NDTV Convergence Ties Up With TutorVista; Our Take On Their Strategy

Update: Nandini Bhatnagar from NDTV has responded in the comments to this post:

Well, of course Alexa figures are quite off the rack, NDTV has about 40% audience coming from US. And both Doctor and Cooks are doing really well in the domain. These are definitely not sites for the heck of being there. We have our own panel of specialists doctors, chefs etc and these sites contribute better than channel sites in our traffic. Only quoting factual errors..each one is entitled to their opinions

Original Story: Going through NDTV.com, we noticed a few sites and sub-sites that we haven’t come across before: Among them, is a tutoring site NDTVTutor.com, powered by Tutorvista.com, which primarily targets their US based visitors. While we don’t endorse Alexa as a measure of traffic, according to Alexa, only around 8.5% of NDTV.com’s traffic comes from the US.

The movies site - NDTVMovies.com also features a new look. We also noticed a couple of other partnerships that the company has inked, though we’re not sure of how old these are - a commodities site powered by commodityonline.com, and an astrology section powered by Astroyogi.com. Interestingly, there’s also an environment site called Green.NDTV.com, sponsored by Toyota, with Dr Rajendra K Pachauri, Director General of TERI as their expert advisor. There’s an environmental anthem for you to sing along to (you may download it here)
Quick take on NDTVs strategy
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NDTV Q2-09 Revenues At Rs. 128 Crores; NDTV Convergence FY08 Loss At Rs. 5.5 Crores

NDTV Ltd has reported revenues of Rs. 128 crores for the quarter ending September 30th 2008 (Q2-09), up 65 percent, from Rs. 77.5 crores for the same quarter last year. The group has reported a net loss (consolidated) of 119 crores, with a standalone loss of 13 crores for NDTV Ltd. According to the release, NDTV Imagine Films, the groups films company, is in the process of developing and producing scripts. According to NDTV, NBC Universal is a potential partner for this venture. There’s synergy with NDTV Showbiz - a Bollywood focused channel that the company launched in August.

Most importantly, NDTV has, as reported earlier, has decided to separate its business into News and Entertainment, which will free up the Entertainment (and indeed the Digital Media business NDTV Convergence) for further investment.

Download the Q2 financials here.

NDTV Convergence
My quarterly requests to NDTV for more inputs on Convergence have been turned down. In this earnings release, NDTV has mentioned that pageviews for Convergence in the last quarter are up, and they’re exploring tie-ups to expand its range of services. One tie-up was announced yesterday, and another tie-up, with Career Builder India for jobs, was reported by WATBlog. Going through NDTV’s Annual Report, we were pleasantly surprised to find details of their financials:

By itself, NDTV Convergence reported a rather low turnover of Rs. 4.9 crores, and a net loss of Rs. 5.5 crores for the full year ending 31st March 2008. For three quarters of the last fiscal, NDTV Convergence sales were being handled by NDTV Media, and probably being bundled along with TV inventory as an add-on. NDTV Media also handles ad sales for MSN’s Desktop TV in India.

That would probably explain why, in January this year, NDTV Convergence took over selling their own inventory separately. MediaNama contacted Sanjay Trehan, CEO of NDTV Convergence for updates on how the first two quarters of this fiscal year have been, but he declined to comment on the financials. In the past, whenever I’ve contacted NDTV Ltd for comments on Convergence financials, they’ve declined to comment.

Download the NDTV Ltd Annual report here. Convergence results are on page 76.

Related:
- NDTV Board Approves Demerger Of News, Non-News Businesses
-Ixigo Powers NDTVtravels.com; Aloke Bajpai On Monetization & OTA Relationships
-Jaman Gets NDTV Lumiere Content; Launches Ad-Supported Streaming
-NDTV Active Gets Mobile Games From Hovr

NDTV Board Approves Demerger Of News, Non-News Businesses

BSE listed NDTV Ltd will be split into two groups of companies - one of which will focus on the News business, while the other will focus on the Entertainment business. Both the companies will be listed on the BSE, and for every one share of NDTV Ltd, shareholders will receive one share each of the News and Entertainment businesses. The names for the two entities haven’t been announced yet. The demerger will take place on 1st April 2009.

Impact On NDTV Convergence and NDTV Networks PLC
NDTV Convergence, which houses the groups Internet and Mobile businesses, is a subsidiary of NDTV Networks PLC, will not be affected directly by this move. However NDTV Networks PLC, which is a subsidiary of NDTV Ltd, and had raised $150 million for a 26 percent stake from NBC Universal, is, in all likelihood, going to be a part of the Entertainment segment.

While the market isn’t right (take a look at the decline in NDTVs share price), our take is that the two businesses have been separated in order to raise further capital for the entertainment business. Fundraising for the News and current affairs business is constrained by a government mandated 26 percent Foreign Direct Investment (FDI) limit. By separating the two, NDTV will be free to sell as much equity as it wants for the Entertainment business. Who’s going to pick up stake in the Entertainment business? I wouldn’t be surprised if it’s NBC Universal that increases their holding.