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Zee Turner Ltd, the joint venture distribution company between Zee and Turner, is eyeing a revenue of Rs 10 billion this fiscal on the back of a faster growth from DTH while pay-TV income from cable TV stays strong.
In the earlier fiscal, Zee Turner had clocked Rs 7.5 billion after adding Ten Sports into the bouquet.
Regionalisation will be a big growth driver for Zee Turner. With Zee Telugu and Zee Kannada turning around, the contribution from the southern region is also set to improve.
Adding channels in the bouquet, which has a strong mix of general entertainment, movies and kids content, would form a part of Zee Turner‘s growth strategy. The plan is to have 50 channels within two years.
In an interview with Indiantelevision.com‘s Sibabrata Das, Zee Turner Ltd. chief executive officer Dinesh Jain talks about the company‘s bouquet strength across 16 genres, the efforts to fill in the gaps and the next wave of pay-TV revenue growth in a digital environment.
Excerpts:
Yes, Ten Sports has contributed but our organic growth has also been significant. I can‘t, though, comment on what our target is. But we expect to get a little under 20 per cent growth from cable TV while revenue from DTH will be at a faster pace. We, after all, have the widest bouquet with 35 channels.
Providing such a wide choice is, in fact, our biggest strength. We have presence across 16 genres and have the maximum number of movie and regional language channels. In the Hindi general entertainment channel space, Zee TV is very powerful. And we have the strongest kids content in Cartoon Network and Pogo. We are a top-of-the-mind bouquet.
Our plan, in fact, is to have 50 channels within the next two years. We may not release all the channels to all parts of the country. But they can be driver channels for the relevant market. We will increase the width and depth of our portfolio.
Yes, our revenues are not in line with the strength of the bouquet. But we are the fastest growing company today. We will be the No. 1 distribution company this fiscal.
Regionalisation is a big thing for us. We have the largest bouquet of regional channels. We have, for instance, big drivers in Zee Marathi and Zee Bangla. News is also becoming regional and in local language. Zee has launched several regional news channels.
We have set up task forces to cater to these regional portfolios. We are connecting the interiors for the regional packages and doing local trade marketing. We see big growth coming from our regional channels.
The contribution from the South has increased as our Telugu (Zee Telugu) and Kannada (Zee Kannada) language channels started delivering. But we also had a strong base there due to our English content, led by HBO, Zee Studios and Zee Cafe. We have added WB, the English movie and entertainment channel, this year.
We expect the pay-TV revenues from regional channels to look up, including the South. Zee Marathi, Zee Telugu and Zee Kannada will give us faster growth. We will also be taking our Zee News Uttar Pradesh and Zee Tamil (which will transition increasingly to a news channel) channels pay in the next 6-12 months. This will mean that all the 35 channels in our bouquet will be pay.
Do you still miss the English news genre in the bouquet after CNBC TV18 moved out? We do not have channels in genres such as infotainment, travel, English general news and English business news. There are some regional languages where we are also absent. For completing our portfolio, we would be looking at filling such gaps.
‘Regionalisation is a big thing for us. We have the largest bouquet of regional channels. We have big drivers in Zee Marathi and Zee Bangla. Zee has also launched several regional news channels‘ The government has recently come out with a Headend-In-The-Sky (HITS) policy. How do you see this impacting Zee Turner? HITS offers another great opportunity for digitisation and addressability. We expect the Telecom Regulatory Authority of India (Trai) to come out with a pricing policy for HITS. As long as the delivery platforms and addressability are similar, the pricing policy should be same.
The freeze in pricing has led to anomalies. Different channels in the same genre are priced differently because they were launched in different dates. The price freeze will not, thus, impact the channels equally.
A case in point is Zee Sports. If Zee Sports is to acquire a cricketing property paying as much as Star Cricket does, it will be at a disadvantage because of the price freeze. Launched later, Star Cricket is priced higher.
Trai, in fact, is looking at revisiting the price freeze issue. Today there is enough competition in the market for channels not to start profiteering from high prices.
No, but then there is definitely an opportunity loss. However, it is overcome by the strength of the bouquet.
