ITV

Tag: Zee Bangla

  • Zee News Ltd misses regional GECs, Q4 net shrinks to Rs 28 mn

    Zee News Ltd misses regional GECs, Q4 net shrinks to Rs 28 mn

    MUMBAI: Zee News Limited (ZNL) has posted a consolidated net profit of Rs 28.2 million for the quarter ended 31 March, a 56.9 per cent fall from the year-ago period, as it has learnt to live without its six regional general entertainment channels since 1 January.

    The channels – Zee Marathi, Zee Bangla, Zee Talkies, Zee Telugu, Zee Kannada and Zee Cinemalu – have now been demerged from ZNL and merged into Zee Entertainment Enterprises Limited (Zeel). ZNL now operates Zee News, Zee Business, Zee Punjabi, Zee 24 Taas and Zee Tamil.

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    ZNL’s total consolidated revenues for the three-month period stood at Rs 600.6 million compared to Rs 1.38 billion a year ago

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    Meanwhile, expenses also came down to Rs 561.8 million from Rs 1.18 billion a year ago.

    ZNL chairman Subhash Chandra said, “Zee News Ltd is all set to embark on a new and promising trajectory after the demerger of the company was formally concluded. Our aim is to consolidate our commanding position in the news genre and spread out our wings even further in the regional and national arena. The company is uniquely poised to accrue benefits from the synergies possible from such an arrangement. Resources from across the spectrum of channels will be pooled together and shared, giving us an edge over competition and also immense cost benefits.”

    ZNL CEO Barun Das added, “The demerger will throw up some exciting opportunities as we go ahead. We had leveraged the low cost entry opportunity during the economic recession and are now well placed to grow from here.”

    The company also announced that Zee Akaash News Private Limited – a subsidiary, where ZNL holds 60 per cent stake and operates Bengali news channel 24 Ghanta – has made an operating profit of Rs 50.11 million for the year ended 31 March 2010.

  • ‘Fragmentation has actually helped the Hindi GEC ad market to grow’ : ZEEL Chief Revenue Officer Joy Chakraborthy

    ‘Fragmentation has actually helped the Hindi GEC ad market to grow’ : ZEEL Chief Revenue Officer Joy Chakraborthy

    Zee Entertainment Enterprises Ltd (Zeel) has a pool of channels that would drive its topline. The transfer of the six regional entertainment channels from Zee News Ltd (ZNL) would reduce Zeel‘s dependence on Zee TV as Zee Marathi, Zee Bangla and Zee Telugu write good revenues. The gain could be to the tune of Rs 4.4 billion on an annualised basis.

     

    Zeel went through a second wave of consolidation when it decided to bring under it ETC‘s broadcasting business. while ETC Music will complement Zing, ETC Punjabi stays as a strong force in the Punjabi market.

     

    Zeel‘s south story is set to bloom. With market leader Sun TV deciding to up ad rates across its network channels after a gap of two years, Zee Telugu is in a strong position to shore up its revenues on the back of soaps, movies and a dance-based reality property in Aata. Zee Kannada is also on the growth track.

     

    Competition from the two Star regional channels could hurt Zee Bangla and Zee Marathi in the long run. Star Jalsha has become a clear No. 1, but Zee Bangla is currently holding on to its revenues due to unduplicated viewership and a smart utilsation of inventory and ad pricing. The Bengali general entertainment channel (GEC) ad market could, however, expand.

     

    Despite Star Pravah‘s rise, Zee Marathi continues to be in leadership position and is aided by Zee Talkies.

     

    Bruised by a weak property in Indian Cricket League (ICL) that ran out of action last year, Zee has plans to launch a few sports channels.

     

    Maximising the company‘s value share is Zeel chief revenue officer Joy Chakraborthy. His academic armoury includes graduation from National Defence Academy, masters in marketing management from NMIMS and, more recently, the Advanced Management Program from Harvard Business School.

     

    In an interview with Indiantelevision.com‘s Sibabrata Das, Chakraborthy talks about the company‘s focus on revenues, profitability and monetisable GRPs.

     

    Excerpts:
     
     

    How much topline growth would come to Zeel due to the transfer of six regional entertainment channels from Zee News Ltd?
    Zeel would be a big beneficiary as the six regional entertainment channels are riding good revenues. They will also help us offer complementary media propositions to our advertisers. We expect Zeel to add about Rs 4.4 billion on a full year basis due to this transfer.

     
    So Zeel‘s dependence on Zee TV will reduce?

    One can‘t undermine the contribution of our flagship brand in our bouquet of channels. With the regional GECs, we will, of course, have more driver channels in the bouquet such as Zee Marathi, Zee Bangla and Zee Telugu. Nonetheless, Zee TV’s contribution to the overall ad pie of Zeel will be in the region of 35-37 per cent.
     

    Doesn’t that spread out Zeel’s risks at the right time when we are seeing the emergence of a new star in Colors and further fragmentation in the Hindi general entertainment channel (GEC) space?
    With the industry maturing, fragmentation is obvious. In fact, fragmentation has actually helped the Hindi GEC ad market to grow. The introduction of Colors has transformed the GEC space from a bi-polar into a tri-polar segment with each of the three players creating their own relevance. As such, we expect the Hindi GECs would take away Rs 24 billion in ad revenues during FY’10 (i.e. up from Rs 19 bn in PY). And going forward, this space is bound to grow if all players get their pricing strategy right. 
     

    But hasn’t the 3-horse race for the top slot in the GEC space damaged the pricing power and impacted Zee TV?
    Zee TV is the No. 1 revenue channel. It gets maximum campaigns and advertisers spend due to two key reasons: consistency in ratings and effective leverage of a huge network. Also, we sell more on plain vanilla FCT (free commercial time) with few but quality innovations.

     

    While our rival networks have taken to very expensive programming, we have delivered with soaps and reality content without flashing Bollywood stars. We have developed Dance India Dance and Saregamapa into our strong reality properties. We have also stayed away from buying GRPs through movies. Our focus is profitability – and not just simply becoming a No 1 GRP channel.

