Indian broadcaster Zee’s profit more than halves as ad slump persists

India’s Zee Entertainment Enterprises reported a more than 60% decline in second-quarter profit on Thursday, as companies continued to cut advertising spending.

The company, which runs television channels such as ZeeTV and ZeeCinema, said its consolidated net profit fell to 765 million rupees ($8.71 million), for the quarter ended September 30, from 2.09 billion rupees a year ago.

Broadcasters, which rely heavily on advertisements, have been hit by a sharp pullback in ad spending, particularly from major consumer companies that are grappling with sluggish demand.

Zee’s revenue from advertising, which accounts for about 40% of the total, fell 11% from a year ago, the twelfth decline in the last 13 quarters.

Core loss in Zee’s streaming service, ZEE5, narrowed more than 80%, while revenue rose 32%, helped by a slew of new content.

ZEE5 is well on track to achieve its target of break-even, the company said.

Higher promotional spending on new content and movie syndication costs also weighed on Zee’s core profit margins, which fell to 7.4% from 16% a year ago.

Zee’s subscription revenue rose 5% led by both linear and digital segments, while revenue from other sales jumped 8% on syndication revenue.

Overall revenue slipped 2% to 19.9 billion rupees.

Zee faces stiff competition from recently merged streaming major JioHotstar, owned by billionaire Mukesh Ambani’s Reliance Industries which holds exclusive rights to stream sports such as cricket in India.

Shares of Zee closed down 0.6% after the results.