Q4FY2007 Media earnings preview: Sharekhan Special dated April 18, 2007

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Sharekhan Special [April 18, 2007] Please see the attachment for details Share khan www.sharekhan.com

Summary of Contents SHAREKHAN SPECIAL Q4FY2007 Media earnings preview The fourth quarter is the best quarter for the media industry as corporates exhaust their remaining ad budgets in this quarter.  For the news channels, specifically the business news channels, the Union Budget is the major event that takes place in the fourth quarter, bringing in more ad revenues. The ICC Cricket World Cup West Indies 2007 was seen as a major event that was expected to affect the revenues of the general entertainment channels (GECs) but India's early exit is believed to have negated this to a certain extent. This was the first quarter of the roll-out of the conditional access system (CAS) in parts of Mumbai, Delhi and Kolkata. While 1.63 million cable homes fall under these CAS mandated zones, about 29% were estimated to have opted for set top boxes (STBs) till February 15, 2007 (source: FICCI- PWC Frames-2007). The penetration of CAS is expected to improve over a period of time with better subscriber awareness, the availability of STBs and its implementation in the other cities. CAS also provides an opportunity to alternative digital distribution platforms such as direct-to-home (DTH) and Internet Protocol TV to expand faster. We expect CAS to bring in transparency and curb under-reporting of subscriber base, thereby improving the profitability of broadcasters and MSOs.

Regards, The Sharekhan Research Team myac...@sharekhan.com

 

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