     

    Also, advertisers don’t buy GRPs; they want relevant ratings. A lot of channels are running break-free content. What is the use? An afternoon GRP is not the same in value as a primetime GRP. And Zee TV has been leading consistently in primetime. So, the point is to develop “monetisable GRPs”. 
     

    What about the economic downturn?
    There is no doubt that broadcasters have experienced a tightening of their revenues. But the slowdown has resulted in a host of positives (especially for television – as a medium).

     

    Clients and agencies have intensely evaluated their ad-spends and experimented with mediums. They have invested in value-for-money genres where risks were low like GECs and movies. High value flashy investments were curtailed. They have looked at TV a lot more optimistically than print. While ad spends on TV will end at Rs 91 bn for the year, (up from Rs 83 bn in PY), print will grow only marginally from Rs 98.20 bn to Rs 99.30 bn.

     

    In fact, the last four months have been particularly good for us. Being the largest network has helped us in attracting advertisers. Though we saw a slump in ad spends from real estate, banking & finance sectors, it has been compensated by FMCG, telecom and auto, which have been high spenders on GECs. 
     

    ‘A lot of channels are running break-free content. What is the use? An afternoon GRP is not the same in value as a primetime GRP. The point is to develop monetisable GRPs‘ 
     

    Has cricket eaten into the GEC space?
    We had expected that our biggest threat would come from cricket. But it has under-delivered. Cricket has taken a severe beating, resulting in some channels offering guaranteed CPRP deals. As such, advertiser confidence on GECs has been high.

     

    On the whole, with Tam expanding its panel this year and the economy improving, GECs will stand to gain. 
     

    Have the movie channels also been hit by recession?
    Advertisers in this downturn have realised the true potential of television in terms of reach. With consumption expected from every nook and corner, the Hindi Cinema genre, which is high on reach, played a very crucial role in the marketer‘s overall communication scheme. This has led to the Hindi Cinema genre witnessing significant growth in revenues despite a marginal fall in GRPs. This growth has come from rate increase as inventory has always been 100 per cent utilised.. Though GECs have been the first to air big ticket movies, movie channels, being well penetrated, go beyond Tam markets, and are value-for-money proposition for advertisers. Zee Cinema’s consistent performance is due to its strong presence not only in the metros but also in the smaller towns and rural markets. 
     

    Sun TV network has increased its ad rates after two years. Will this augment Zeel‘s revenues from its south-language regional channels?
    Despite being a leader, Sun TV’s pricing has always been highly cost-effective. For any market to expand, the leader has to take a leap in pricing. Hence this initiative by Sun TV will only help the entire Southern market grow further. We are doing particularly well in the Telugu space and are highly optimistic on Zee Kannada as well. South will be the big story for us in the years to come. The transfer of the southern channels to Zeel will help our regional sales team as they can offer a complete regional package.
     

    Will the rise of the two Star regional channels hurt Zee Bangla and Zee Marathi?
    In the Bengali GEC space, Zee Bangla has lost its leadership position to Star Jalsha, but, over the last couple of months, we have undertaken new initiatives and the channel is looking up again. More importantly, our focus has been to ensure profitability and towards that end we are, even today, writing much more revenues than Star Jalsha. This is primarily because of our two-pronged strategy: optimal inventory utilisation and appropriate pricing. One of the noteworthy propositions of Zee Bangla is its high unduplicated viewership. All of this has helped us ensure against loss of any campaign. Having grown, we now hope that Star Jalsha increases its rates to sustain the market expansion.

     

    In Marathi, we are almost three times that of our nearest competitor. Zee Marathi is a clear leader and is well complemented by Zee Talkies, both in terms of revenues and viewership. 
     
     

    Zee‘s sports business falls under your ambit. Are there plans to launch more channels?
    The various sports-led initiatives of Zee that straddle not only on-air (Ten Sports & Zee Sports) but also on-ground properties like Mumbai FC, AIFF (All India Football Federation) and cricket (Zimbabwe & Sri Lanka) are a part of my Sales responsibility. Print properties like All Sport Magazine also come under me.

     

    In our sports business, our focus has always been to look beyond cricket. So, our sales approach will also be one that is inclusive of all sports genres wherein we shall bundle various properties. And, yes, given the potential that we foresee in the near future, we are in the process of evaluating new channels.
     
     

    With the producers going on strike and Bollywood having less releases and hits this year, what has been the impact on music channels ETC and Zing?
    For the film-based trade genre, ETC is a must-have. Moreover, in this genre the buying parameter is not GRP-led; instead, the trade evaluates the channel‘s brand equity. Being the undisputed leader in this space, ETC has performed exceedingly well.

     

    Post relaunch, Zing has aggressively followed an approach of co-creating value propositions that are customised to its business constituents’ communication objective. This approach has helped showcase a much greater value proposition to our advertisers, insulating us from the vagaries of hits and flops. The channel has posted higher revenues.
     

  • ”We have created a basket of Marathi channels to dominate our position in this market’ : Nikhil Sane – Zee Marathi and Zee Talkies business head

    ”We have created a basket of Marathi channels to dominate our position in this market’ : Nikhil Sane – Zee Marathi and Zee Talkies business head

    Subhash Chandra realised as early as 1999 that the next wave of Zee network’s growth would be in the regional broadcasting space. Up came a clutch of channels including Zee Marathi, Zee Bangla, Zee Punjabi and Zee Gujarati.

     

    Chandra has cemented his leadership position in the Marathi market with the launch of a news channel, Zee 24 Taas, and a movie channel, Zee Talkies.

     

    Following the vertical integration model, Zee has also got into the Marathi film production business.

     

    Starting as the first private Marathi channel on 15 August 1999, the initial years were slow. With the launch of ETV Marathi in 2001, Zee Marathi, in fact, even lost its leadership position. But it was in 2005 that things paced up as Zee Marathi scaled up its distribution and programming. Reality content through shows like Saregamapa, Eka Peksha Ek and Hasya Samrat gave the channel a big boost in ratings.

     

    In an interview with Indiantelevision.com’s Gaurav Laghate, Zee Marathi and Zee Talkies business head Nikhil Sane talks about the 10-year journey of Zee Marathi.

