Topic: Digitization- A game changer ?
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koolvalue
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Joined: 30/Apr/2011
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Posted: 10/Dec/2012 at 8:41am
Originally posted by rohit1889 Can you please post your findings ??
Originally posted by koolvalue After digging deep in this sector slowly comming to a conclusion this is going to be next capital sucker for small investors.Trap well layed to exit lossmaking previous
investments.
Sorry for late reply.
Bsically I spoke with some people who are closely associated with media sector (not equity analyst).As per them
1)Digitalisation is unlikely to happen very soon and it is a prolonged process. Hence it cannot be a game changer.
2)Basically media sector here makes money for not giving news/not giving coverage and hence listed entities do not get any benifits.
3)Most of the media ventures are strategic in nature and making money for shareholders is not their main aim.
4)Most of the people in this sector are not comfortable with basic structure of the model. They feel it is somewhat similar to Airline business which always bleeds
regardless of positive or negative environment.
5)There is no proof for ad rates increasing. Infact because of competation from web based advertising television/news paper ad rates are more or less stagnent or moving downward.
6)Lack of creative content- as this field is run by chacha-bhatija kind of people creative content is not happening.
7) Most of the media players are indirectly controlled by political parties hence EDITORS are planted rather than selected and spend most of time protecting interest of planters rather than doing business.
Basically problems with media sector are more structural in nature and unless these are addressed digitalisation alone cannot be a game changer but will just act as sucker
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rohit1889
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Posted: 19/Jan/2013 at 10:34pm
http://www.moneycontrol.com/news/results/tv18-turns-cornerrs-213cr-net-profitq3_810345.html#toptag
If you're prepared to invest in a company, then you ought to be able to explain why in simple language that a fifth grader could understand, and quickly enough so the fifth grader won't get bored.
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basant
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Posted: 19/Jan/2013 at 8:19am
Key numbers to watch and predict will be EPS and RoCE. ALso one has to think that from the current market cap of Rs 6000 crores for one to make a 5 bagger the company has to do a profit of Rs 1000 crores to be traded at a PE of 30. What can help it reach that number. Assuming a 18% PAT they would need a revenue of Rs 6000 crores. You can keep tweaking on those numbers but this is a broad guideline for a five bagger. There are already six business channels now and the public opinion on all the channels cannot be differentiated because the talking heads remain the same so how can they take this forward. Edited by basant - 19/Jan/2013 at 8:20am
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rohit1889
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Posted: 19/Jan/2013 at 10:58am
Agreed.. If you go by their traditional business, doing 6000 cr is steep ask. My bet is that TV-18 will benefit from digitization as the under-reporting done by LCO will disappear. Basantji, don't you think this is a likely scenario? Thats the reason I think their revenues should go upward..
I've not taken a big bet on this though and it forms 10% of my portfolio..
Originally posted by basant Key numbers to watch and predict will be EPS and RoCE. ALso one has to think that from the current market cap of Rs 6000 crores for one to make a 5 bagger the company has to do a profit of Rs 1000 crores to be traded at a PE of 30. What can help it reach that number. Assuming a 18% PAT they would need a revenue of Rs 6000 crores. You can keep tweaking on those numbers but this is a broad guideline for a five bagger. There are already six business channels now and the public opinion on all the channels cannot be differentiated because the talking heads remain the same so how can they take this forward.
If you're prepared to invest in a company, then you ought to be able to explain why in simple language that a fifth grader could understand, and quickly enough so the fifth grader won't get bored.
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FutureBull
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Posted: 14/Feb/2013 at 8:08pm
Those who think media is like monopoly biz with steady subscription revenue like in US. Those should also keep in mind the recent trend of Google YouTube becoming like a channel itself. The trend is catching up very fast and we Indians like free lunch isn't it? How many guys are ready to pay Rs 1000/month for a dumb cable subscription? Someone would say that only strong content players would survive but the key question is with politicians pumping black money in this sector are we not underestimating the staying power of losers?
However, I do feel there would be brief period of sunshine in the next few years when it would look like things are getting better before another digital revolution i.e. internet arrives in our homes.
‘The market always does what it’s supposed to — BUT NEVER WHEN’.
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oakleysunglasse
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