ITV

Tag: Puneet Goenka

  • Future of Television

    Circa 2061 – Television in its new form and shape, as a personalised medium will not just continue to exist and will be 130 years old, but would actually wield a true global power.

    I truly believe that television will continue to play a critical role for India to emerge as a developed country and one of the top three economies of the world.

    Two aspects are unlikely to change – human beings will continue to bear the same thirst for entertainment and
    content will continue its reign as the real King….
    _____****_____

    It is not easy to visualise where technology will take us in the future – but two aspects are unlikely to change – human beings will continue to bear the same thirst for entertainment and content will continue its reign as the real King.

    Zee will be a leading brand for entertainment, education and a medium for prosperous growth for every Indian. Burt Manning, founder of J Walter Thomson said 40 years ago when he founded Media Lab at MIT, that the 21st century will all be about personalised segmentation of the media. We are heading towards relevant, curated content consumption. We will move from semantic web (web 2.0) to intuitive web (3.0) and finally to machine to machine talks (web 4.0).

    At Zee, our global focus is to connect to every household, and offer relevant content, to keep them engaged. Having entertained over 670 million viewers worldwide, Zee is now marching towards reaching one billion viewers. We also aim at multiplying our productivity by many folds, in order to re-conquer our achievements in the last 20 years in merely eight years. With the swift pace, at which Zee as a brand is growing worldwide, it makes me extremely confident to state that by 2061, we would be amongst the top global media conglomerate, entertaining more than half of the total television viewers across the globe.

    Zee is a pure family entertainment company. Three generations of a family can sit together and watch our programmes. We will continue in our endeavour for freedom, dignity and prosperity of our viewers and shareholders in the future. Zee as a brand, has achieved global recognition today, and has grown exponentially over the years, establishing a strong connect in the minds and hearts of its audiences globally and has gained a top of the mind recall in the media & entertainment space. Zee has been able to achieve all this through its people-centric programming and keeping its audience at the core of all its offerings.

    Our pioneering vision, has led to the formation of a seven billion dollar industry in India, and has set a foundation for not just Indian, but many international media companies. ZEE being an Indian company, has ventured into the international markets and has earned a global recognition, unlike the international media brands which have ventured in Indian markets. This strong penetration in the global markets, and the immense high brand equity earned in the last 20 years, has taken Zee to the cadre of an emerging multinational. Leveraging its core expertise of a sharp insight in the audience pulse, Zee will continue with its string of innovations and industry firsts, enhancing the media & entertainment landscape by many folds.

    Zee has been a social catalyst in TV programming and dramas, in less than 20 years. Although it surely happens at a subconscious level. When viewers watch middle class people achieve higher boundaries, they appreciate the quality of life. When they witness the rags to riches stories, they celebrate their belief in dreams and destiny.

    In another decade or so, I still expect consumers to catch up with the linear TV content. Although there would be trends of short form content in terms of news, sports, entertainment, etc., but these would never fall in high content consumption patterns. The reason being that, largely depends on the consumers’ moods, their information seeking thirst and their desire to express on social media platforms. These traits are extremely high in the mornings and also in the later part of the evening time bands. Both these activities create a leap in short consumption of content. Even today, the specially created content on new media platforms is largely following traditional media content approach.

    Introspecting the world of Television

    Television is all about content – irrespective of the advancements from a technology perspective. It has surely transformed India in the last two decades and has effectively brought about changes to hearts and minds of millions. Zee would continue with the same zeal to play a catalyst in the transformation that not just India, but the rest of the world, will witness in the coming decades.

    May be a decade later, i.e. 2020 onwards, we could expect consumers to express new moods and tastes, even when they are on the go, provided the mode of transport gets more comfortable. The content formats would also enjoy a deep paradigm shift, considering the change in consumption patterns. Just to cite some of the experimental content formats, which surely would evolve in the near future on the Non TV Screens – we could expect five to 15-minute comedy films, five-minute exposure slots (back to back new film promos), 30-minute documentaries and factual entertainment for students and business travellers, five-10 minute amateur content – short films, 60-second public service campaigns or five-10 minute highlights of sports, etc.

