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Published: September 15, 2024
Updated: September 15, 2024

Entertainment Network (India)

Double-digit revenue growth as New 'Gaana' app boosts revenues

The outlook for Entertainment Network (India) (ENIL), promoted by Bennett Coleman & Company -- the flagship company of the Times of India group -- is highly positive, going by the actual performance in Q1 (April to June 2024) of fiscal year 2025. This was revealed by Yatish Mehrishi, CEO, at a conference call organized to discuss the financial performance of ENIL during Q1FY25.

Coming to the business segments. Mr Mehrishi revealed that the company continues to maintain a leadership position in FCT, growing ahead of the industry both in volume and value. Its FCT revenue for the quarter was Rs 75.2 crore as compared to Rs 67.8 crore, a growth of 10.8% yoy. It has a volume marketshare of 24.3%. NonFCT segments, including digital, witnessed a growth of 43.6% yoy on the back of subscription revenue from Gaana.

'GAANA' BOOST

On the digital front, he revealed that the company saw promising improvement post integration of Gaana. During the quarter, ENIL launched an improved version of the previous app, which was well received. This led to strong digital revenues of Rs 17.8 crore, contributing almost 25% of radio revenues as compared to 11.8% in Q1FY24.

According to him, the management had guided earlier that its aspiration and ambition is to get 25% of revenues from the digital segment. It has made investments on this new platform, which is close to Rs 15 crore this quarter. However, the key takeaway is that this is expected to come down in the subsequent quarters. Its international market continues to be EBITDA-positive at Rs 1.5 crore for Q1FY25. The inventory utilization for this quarter is about 72%. The balance sheet remains robust with a cash balance of Rs 355 crore as of June 30, 2024.

Pointing out that "ENIL acquired Gaana on December 1," Mr Mehrishi added that the company went ahead and did a pure subscription business. So it's not a free music business, unlike what Gaana used to do, or what Spotify does right now, or what JioSaavn does. Its business is a pure subscription model. It's more of a revenue share with the label business. And subscribers have to pay to listen to music on Gaana. So, it's a pure subscription model business. Its pricing earlier used to be Rs 299, which was not feasible. But from July 1, it increased the price to Rs 599.

Any new digital investment requires a certain bit of an incubation period, so the company will be investing for another couple of years into the business, into the product, into the product experience or recommendation engine, acquiring more and more subscribers. Right now, it has very healthy numbers. It has a very good base and a good marketshare in the subscription business (not looking at the free music subscription).

SUBCRIBERS GROW

In the paid subscription business, it has a healthy share of the market. With its experience in the radio business and its presence, it believes it'll be able to drive this business profitably as soon as possible. Subscribers' numbers are very healthy number and are increasing on a daily and monthly basis. The company's aim is to make the Gaana business profitable as soon as possible.

In conclusion, the company's primary objective has always remained to maximize shareholder value on the back of sustainable growth and profitability, Mr Mehrishi said.