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Why India Has Become a Key Growth Market for Viacom

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Viacom’s optimism regarding India

Viacom (VIAB) expects India (EPI) to be a key contributor to the company’s growth in the near future. Viacom’s revenues in India are experiencing a strong double-digit growth.

On June 9, 2016, Viacom stated at the Gabelli & Company Movie & Entertainment conference that Viacom expects India to contribute $300 million in operating income by 2020.

Viacom (VIAB) currently has 16 media networks in India and expects these networks to grow further. Viacom stated at a Deutsche Bank (DB) investor conference in early 2016 that its joint venture with Reliance Industries in India, Viacom 18, created “the largest media groups in India.”

Viacom 18 caters to a broad demographic in India with its regional language portfolio of channels. It also targets children and teens with Nickelodeon and MTV, respectively.

In March 2016, the company also launched Voot, an OTT (over-the-top) service in India. Other existing OTT players in the Indian market include Netflix (NFLX), 21st Century Fox’s (FOXA) hotstar, and Sony’s (SNE) LIV.

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India and 21st Century Fox

Twenty-First Century Fox (FOXA) is another media company that is also targeting the Indian market. The company is projecting a profit of $0.5 billion in fiscal 2018 and a profit of $1 billion in fiscal 2020 for the STAR network in India. The company is on track to achieve this target through the growth of its STAR entertainment network, which has a 22%–23% market share of entertainment in India.

As the chart above indicates, FOXA stated in an earlier earnings call that the Indian television market could be worth $20 billion by 2020.

FOXA makes up 0.62% of the PowerShares QQQ Trust Series 1 ETF (QQQ). If you’re interested in exposure to TV, QQQ has 4.5% exposure to that space.

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