    Excerpts:

    Zee launched its Marathi general entertainment channel on 15 August 1999. How has the 10-year journey been?
    Everyone was skeptical at that time about Zee’s decision to launch a Marathi channel. In Maharashtra, Hindi channels – Zee TV, Sony Entertainment TV and Star Plus – were dominating television viewership. The only available Marathi content then was on Doordarshan – that also for four hours. So launching the channel way back in 1999 was a big, big step.

    But wasn’t it a big advantage to be the first private Marathi channel?
    In 1999, the Marathi TV industry was non-existent. So you can say that we created the Marathi TV viewing audience. What we got was a lot of talent. Maharashtra has produced ace directors, writers and actors, who supported us in this endeavour passionately. And we offered them a robust platform. So, Zee Marathi played a pivotal role in shaping the Marathi entertainment industry.

    What was the programming mix for the channel then?
    As I said earlier, there was no scarcity of talent, but it was scattered. With our launch, people from Marathi theatre and cinema joined us. That time we were experimenting a lot. We were the first channel to launch a daily show, Abhaalmaya, at 8.30 pm. The competition was against Amaanat on Zee TV, Heena on Sony TV and Saas on Star Plus.

     

    We got a humongous response for the show. Soon after, we launched the afternoon slot with Maansi, which again got a good response from viewers.

     

    Step by step, we increased our prime time, which at present is from 6 pm till 11 pm. We launched weekend programming, reality shows, events and even entered into film production business.

     

    Meanwhile, we launched the news channel (Zee 24 Taas) and the Marathi movie channel (Zee Talkies) to create a basket of channels and dominate our position in this market.

    When did you extend your prime time?
    We had a prime time from 7.30 to 10 pm till 2006. We extended this to a four-hour band starting 7 pm. We also had hourly news bulletin, which were very popular. Later, as we launched our own news channel, we shifted news from Zee Marathi.

     

    Earlier we used to air weekend movies on Zee Marathi. But as we launched Zee Talkies, the movies were shifted and we started daily soaps from Monday-Saturday.

    ‘It was in 2005 really when Zee Marathi scaled up its production, distribution and programming’

    You said initial years were experimental. So when did you manage to strike the right formula for growth?
    We launched some very good shows in our first five years. But it was in 2005 really when Zee Marathi scaled up its production, distribution and programming. It was like a channel revamp.

     

    We created reality shows like Saregamapa (singing talent hunt), Eka Peksha Ek (dance reality show) and Hasya Samrat (comic reality show). Recently, we launched Hapta Band, a quiz-based show.

     

    Also, we organised grand scale events like finale of reality shows, Zee Gaurav Puraskaar (awards for films and theatres) and Zee Marathi awards (viewer’s choice awards for Zee Marathi shows).

    What were the milestones in programming?
    We experimented with different genres. Our comedy show Hasa Chakatful saw performances from the best performers of the industry. Shriyut Gangadhar Tipre was also one hugely popular comic fiction.

     

    Among fictions, Abhaalmaya, Avantika, Asambhav, Vaadalwaat and recently launched Kulvadhu got us good viewership. Our reality shows and events also are some of the most popular properties on Marathi television.

     

    Apart from these, we had shows devoted to literature (Pimpalpaan), poets and musicians (Nakshatranche Dene) and horror (Gahire Paani).

    ETV, which launched in July 2001, emerged as a strong competitor and even surged ahead of Zee Marathi at one stage. What were the reasons?
    After a fabulous three-year ride, we had a tough patch for two years. ETV Marathi launched with a very strong distribution and this impacted us. We were popular in towns, though. But after 2005, we focused on every aspect of the business.
    Now there is new competition from Star Pravah. While other channels like Mi Marathi and Saam Marathi have launched, they haven’t really been able to shake things up. So do you see a three-player fight in the Marathi GEC landscape?
    If you see our current ratings in Maharashtra, we are only below Zee TV while outnumbering Star Plus, Colors and other national GECs. That is what our competition is. Today, Hindi viewership amounts to 26 per cent while Marathi is 20 per cent in the state. We have a lot of space to grow here. Also, competition gives advantage to viewers ultimately as they get variety. And it grows the market.

    You talked about entering into the film production business and have so far released six movies. How are you scaling this up?
    After establishing Zee Marathi, the natural progression was to launch a movie channel. So we launched Zee Talkies. The next logical step was to enter into the film production business ourselves.

     

    We have, in a big way, led the revival of the Marathi cinema industry. So far, our movies have done good business.

     

    We have released Saade Maade Teen, followed By De Dhakka, Galgale Nighale, Dudgus, Ek Dav Dhobi Pachaad and Gallit Gondal Dillit Mujra.

     

    The next movie we are ready with is Hai Kai Nai Kai. We have signed five directors for three films each.

    So how do you see the Marathi broadcasting space evolving?
    The time ahead is surely challenging. We have to be open to change and need to continuously evolve to stay ahead of competition. And by competition I do not mean Marathi or even Hindi GEC channels. The main competition is with new media. With so much available on different platforms, attracting viewers to TV will be a challenge.

     

    From now on, the biggest question to ask ourselves would be ‘what next’. Hindi GECs will survive as their base HSM (Hindi speaking market) is very big. Innovation is the only way to keep ahead in this Marathi TV broadcasting space.
  • ‘The downturn will bring in corrections not just in carriage but in every other aspect’ : Barun Das – Zee News Ltd CEO

    ‘The downturn will bring in corrections not just in carriage but in every other aspect’ : Barun Das – Zee News Ltd CEO

    Churn. The television industry has been going through turbulent times with the economy downsliding and ad growth decelerating. Like its peers Zee News Ltd (ZNL) too has been riding the wave of turbulence with its unique mix of national news and regional language channels.

    While Zee News, Zee Marathi and Zee Bangla have been growing rapidly and notching up profits, Zee Telugu has turned operationally cash positive. The management has managed to keep losses from its ‘new businesses’ (channel launches in the south and Zee Talkies) under control; full fiscal loss forecasts stay unchanged at Rs 700 million, even though it is planning to launch a regional channel targeted at Uttar Pradesh. Simultaneously, it has decided to pull the shutters down on Zee Gujarati from 30 April as it was bleeding.

