Bengaluru - India's Network18 Media & Investments reported a loss for the second quarter on Tuesday, as advertisers spent less and the media conglomerate backed by billionaire Mukesh Ambani poured funds into new television channels and shows.
Viacom18, a joint venture in which Network18 is a 51% owner, has launched three new sports channels having won digital streaming rights of the lucrative Indian Premier League cricket tournament for the subcontinent, which it expects to help attract viewers.
YouTube and Netflix have proven to be a big challenge for the already crowded Indian television industry as cheap internet plans have helped video streaming websites compete with TV channels.
Businesses ranging from startups to conglomerates are also rethinking their advertising spending as they are already having to deal with higher raw material and labor costs.
"The opening up of the economy set high expectations for 2022. However, ... a high inflationary environment (is) forcing advertisers across categories to reduce spends," Mihir Shah, vice president of research firm Media Partners Asia said.
Consolidated loss attributable to owners of Network18 widened to 364.9 million Indian rupees ($4.44 million) for the three months ended Sept. 30 from 33.2 million rupees in the previous quarter.
"The profitability of the (entertainment) business was impacted as the advertising revenue lagged expectations despite content investments helping us strengthen our ratings in certain markets," Network18 said in a statement.
For Network18, which incorporates a spate of media houses including channels CNBC-TV18 and Colors, quarterly expenses increased nearly 34% to 15.92 billion Indian rupees due to higher operational and promotional expenses.
Network18's revenue from operations still increased nearly 12% to 15.49 billion rupees.
The company had posted a profit of 390.2 million rupees in the September quarter a year ago.
($1 = 82.2740 Indian rupees)
(Reporting by Praveen Paramasivam in Bengaluru; Editing by Shinjini Ganguli)