We are building capabilities for the digital environment – be it IPTV, DTH, cable TV or 3G devices. India will have all models successful because it is such a huge market. We have created vertical heads separately for digital, analogue cable and commercial business 18 months back to bring more focus into these business segments.
Cable TV currently accounts for 70 per cent of the broadcasters’ pay-TV revenues. We see the industry settling at an equal ratio between analogue cable and digital platforms within two years.
Broadcasting distribution companies have entered into joint ventures like Zee Turner, MSM Discovery and Star Den. Is there scope for further consolidation?
There are still many splinter groups such as Sahara and UTV. At some stage, they may decide to align. We are looking at such opportunities and alliances.
The market is getting matured and organised. Though we are seeing the emergence of bigger MSOs (multi system operators), this will mean that the business is getting more rationalised. Bigger cable companies will look at improving bandwidth. There will be huge upsides – much like the coming together of organised retail helping FMCG companies.
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Tag: Zee Telugu
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‘We will be the No. 1 distribution company this fiscal’ : Zee Turner chief executive officer Dinesh Jain
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Zee News Ltd bucks trend, posts strong Q3 growth
MUMBAI: Bucking the trend of a slow ad growth, Zee News Limited (ZNL) posted a 45.4 per cent jump in third-quarter revenue over the year-ago period, with regional channels driving the pace.
Consolidated revenue stood at Rs 1.43 billion for the quarter ended 31 December 2008, sending signals that regional advertisers can come to the rescue of channels that successfully target such audiences.
Net profit was up 18.38 per cent to Rs 151.27 million for the quarter under review, as ZNL kept costs under control.
Says Zee Group chairman Subhash Chandra, “Our bouquet composition, aggressive and innovative strategy and an ever cost-conscious approach to business helped us achieve this feat – something seemingly impossible for most other media organisations.”
ZNL’s advertising revenues grew by 38.8 per cent to Rs 1.12 billion while subscription earnings stood 46.4 per cent up to Rs 236 million for the third quarter of the fiscal.
ZNL’s standalone net profit stood at Rs 153.71 million, up 19.7 per cent from a year earlier. Revenue was up 45.78 per cent to Rs 1.39 billion for the quarter under review.
Says Zee News CEO Barun Das, “The existing businesses continued to grow and recorded 23 per cent growth in operating revenues while the same for new businesses was 333.3 per cent. This has helped us outperform the market.”
Zee Telugu, Zee Kannada, Zee 24 Taas, Zee Tamil, Zee Talkies and Zee 24 Ghantalu (yet to launch), which are considered as ‘New Businesses,’ have incurred an operating loss of Rs 394.83 million during the nine-month period ended 31 December, 2008. The loss on Zee 24 Ghantalu (Telugu news channel) was Rs 9.26 million during the period.
The company is critically reviewing the performance of its channels and has announced the closure of Zee Gujarati from 30 April. Says Chandra, “While we are strategically expanding our presence, the channels which are not likely to make profit in the near future have been critically reviewed by the company. The board has approved the closure of Zee Gujarati with effect from 30 April, 2009. The forthcoming UP news channel launch will be a key strategic expansion along with other regional proliferation of our products and services.”
Zee Akaash News Pvt. Ltd, a subsidiary of ZNL that operates Bengali news channel 24 Ghanta, has incurred an operating loss of Rs 6.96 million during the nine-month period ended 31 December, 2008.
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Zee News Q1 net up 49.9 % at Rs 95 million
MUMBAI: Zee News has posted a standalone net profit of Rs 95 million for the quarter ended 30 June 2008, up 49.9 per cent as compared to Rs 63.7 million in the corresponding quarter last fiscal.
During the period, the company’s standalone revenue grew 47.2 per cent to stand at Rs 1.1 billion as against Rs 744.5 million in the year-ago period.
Advertisement revenue fetched Rs 858 million, up 44.8 per cent from Rs 592.4 million. There has been a surge of 55 per cent in subscription revenue to touch Rs 212 million from Rs 136.5 million.
Total expenditure has increased 47.2 per cent to Rs 921.1 million in the first quarter of FY 09.
Zee News Subhash Chandra chairman says, “New business comprising Zee Telugu, Zee Kannada and Zee 24 Taas performed as projected and delivered close to 170 per cent growth in operating revenue as compared with the corresponding quarter last fiscal. Our regional properties continued to gain ground with Zee Marathi and Zee Bangla garnering higher channel share.”
