Digital gains fail to offset TV ad slump, sports costs squeeze broadcasters

India's broadcasters continue to expand their digital and subscription businesses, which is not sufficient to offset declining ad revenues. The traditional television sector has been affected by decreasing pay-TV connections and a shift to digital advertising. Companies like JioStar, Zee Entertainment, and Sun TV Network reported mixed financial results amid these challenges. Subscription growth remained strong, but increased programming costs have impacted profitability significantly.

Mumbai: India's broadcasters are seeing their digital and subscription businesses expand, but the gains are yet to offset declining television advertising and rising content costs, particularly investments in sports rights, squeezing profitability. The September-quarter results of JioStar, Zee Entertainment Enterprises and Sun TV Network underline the pressure on traditional television business, even as companies invest in digital and sports.

The weakness is structural. According to the FICCI-EY 2026 report, linear television advertising revenue fell 10.3% to 26,300 crore in 2025, while distribution revenue declined 8.3% to 35,400 crore.

Both have contracted for three consecutive years, dragging total linear TV revenue down 13.1% between 2023 and 2025. Declining pay-TV connections and shift of advertising budgets to digital have weakened traditional business models.

The pressure on entertainment is also adding to the burden of sports investments. Historically, profits from television entertainment provided a cushion against the high costs of sports rights. While broadcasters continue to bear substantial programming costs, franchise owners such as Sun TV benefit from the growth in cricket league media rights.

JioStar's revenue from operations rose 10.1% year-on-year to 6,806 crore in July-September, driven by subscription growth and digital entertainment advertising. Ebitda from operations fell 10.5% to 1,372 crore, while profit after tax declined 13.2% to 1,147 crore. JioHotstar averaged 440 million monthly active users, up 10% year-on-year.

JioStar CEO, sports, Ishan Chatterjee said during Reliance Industries' earnings call on October 30 that sports viewership remained strong across digital and connected television, though monetisation was affected early in the quarter by the West Asia situation. The company also flagged challenges in linear television advertising.

Zee Entertainment's revenue rose 13% to 2,224.6 crore, led by a 30% increase in subscription revenue to 1,332.4 crore. ZEE5 revenue more than doubled to 626 crore, while network advertising revenue remained flat at 803 crore. Net profit fell 40% to 46 crore and Ebitda declined 52% to 71 crore, with margins falling to 3.2% from 7.4%, as higher programming and promotional costs weighed.

Zee Entertainment chief financial officer Mukund Galgali said FIFA-related programming and advertising costs affected the quarter. Zee has acquired media rights for the FIFA World Cups in 2026 and 2030, Bundesliga and Serie A, as it re-entered sports broadcasting via its Unite8 channels after selling its sports business under Ten Sports to Sony Pictures Networks India in 2016 for $385 million.

Sun TV Network's consolidated revenue from operations fell 27.66% to 940.3 crore, largely due to the absence of movie revenue, while net profit rose 2.79% to 364.6 crore. On a standalone basis, advertising revenue declined to 252.76 crore from 292.2 crore, while domestic subscription revenue increased 2.34% to 487.2 crore.

The company's cricket franchises -- Sunrisers Hyderabad, Sunrisers Eastern Cape and Sunrisers Leeds -- generated consolidated revenue of 100.4 crore in Q2FY27, against 94.5 crore a year earlier, against costs of 80 crore.