     

    ZNL is also pursuing growth through the franchisee model, an experiment not tried yet by the other news broadcasters. After partnering with SB Multimedia for a regional news channel in Chattisgarh, the company is keen to tap local entrepreneurs who desire to get into the TV news space in regions which do not occupy Zee’s immediate direct expansion plans.

     

    In an interview with Indiantelevision.com’s Sibabrata Das, Zee News Ltd CEO Barun Das talks about the success of the Zee News channel following a repositioning exercise, the turn around of Zee Business, the emergence of new driver channels within the bouquet, the challenges of tiding over the global economic turmoil, and the company’s growth plans.

     

    Excerpts:

    Media companies are reeling under a severe ad slowdown. How has Zee News Ltd bucked this trend so far?
    We are helped by the fact that the regional language markets are growing faster. What is working for us is the composition of the bouquet. Some of the new regional channels have started delivering while the driver channels continue to post strong growth. The positive thing is that more channels like Zee Telugu, Zee Kannada and Zee Business are positioning themselves to get into the driver category over the next 12-18 months.

    Isn’t the economic downturn affecting regional markets as well?
    There is an overall slowdown. But regional television media markets are still in their nascent stages. The size of these markets is small and there is a lot of potential to grow them. The Marathi news market, for instance, is new. Even in the general entertainment space, the regional channels arrived much later than the invasion of private satellite television in national languages. Outside the southern region, it is the Marathi and Bengali markets that really matter. The other regional markets are small and I don’t see them growing to any significant size in the near future.

    Is this the time to take hard calls like shutting down Zee Gujarati?
    We critically reviewed the channels that are not likely to make profit in the near future and decided to close down Zee Gujarati with effect from 30 April. Our learning in that market shows that the revenue is too small as entertainment consumption happens primarily in Hindi. It didn’t make sense to linger with the channel and burn cash any more. We would rather focus on the bottom line of the company while strategically expanding our presence in other markets, products and services.

    Has the break even success of the Telugu general entertainment channel put you in a comfort zone in the southern region to launch more channels?
    We are backing up the progress of Zee Telugu with the launch in this quarter of Zee 24 Ghantalu, a Telugu news channel. Though Zee Kannada will not break even this fiscal, it would happen in the first or second quarter of FY’10. So yes, we have managed to open up the southern space for ourselves.

    How bullish are you about cracking the Tamil market, particularly when the Marans (Sun TV promoters) and DMK party chief and Tamil Nadu chief minister M Karunanidhi have smoked the peace pipe?
    We are investing Rs 900 million for the Tamil channel in the first year (capex+one year opex). We expect Zee Tamil to break even over 36-48 months. We have signed up with Sun Group’s cable TV arm SCV and the channel is well distributed. We are also in talks with Sun Direct for a presence of the channel on the DTH platform.

     

     

    What makes us stay bullish is that Tamil Nadu is the biggest regional market. Besides, there is only one player (Sun TV) in that market, giving us space to climb the ladder. We feel we have a good opportunity to be a strong No. 2 or No. 3. Also, we have started understanding the nuances of the southern market from our experience, planning and research in running a Telugu and a Kannada channel.
    ‘What is working for us is the composition of the bouquet. Some of the new regional channels have started delivering while the driver channels continue to post strong growth. The positive thing is that more channels like Zee Telugu, Zee Kannada and Zee Business are positioning themselves to get into the driver category over the next 12-18 months‘

    How much is ZNL going to lose from its new businesses this fiscal?
    We are sticking to our original guidance of an EBITDA loss of Rs 700 million from our new businesses (Zee Telugu, Zee Kannada, Zee 24 Taas, Zee Tamil, Zee Talkies and Zee 24 Ghantalu) this fiscal. There is no revision upwards despite us planning to launch a regional news channel in Uttar Pradesh.

    With the Indian economy coming under the shadow of a global recession, have you shelved plans to launch an English news channel?
    There is no additional expansion plan at this stage outside the launch of Zee 24 Ghantalu and a regional news channel in Uttar Pradesh. But we are exploring opportunities in the English business news space. There is a lot of potential, but we have not concretised our plan as yet.

    Marathi movie channel Zee Talkies got transferred from Zee Entertainment Enterprises Ltd (ZEEL) to ZNL. Will the company launch regional movie channels in each market where it runs a GEC?
    Theoretically, we should have a GEC, a news, a movie and a music channel in each regional market where we have a presence. But we are not getting into that gear at this stage. Our Marathi presence is the most widest, followed by Bengali where we are involved in two GECs. While we have the market leader in Zee Bangla, we have taken a 26 per cent stake in Akaash Bangla along with a channel management agreement.

    Will you be expanding in the near future through the franchisee model?
    After launching Zee 24 Ghante Chattisgarh under this model, we are exploring more such opportunities. There is a huge upside in revenues when the economic climate is more favourable; and the money goes straight into the bottom line.

    Is the flagship Hindi news channel growing at a slower pace?
    Along with the growth in viewership share, there is a significant revenue growth as well. After we relaunched the channel with a game-changing strategy, premium brands from sectors like cosmetics, automobiles, and IT – who were earlier not present as our advertisers – have come on board.

    How are you planning to push Zee Business which is considered as a laggard in comparison to its competitive channels?
    Zee Business has made rapid strides over the last several weeks and has moved up from a 11 per cent share in a four-channel market to a 26 per cent share in a five-channel market scenario. We have changed the look and feel of the channel, beefed up our research team, took it beyond a eight metro approach, targeted specific audiences, and focused on the SME sector. We have also concentrated on events; we would have conducted 47 events in the second half of the year. All this seems to be working for us.

     

     

    In fact, 2008 is also the year when 24 Ghanta went ahead to emerge as a leader in the Bengali news market with its focus on content, events and communications. We nullified Star Ananda’s strength in football coverage by acquiring the rights of the National Football League.

