Vol.

40, 18th May 31st May 2012

Mediatainment Track
Fortnightly Update on Indian Media & Entertainment Industry

In the Spotlight
FY13: Re-invent, Re-grow Indias GDP has declined to reach a 9 year low. With ad revenues dependency on GDP, FY13 looks like another tough year for the media industry. Listed leader Zee has been optimistic about FY13 outlook despite 12% decline in Q4 ad revenues. Zee forecasts industry to grow at 8-10% in FY13 while it aims to grow faster by increasing market share of its own channels, and the increasing subscription revenues. The second listed player Sun TV had a tough FY12, due to political issues. It is likely to face further headwinds in FY13. Regional media and retail advertising have done better on the whole as compared to the national. Print players have grown by geographic expansion but were hit by higher newsprint costs due to Rupees fall. In its earnings call, DB Corp revealed that while retail advertising grew over 20%, corporate advertisement remained a concern. Radio leader ENIL is confident of over 10% revenue growth for FY13. Indian M&E sector is re-inventing itself from a corporate advertising model to more robust multiple revenue streams model. Players are expanding geographically and digitally to make the most of local and digital media consumption and retail advertising. The regulatory support in form of Digitisation, Spectrum decisions, Radio Phase III auctions has been laid out by the Government. We would see new growth through changing business models in FY13.

Content
Private Equity Mergers & Acquisitions Corporate Developments News Update Stock Market Update Financial Benchmarking About Four-S

Content

2 2 3 4 5 5 7

Meanwhile, About Four-SIndia is getting increased focus in the Services online/mobile segment. Nimbuzz is relocating

Four-S Services is India's leading provider of Research, Financial Consulting and Investment Banking services with offices in Gurgaon, Mumbai and Headquarters to India. InMobi, the biggest PE recipient last Bangalore. We have a proven track record of consistently delivering high quality solutions, enabling our clients to improve the effectiveness of decision year, has opened up offices in Mumbai and Delhi in addition making and acting as a catalyst in achieving business success. We have executed more than 120 mandates across diverse range of industries including to its Bangalore office. Education, Financial Services, Infrastructure, M&E, IT-ITeS, Auto and Auto ancillaries, Retail, Real Estate and Textile etc

their

Our Services:
Strategy Consulting Business Planning Investment Banking Research Support Valuation Services Investor Relations & IPO Consulting

For further information, please contact Seema Shukla at seema@four-s.com seema@four-s.comse or reach us as http://www.four-s.com

FOUR-S Mediatainment Track

Investment Activity
Private Equity deals in M&E and Mobile VAS till 31 May, 2012
Date Investors 9-Ma y IndoUS Ventures Mumba i Angel s . Bl ume Ventures , Indi a 26-Apr Venture Pa rtners (Ma uri tius ) a nd Chri s topher Prei nz a nd As s oci a tes (EU) 18-Apr Future Ventures 27-Ma r 13-Ma r 20-Feb 17-Feb 15-Feb 8-Feb 31-Ja n 27-Ja n Ni rva na Ventures Advi s ors Provi dence Equi ty, Ma cqua ri e Ba nk Oja s Venture Pa rtners Upda ta, Wes tBri dge & Intel Ca pi tal Ci s co Sys tems Indi a n Angel Network Oja s Ventures NA Target Ma gzter Uni ted Mobi l e Apps Ama r Chi tra Ka tha (Ack) Ga mes 2wi n Ha thwa y Ca bl e Bri zzTV Medi a La b Jul y Sys tems Qyuki Ga mi a na Di gi tal Ga mi ng Venturenet Pa rtners Pvt Ltd InRev Stake % NA NA 9.8 10.0 17.3 NA NA 17.0 NA NA NA NA NA Amount $mn Business NA 1.0 NA NA 72.0 NA 15.0 5.5 1.0 NA NA NA 6.6 Di gi tal Publ i s hi ng Mobi l e Apps Publ i s hi ng Ga mi ng Ca bl e opera tor Di gi tal medi a mVAS Di gi tal medi a Ga mi ng Di gi tal Ra di o Soci a l medi a product Stage Ea rl y Ea rl y
st