Zee News MD Laxmi Narain Goel says, “Amongst regional properties Zee Marathi and Zee Bangla scaled new heights while Zee Telugu and Zee Kannada are firmly on track to break even.”
Zee News CEO Barun Das adds, “To further drive the performance of our Hindi business channel, we are planning a re-launch of Zee Business in the coming months.”
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Zee News Q2 net profit up 97% at Rs 57 million
MUMBAI: Zee News Limited (ZNL) has posted a standalone net profit of Rs 57 million for the quarter ended 30 September 2007, up 97 per cent as against Rs 29 million in the corresponding quarter last fiscal.
Operating revenue at Rs 776 million represented a 44 per cent jump over the year-ago period. Operating profit was at Rs 105 million, up from Rs 18 million.
ZNL’s advertisement revenue was Rs 608 million for the quarter, up 57 per cent on a like-to-like basis compared to Q2 FY07. Subscription revenue stood at Rs 150 million, up nine per cent.
Said ZNL chairman Subhash Chandra, “Zee News Limited has strengthened its position in the marketplace during Q2 FY08. Advertising revenues have grown by 57 per cent while subscription revenue improved by 9 per cent during the quarter. While ‘Zee Marathi’ and ‘Zee Bangla’ are steadily climbing the rating chart, the other existing businesses of Zee News Limited have also shown consistent growth momentum. The trends in the new businesses are encouraging with Zee Telugu and Zee Kannada improving their performance despite hyper competitive business environment. This nurtures our hope for a better future. Zee News Limited is moving well on its journey to gain envious position in the news and regional entertainment genres.”
ZNL MD Laxmi Narain Goel said, “Zee Marathi and Zee Bangla have given sterling performance during the quarter. Zee Marathi has maintained its Numero Uno position in the Marathi genre holding a vice-like grip on the number 1 position, while 24 Ghanta has also delivered a huge GRP increase and leading in Bangla news genre in Q2 FY08. Zee News maintained its ratings in the face of multiplying stiff competition in the Hindi News genre while achieving strong revenue growths. We have met the bottom line target during the 2nd quarter and this fortifies our belief that good people skill, sensitivity to changing needs of viewers, agile strategies, new offerings in content should stand us in good stead for a better future.”
Goel added, “The existing businesses have shown consistency in performance and revenues of existing businesses have grown by 42 per cent, the new businesses have also performed well in revenues and registered a growth of 80 per cent during the second quarter. We are also pleased to report that the operating margins on our existing businesses increased from 30 per cent during Q2 FY07 to 33 per cent during Q2 FY08.”
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Zee intensifies focus in south, redesignates Ajay Kumar as head of south initiatives
MUMBAI: As part of intensifying its focus on the Southern states, Zee Network has redesignated R Ajay Kumar as head of the south initiatives.
Kumar now has an additional charge and independently heads the distribution business of all the 32 Zee and Turner Channels in all the four southern states, says an official release.
Earlier, he was the business head of Zee’s south-language channels.
Kumar has been associated with Zee Telefilms in last one and half years, spearheading Zee’s South foray by launching two of it’s South-focused TV channels – Zee Telugu and Zee Kannada.
Zee made its first move by launching regional channels in Bangla, Marathi, Gujarati and Punjabi, and then came Zee Telugu in 2004.
Also in the pipeline is the launch of Tamil and Malayalam language channels, the two lucrative and difficult markets to penetrate.
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Zee South to bring talent hunt ‘My Parents are the Best’
MUMBAI: Zee Telefilms has conceptualised a talent hunt for parents, My Parents are the Best, for its Southern channels.
Titled Ammananna Nenu for Zee Telugu and Nammappaamma for Zee Kannada, the hunt will look for those parents, who have not just been the parents that they will always be but have done something extraordinary to shape and change the lives of their child/children.
The nominations should be filed by the children for their respective parent/parents.
Each episode will talk about the achievements of the parents, about their happy moments and the times when they saw no hope. This concept is an effort to bring forward the unsung heroes of the society, as it is the contribution of each parent to his child which moves the society forward and still makes it a beautiful place to live, the release adds.