    Do you have plans to launch add-on channels like Tez to guard your flagship Hindi news channel?
    Primarily, our strategy is to have state-based news channels. This will continue to be our going-forward direction in the near future.
    Is subscription revenue looking positive with the entry of more DTH players?
    DTH is a growing segment and we stand to benefit from it. It currently accounts for 32 per cent of our subscription income.
    Will carriage costs continue to climb as more channels launch and continue to jostle for space on cable networks?
    With digitalisation growing, carriage rates will continue to slide. The downturn will bring in corrections not just in carriage, but in every other aspect.
    Including downsizing staff?
    Retrenchment is not required. But going forward, we will see how much we need to rationalise on our costs. We will scrutinise every cost, review every deal, and re-negotiate with our suppliers.
    In such a tough market, will you cut down on rates and play the volume game to consume ad inventory?
    The right strategy would be to provide better value than cut rates. Our plan is to offer tailor-made solution for clients and work on innovations. We are, for instance, getting four co-branded programmes on Zee News channel. The truth is that all of us have to stretch more than what we have ever done so far.
    How do you plan to survive the woes of 2009-10?
    It will probably be the worst year any of us have ever seen. Our endeavour will be to strongly hold on to the ground and use this period to prepare ourselves for being able to take the next big leap when we finally move out of the global recession.
  • ‘Zee’s largest bouquet makes it the best prepared network for digitalisation’ : Joy Chakraborthy – Zee Entertainment Enterprises Ltd President, Head – Revenue

    ‘Zee’s largest bouquet makes it the best prepared network for digitalisation’ : Joy Chakraborthy – Zee Entertainment Enterprises Ltd President, Head – Revenue

     Zee is on an upsurge, driven by its flagship Hindi general entertainment channel. Kicking in ad revenues for the fiscal has not just been Zee TV but also the two regional channels – Zee Marathi and Zee Bangla – who together will make Rs 2 billion. And despite less aggressive movie buying, Zee Cinema will see a 25 per cent jump to rake in Rs 2 billion.

     

    As revenue head for Zee Entertainment Enterprises Ltd, Joy Chakraborthy takes credit for it. His role extends to the regional general entertainment channels (except south) which reside in sister company Zee News Ltd. The sports side of ZEEL’s business, however, doesn’t fall under his supervision.

     

    “I handle the power brands where effort to returns are high,” he says.

     

    Joy also takes pride in continuously doing price-correction deals. Even then Zee is under-priced and there is scope for growth, he says.

     

    In an exclusive interview with Indiantelevision.com’s Sibabrata Das, Joy talks of how Star Plus’ loss in GRPs has been pocketed largely by Zee TV and its regional channels. He also elaborates on Zee’s plans to pile up a huge bouquet so that it stays as the best network prepared for the digital era.

     

    Excerpts:

    How much of an ad revenue growth will ZEEL see in the current fiscal and is this still disproportionate to the rise in GRPs of the network?
    There will be a 65 per cent robust ad sales growth for the channels that are handled by me. Advertisers like to invest in channels which are growing. Zee TV, Zee Marathi and Zee Bangla particularly gained, as the leader channels in these segments (Star Plus, ETV Marathi and ETV Bangla) were falling sharply.

     

    The revenue has grown disproportionate to the GRP growth. The pricing, though, needs correction. We feel we are under-priced. With every new deal, we have corrected the price upwards.

    Are the channels that fall under you (ZEEL channels except sports, and the regional GECs barring the south languages) going to post a revenue of Rs 12.5 billion during the fiscal?
    Since we are a listed company, I can’t reveal the figures of the specific channels.

    As Zee TV is the predominant revenue earner, isn’t ZEEL in as risky a position as Star India is with the dominance of Star Plus?
    Zee TV accounts for 65 per cent of ad revenues that the channels under me generate. But that is how the network business will look like in India. Hindi general entertainment channels (GECs) make bulk of the ad revenue business.

    Zee Next was launched as a flanking channel in the GEC space, but it doesn’t seem to have worked at all?
    Zee Next has a problem. We are doing introspection on what went right or wrong. We will be ready with a plan within 5-7 weeks. Besides, distribution is an issue. But we feel it is not right to pay this kind of carriage fee and spoil the market.

    What is the purpose of launching a flanking channel without aggressively distributing it when in the marketplace there is a scramble for space on choked cable networks?
    Strategically, it is important to have a second GEC as a de-risk business model. The GECs are sitting on Rs 20 billion of ad revenues. In as large a size as this, we can’t put all our eggs in one basket. If viewers want something outside Zee TV, we are offering a different kind of programming in Zee Next. With fragmentation happening, our plan also is to try and grab whatever audiences we can with the concept of a family channel for all age groups.

     

    But we still have to be realistic on the carriage fees. Otherwise, it will affect the business model of the whole network; we are, after all, not a single channel company. We have to take a business rather than an emotional call.

     

    The channel will take time to build. Any GEC with less than 130 GRPs will continue to bleed – and we have been seeing that. But with a new plan in place, we will sort out the distribution and other issues that need to be corrected.
    ‘The loss of GRPs by Star Plus has been made up by Zee TV and its regional channels. Zee Marathi and Zee Bangla are doubling their previous year’s revenues to touch Rs 1 billion each‘

    Isn’t growth of GEC as a category slowing down?
    The GRPs of GEC channels as a category have grown by 6 per cent. Revenue from GECs, on the other hand, have jumped 22 per cent. What is happening is that the GRPs of GECs are getting reorganised. Star Plus, for instance, has seen a fall in GRPs while we have gained.

    Could you elaborate?
    The loss of GRPs by Star Plus has been made up by Zee TV and the regional channels. Our regional channels are operating in the most important primary markets. Zee Marathi and Zee Bangla have particularly grown.

    One reason for the growth of these two channels, according to you, is because the leader ETV is falling. But what sort of ad growth are both of them going to post this fiscal?
    Zee Marathi and Zee Bangla are doubling their previous year’s ad revenues. They will end up making around Rs 1 billion each. The ad rates of regional channels, though getting corrected, are still very low.

    After rolling out Zee Talkies to addess the Marathi market, are you planning to launch a Bengali movie channel?
    We will be launching a Bengali movie channel as it will help us create a wider bouquet in that local market. We have created a GEC, a news and a movie channel in the Marathi market. We will be repeating this combination in the Bengali market. Regional movie channels work for sales as well as help boost distribution.

    Like Kalanithi Maran’s Sun network, are you looking at packing in regional music channels as well?
    We don’t see music channels being viable in these markets.