Late Late Late Early Late Early Early Early

Ea rl y

19-Jan CCube
19-Ja n Sequoi a Ca pi tal

MyAdCorner.com
Knowl a ri ty Communi ca tions

Online ad booking

Early

mVAS - Cl oud Tel ephony Growth

2012 has seen 13 deals for more than $101.1mn till date. Merger & Acquistions in M&E and Mobile VAS till 31 May, 2012
Date Acquiror 23-May ValueFirst Messaging 19-May AV Birla Group 17-May Trivone Digital
26-Apr CA Medi a , Zodi us Advi s ors
st

Target Way2SMS India Today Chakpak

Onl y Much Louder

Stake (%) Amount ($ mn) Business

NA 27.5 NA NA 49.0 76.0

NA NA NA
NA

mVAS Publishing Online portal

Event

26-Apr CA Media 25-Apr Eros International Plc 24-Apr Publicis Groupe 2-Apr Jagran Prakashan 30-Mar Affle, D2 Communications 21-Mar Gruner + Jahr 15-Mar Ver Se Innovation 13-Mar Pubmatic 29-Feb Komli Media 10-Feb GigaOM 3-Feb Persistent Systems 2-Feb Walt Disney 25-Jan Gujarat Telelinks
4-Ja n Wa y2Onl i ne 3-Ja n Network 18 Group 2-Ja n Undi s cl os ed buyer

Endemol India B4U Television Network Indigo Consulting Nai Dunia Media Pvt Ltd MobiMasta NetworkPlay Eterno Infotech MobiPrimo AdMax Network Openwave Location Business UTV Software V&S
160by2 Eena du Ba l a ji Tel efi l ms - educa tion/ mobi l e

NA 53.1 NA 0.7 NA 18.2 NA NA NA NA NA NA

NA 430* 0.2 NA NA 395.0 1.6

Content Production Broadcasting Digital Agency Ad network Publishing Exhibition mVAS - Advertising Digital Ad Network Mobile Media platform mVAS Ad Network Content mVAS - Location services Broadcasting, Production Distribution - MSO Distribution - Cable
Onl i ne portal - mes s a gi ng Broa dca s ting Content/ Medi a educa tion

NA
94.6

5-Apr Tyroo media, Inflection Digital DGM India 30-Mar Gujarat Fluorochemicals/ Inox Fame India

NA
18.7

NA
70.0

NA
100.0

NA
100.0 NA 51.0 1.1 100.0 NA NA

NA Guardian News & Media - PaidContent, other assets

19-Jan Reliance Strategic Investments DEN Networks

*estimated value

2012 has seen 23 acquisitions happening in the segment, worth more than $899mn.

Four-S Indian PE Directory 2012 A Guide to choosing private equity partners

Detailed listing of ~330 Active PE/VC Investors in India - PE/VC players that have invested in the past 3 years. A first-of-its-kind, the directory offers Deal History in India for individual investor. Management, investment profile and Contact details. User-friendly Spreadsheet Format. It comes from Four-S Services, the most trusted deal information bank in India.

Research Desk
For further information, please contact Seema Shukla at seema@four-s.com or reach us as http://www.four-s.com

