The hopes of the continuation of the bull run on the Indian bourses have taken a back seat with the Indian indices in a tailspin since (almost) the start of 2004. After achieving multi-year highs in early January this year, the Indian bourses have gone into reverse gear.

While they remained in a strong grip of volatility during the first two months of 2004, the situation has particularly turned bitter in the month of March.

While during this 'correction', stocks across sectors have taken a beating, we look here in brief at a few media stocks, which, akin to many other stocks in the Indian stock markets, have become the target of overall weak sentiments.

	% fall*
Sensex	-14%
TV Today	-44%
Zee TV	-35%
Balaji Telefilms	-29%
TV 18	-17%

The table above shows the performance of some key media stocks since the time of they achieving their respective 2004 (and 52-week) highs. Thus, while the Sensex has corrected a good 14 per cent from its highs, losses in media stocks (under consideration here) have ranged from 17 per cent to 44 per cent!

TV Today, which got listed on January 16, 2004, has given up almost half of its gains from its listing highs of Rs 225. TV Today is the owner of the popular Hindi news channel 'Aaj Tak.' Ever since its launch (year 2000), the channel has continued to gobble the market share of its competitors, albeit stabilising in recent times.

The company is leader in the news segment with control over almost 1/3rd of the market. With a slew of advertisements promoting the punch lines "Bada hi tez channel hai yeh", and "Sabse Tez", the company has managed to achieve a high brand recall, which has helped it tap advertisers, both national and regional, with relative ease.

With advertisements being a major source of revenues for the company, the company has positioned itself well amongst masses and with general elections round the corner and that the Indian economy is on a roll, the company is likely to continue to deliver in the foreseeable future.

Zee Television (Zee TV) has lost 35 per cent since its 2004 highs. Zee TV, India's first private TV channel, is the country's largest vertically integrated media and entertainment company. It is also one of the largest cable TV distributors through a 100 per cent subsidiary, Siticable. The company derives its revenues from two sources – advertisements and subscriptions.

While, until recently, advertisements constituted a major chunk of its topline (61 per cent in FY02), the company's concentrated efforts in reducing its dependence on ads as a source of revenue has paid-off. This is evident from the fact that the company is expected to derive almost 53 per cent of its revenues from subscriptions in FY04.

It must be noted that this is towards getting inline with international trends wherein subscriptions contribute to 75 per cent of the media revenues pie. While the company has been making serious efforts to improve its programming content to face competition, the implementation of CAS (Conditional Access System) would lead to a significant boost in the company's earnings.

The next big loser is Balaji Telefilms with the stock price having corrected nearly 29 per cent. Balaji Telefilms is one of the leading television software producers in India. It's software production spans across four languages i.e. Hindu, Tamil, Telugu and Kannada.

The company has a unique mix of soaps, sitcoms and children's programmes, which has given the company a leading position among all television content providers. Competitors have found it difficult to displace the programmes of Balaji Telefilms from the top slots in the TRP (television rating points) ratings, where the company usually command the top 9-10 positions.

The company already has a rich content library, which has a high re-run value. Considering the revenue mix of the company, it is tilted favourably towards the commissioned programmes (65%), in which the company does not bear any risk (assured operating margins) and assumes responsibility to deliver content to the broadcaster.

The TV18 stock has performed relatively well as compared to its peers. TV18 is India's premier business news broadcaster and a leading media content provider. The company has provided a wide variety of content for television programming. It's tie-up with CNBC Asia led to the launch of CNBC India, a full-fledged business news and information channel.

The company is also present on the Internet in the form of moneycontrol.com, a premier business news portal. The company derives its revenues from three streams viz. news, entertainment and Internet & software. However, the news segment contributes the major chunk (over 90 per cent) of revenues. TV 18 is assured of a revenue stream from the sale of its content to CNBC India.

Going forward, we feel that the big trigger for the domestic media industry would be the introduction of the CAS. Though initial hiccups relating to the same cannot be ruled out, the long-term benefits for the industry are immense.

India has over 80 million television homes of which over 50 per cent homes have cable and satellite (C&S) connection and this number is expected to continue to grow substantially over the next few years. This would then lead to an overall growth of the media industry and its players.

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