    TV programmes are benefiting today from the consumer habits, values and lifestyles, and at the same time they are also power feeding new lifestlyes to the consumers.

    Going forward, programming would be more inclined towards relevant issues and concerns, segmenting would
    be the way forward…
    _____****_____

    They need to evolve to a stage where they are able to predict modern India, or modern Indian lifestyles and possibly taking a position on almost all issues that affect society. Whether masses favour your position or stance, would not be that important, but a strong stance/positions will have to be taken. As of now, TV is aiming at making consumers happy with one set of generic content for all the viewers. However, going forward, when programming would be more inclined towards relevant issues and concerns, segmenting would be the way forward. So we might have a channel which only showcases modern value content, or a channel which showcases only non-fiction content, or a channel which showcases only current issues, and so on.

    As television companies adapt to the internet by deciding which shows to offer for free online, internet users accustomed to free content, and the rhetoric that promotes it, have protested that shows should be supported with advertising alone. The problem is that in a world with a hundred channels – let alone a thousand websites – there may not be enough advertising to go around. That’s why, over the course of the 1990s, cable channels that once relied mostly on advertising tried to create hit shows or buy sports rights that would let them demand higher fees from cable companies. When cable channels started to invest in original shows, they did so very differently from traditional networks. Since networks only made money on advertising, they chose shows that would reach as large of an audience as possible, whether or not individual viewers felt strongly about them. Carriage fees gave cable channels a very different incentive: to develop programmes, some viewers cared about so much that they might cancel their subscriptions without them. Not only could channels show more adventurous fare – their success depended on it.

    As we stand, we are on a brink of a revolution and convergence of television and new media platforms. We are heading towards people getting what they want, when they want, and how they want. Although it goes without saying that top quality content will be the king in the new world of TV convergence.

    In my view, TV will woo audiences to interact with the programming. And viewers will not be satisfied on the one way communication and interact with TV.

    A basic social media integration on the content distribution platform will bring in a whole new perspective to
    the viewing experience…
    _____****_____

    Unlike the pre-digitisation era, wherein there was just a monologue between the consumer and broadcaster, a more circular relationship is expected with real time communication, enabling consumers to express their feedback instantaneously. Also a basic social media integration on the content distribution platform will bring in a whole new perspective to the viewing experience.

    Reality shows shall become more and more real and would almost touch the nature of a sports event. From the current era of scripted and fictionalized content formats, there would be a huge paradigm shift to much realistic shows. The only way they can sustain the attention of viewers is by revealing real pacer content and hence as much closer to something like sports content.

    The industry is changing before our eyes and this kind of innovation creates winners and losers. No longer will consumers be forced to overpay for a one-size- fits-all bundle of channels and services.

    As rightly put forth by Robert Levine, “In the digital world, television will be revolutionised once again”. Already, more viewers than ever are using their laptops to download and to watch shows they once saw on a TV screen. The problem is that even legal online services only generate a fraction of the revenue that cable does. Like newspapers, television channels are now reaching more viewers than ever before, but in a medium where they don’t like to pay for content and aren’t worth much to advertisers. And if more viewers begin “cord-cutting”- cancelling their cable subscriptions in favour of online options – it’s hard to see how television producers could avoid the same kinds of cost reductions that are killing newspapers.

    We will be able to watch Live or On-Demand stations, either as merely stations or individual shows on home television sets, tablets, desktops or mobile phones.

    Some screens may discontinue along the way, but there will be other screens that will emerge as life continues
    to evolve…
    _____****_____

    The rise of the DVR gave access to shows on the viewer’s timetable, and the explosion of apps are putting control in consumers’ hands – who can now watch anything, anytime, anywhere. Speaking of control, a number of new TV sets- turn viewers into a remote. A remote has a touch-sensitive track pad on one side, and a Qwerty keyboard on the other. An advanced version of the same remote functions like a magic wand, allowing TV watchers to move a pointer on the screen. On the other hand, some just function based on the movements of the viewers hands. Some very advanced sets, now have an in-built voice recognition
    intelligence, enabling the viewers to literally dictate their search preference.

