Movies Now expects to grow revenue by 50 per cent in FY '12-13

Launched exactly two years ago, Movies Now has had a great run so far. What it plans to keep the story going.

The English movie channel from the Times stable, Movies Now, has completed two years in the television broadcast space since it began operations in December, 2010. The channel expects to close the current financial year (FY 2012-13) with a 50 per cent growth in revenue. It also hopes to increase its viewership further by lining up several new properties.

Industry sources estimate that the channel's total revenue, including both advertising and subscription, would be in the broad range of Rs 100 crore. Of total costs, about 35 per cent are accounted for by content acquisition as against 15 per cent by distribution. Marketing is the other major cost head.

Ajay Trigunayat, CEO, English movie channels, Times Television Network, explains that the marketing spend will be scaled back in percentage terms in the coming year: "Any channel needs a strong back-up of marketing in the launch phase and a little after that. So did Movies Now. Marketing accounted for close to 10 per cent of our total expenditure in the first two years. However, from now on the spend will come down to about 7-8 per cent."

That being said, Trigunayat concedes that competition in the segment is fierce and with the top players constantly jockeying for the top slot, marketing will continue to play a critical role.

Interestingly, right after its launch, the channel topped the English movies genre list, garnering an average of 32 per cent relative share in the first quarter of 2011 (C&S, 15+, 1 million+). However, the channel has stood on second position with a relative share of 22 per cent in the recent Q4 of 2012, whereas STAR Movies, on the top, has garnered 26 per cent.

The current reach of the channel is close to 23 million viewers every week, which is expected to increase to 25 million per week within a year.

The channel telecasts about 35-40 fresh movies in a week, while the remaining slots are filled with repeat telecasts. Movies Now plans aggressive experimentation with the scheduling of the content from April onwards.

The channel has seen a substantial increase in the number of advertising partners since its launch. In the initial three months, it had barely 50 advertisers on board, which increased to 260 advertisers between April, 2011 and March, 2012. Currently, it claims to have 360 of them.

Compared to other older players in the market such as HBO, for whom subscription accounts for about a third of the total revenue, Movie Now's monies from this stream are piffling. Armed with the new programming, Movies Now plans to increase this to be more in line with other players in the genre.