FOUR-S Mediatainment Track

Corporate Developments
ValueFirst acquires Way2SMS In the first deal in the messaging space this year, ValueFirst messaging has acquired Way2SMS in an all cash deal. While the deal amount was not disclosed, it is pegged to be around $30mn by some news reports. Way2SMS was in the news in late 2011 when it had acquired another Person2Person online portal 160by2. The combined entity had a market share of 95% in P2P online SMS business with over 33mn registered users. ValueFirst messaging is a leading Enterprise Messaging service provider. It is also into SMS advertising network, SMS content publishing and content alerts. It has raised a total of $21mn till date in two rounds from Headland Asia Ventures and NEA. It has been acquiring companies to increase its breadth of services. Earlier acquisitions include SMS Social network Tagg.in, telecom products company PacketShaper, VAS firm CellNext. ValueFirst is expected to achieve turnover of $50mn this year. This acquisition will increase ValueFirsts presence in consumer space. Post acquisition, ValueFirst will have over 50mn opt-in subscribers. Aditya Birla Group acquires 27.5% in India Today In another case of an Indian corporate house increasing presence in media space, Aditya Birla Group has acquired 27.5% in India Today Group Living Media India, for an undisclosed amount through its Private Investment arm. The India Today Group has presence across all media verticals publishing, television, radio and events. Its listed group company TV Today Network Ltd closed FY12 with a turnover of Rs. 3,084mn and a PAT of Rs. 105mn. Commenting on the investment, Chairman of Aditya Birla Group termed the media industry as a sunrise sector. Trivone acquires Chakpak.com Trivone Digital Services has acquired Chakpak.com for an undisclosed amount. Chakpak is an entertainment portal mostly focussed on South Indian film news. It had raised a $5mn funding from Accel Partners. Flipkart had acquired rights to Chakpaks digital catalogue that included 40,000 filmographies and over 10,000 movies. Trivone owns and manages four other portals techtree.com, CXOtoday.com, Supportbiz.com, and Channeltimes.com. Chakapk, its fifth portal will get it into entertainment segment. It also plans to launch sports and auto portal. Trivone also has Accel Partners as investors. It had raised a Series A from Accel in December 2011. Magzter raises Series A from Indo-US Magzter has raised a Series A funding from Indo-US Venture Partners. While the amount was undisclosed, news report put it in the range of $3mn-$5mn. Magzter is a digital magazine store and news stand for mobile devices which allows users to browse, buy and read digital editions of select magazines and periodicals. It has apps for iPhone, iPad and Android devices. The 11 month-old company is based in New York and Chennai. It claims to have 2.5mn registered users, including 0.6mn iPad users from India, and has 1,000 transactions per day. It has over 400 magazines on its platform at present. It plans to add newspapers and increase magazines catalogue to over 10,000 from across the world in next 18 months. The company is looking for another funding round of over $10mn. Seed Funding deals: Innoz, iDubba In two seedfunding deals of the month, mobile search company Innoz and TV guide iDubba raised seed funding. Innoz has raised series-A funding from Seedfund. It offers mobile search service on the shortcode 55444. It charges a rate of one rupee per serach and also has a subscription option at thirty rupees per month. The company had a turnover of $1.2mn in FY11 and it receives over 33mn queries in a month. More than 80% of Innozs traffic comes from Airtel. Innoz positions itself as a good data mining platform for telcos for customer insights. iDubba has raised angel funding from a group of angel investors. iDubba is an Online and Mobile TV Guide and based in Noida. It offers interesting services around TV programme information, like recommendations and alerts. Punjab Kesari to expand, looks for PE funding Hindi Daily Punjab Kesari plans to enter new markets of UP and Uttarakhand in this year. It has already acquired land and is setting up facilities in Noida, Meerut, Ghaziabad, Lucknow, Dehradun, Bareilly and Agra. There will be two main editions, one for each state, and many sub-editions. Punjab Kesari has editions in Punjab, Haryana, Jammu and Kashmir, Himachal Pradesh and Chandigarh. It also plans to increase itds reach in Rajasthan where it already has one edition. It plans to raise $30mn via PE funding route for the planned expansions.

