Q2-09: UTV Invests Rs. 256.39 Crores In Gaming; EBITDA Losses; Increases Stake In ITNation, IndiaGames

For the quarter ended September 30th 2008, UTV net profit grew to Rs. 32.8 crores, up from Rs. 17.6 crores for the same quarter last year, while Operating Revenues grew to Rs 170.8 crores from Rs 71.9 crores for the same quarter last year.

Note: The year on year comparison isn’t valid since UTV has revenues from its acquisitions during the last fiscal, including those from True Games for September 10th to 30th 2008. The company structure has been rather fluid as well. As an example, the True Games acquisition is via a subsidiary we haven’t heard mentioned before, called UTV Games.

It’s interesting to note that despite investments in TV, New Media and Interactive (Gaming), Movies continues to be the largest contributor to revenues. During the quarter, Disney also infused Rs. 1.18 billion into UTVs broadcasting business. A look at their Interactive and New Media segments:

Interactive

The Interactive segment reported revenues of Rs. 21.55 crores for the quarter, and contributed around 14 percent to UTVs operating revenues. However, as was the case last quarter, the Interactive segment continued to make a loss at the EBITDA level - of Rs. 2.77 crores, and a staggering increase in investment at Rs. 256.39 crores.

Last quarter, the company had invested Rs. 133.79 crores in the Interactive segment. UTV Interactive consists of Ignition Entertainment (console gaming), True Games (Massively Multiplayer Online Games) and Indiagames (Mobile Games, Broadband based PC Games distribution).

Indiagames
During the quarter, IG Interactive Entertainment Ltd, a subsidiary of UTV acquired an additional 3.78 % equity stake in Indiagames. Indiagames appears to have had an excellent quarter - UTV Chairman and CEO Ronnie Screwvala has said that Indiagames has witnessed consistent QoQ growth, with a year-on-year increase of 150% growth in revenues.
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UTV Owned Techtree Gets Overhauled; Tech2 Needs To Rethink Ads; SEM-Sales Margin Game?

Well, this was on the cards: Techtree has become the first of the IT Nation properties to be overhauled, post the acquisition by UTV. And it’s not surprising either - TechTree has a tech and gadgets show UTVs business channel UTVi, and it was never a good idea to send viewers to a stone-age site. While the content in the new site appears to be the same, its positioning is significantly different. Take a look at the older version (here) and the revamped site.

The interactive elements - Forums, Ask Techtree, E-Classifieds, Comments and Contests are separated from other categories on top; the opinions segment has also been given a prominent position on the right, and its good to see that they’ve retained the recent comments section from the front page…. Their Price Search has also come out of beta. Apart from that, there are no new sections of note, but the content discovery and usability has been improved.

Tech2 And Ads

TechTree competes head-on with Web18s Tech2.com, both on the web at TV. I just checked out Tech2, and I think it’s obscene what they’ve done with the site, with permanent Nokia E-Series background. Just because it’s possible to put a product as the site background doesn’t mean you do it - I wonder if the editors have any say in this. Then again, if they’re just getting in traffic using Search Engine Marketing, and selling ad space to advertisers based on those numbers, reader loyalty doesn’t really matter.

UTV had completed the acquisition of a 76 percent stake in IT Nation for Rs. 15 crores earlier this year. They’d announced plans to invest Rs. 120 crores in the digital space over the next two years.

Disclosure: I own an inconsequential number of shares of Network18