    To summarise, I truly believe that TV will not die. At Zee, we no longer term ourselves as merely broadcasters, but “Content Creators” and will focus on reaching out to audiences at the end of any screen that they are available on. Some screens may discontinue along the way, but there will be other screens that will emerge as life continues to evolve.

    I think there will be several technologies and platforms that are going to emerge that we have to consider and migrate. Ditto TV, which is Zee’s yet another pioneering step in the over the top television space, is something that we have foreseen and we do believe that it is going to be a big opportunity for us, in the years to come.

    The future of television is all about viewers experiencing entertainment and information content on their preferred devices, time and place.

    (Excerpted from the India 2061- A Look at the Future of India Copyright Cogito Consulting Publication) 

  • Phase II of ad cap comes into effect; channels follow TRAI mandate

    Phase II of ad cap comes into effect; channels follow TRAI mandate

     NEW DELHI: Indian TV viewers are going to be a delighted bunch. Reason: the number of TV commercials being bombarded at them on TV channels just got reduced.

     

    The Telecom Regulatory Authority of India (TRAI) ad cap regime imposed on news and general entertainment channels came into force today with an upper limit of 20 and 16 minutes per hour respectively. This will run till 30 September, following which the 12-minute rule will come into play from 1 October.

     

    Both Indian Broadcasting Foundation (IBF) and the News Broadcasters Association (NBA) have said their members are following the regime, the first phase of which came into effect on 29 May when its members agreed not to exceed 30 minutes of advertising per hour. IBF president Man Jit Singh and NBA president K V L Narayan Rao told indiantelevision.com that the TV channels would stand by their commitment to the government since this was now the law.

     

    The final decision of 29 May had taken a lot of wrangling, with the matter also going to the Telecom Disputes Settlement & Appellate Tribunal against TRAI which insisted that it was only implementing a regulation which was part of the Cable TV Networks Rules 1994.

     

    Following this, the IBF Board finally appointed a committee of five persons – K V L Narayan Rao, Zee Entertainment CEO Puneet Goenka, Asianet managing director K Madhavan and Disney UTV media managing director K Anand with the assistance of secretary general Shailesh Shah – to research, debate, consult and arrive at what will work.

     

    The committee admitted in its report that some channels especially those in regional languages ran more than 30 minutes of advertising per hour. Shah, however, claimed to indiantelevision.com that the per hour ad time works out to just over 11 minutes if a full-day average is taken.

     

    The TRAI, however, says it is going to keep a sharp eye on each channel to ensure that there is no violation of the time cap set on the TV broadcast industry. “TRAI would continue to monitor the timing of commercials per hour by various channels,” says TRAI principal advisor on broadcasting and media N Parameswaran.

     

    It is quite likely that the air time reduction, could result in revenue losses for the channels. Though none of the broadcast bodies have clearly highlighted how much this erosion could be, media buyers do acknowledge that broadcasters will no doubt hike ad rates with the implementation of 12 minute ad cap on 1 October.
    “The impact cannot be felt as of now. Once the ad time comes down to 12 minutes (across GECs) in October that is when the crunch will be felt,” said an executive from a leading media buying and planning company. June to September is a lean period for advertising on channels, especially considering it is the monsoon season all over India.

     

    There are also few who believe that the ad cap restriction will improve quality of viewing. Madison Group COO- buying Neel Kamal Sharma opines, “It is a win-win situation. On one hand the advertisers will benefit as now they can target their audiences in an effective way. The broadcasters will also increase their ad rates. Parallel to this even digitisation will bring in extra revenue for the broadcasters, decreasing their dependence on ad revenue.”

     

    Sharma hopes for the transition to take place in a fair manner, which has been recognized by all without shifting the entire burden onto advertisers. “We must take a long term view of the situation and handle it carefully as some people may try to take advantage of the situation to increase rates disproportionately which may neither be good for them nor good for TV industry’s growth in the long run as many advertisers have already started exploring alternative options,” he adds.

