JioStar Profit Slips 33% Amid Ad Market Pressure

MEDIA-AND-ENTERTAINMENT
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AuthorIshaan Verma|Published at:
JioStar Profit Slips 33% Amid Ad Market Pressure
Overview

JioStar, the Reliance Industries, Disney, and Bodhi Tree Systems joint venture, posted a 33% quarter-on-quarter drop in net profit to ₹888 crore. Despite revenue growth driven by strong subscription services, the company cited significant pressure in the television advertising market due to spending cuts from FMCG and consumer electronics firms. However, early signs of recovery were observed in December.

Ad Market Headwinds Impact Earnings

JioStar's net profit took a significant hit, declining 33% quarter-on-quarter to ₹888 crore in the December quarter. This downturn comes despite a 12% rise in revenue from operations to ₹6,896 crore, fueled by robust subscription growth across its digital and television platforms. The company's Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) also saw a 25% sequential decrease, falling to ₹1,303 crore. A year-on-year comparison was deemed inapplicable due to the merger's effective date.

Revenue Growth Amidst Challenges

The growth in revenue was primarily attributed to strong performances in the sports and entertainment segments. JioStar CEO (entertainment) Kevin Vaz highlighted record highs in digital entertainment revenue, driven by connected TV offerings and strategic content monetization. Subscription revenue across both digital and traditional TV channels remained healthy, demonstrating resilience in the face of a challenging macroeconomic environment.

Television Advertising Strain

However, the television advertising sector continues to face considerable pressure. Vaz noted that spending cuts from major Fast-Moving Consumer Goods (FMCG) and consumer electronics companies are directly impacting ad revenues. Despite these challenges, early indications of improvement were observed in the final month of the quarter. Vaz expressed optimism that the recovery seen in December, particularly post-Goods and Services Tax (GST) implementation, would persist.

Viewer Engagement Metrics

The network's reach remained substantial, with over 830 million viewers tuning in during the quarter, accumulating more than 60 billion hours of watch time. JioHotstar also saw continued user engagement, averaging 450 million monthly active users, a 13% increase from the previous quarter. This strong viewership underscores the platform's dominant position, even as financial performance faced headwinds.

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