    Doesn’t Zee have such plans for Gujarat?
    Zee Gujarati didn’t see much growth. Almost 99 per cent of the Gujarati viewership is covered by Hindi GECs and movies. It is not a viable market for india, but has an international distribution story.

    Though Zee Cinema is the second biggest channel in the network, it has been less aggressive in movie buying this fiscal. Will this hurt the revenues?
    For the movie channel category as a whole, GRPs have fallen. But Zee Cinema’s revenue for the fiscal would be Rs 2 billion, up 25 per cent. We are selling better, using all time bands.
    As revenue head, why haven’t the sports, news and southern language channels come to you?
    I am handling the power brands where effort to returns are high. The sports business is cricket-centric and needs dedicated attention. So Ten Sports is handling the ad sales. I already have too much on my plate as the network revenue head.
    Will subscription revenues be sluggish, driven by slowdown in international business and foreign exchange loss?
    Domestic subscription will grow by 30 per cent – and we see the situation improving in next fiscal. The Star bouquet is strong, but we have been catching up this year. We have more pull channels than anybody else – Zee TV, Zee Cinema, Zee Cafe, Zee Marathi, Zee Bangla, Zee Talkies and Zee Studio. International distribution is outside my ambit and I can’t comment on that.
    There is a buzz in the market that the TV18 group channels including CNBC TV18 will soon move to Star DEN?
    There is still time for some channels to move out, if at all. We will soon be making an announcement of more channels in our bouquet to make it stronger.

    Are you referring to Ten Sports moving out from SET Discovery (now MSM Discovery) to Zee Turner?
    I can’t comment on this.

    Zee has the largest bouquet of channels. With carriage fee on the up, how does it impact the business at the net level?
    Since we have a large bouquet, this at one level affects us in carriage deals. But on subscription ground, it helps make our bouquet stronger. We have presence in all genres except kids. The net effect in the long term is beneficial once digitalisation happens. We are the best prepared network for digitalisation.

    What is being done to beef up Zee’s English genre channels?
    Zee Cafe is airing new American shows and has a very loyal viewership. It will grow in ad revenues by 45 per cent this fiscal. Zee Studio’s perception as a repeat channel is changing. The sub-titling has helped us, we will be seeing 37 per cent growth, and it completes our bouquet.

    What is your revenue forecast for the next fiscal?
    Keeping in mind the fragmentation scenario, our target will be to post 30 per cent growth in both ad sales and domestic subscription. It will be a challenging year and we hope that the newcomers don’t spoil the ad sales and distribution market with price cutting and high carriage deals.

    Do you see BARC (Broadcast Audience Research Council) taking off any time now?
    It is a good initiative as it represents an association of broadcasters and advertisers. TV as a medium is very research-focused. The sector is also grossly under-priced. BARC is at an initial stage of progress but the intention is there to set it rolling.
  • ‘For the Zee Network, regional channels will be strong pillars’ : Nitin Vaidya – Zee Entertainment Enterprises Ltd. director regional channels

    ‘For the Zee Network, regional channels will be strong pillars’ : Nitin Vaidya – Zee Entertainment Enterprises Ltd. director regional channels

    As localized channels are gaining momentum on television, the Zee Network has been quick to grab untapped genres in regional markets. Spearheading four regional channels from the Zee bouquet, including Zee Marathi, Zee Bangla, Zee Gujarati and now Zee Talkies, is Zee Entertainment Enterprises Ltd director regional channels Nitin Vaidya.

     

    In a free flowing conversation with Indiantelevision.com’s Renelle Snelleksz, the Zee veteran outlines the growth trajectory of each region and the targets set for “regional channels to become the pillars of the Zee Network.”

     

    Excerpts:

    Zee has strengthened its position in Maharashtra with three channels – general entertainment, news and now movies. How has this market evolved and what is the growth story for Zee?
    In 1999 when we entered Maharasthra, there was a widespread belief that though Marathi audiences were bilingual, the market was largely Hindi skewed. It was expected that few viewers would be attracted to a Marathi channel.

     

    Till 2003, it was a real struggle but we were determined to provide value for the investors, for advertisers and for consumers.

     

    In 2003, the share of the Marathi television market was 8.3 per cent. Currently, the share of the market stands at 16.8 per cent (Tam data; January till Week 35, C&S 4+). Though Maharastra was believed to be Hindi dominated, the share of Hindi general entertainment channels dropped from 34.9 per cent in 2003 to 24.4 in 2007.

     

    Over the last four years, Zee Marathi has driven viewers to the genre through a very aggressive programming and marketing push.

     

    Evidence of that is seen in the channel share of Zee Marathi. In 2003, it stood at 40 per cent while ETV Marathi was at 35 and DD Sahyadri at 25. Although there was a decline in 2005, Zee Marathi has regained its leadership position in 2007 with a channel share of 45 per cent while ETV Marathi is at 36 and DD Sahyadri at 11.

    Can you identify the factors that contributed to Zee Marathi’s growth?
    We achieved two things in this market. Firstly, we were able to divert viewers from Hindi entertainment channels. In doing this we also changed the existing perception of the Marathi market being Hindi skewed. Secondly, the television universe as a whole has also grown considerably.

     

    This picture tells a story of how audiences are embracing local channels which they first try and then stick to. This gave us encouragement to invest monies behind this proposition.

    What is the growth that the Bengali market has witnessed?
    Bengal is far ahead of Maharasthra in terms of what has been accomplished as it consistently stayed ahead of Hindi GECs. In 2003, the Bangla market occupied a share of 28.6 as opposed to Hindi GEC which was at 22.9. The average for this year is 33.6 per cent share and Hindi GEC is 20.

    What were the differentiators used to combat competition and pull audiences from Hindi channels to Zee Marathi and Zee Bangla?
    We did not follow the set formula that is commonly used on Hindi GECs and replicate it for our regional audiences. We decided to take a different route and deliberately resisted the ‘saas-bahu’ dramas. Instead, we chose to focus on the interpersonal relationships that reflect the ethos of that particular region.

     

    These family dramas along with our popular musical format Sa Re Ga Ma Pa have been the major drivers of audiences for both these channels.

     

    Besides, we have not compromised on the production values for these channels and have attempted to extensively involve our viewers in daily programming through a host of interactive shows.