     

    The message for broadcasters is clear: take tiny steps – together with your advertising partners. Don’t go for the long jump; you might end up jumping alone.

  • Zee Tele’s stock soars on ratings upswing, future prospects

    Subhash Chandra touts his plans to disassemble Zee Telefilms Ltd (ZTL) into four separate entities as a necessary move to unlock value. As he stands on the eve of the digital age, he feels he can size up each line of his media business spreading across cable TV, direct-to-home (DTH), content and broadcasting with independent focus and management care.

    What this means is that the core ZTL, after the trimming, would have all the network channels except in the news and regional genres which raked in Rs 2.01 for the 2005-06 fiscal. Operating revenues of Rs 1.54 billion from cable TV would also be transferred out, further eroding the company‘s consolidated turnover.

    Even after cropping the topline, there is a mandate for robust growth. Riding on the wave of Zee Cinema and a resurgent Zee TV, the company expects to clock a 10 per cent rise from last year‘s turnover of Rs 10.51 billion.

    Says Essel Group CEO of corporate strategy and finance Rajiv Garg, “We expect an advertising revenue growth of 12-15 per cent this fiscal. While international business will sustain its 10-12 per cent growth (adding of channels and gain from Middle East operations), domestic subscription will stay steady.”

    Zee‘s road to recovery came last year as the flagship Hindi general entertainment channel bounced back big time on the ratings scale with simple storyline soaps like Saat Phere and Kasamh Se. Zee TV smelt the first scent of success since its continuous slide for over six years, with Sa Re Ga Ma Pe Challenge, a singing talent show.

    “It is not that we came out with any magic potion in programming. We just stuck to the basic rules. What made the difference this time is that we jelled as a team and came out with a winning mindset. The external environment also played a role as Sony lost audiences and Star Plus was still lighted up by the three long-running flagship soaps,” says Zee Network senior vice president Ashish Kaul, explaining the turnaround story.

    Zee‘s resurrection was born out of a long sequence of internal discussions and, in a reshuffle, Chandra‘s elder son Punit Goenka was made business head of Zee TV. In an interview with Indiantelevision.com, Goenka had then said that his induction would bring stability to the channel. “You can expect one change. We want a planned execution of what we do. We won‘t resort to any knee-jerk reactions… Here, internal palpitations happen whenever crucial projects come up. There have been instances when we started a project and left it midway… It is more like using someone who can handle pressure and bring in stability. I consider myself as one of the Zee professionals, not as a family hand. But, being a family man, I think I can bring in stability.”

    The duo of ZTL CEO Pradeep Guha and Goenka clicked and the strategy to build an entire programming wall with focus on a time band approach was chalked out. Programmes were jazzed up and a marketing buzz was created around them. The investments on Zee TV‘s content and marketing rose almost 20 per cent to Rs 2.2 billion in FY06. “There is usually a lag of 4-6 months between improvement in TRPs and ad revenue growth. So with an improvement in ratings, we are predicting a recovery in ad revenues going ahead this year with a return in pricing power,” says an analyst.

    Meanwhile, Zee Cinema, ZTL‘s second major revenue earner, continued as the numero uno in its space and posted an almost 20 per cent rise in turnover to end FY06 with Rs 1.45 billion in earnings. The channel banked on Amitabh Bachchan‘s films and a mix of new and old movies to fend off competition from Max and a revamped Star Gold.

    The change was reflected in the financial health of the company. Facing rough weather, Zee had reported a CAGR (compounded annual growth rate) of 7 per cent in revenues for the period FY02-05. This was contributed by a 28 per cent CAGR in subscription revenues and an annual decline of 8 per cent in ad revenues. The picture changed last fiscal and Zee posted a 13 per cent ad revenue growth, fueled by the ratings ramp up.

    International revenues, which account for one-fourth of Zee‘s earnings, will continue its good run, though operations from UK and US have matured. The Middle East and South Eastern region would ride on a growth wave and Zee is also planning to launch a dubbed movie channel in Russia.

    The worry, though, is the losses from new businesses which remain large at Rs 1.65 billion. But Zee Telugu, which suffered a loss of Rs 460 million last fiscal, now forms a part of Zee News Ltd. Operational expenses will continue to rise as several businesses will be in investment mode.

