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Reliance Broadcast Network Ltd.: Experts' corner
533143 RBN Group (B) BSE data
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Management speaks
Ismail Dabhoya
Ismail Dabhoya
Chief Financial Officer
Reliance Broadcast Network Ltd.
March 22, 2011, 3:01 pm
Why should an investor buy your company's stock?

The confluence of promising economic, demographic and geographical factors means high market potential for the Indian media & entertainment industry. This is reflected in the projected growth of the sector -- 75% over the next four years! The positive impetus for M&E is also reflected in advertising spends and therefore growth of media platforms. Advertising across TV, radio, OOH and the Internet is growing in double digits, much faster than the economy as a whole.

Reliance Broadcast Network Limited (RBNL) is a multi-media conglomerate with interests in radio, television, out-of-home and live entertainment. It is part of the Reliance Group and specialises in creating and executing integrated media solutions for brands. Businesses include 92.7 BIG FM – India’s largest FM Network with 45 stations, reaching over 3.57 crore Indians each week. BIG CBS -- a joint venture with CBS Studios International, USA’s No. 1 TV broadcaster which is launching three channels, BIG CBS Prime, BIG CBS Love and BIG CBS Spark. The company has also recently acquired Imagine Showbiz, a 24-hour Bollywood music channel, which will soon be re-packaged with enhanced programming and presented to consumers. BIG STREET – in the business of acquiring and marketing of out-of-home assets, it owns marketing rights for premium properties across India. BIG LIVE – in the live entertainment business, the division develops, executes and markets intellectual property, integrated across RBNL’s media platforms. All these business verticals come together to offer a truly integrated media solution to clients.

 

Value Proposition

  • A multi-media conglomerate with well-established brand equity and reach
  • An integrated media sales approach, creating greater depth in client relationships.
  • Well-established radio brand and a stable radio business now generating cash
  • Building a strong presence in areas with high head room for growth – out-of-home, television and experiential marketing, which are currently in the investment phase
  • Strong entertainment footprint, allowing for greater synergy across business divisions 
  • Experienced management team, with proven execution credentials

Business Overview

  • BIG Connect -- 300+ integrated sales force leveraging our multimedia presence
  • BIG FM -- India’s largest FM network with 45 stations
  • BIG Live -- experiential marketing division, creating IP, mall activations and rural marketing solutions
  • BIG Street – Out-of-home division acquiring and marketing premium inventory
  • BIG Broadcasting -- JV with CBS Corporation. Launched PRIME, launching two more channels.  Acquisition of music channel Showbiz, to be re-launched.

 Key Performance Highlights – Quarter Ending December 2010:

  • RBNL recorded the highest ever quarter revenue of Rs. 70 crore, up by 40%
  • EBITDA grew by 123% from the same quarter of the previous year to Rs. 7 crore
  • Radio operations turned EBIT positive basis increases in revenues 13% over the last year
  • OOH business posted 41% growth in sales performance, driven by new inventories
  • Experiential marketing business revenues grew by 561% on the back of IP properties
  • Repaid debt of Rs. 200 crore -- financial charges down by 72%
What events do you expect in your industry sector over the next few months? Are these hurdles or catalysts?
What growth initiatives has your company planned?

RBNL’s overall strategy is to create ownership of multi-media consumer touch-points, offering robust entertainment options with novel programming enhancements, creating an exciting and integrated platform for marketers. The company plans to leverage and grow its existing integrated media platform to cross-sell advertisements, use common content sourcing, create package deals for ad buyers, and use the existing distribution network.

RBNL’s TV foray is a systematic entry into the category beginning with niche market segments – English entertainment and Indian music. The changing landscape in distribution and demographic terms provides a greater opportunity for the company.

The company has already launched a general entertainment TV channel — Big CBS Prime — in partnership with CBS Studios International in India and two new channels — Love and Spark — are slated for launch this month. The JV with CBS Corporation gives RBNL a distinct edge in depth in content which existing channels lack. This, backed by RBNL’s strong media presence, puts in it in a good position to build these channels into strong media platforms. The acquisition of Imagine Showbiz, which will be re-launched as BIG MAGIC, allows RBNL to expand its portfolio into the Hindi language space.

The company is proposing to enter into a joint venture (JV) with RTL Group to own and operate a portfolio of television channels. The business of the JV will initially include providing content and services to and owning and operating a bouquet of English, Hindi and other local language channels in the country.

The company is also in the process of launching television channels in neighbouring countries such as Nepal, Bangladesh, Pakistan, Bhutan, Sri Lanka and Maldives, and is awaiting regulatory approval.

Who is your competition? What differentiates you from them?

RBNL has uniquely positioned itself as an integrated multi-media conglomerate. It is one window to the world of Reliance Group’s 200 million+ consumers through its integrated media sales team – BIG Connect, which serves 1,200+ clients each month through its 52 offices across the country. RBNL’s sales team maximizes the opportunity available across the Reliance Group’s advertising assets to create value for advertisers and brand owners. The reach and spread of the Reliance Group is known to all. With business interests that permeate almost every single aspect of consumers’ lives, the group offers multiple business and consumer touch points across communications, infrastructure, power and entertainment. Reliance Group media assets across infrastructure include -- Delhi Airport Metro Express, Mumbai Metro One and Bandra Worli Sea Link; telecommunication -- Reliance Mobile; retail -- BIG Cinema, Reliance World Outlets, Zapak Gameplexes, BIG Flix etc; OOH -- BIG STREET; broadcasting -- 92.7 BIG FM; and online -- Zapak.com and BIG ADDA. It is an enviable portfolio of media that touches the lives of millions of Indians across the country, every day. This world of Reliance Group consumers offers advertisers multiple touch points to connect with their audience.

How do you see your company performing over the next financial year?

Key growth / performance drivers for the company:

 

  • Reliance Connect -- Integrated solutions approach, creating greater depth in existing client relationships and building new ones
  • BIG FM -- Actively participate in Phase III expansion of FM, adding greater reach to the existing network
  • BIG Live -- Build IP across various markets, entertainment platforms and consumer segments. Build scale in activations through a focused mall activations strategy and rural activations
  • BIG Street -- Grow the out-of-home business on the back of long-term contracts, exclusive marketing rights with low Capex and no MGs, public-private ventures and opportunities emerging from Reliance Infrastructure projects
  • BIG Broadcasting -- Pursue phased growth for television broadcasting, in sync with the Reliance Group’s expansion plans in distribution and media infrastructure. Strengthen television portfolio by expanding from English into the Hindi entertainment space