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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.
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Zee Telugu promotes Rasool Ali as business head
MUMBAI: Zee South Initiative VP Analytics Rasool Ali has been promoted the business head of Zee Telugu. Ali will be taking three sixty degree control of the first vernacular TV channel of Zee Network in South India, which is fifteen months old.
An MBA Gold Medallist from AMU and an IIFT post graduate, Ali has vast experience in retail and International marketing, He crossed over to media industry in 2002 as head of analytics at ETV and then moved over to Zee South Initiative, states an official release.
Ali will report to Zee Network South Initiatives head R. Ajay Kumar.
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Zee expands South presence with Zee Kannada launch
BANGALORE: Zee Group launched its much anticipated Kannada channel Zee Kannada on 11 May. The 24-hour channel hit the airwaves at 5 am.
In an official release, Zee South said the new channel was slated to capture the needs, moods, sentiments and aspirations of Kannadigas. Zee Kannada is the second south Indian language channel that Zee is launching after Zee Telugu, which was launched in May 2005.
Says ZTL director Punit Goenka, “It’s a real delight to be in Bangalore, Zee Kannada is a tribute to the spirit of “Kannadigas”. As Karnataka happens to be the gateway of South India, it will be our constant endeavor to make it the most admired channel in South. We promise to deliver you best service and quality programs throughout our transmission and aspire to be the number one Kannada channel within an year.”
Zee was seen promoting the launch through outdoor advertising and direct contact programs with viewers across Karnataka. Kannadigara Kanmani will be the tagline for Zee Kannada.
Speaking on the initiative, Zee South channels head Ajay Kumar offers, “The Southern region has always been our priority. Launch of Zee Kannada is in continuance with our Zee South initiative. This is the first time in the television history that a channel, whose programs are fine tuned as per the viewer’s feedback, is launched.”
Zee Kannada business head Venkat Giridhar adds, “Zee Kannada is a dream come true for us .We are highly grateful to the viewers across Karnataka whose feedback has been of immense help in deciding on the content and quality of our programmes. We are sure that our people of Karnataka will be proud to see the channel of their choice.”
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Zee consolidated net skids 30% at Rs 2.21 billion in FY06
MUMBAI: Zee Telefilms has posted a 30 per cent fall in consolidated net profit at Rs 2.21 billion for the fiscal ended 31 March 2006, as against Rs 3.17 billion a year ago.
Total income, however, rose to Rs 14.87 billion, up from Rs 13.3 billion.
For the last quarter of the fiscal, the company has reported a 27.2 per cent decline in consolidated net profit to Rs 675.5 million, as compared to Rs 925.7 million in the corresponding period of the previous year.Total income, however, rose 10 per cent to Rs 4.1 billion, up from Rs 3.8 billion. The operating profit stood at Rs 761 million, after expensing of initial investments in new activities viz. Zee Telugu, Zee Smile, Zee Sports and others, amounting to Rs 525 million (13.2 per cent of consolidated revenues). As a result, consolidated operating profits of continuing businesses were Rs 1.28 billion. These are higher by 4.8 per cent as compared to the corresponding quarter last year. “The growth rate is subdued mainly due to investments in marketing focused on long-term buildup of mainline channels,” Zee said in an official release.
On a standalone basis, Zee Telefilms has posted a 54.39 per cent fall in net profit to Rs 740.00 million for the year ended 31 March 2006 as compared to Rs 1.62 billion a year ago. Total Income has increased to Rs 8.84 billion, up from Rs 6.93 billion.For the quarter ended 31 March 2006, the company reported a net loss of Rs 132.5 million as compared to a net profit of Rs 370.40 million a year ago. Total income, though, has increased to Rs 2.66 billion, up from Rs 1.75 billion during the period.
“The business of Zee Sports channel started on 8 June 2005. Zee Sports Ltd is re-organised in ZTL during current quarter and content gathering and space selling activity is retained in Zee Sports through an agency arrangement. Hence the standalone results of the company for current quarter and year are not comparable, said the company.