FOUR-S Mediatainment Track

News Update
TRAI: TV Advertisement to be capped at 12minutes/hour The Telecom Regulatory Authority of India (TRAI) has issued regulations regarding Duration of advertisements in television channels to all broadcasters, to enhance TV viewing experience for subscribers. It had earlier released a consultation paper in March for the same inviting comments from all stakeholders including consumers. There were complaints on the increasing duration and distracting formats of TV ads. The new regulations include maximum duration of TV ads to be capped at 12minutes per clock hour with no carry forward of unconsumed duration. This will include promotional ads as well. In case of live sporting events, ad breaks to coincide with breaks in the actual event, Time gap in consecutive ad breaks in a program to be a minimum of 15 minutes, Part-screen and drop-down advertisements will not be allowed, and audio level of ads not to be higher than the program. Chrome Dii R2: Carriage fee increases $60mn in FY12 According to the Distribution Investments Index (Dii) study on Carriage fee released by Chrome Data Analytics and Media, carriage fees paid by broadcasters in FY12 increased by $60mn to reach $380mn. In MSOs, DEN leads in premium commanded as it has a 18% share in C&S households across Chrome reported markets. DENs carriage fees in FY12 increased 44% for UHF-band and 22% for S-Band. On a national level, the cost per contact per household for a new player has increased by 43% for S-Band to Rs 26 and by 42% for UHF band to Rs 17. For existing players, the increase has been 39% and 37% respectively. A reason for increase in cost per contract is that number of households have decreased due to increasing DTH subscribers. South is the only market to show a decline in carriage fees, as a result of Governments control on Cable. Chennais market share in South has decreased from 56% to 37%. North remains the most expensive area. CCI nod to Reliance TV18, FIPB nod to Bloomsbury UK CCI has approved Reliances stake acquisiton in TV 18 and Network 18. The multi-layered deal has already seen Network 18 Group acquiring Reliances stake in Eenadu for $395mn. Reliance, through its Independent Media Trust, will provide funding through optionally convertible debentures to Network18 Media and Investments Ltd and TV18 Broadcast Ltd. Network 18 and TV 18 have targetted to raise $800mn in total including promoters contributions. Reliance will get access to Network 18s media content as a part of the deal. The Foreign Investment Promotion Board (FIPB) has approved proposal of Bloomsbury India UK to carry out publishing business in India for an investment of upto $1.876mn. Percepts IPL5 Scorecard An analytical study done by Percept Media shows that ad volumes for IPL5 dropped by 19% and number of advertisers dropped by 41%. In this IPL season, the rate per single 10 second slot was hiked to ~Rs. 0.51mn from Rs. 0.45mn in IPL4, a hike of ~13%. For audience, average GRPs per match dropped marginally to 32GRPs. The study also confirmed that General Entertainment Channels are slowly reinstating the female viewership. Online streaming of IPL5 done by Indiatimes in partnership with YouTube reported a 55% increase in combined page views over last IPL to reach 113mn pageviews. IPLs CEO claimed that the pageviews at official IPL site increased by 355% this year. Mobile viewing also went up with 0.6mn viewers in the first week itself. Apalya had tied up with Indiatimes for mobile streaming of IPL matches. Copyright Bill Amendment passed The Copyright Amendment Bill 2012 has been approved by the Parliament. The legislation will now be presented before the President. The bill essentially recognizes artistes as the owners of of copyright rather than producers. Hence, broadcasters will be mandated to pay royalty to owners of copyright everytime their work is broadcasted. The Indian Broadcasting Federation (IBF) has appaluaded the move as a significant and positive step for the industry. Mobile TV Spectrum to be located The Information and Broadcasting ministry is in talks with the Department of Telecommunications (DoT) for a regulatory framework to allocate mobile TV spectrum. The framework will include spectrum identification within the recommended band, service area licences, number of providers, as well as TRAI recommendations on bidding for mobile TV licenses. Mobile TV requires spectrum in UHF Band V (585-698 MHz), however there is not enough spectrum available in this band at present. This has been a big roadblock in launch of mobile TV services so far. Mobile has become an increasingly important screen in Media sector. Indian Cellular Association (ICA) has said that mobile handset demand in India was 180mn in 2011, a YoY increase of 20%. It predicts demand for mobile handsets to increase to 250mn by 2014.