    The positioning of Zee Smile, a humour-based light entertainment channel, will be up for change. “We are considering whether we should turn it into a flanking second general entertainment channel or design it as a full fledged comedy channel. We have not taken any decision yet,” says Kaul. Zee is also planning to beef up content on its English channels, particularly Zee Cafe which would get a facelift.

    Some analysts have projected a high growth for the whole of Zee. “We model ad revenues to grow to Rs 8.24 billion in FY07, compared to Rs 6.44 billion in FY06 as the non ICC cricket matches pick up. We model subscription revenues to grow to Rs 13.1 billion in FY11 from Rs 7 billion in FY06. The bulk of our expected growth comes from domestic pay TV revenues which we model to grow to Rs 6.45 billion against Rs 2.95 billion in FY06,” writes an analyst in a research report.

    Several analysts, however, play these figures down, saying a lot will depend on how Zee shapes up its content businesses against intense competitive pressure.

    But what will the demerged ZTL look like? “The topline would be lower than what one would see today but bottomline would be healthier,” Chandra said in a recent interview to a business news channel.

    Zee‘s stock price has almost doubled in the last one year and is currently trading at Rs 260. The sum-of-the-parts value is what is driving the scrip up. It will further balloon when the demerger implementation is closer to date,” an analyst at a brokering firm says.

    So what are the potential downsides? There is of course Zee Sports, by virtue of its being a start-up proposition at the present. We do feel though that the new sports channel kid in the Zee family feel has the potential to contribute to ZTL‘s topline growth.

    Zee Sports

    Zee Sports is ready to play the high-cost game of sports broadcasting. After losing the four-year India cricket telecast rights to Harish Thawani-promoted Nimbus Communications, Chandra bowled just about everybody with his googly: a whopping $219.15 million bid to grab cricket rights for 25 one-dayers played by India in offshore non-ICC venues over five years.

    Even Thawani‘s humungous $612 million bid for BCCI (Board of Control for Cricket in India) cricket in India pales in comparison. With 115 days of Test cricket and 54-56 ODIs for four years, Thawani‘s payout for each match works out to around $3.57 million against Chandra‘s $8.77 million.

    Analysts are not enthused by such a high-cost bid. “We do not expect Zee to be able to recover its costs unless there is substantial rub-off effect on its distribution business. The positive aspect is that costs are back-ended, which will mitigate cash flow and balance sheet risks partially and allow Zee sufficient time to scale up its distribution business. The pace of adoption of addressability in India remains the key to Zee‘s future earnings and valuations,” an analyst at an institutional equity firm writes in a research report.

    For the first two ODIs in Abu Dhabi between India and arch rival Pakistan, Zee Sports suffered a loss. On a paying price of $10 million (Rs 450 million), sources say gross revenues from India stood at Rs 240 million (Rs 130 million on Doordarshan and Rs 110 million on Zee Sports channel). If you cut out a 15 per cent commission as media agency fee and a 25 per cent revenue share to DD (Rs 27.6 million), Zee‘s trimmed earnings would be Rs 176.4 million.

    Zee Sports business head Himanshu Mody does not agree that the offshore properties are a big hole in the company‘s pocket. The commercial exploitation from overseas markets fetched as much as was generated from ad revenues in India, he says. “Incremental subscription revenues from Zee TV‘s global channels, ad sales and earnings from content syndication were healthy. Besides, it increased the reach and visibility of Zee Sports in India.”

    Chandra is optimistic about his big bet on cricket. “We got only four days to sell the two ODIs and incurred a small loss of Rs 20-30 million. We have a staggered payment schedule which increases towards the end of the five-year period. We believe we will make money on this because of broadband and pay-per-view opportunities which are emerging. This will establish Zee Sports as a channel and boost our international subscription and domestic growth,” he told analysts.

    Chandra also believes he is paying only for the ODIs which are high-value properties. Besides, these are all India matches and will involve strong teams including Pakistan, Australia and England.