     

    This strategy even attracted urban viewers from Mumbai and Kolkata, areas considered too cosmopolitan for a regional channel. Both channels have surpassed Star Plus in C&S 15+ female SEC-A,B&C and while in C&S 4+ market Zee Bangla is far ahead of Star in Bengal, Zee Marathi is just 20 GRPs away from Star Plus in Maharashtra.

    But the growth witnessed by Marathi and Bengali has not been seen with Zee Gujarati – Why so? What was the setbacks that the channel encountered in this market?
    With Zee Gujarati we did have a problem. This too is a market strongly dominated by Hindi. With only three players in the game ETV, Zee and DD, the market has seen marginal growth over the last couple of years.

     

    Zee Gujarati requires the push that was given to Marathi and Bengali and going forward this is our plan. We will pump in more investments into the Gujarati market as well as rope in good talent and push our content more aggressively. One can expect to see a turnaround of Zee Gujarati.
    ‘Zee Gujarati will see a turnaround in the next two years‘

    What is the time line that Zee has set for revamping Zee Gujarati?
    Within the next two years, Zee Gujarati will witness a complete turn around. In fact, the potential of this market is more than that of Marathi and Bangla due to the mere consumption of the State. Therefore, we are putting serious monies behind the channel.

    How much will you pumping into Zee Gujarati?
    I would not like on that at the moment.

    What is the current ad pie for each of the three markets and what growth is expected in these regions?
    The ad revenue of the Bangla language channels in the Bengali TV market is expected to touch Rs 280 crore (Rs 2.8 billion) in 2007 and grow to a category share of 35 per cent. Meanwhile, Marathi language channels will cross Rs 225 crores to occupy 25 per cent share of the Maharashtra TV market this year. However, the Gujarati market is presently a mere Rs 50 crores.

    The network recently made its foray into the Marathi movie segment with the launch of Zee Talkies in August, what has been the response thus far?
    Although, we were aware of the untapped Marathi movie genre, the response to Zee Talkies has been phenomenal as it touched 70 GRPs in its first week of launch. The was far beyond our expectations.

     

    This was supported by an extensive marketing push of Rs 80 million dedicated to the launch campaign. We consciously decided that for the first 20 days the channel will not have a single advertiser. We wanted them to first see the response before they put money on the table. The numbers speak for themselves!

    As part of the network’s attempt to boost Marathi cinema, you tied up with three production houses for a slate of 15 films across two years. When will these movies be released and what is the investment outlay for these films?
    The first film will be released by the end of this year in theatres, following which it will be telecast on Zee Talkies. Close to Rs 10 million will be spent on each film.

    Do you have plans to enter Bengali film production as well?
    We are currently in talks with a few production companies for Bengali movies. We plan to get into Bengali film production very soon.

    Which production companies are you in talks with and what is the budget allocation for Bengali films?
    We have not yet zeroed in on the production houses yet, so it would be premature to talk about it now. But we will definitely be spending more than Rs 10 million on each film.

    So, are you looking to launch a Bengali movie channel as well?
    (Laughs) No! Not at the moment.

    Going forward what are the growth opportunities that you foresee in the three regions?
    The addressable television environment will definitely provide a huge thrust in pushing these channels ahead. For the Zee Network, the regional channels will be strong pillars. This will help grow both subscription and ad revenues for the network.

  • Zee Bangla on top

    MUMBAI: Week 5, and Zee Bangla is on top with a relative channel share of 33%.ETV Bangla, the leader so far is at No. 2 with share of 31%. Aaakash is at No.3 with a share of 13%.The scenario is a little changed today, In the core prime time, It is Zee Bangla that dominates.

    Leaders from 2100hrs onwars till 2400 hrs. No questions asked. However, in the female TGs, it also leadsin a few bands in the early prime as well.Stand out and clear winners are SRGMP, Mirakkel, Khela, Aerao Shatru, Labonyar Sansar and so many.

     

    Another hall mark achievement this year for Zee Bangla is that of leaving the National Leader, Star Plus behind in all important TGs. For eg; F25+abc, Star Plus is 8.9% as against Zee Bangla’s 17%. In youth TG, Star Plus is 8.8%as against Zee Bangla’s 13.5%. Zee Bangla has managed to turn around the attention of the young female audience(f15+abc), who were eroding to Hindi. Star Plus manages a share of 9.6% as against Zee Bangla’s 15.6%.Such strong and compelling is Zee Bangla’s content today that even the mighty and the most hyped about showof Star Plus, KBC-SRK, could not dent one bit. On the contrary, Zee Bangla only grew further.

     

    With its array of new launches up ahead, Zee Bangla promises a rivetting fare for these lovely audiences of Bengal.

  • Zee plans to launch Southern channels overseas in Q1 2007

    Zee plans to launch Southern channels overseas in Q1 2007

    MUMBAI: Zee Network is planning to launch its two southern language channels overseas in the first quarter of 2007-08.

    There is no decision taken yet on which country Zee Telugu and Zee Kannada would launch first. “we are looking at taking these two channels to the international markets. There is a sizeable audience to be tapped,” says Zee’s south initiatives head Ajay Kumar.

    Zee is also preparing to launch a Tamil and a Malayalam channel to cover up all the southern language states. But these are tough competitive markets, dominated by Sun TV, Asianet and Surya.

    Zee’s aim is to have a presence across eight regional languages of India. Already available are Zee Marathi, Zee Bangla, Zee Punjabi, Zee Gujarati, Zee Telugu and Zee Kannada. The focus will be on consolidating in these eight languages over the next five years by clubbing the language entertainment channels with regional news channels.

    The regional channels form a part of Zee’s demerged entity, Zee News Ltd (ZNL). Under this company also falls the news channel business.

    ZNL has projected a 33 per cent compound annual growth rate (CAGR) over the next five years to touch a revenue of Rs 8.7 billion by FY 2011, up from Rs 2.01 billion in FY 2005-06. The operating margins, which stood at 16 per cent, are expected to expand to around 30 per cent during this period.

    ZNL has a networth of Rs 1.7 billion. The capital employed (as of 1 April 2006) is Rs 2.31 billion with loan funds standing at Rs 612 million. The company has no major capex requirement at this stage.