ResearchDesk DeskDeskResearch projects for prestigious Indian as well as global corporations, investment banks, private equity funds, venture capitalists and services. We have executed DeskResearch hedge funds including Indias Top 5 PE Funds. For further information, please contact Seema Shukla at seema@four-s.com or reach us as http://www.four-s.comFour-S Services is India's leading provider of high-end research, financial consulting and Investment banking services. We have DeskResearch executed projects DeskResearch for prestigious Indian as well as global corporations, investment banks, private equity funds, venture capitalists and hedge funds

FOUR-S Mediatainment Track

Stock Market Update (Returns)
Stock Zee Entertai nment Sun TV Network Di s h TV DB Corp Ja gra n Pra ka s ha n HT Medi a Ha thwa y ca bl e Eros Interna tiona l Den Networks ENIL TV 18 Broa dca s t Pri me Focus Decca n Chroni cl e Onmobi l e PVR Rel i a nce Broa dca s t Ba l a ji Tel efi l ms Rel i a nce Medi a works Ni fty Sens ex MCap (May31) Price (May31) 15 days 1,26,222 94,167 61,470 35,745 29,255 25,946 23,421 15,196 12,416 10,235 6,608 6,089 5,736 4,744 3,952 2,880 2,380 2,292 131.7 239.0 57.8 195.0 92.5 110.4 164.0 165.7 95.2 214.7 18.3 43.9 27.5 41.3 152.6 36.3 36.5 49.7 4924.3 16218.5 6% -9% -5% -3% 5% -2% -1% 0% 3% 8% -20% -2% -17% -17% 5% -17% 6% -22% 1% 1% 1m 4% -17% -4% -6% -6% -14% 5% -11% -12% 3% -32% -9% -31% -23% 2% -28% -19% -33% -6% -6% 3m 4% -23% 6% -4% -13% -23% -1% -11% -9% -9% -40% -19% -37% -42% 7% -31% -13% -40% -9% -9% 6m 7% -9% -10% -11% -12% -9% 59% -26% 56% -13% -51% -9% -39% -37% 12% -35% 7% -41% 2% 1% 1 yr P/E (TTM) -4% -39% -26% -19% -28% -31% 47% 12% -8% -12% -80% -20% -60% -63% 39% -48% 4% -63% -11% -12% 21.4 13.6 NM 17.7 16.4 15.7 NM 10.3 85.2 18.2 NM 6.1 9 5.7 15.5 NM 11.6 NM

Market Cap in `mn

Financial Benchmarking - Quarter 4, FY12 Results

Quarter ending 31 March, 2012
Revenue
Zee Entertai nment HT Medi a Di s h TV* Sun TV Network* DB Corp TV 18 Broa dca s t Ja gra n Pra ka s ha n* Den Networks Eros Interna tiona l Decca n Chroni cl e Rel i a nce Medi a works Pri me Focus Onmobi l e Ha thwa y ca bl e* PVR ENIL Rel i a nce Broa dca s t Ba l a ji Tel efi l ms *
st

EBITDA

PAT

Q4FY11 7,954 4,673 4,330 4,605 3,174 2,058 2,826 2,821 1,143 3,349 1,392 768 1,333 1,235 898 822 678 433

Q4FY12 8,691 4,941 5,248 4,270 3,606 5,120 3,104 3,216 2,068 2,195 1,760 1,891 1,776 1,355 1,177 935 687 369

YoY 9% 6% 21% -7% 14% 149% 10% 14% 81% -34% 26% 146% 33% 10% 31% 14% 1% -15%

Q4FY11 2,222 862 902 3,639 796 72 714 231 134 68 -641 380 309 187 190 326 -120 2

Q4FY12 1,600 482 1,442 3,282 758 -458 659 305 342 397 -392 597 413 233 47 329 -185 -16

YoY -28% -44% 60% -10% -5% NM -8% 32% 156% 481% NM 57% 33% 25% -75% 1% NM NM

Q4FY11 1,968 529 -371 2,083 450 -132 421 81 136 -466 -1,735 102 269 -175 -11 180 -197 -11

* Standalone results

Q4FY12 YoY 1,602 -19% 220 -58% -490 NM 1,590 -24% 454 1% -334 NM 428 2% 48 -41% 297 118% 61 -113% -1,262 NM 209 105% 48 -82% -68 NM -132 NM 196 9% -307 NM 15 NM Figures in Rs.`mn

