JioStar Posts Strong Q3 Revenue Growth Amid Digital Push
JioStar, the media and entertainment arm controlled by Reliance Industries, has reported a solid increase in its operational revenue for the December quarter. The company saw sequential growth, primarily fueled by robust subscription income from both digital platforms and television services. A significant rise in digital advertising, supported by the expansion of connected TV and new film and web-show launches, also contributed to this upward trend.
Financial Performance Highlights
In the third quarter, JioStar's revenue from operations climbed by 11.6% quarter-on-quarter, reaching ₹6,896 crore. However, the company faced a decline in profitability. Its profit before tax dropped by 32.2% to ₹898 crore. Earnings before interest, taxes, depreciation, and amortization (Ebitda) also fell, standing at ₹1,303 crore compared to ₹1,738 crore in the previous quarter.
User Engagement and Entertainment Growth
The digital platform JioHotstar maintained strong user engagement during the October-December period. Average monthly active users (MAU) hit 450 million, marking a 13% increase from the previous quarter. This figure matched the levels seen in the first quarter of the fiscal year, which included the popular Indian Premier League (IPL) season.
Entertainment watch time on the platform grew by 15% in the same quarter. This growth was driven by several key factors:
- New seasons of the reality TV show Bigg Boss in three languages.
- Strong performance of Hindi and regional content launches.
- Sustained popularity of TV network content on JioHotstar.
Kevin Vaz, CEO of Entertainment at JioStar, emphasized this success during a recent earnings call. He stated, "We managed to convert many consumers from cricket to entertainment and kept them engaged on our platform. Our entertainment watch time increased by 15%, thanks to Bigg Boss seasons and our regional and Hindi portfolio."
Challenges in Advertising Market
Despite the positive trends, JioStar faces headwinds in the TV entertainment advertising sector. Vaz noted that the market remains challenging due to spending cuts by fast-moving consumer goods (FMCG) and consumer electronics companies. This has impacted ad revenues on linear television.
On a brighter note, the company's viewership share on linear television grew by 1% year-on-year to 34.6%. Additionally, the Hollywood theatrical release Avatar: Fire and Ash performed well, grossing ₹200 crore at the box office within 15 days.
Sports Viewership and Strategic Moves
In the sports segment, the Women's World Cup emerged as the most-watched women's cricket tournament. Men's cricket bilaterals also saw strong performance, with average watch time per ODI and T20 match increasing by 55% compared to the period before the Disney-Reliance merger.
The Pro Kabaddi League demonstrated impressive growth, with digital watch time surging by 120% year-on-year. This reinforces Kabaddi's position as the second most-watched sport in India after cricket.
Industry Context and Future Outlook
The joint venture between Reliance Industries and The Walt Disney Company, formed in February 2024, has created a formidable entity in India's media landscape. JioHotstar, the merged streaming platform, has crossed 300 million paid subscribers, as announced at Reliance's annual general meeting last year.
Industry experts highlight that this combined entity is significantly larger than competitors like Netflix in terms of total programming hours. However, they caution that success in the crowded subscription video-on-demand market will require more than just popular content like IPL and Bigg Boss.
Kiran Mani, CEO of Digital at JioStar, recently commented on the company's strategy. He said, "While IPL is a major attraction, our core business is general entertainment. We leverage our extensive television content, which has a loyal audience on OTT platforms."
Mihir Shah, Vice-President at Media Partners Asia, noted that the JioCinema and Hotstar merger has the potential to accelerate India's premium video-on-demand market. He stressed that innovation in content, interactive features, and consistent user experience will be crucial for long-term success.