  • Zee Telefilms creates 3 new business entities; to list them

    Zee Telefilms creates 3 new business entities; to list them

    MUMBAI / NEW DELHI: The Subhash Chandra promoted Zee Telefilms board today approved splitting of its broadcasting business into three entities — news operations, broadcast and content creation, and Siti Cable, which will also include the initiatives on the CAS front.

    After the restructuring, which is expected to be completed within six to eight months, the new entities involved in cable business, and news operations, would be listed on the stock exchange.
    It also announced an ‘in principle’ approval of a proposal to demerge the consumer services business for Dish TV. The board of directors has approved the restructuring proposal related to the de-merger of news and cable business while directing the management to evaluate the direct consumer services business (Dish TV related) and the assess the effect of de-merging it.

    According to Zee Telefilms chairman Subhash Chandra, the company had a complex structure, which needed to be simplified as required by the regulatory environment and market needs.

    * ZTL holds 33 per cent in Zee News Limited, while promoters of Zee hold the balance. Zee News Ltd delivers news uplinked fto the satellite for Zee News, Zee Business and News content of regional channels.
    He added, “Due to regulatory restrictions, the business of Dish TV was structured in a very fractured manner and hence was difficult for ZTL shareholders to understand.

    “At the same time, the structure was also tax inefficient. The management of the businesses under the same board was not focused and thus unable to capture the growth opportunities in the market as different skill sets are required for distribution to trade, which in this case is cable business.”

    He continues that the regulation in the news and news related broadcast content is different from regulation in entertainment and other content.

    Due to technological advancements and changes, the media businesses have to be prepared for a forthcoming digital age, the company said.

    “We feel confident that these measures of restructuring these businesses subject to necessary approval would result in streamlining operations and better exploitation of opportunities in each area to build long term shareholder value. It would also clear the ground for acquisitions and strategic or financial partners in the demerged businesses, apart from unlocking shareholders value,” Chandra says.

    Queried as to whether he saw the demerged cable business (Siti Cable) and the direct consumer services business (Dish TV) as being the most likely to invite international interest for strategic and financial partnerships, Chandra replied in the affirmative.
    Restructuring of consumer business for Dish TV
    The direct consumer business is marked by division of activities between the DTH license holder ASC Enterprises Limited (ASCEL) and the subsidiaries of Siti Cable.

    * Percentage holding to be decided by the board after valuation by independent valuers.
    As per the proposal, the direct consumer related business of ZTL would be de-merged into ASCEL, with the shareholders of ZTL receiving shares in ASCEL in proportion.

    This has been done due to lack of clarity in structure, inefficiencies in tax and diffuse strategic focus.

    The proposal has met with in principle approval of the Zee board. The board has authorised management to evaluate the proposal and its effect and present to board for final approval.

    The scheme of arrangement would require approval of the stock exchange, shareholders and creditors of Zee and from Bombay High Court.

    Restructuring of news business; regional channels included

    # ZTL shareholders would get 137 shares of Zee News Ltd for 100 shares in ZTL. ZTL foreign shareholders will get upto a maximum of 26 per cent. Any additional shares accruing would be converted into Preference Shares. Currently the FII holding is 31 per cent, hence everyone will get equity shares. The equity shares held by foreign promoters would be shifted to India as domestic holdings.
    In compliance with the news uplinking guidelines with effect from October 2005, newsgathering activities of ZTL were transferred to Zee News Limited, while downlinking and commercial exploitation of all news-bearing channels was retained under ZTL.

    “Despite a compliant corporate structure for news bearing channels (particularly regional channels), we have felt it important to bridge the divide and bring all the operational activities together, to create strategic focus, remove tax efficiencies and unlock shareholders value,” Chandra said.

    Under the scheme of arrangement, the news-related business (Zee News, Zee Business, Zee Bangla, Zee Punjabi, Zee Marathi, Zee Telegu and shortly to be launched Zee Kannada will be subsumed into Zee News Limited (ZNL).

    The company will in due course be suitably changing the name of Zee News Ltd.

    As the result of preparation of news business the shareholders of Zee Telefilms will get proportionate shareholding in ZNL. As per the formula that has been worked out 137 ZNL shares will fetch 100 shares in ZTL.

    In case the allotment works out to more than 26 per cent (which is the permissible limit of foreign investment in news ventures in India), the FIIs would be allotted preferentail shares of equivalent value on a proportionate basis.

    Zee News Limited would be listed on all stock exchanges where ZTL is listed.

    Restructuring of cable business

    Siti Cable has been hived off into a separate entity, Chandra pointed out, as the cable assets were under-utiliseted, despite large and well-positioned investments in the cable business.

    To properly address the emerging business opportunities in digitisation of cable and convergence, there also are large funding requirements. And the regulatory requirement applicable to cable distribution is very different to broadcasting.

    Combined with the fact that the competitive environment of distribution business is also different, the Zee board felt that an invigorated corporate and governance set up was essential to aggressively address the emerging opportunities.

    * Shares held by foreign promoters will be shifted in India as domestic holding to bring down the overall foreign holding to about 35 per cent. Cable business is allowed foreign holding upto 49 per cent.

    As per the scheme of arrangement, the cable business of Siti Cable, a 100 per cent subsidiary of ZTL, and the cable related business of ZTL would be de-merged into Wire and Wireless (India) Limited (WWIL), a new company incorporated for the purpose.

    The shareholders of ZTL would receive shares in WWIL in proportion, as consideration.

    WWIL would in turn issue preference shares to the shareholders of ZTL.

    Meanwhile, the Zee scrip moved in a narrow band today. While opening at the BSE on 238.90, the scrip touched a high of 243.35 and a low of 236.10 before closing the day at 239.55. The stock is expected to react tomorrow as the restructuring of Zee’s businesses was announced in the evening, after the bourses had closed.

    MY Khan joins Zee board

    Dr MY Khan, chairman of Banking and Advisory Council, YES Bank Ltd, has joined Zee as a director on the board of the company. Dr Khan has previously served as chairman of J & K Bank. He is also a director on the Board of Bharat Hotels, as well as an advisor for Berenson & Company, New York.