Everybody yearns for a big-bang entry when they start off their career. The same can be said about Zenga TV which decided to take the path one would rarely tread upon.
At a time when most of the mobile TV platforms were approaching mobile operators to be carried, Zenga TV offered the first free 'live TV' service in the country. People scoffed and laughed but two years after a debut with IPL 2009, serving seven million viewers in over 140 countries, the company has turned profitable. Now, after adding more than 150 channels and 18,000 movies to its kitty, the platform will soon be venturing into delivering original content in 52 genres.
Shabir Momin, who made Zenga TV from scratch, will look for investors in some years to scale up the free mobile TV platform's ambitions
Out of these, production in four genres namely fashion, styling, comedy, fashion and cooking will be done by Zenga, itself while the rest will be aggregated from all over the world such as music, gaming, extreme sports, travel and other fashion. "These four genres need localisation," says Zenga TV founder, MD and CTO Shabir Momin.
A technologist all his life, Momin and his friend Vikramjiet Ray invested about six to seven million dollars into this venture which started reaping profits within two years. Industry sources put it at anywhere between Rs 2-3 crore per annum.
Starting off at a time when the minimum bandwidth was 20-25 kbps in India as compared to 78 kbps in other parts of the world, they developed a code to provide live streaming at 2.5G and at this low bandwidth. Even though 3G is being promoted, only 10 percent of Zenga TV's users are 3G users. The arrival of 4G will only enhance the picture quality, according to Momin.
Zenga TV has a long list of Indian channels as well as 30 international ones which are genre specific. However, 70 per cent of the traffic comes from movies while 30 per cent from channels out of which Aaj Tak, Pogo, 9xm are some of the popular ones. Animated content being in the top ten has surprised even those at Zenga TV. Some of the other channels it streams live are NDTV Profit, Raj News Kannada, Focus TV, Big Magic, 9XM, Sahara filmy.
One of the news channels on the portal which wished to remain unnamed said that two years ago when they got into a deal with Zenga TV it helped it because it targeted non-smartphone users, even though it had an application of its own. However, its expectations from the association has been only 'just met' and in order to have more control from its side it is looking at revaluating the contract and seek more opportunities outside of Zenga TV.
"Zenga TV is not very viable because broadcasters do not want to lose big money from their DTH and cable operators who may object to live streaming for free on the internet at the same time making money on advertising," says media consultant Sanjeev Hiremath. This could be why Star, Zee, Sony etc are not part of the bouquet but are available on its competitors Ditto TV and Apalya. Demand for these channels is there; according to Momin, but since there is no ROI for it and so he opted to not negotiate with them. To date a 50:50 revenue share is maintained with all its channels. Market estimates varied from approximately Rs 25,000 to Rs 7-8 lakh per channel.
"I would rather give you exciting and intriguing content which is cost effective for me as well," states Momin.
Speaking in terms of demographics, 45 per cent of viewership comes from rural India while 35 per cent comes from urban cities, Delhi and Mumbai being the larger chunk of it; the rest from tier II cities. Local retailers propose a data plan to customers which will let them watch free TV on mobile. This benefits the customers as a lot of times electricity isn't available to watch TV and the plan is approximately Rs 200 a month. It also means customers coming back to them every month.
Abhishek Joshi joined the team a few months ago to spearhead the project from Mumbai The time when most traffic is on it is from 11:00 am to 2:00 pm. The average time span is 10 minutes per view and six to eight views per month each amounting to 250 million views per month. And is a male dominated area wherein 70 per cent viewers are men. The target group is 13 to 65 years but a majority of the viewers are the young audience between 18 to 35 years. About 85 per cent of viewers are from India while UK, US and UAE keep juggling in the top three spot from the international countries.
It has an automatic system that adds servers to tackle unexpected increase in traffic, when it isn't manned and when traffic goes down, it automatically kills the servers. From two, the team now consists of 55 to 60 people in Delhi and Mumbai with an attrition rate of just 0.5 per cent most of the team being freshers who are brimming with ideas. Momin who was formerly the CEO, gave way to Abhishek Joshi to be the CEO in July 2012, marking the beginning of the Mumbai office. Bangalore and Kolkata are the next expansion destinations.
At inception it was available on Windows, Android and iOS while Symbian 60 was added recently. Anybody with a browser could view. Everything is cloud based with seven Amazon servers across the world. It was only in 2012 that the app was created. Momin maintains that an app will not be made for Blackberry phones. It has over 10,000 fans on its Facebook page.
Zenga TV works purely on advertising with more than 60 brands currently, most of them from India. It got its break when it bagged Pepsi during its telecast of IPL 2009. Cadbury, Red Bull, Aditya Birla, Fiat are some of the other brands it has deals with. Both video and banner ads are present but what is prevalent more is video ads that are either pre roll or mid roll. Industry sources put the CPT for a video ad at Rs 300- 350 and a banner ad at Rs 180-190. The annual revenue would be around Rs 13-14 crore per annum. Just like on television, depending on the customer's brand campaign the ads can be modified such as L-shaped ads or bugs. It can also be targeted based on content, channel and geography. A team of five works on ad sales.
Media planners seem to be skeptical despite Zenga TV's claims. Ignitee digital media planner Saurav Kumar says that it is a good advertising platform if the client is targeting mobile phone customers. However, he adds that mobile phone commerce is still at a very nascent stage. "There is not much ROI on mobile advertising," points out Kumar. Lodestar Universal vice president Deepak Netram believes that Zenga TV is yet to gain critical mass but as an add-on, it is a great platform available.
Money spent on mobile advertising is just five to ten per cent of the total as of now and the only way an increase can be seen is when the coverage of 3G increases and the price of 3G subscription decreases. In a mobile TV market of 30 million dollars, Momin claims Zenga TV owns about 60 per cent of it. "If you ask me, mobile TV advertising is the future," says Hiremath.
Momin stated that he had initially approached mobile operators, which was the custom around 2007 but the business model was hitting a negative end for him so he decided to set up his own brand and connect directly with the users. It could have been a risky stance, but he decided to be his own master than be someone's slave (in this case the operators). "We are the only profitable company in this space. All the others are more than fifty points negative," he claims. "Most of my competitors work for operators," he says. Had Zenga TV decided to go the same way they wouldn't have been able to control price point.
Apparently, not a single penny goes into marketing Zenga TV and everything was done by word-of-mouth. More than 50 per cent of users tend to come back and Momin attributes it to the fact that they have no system of registration or forcefulness.
Changes have also come about since then. To increase content discovery, a search bar and index were added. Some football sports are being reviewed but only half of sports content is financially viable for it.
Consumption patterns have changed from channel specific to genre specific viewership.
Predictions are that the current space of mobile TV advertising is about Rs 150 crore and in two years time it is set to multiply to Rs 3,000 crore due to better network. Zenga TV sets itself a target of doubling its viewership, profit and revenue and for the last three years they've surpassed their own predictions.
As for the future, Momin says he might think of raising investors or IPO someday but he will not give up ownership of the company. "I didn't want to have investors initially because they have their POV and they drive it in a way you may not want to," he says.
There is a general feeling that digital is the way forward. Zenga TV has achieved some success but still stays relatively unknown. In Momin's words, "Those who don't know Zenga TV don't use Zenga TV."
