So how we are going to mitigate this? Probably at some point of time, the advertisers may say, I don't have budget to spend on the nonsports or my -- I had to reduce my budget on the nonsports content. Do you -- I mean, it may not happen immediately, but third or fourth or fifth year, this may have -- this may happen. So how we are going to mitigate this? Any thoughts on this?
So firstly, just a minor addition to what you said. That IPL costs went up by 3x, not necessarily that you have to pay 3x. That's your choice, right? And the advertisers' choice whether they wish to pay 3x of what they paid over the last 5-year cycle or not.
Secondly, my viewpoint is, yes, the sports ad pie is increasing in the country. It is already close to 25% to 30%. And that's why, if you remember or you may recall from the earlier calls, I have stated that we want to reenter the sports business because that's a crucial genre and segment that we have to be present in.
As far as the advertisers thinking that because they have to shell out more money on IPL, they would not have money for spending on nonsports channels. Very difficult for me to understand and how can an advertiser advertise for 60 days and then for the rest of the year, not advertise at all.
At the end of the day, they are in the business of selling product every month, every day. And therefore, the advertising function is also every day and every month.
So basically, what you are saying is that overall advertisement spend from the company has to increase. Is this understanding right?
Well, yes.
Or the IPL bidders have to take some loss, something like that.
Well, yes, I mean, that is -- I don't know what their strategy will be, but that's for the advertiser to decide what they want to do.
The next question is from the line of Aditya Chandrasekar from UBS.
A couple of questions from my side. Firstly, on the viewership share on the linear side. So even if you adjust for this FTA removal, it's stayed at around 17%, 17.1%, right? So just wanted to understand like more specifics on what you're doing to kind of increase this. And what will it take to kind of get it back to an 18%, 18.5%, which markets you'll have to target, what kind of content are we kind of losing out on, et cetera? So that's my first question.
And second question, if you could just comment on sort of the inflationary pressures we saw in Q1, how are things on the ground now in Q2? So obviously, commodity prices have kind of cooled off, et cetera. So are we seeing a better kind of ad spend and more ad investments from the FMCG companies in Q2? Just wanted to understand that.
Yes. So on the market share side, the only way to get it back is to do better content that is far more engaging to the viewers. And we are focused on the markets of the flagship Hindi, Marathi and Tamil. These are the 3 areas where we are completely focusing on.
In terms of kind of content, as you know, the obvious mix is still soap operas dominate the content on the GEC channels, of course, sprinkled with some garnishing of the nonfiction shows. And we'll continue the same route.
On the inflationary pressure, because Q2 has just started, we are seeing some amount of positivity, but nothing that gives me a trend that the worse is behind us. So I think we have to still wait and watch for a few more months. We really better able to guide you in the next quarter.
The next question is from the line of Vivekanand from AMBIT Capital.
Would it -- will it be possible for you to explain to us how the inventory -- the duration of the inventory in terms of movies? I mean, obviously, we know the amortization policy. It's 5 years from movies and less for other content. So at an aggregate, movie shows and content inventory, is it possible to quantify in terms of how much -- what is the division of that? That's question one.
Secondly, in terms of the music business, you put out a slide on that. Can you talk a little bit more on that? What kind of revenue growth there? What kind of monetization streams you are seeing there and give us an update there?
So the average age of the inventory will be difficult for us to give you right away, but right now Mahesh can work it out and share with you offline. The music business, we're seeing good growth. We have the number, the growth numbers in music...
Let's get that. Our video views growth we have, but I think revenue...
So can we take it offline with Mahesh, please? We don't have the numbers here right now. We have the growth numbers in terms of metrics, but the revenue is...
I think we haven't...
Sure. Okay. I'll take this offline.
Ladies and gentlemen, as there are no further questions from the participants, I now hand the conference over to Mr. Mahesh Pratap Singh for closing comments. Over to you, sir.
Thanks, Stephen. Thanks, everyone, for joining us today on our earnings call. We hope all your questions were answered. If there any further questions, please feel free to reach out to us. Thanks and look forward to speaking with you next quarter. Have a great evening, and a great weekend. Thank you.
I wish you all a happy Independence Day.
Thank you. Ladies and gentlemen, on behalf of Zee Entertainment Enterprises Limited, that concludes this conference. We thank you all for joining us, and you may now disconnect your lines.