    Still, there is no getting away from the fact that Zee‘s cricket gamble needs to be backed up with good properties. Chandra will get just five matches on an average every year (the final calendar of matches hasn‘t yet been finalized), which is a spread too thin for any sports channel to command distribution clout and revenues. “A sports channel needs at least a long drawn cricket series to ramp up its subscription revenues,” says the distribution head of a leading network.”

    Having paid dearly for these spike properties, Chandra will have to build up a breadth of live mass-watched programming which will have a longer enduring value. If he is not able to manage a stream of supply that is more widespread, the property that he has acquired will lack bite and value. The youngest channel in the Zee bouquet will have to be fed with more days of live cricket or bankable international football.

    Even if Chandra loosens his purse strings, where is the cricket or football of value available to fill up the plate?

    Some options will open up for Zee like the Octagen-CSI cricket telecast rights (with ESPN Star Sports now) and the Pakistan and Sri Lanka domestic cricket (with Ten Sports), but the content will not be available before 2008. Even the ICC World Cup will be up for grabs after SET India‘s rights expire in with the 2007 World Cup in the West Indies.

    So, what does Zee do till 2008? The challenge is to develop Zee Sports as a platform for second-tier sports like football and wait till it can snap up bigger properties. Having acquired 10-year rights to AIFF (All India Football Federation) football, the task is to build this as a long term property.

    Zee Sports will focus on cricket, football and tennis, says Mody. “We hope to reap profits from football where our cost will be up by 5-7 per cent year-on-year while revenues can leapfrog. We have also got Mumbai and Delhi marathons as long term properties.”

    Working on collaboration with other sports channels is also a route Mody is going to push for. “Competition has to be more collaborative as acquisition prices of sporting events shoot up. The French Open is an example of how this can be achieved with Ten Sports allowing us to telecast the event as they had cricket on their channel,” he says.

    Zee Sports is at an incubation stage and will require long term investments for the development of the channel. For the fiscal ended March 2006, Zee Sports posted a loss of Rs 600 million. “Obviously, in the initial period there will be losses. We are not going to stop at the 25 ODIs. We will bid for the World Cup and the other boards as well. Sports as a business would grow for us,” Chandra told analysts.

    The decision to bring Zee Sports under the ZTL umbrella was something Chandra had not originally planned for. “We had created it as a separate entity because we were thinking of bringing a strategic partner in the business. But some developments took place and we decided it should become a division of ZTL,” he replied to analysts.

    The losses of Zee Sports, in fact, had a beneficial impact on ZTL‘s bottomline in FY06 as it acted as a tax shield. “It had a positive impact. Our tax liability has been reduced by at least Rs 180-200 million,” Chandra admitted.

    But by kicking in losses for a longer period, will Zee Sports be a drag on the profitability of ZTL? Making calculations based on the existing properties, Mody believes Zee Sports‘ losses would reduce this fiscal and the entity would be profitable by FY08. “We realise sports broadcasting is a long term play. As it was the only genre where Zee was not present in, we launched it with the idea of now or never. But we are in a special position by being part of a larger bouquet for both distribution and ad sales revenue exploitation. Since we also have a large global presence, we can also leverage it better,” he says.

    Zee Sports will spruce up ZTL‘s topline which has under its umbrella channels like Zee TV, Zee Cinema, Zee Café, Zee Studio and Zee Sports. Among all the horses within ZTL, it is Zee Sports which, as a startup, can provide faster growth for the company if properly incubated.

    Perhaps, it is with this logic that Chandra is putting big money behind the sports channel. Perhaps, it is also the ego of a media baron who wants to prove that he can win in sports broadcasting (after being deprived of ICC World Cup and BCCI cricket despite bidding higher on both the occasions) as well. Or is it a mix of both?

    Whatever it is, Chandra will have his task cut out for him to make money from a bid that, at the surface, seems ridiculously so high that it made Sony stay out and ESPN Star Sports come out with an offer lower than the floor price of $5 million per match.

    But it is exactly this quality which separates Chandra from the other Indian media entrepreneurs. Where others see risk, he sees an opportunity to make money.