Research Desk
For further information, please contact Seema Shukla at seema@four-s.com or reach us at http://www.four-s.com

FOUR-S Mediatainment Track

FY12 Results
Revenue EBITDA PAT

Company Zee Entertainment HT Media Dish TV Sun TV Network DB Corp TV 18 Broadcast Jagran Prakashan Den Networks Eros International Deccan Chronicle* Reliance Mediaworks Prime Focus Onmobile Hathway cable* PVR ENIL Reliance Broadcast Balaji Telefilms

FY11 30,088 17,762 14,367 20,135 12,652 8,042 12,211 10,419 7,070 10,309 8,361 5,030 5,372 4,739 4,622 4,635 2,454 1,922

FY12 30,406 20,030 19,579 18,472 14,638 14,227 13,557 11,393 9,439 9,147 8,145 7,719 6,380 5,142 5,131 3,110 3,002 1,878

YoY 1% 13% 36% -8% 16% 77% 11% 9% 34% -11% -3% 53% 19% 9% 11% -33% 22% -2%

FY11 8,219 3,320 2,380 15,779 4,031 463 3,565 1,108 1,561 3,475 -137 1,671 1,208 900 916 1,016 -64 3

FY12 7,396 2,869 4,960 14,144 3,550 -495 3,169 963 2,124 2,121 -1,443 2,343 1,399 873 794 1,222 -633 12

YoY -10% -14% 108% -10% -12% NM -11% -13% 36% -39% NM 40% 16% -3% -13% 20% NM 312%

FY11 6,370 1,809 -1,920 7,698 2,585 -174 2,078 375 1,172 1,626 -3,289 761 892 -403 82 172 -537 -11

FY12 5,892 1,655 -1,331 6,929 2,021 -738 1,783 146 1,478 607 -5,180 993 831 -502 254 561 -1,130 204

YoY -8% -9% NM -10% -22% NM -14% -61% 26% -63% NM 30% -7% NM 211% 227% NM NM

* Standalone results

Figures in Rs.`mn

Research Desk
For further information, please contact Seema Shukla at seema@four-s.com or reach us at http://www.four-s.com

FOUR-S Mediatainment Track

Four-S Services Pvt Ltd

Founded in 2002, Four-S has a strong & successful track record of genuine, accurate and objective advice to top Indian & global companies & PE Firms. Four-S has already proven success in corporate finance, strategy consulting, fund-raising, investment banking and investor relations mandates with 100+ corporates and large PE funds

Four-S, trusted advisor to top Indian & Global Cos

Offering comprehensive bouquet of services to SMEs, Corporates and PE Funds

Target Identification Portfolio Benchmarking Post investment Review

Sector Research

Investor Relations

Investment Banking

Entry Strategy

Independent Valuation

FOUR-S Mediatainment Track

About Four-S Services
Four-S Services provides customized business and financial research to organizations across the globe. The company also provides Investor Relations consulting to corporate based on in-depth sectoral and company research. The company has an impressive client profile and a team of senior analysts covering key sectors including Finance & Banking, IT & Telecom, Retail, Media & Entertainment, Pharmaceuticals, Infrastructure and Manufacturing amongst others. For further information on the company please visit www.four-s.com

Disclaimer
The information contained herein has been obtained from sources believed to be reliable but is not necessarily complete and its accuracy cannot be guaranteed. No representation, warranty, guarantee or undertaking, express or implied, is made as to the fairness, accuracy or completeness of any information, projections or opinion contained in this document or upon which any such projections or opinions have been based. Four-S Services Pvt Ltd. will not accept any liability, whatsoever with respect to the use of this document or its content. This document has been distributed for information purposes only and does not constitute or form part of any offer or solicitation of any offer to buy or sell any securities. This document shall not form the basis of and should not be relied upon in connection with any contract or commitment whatsoever. This document is not to be reported or copied or made available to others. The Company may from time to time solicit from, or perform consulting, or other services for, any company mentioned in this document.