Credit Outlook Negative for Indian Media and Entertainment Industry: ICRA

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Rating agency ICRA said that the credit outlook is negative for film production and exhibition, print media, and television broadcasting segments. They interpreted that this is because of the impact of the COVID19 pandemic, while it has no changes for distribution platforms operators and over-the-top platforms.

Due to this pandemic situation, there was a huge shift that occurred in the Indian media and entertainment (M&E) industry. The sector includes film production and exhibition, print media, and television (TV) broadcasting segments, besides distribution platform operators (DPOs) and over-the-top (OTT) platforms.

ICRA said that, except the distribution platform operators (DPOs) and over-the-top (OTT) platforms, other segments of Indian media and entertainment such as film production and exhibition, print media and television (TV) broadcasting segments had a negative credit outlook due to the pandemic. It said that the overall economy has been affected by the loss of sales due to the shutdown of cinema halls. There was a sharp reduction in advertisement spends at the time of April and May 2020.

Sakshi Suneja, Assistant Vice President, ICRA said, “Cinema halls were the first ones to shut down, even before the lockdown started, and are expected to be amongst the last segments to witness relaxations. This segment will thus witness a complete loss of revenues in Q1 FY2021.”

Also, she added that, even after the theatres resume shows post lockdown, there will not be many audiences, as a means of caution, they are likely to stay away from crowded places.

On the other hand, distribution platform operators (DPOs) and over-the-top (OTT) platforms have shown a stable outlook even in this situation.

ICRA added that “The impact of the pandemic on the DPOs will be limited as subscribers are expected to hold on to their current subscription packages. New subscriber acquisitions have, however, been impacted as very few new installations are being carried out by DPOs, though the same is expected to resume once the lockdown restrictions ease. Prolonged lack of fresh content from TV broadcasters may, however, increase subscriber churn towards DD Free Dish,”

In this lockdown, the consumption of OTT platforms has been increased. Since people are staying at home with restricted entertainment sources. The film producers are planning to release their films on these OTT platforms.

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