Commenting on the results, ZTL chairman Subhash Chandra said, ““We are pleased to report the continuing uptrend in advertising revenues and the strong recovery in our market position. You are aware of the hike in advertisement rates announced by Zee Network, which we are confident would start reflecting in FY2007 revenues.”
“The Board has also given approval for the hiving off of Zee’s direct consumer business. All DishTV operations would now be under a single corporate entity, bringing strategic clarity to this high growth business. This shall complete the restructuring agenda we had set for ourselves to create four focused, pure play, listed companies ready to exploit the vast emerging opportunities in each line of business. Subject to necessary approvals, this would result in streamlined operations in each area to build long-term shareholder value. It would also clear the ground for acquisitions and strategic or financial partners in the de-merged businesses, apart from unlocking shareholder value,” said Chandra.
Commenting on the results, ZTL CEO Pradeep Guha said, “While general entertainment (GE) as a genre has posted a 5 per cent decline in time spent, Zee TV has increased its viewership share from 16 per cent to 22 per cent along with a significant growth in time spent. Even within prime time Zee TV is the only channel to have grown, by 21 per cent, while its main competitors have dipped between 7 per cent and 12 per cent. Zee TV now conclusively occupies the second place in the pecking order of GE channels. With an average of 180 GRPs, we are fully 30 per cent higher than the number three GE channel, which continues to be behind Zee Cinema as well.”
“The cinema space has shown a decline except however for Zee Cinema, which has grown 7 per cent, with a channel share of 37 per cent. Recently we won the BCCI Cricket Rights for the one-day internationals to be held in non-ICC countries.This further strengthens the long term business prospects of the company,” Guha added.
The Board of Directors in its meeting held today, has taken on record the unaudited consolidated financial results of Zee Telefilms Limited and its subsidiaries for the quarter ended 31 March, 2006.
REVENUE STREAMS:
Zee’s advertising revenues increased to Rs 1.96 billion, a 11.7 per cent growth as compared to the corresponding quarter last fiscal. “This growth in advertising revenues was a result of higher average rates on most of the network channels,” the company said.Overall subscription revenues at Rs 1.76 billion registered an increase of 5 per cent over the corresponding quarter last fiscal. Domestic pay revenues stood at Rs 717 million. Other sales and services grew to Rs 253 million. “From 2Q FY2006, we are recording the net income component of the trading of set top boxes as part of other income”, the company said in the release.
EXPENDITURE:
Overall, the cost of goods and operations went up 44.8 per cent compared to a year-ago period, mainly due to investments made in new channels like Zee Sports, Zee Smile, Zee Telugu and Zee Jagran.Personnel costs were 6.5 per cent higher than corresponding period last year. Other costs, particularly marketing expenses have increased by 24.4 per cent. As a result, total expenses were higher by 35 per cent.
From FY2006, the Company has accelerated its investments in the development and expansion of its network. “This has taken two directions. One, substantial marketing and content improvement initiatives have been put through and second, a number of new channels have been launched, to fill out our content offerings,” states the company.
“As a result, Zee is in a phase in which the initial investments have been made and expensed fully, while the corresponding revenue build-up is to be realized in the next several quarters. The immediate impact is lowering of operating profits, which we hope to recover in successive quarters through increasing revenues and progressive reduction in costs,” the company adds.
Zee’s Q4 segment-wise revenues are indicated in the table below:
OTHER HIGHLIGHTS
Cable Network
Zee is looking forward to reinvention of its cable TV business and augmenting revenues. “The cable business is poised to pursue new technology opportunities with renewed focus including ‘triple play’ offerings, digitisation of cable, broadband and other similar initiatives that form the frontiers of cable today. Firm business plans are being given shape and field launch is due to commence shortly. There is more visibility now on the path of transition in the cable business towards digitalization. The recent regulatory and legal developments look set to lead to a roadmap for digitisation initially in the metros,” the company said.Direct Consumer Services business
The DTH subscriber numbers have crossed 900,000 and are growing at the rate of about 2,500 per day. “We are poised to execute market expansion strategies which would lead to a ramp up of subscription from the urban markets, based on value added services not presently available on cable,” the company said.At the Bombay Stock Exchange today, the Zee scrip opened at Rs 241.50 and closed at Rs 246.65, after touching a high of Rs 253 and a low of Rs 242.50.