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  • Alok Agarwal replaces Barun Das as Zee News Ltd CEO

    Alok Agarwal replaces Barun Das as Zee News Ltd CEO

    MUMBAI: Alok Agarwal is replacing Barun Das as chief executive officer of Zee News Ltd (ZNL) with effect from 1 October.

    Das, who had a five-year stint has resigned and will be serving his notice period. He will complete the handover formalities to Agarwal.

    ZNL managing director Punit Goenka said, “Over the last five years, Barun has contributed immensely to the growth of Zee News and taken the company to greater heights. We wish him the best for his future endeavour.”

    Agrawal, an alumnus of IIT Kanpur and MBA from IIM Bangalore, moves in from CHEIL where he held the position of chief operating officer. He comes with a rich experience of over 22 years.

    Said Goenka, “We welcome Alok into the Zee News family. His rich experience in the media domain would help us take Zee News to the next level of growth.”

  • Zee News Ltd Q3 ad rev strong, no big fall in carriage fee

    Zee News Ltd Q3 ad rev strong, no big fall in carriage fee

    MUMBAI: A double-digit ad revenue growth has helped Zee News Ltd (ZNL) put up a performance better than the market expectations in the festive quarter but a top executive of the company cautioned that a significant turnaround in spending by advertisers is yet to be visible.

     

    The carriage payout to cable networks has only marginally dropped in the digitised markets and subscription growth has been subdued.

     

    ZNL’s ad revenue rose 14.8 per cent to Rs 595.6 million in the fiscal-third quarter from Rs 518.8 million a year earlier, despite a ‘significant opportunity’ loss in terms of advertising revenues from the government.

     

    “There was a better utilisation of ad inventory during the festival season and we also offered branding and event-based solutions to advertisers. But this is not to say that the ad slowdown has lifted and there is a big turnaround. We will outperform the market which is growing in single digit,” ZNL chief executive officer Alok Agrawal told Indiantelevision.com.

     

    ZNL’s ad revenue growth for the full-fiscal will be in single digit. TV news broadcasters have been fighting the government on ad rates and are not accepting DAVP (Directorate of Audio Visual Publication) advertising. “The standoff continues and NBA (News Broadcasters Association) members are not carrying DAVP ads,” said Agrawal.

     

    ZNL posted a 14.2 per cent growth in net profit to Rs 185.5 million in the third quarter ended 31 December from Rs 162.5 million a year earlier.Its operating profit (Ebidta) in the third quarter stood at Rs 196.7 million against Rs 189.7 million in the corresponding period of the previous fiscal.

     

    The news broadcaster, which has seven channels in its portfolio, reported consolidated revenues of Rs 858.4 million in the third quarter, an increase of 10.1 per cent from Rs 779.7 million a year ago.

     

    Subscription revenue stood at Rs 222 million, down 0.3 per cent from the previous quarter, and up 15.2 per cent from the earlier-year period.

     

    Operating expenditure jumped 12.2 per cent to Rs 661.7 million due to increase in employee costs and other expenses.

     

    Carriage fee has only fallen marginally in the digitised markets. “There has been no significant reduction in carriage fee in the completely digitised markets of Delhi and Mumbai. It has not definitely gone as per the plans of the news broadcasters,” said Agrawal.

  • Umesh Pradhan joins Zee Learn as CFO

    Umesh Pradhan joins Zee Learn as CFO

    MUMBAI: Zee Learn Limited (ZNL) has appointed Umesh Pradhan as the chief financial officer of the company with effect from 2 January.

     

    Pradhan replaces Arun Kabra who had quit the company on 5 December.

     

    As the CFO of ZNL, Pradhan will be responsible for all the companies and the trust associated with the education sector for the Essel Group.

     

    Zee Learn is also looking after content and channel management of the recently launched edutainment channel ZeeQ. The channel is housed under Zee Entertainment Enterprises Ltd.

  • ‘We have a 3-tier growth plan and are eyeing a bn viewers internationally in 3 years’ : MD & CEO – ZEE Punit Goenka

    ‘We have a 3-tier growth plan and are eyeing a bn viewers internationally in 3 years’ : MD & CEO – ZEE Punit Goenka

    For Subhash Chandra the last 20 years has been one man‘s war. He has allied and fought against Rupert Murdoch, fallen and bounced back in winning spirit, triumphed over the competitors, and grown a media empire that can make anybody proud. A nationalist to the core, he has a strong footprint in all the value chains of the media business and stands independent in a media landscape that is occupied by the multinationals.

    When in my early years of journalism, I remember the day I rushed to my editor. I told him that I heard from a source that the merger talks between Chandra and Murdoch had snapped. He told me to go ahead with the story and I was afraid that I could be proven wrong.

    I felt happy that the divorce took place. Some may call this a sadistic pleasure but it made me feel nice that my story in The Financial Express was right and, more importantly, allowed me to observe the growth of a warrior who was blessed with intuitive powers, strong business acumen and an innate ability to get into untapped areas.

    Chandra showed his true colours very early in life and in 1991 got the better of Hong Kong tycoon Li Ka-Shing who asked for $5 million to lease a transponder on AsiaSat. He signed a deal with Richard Li a few months later that would kick-start his Zee empire.

    Zee‘s unchallenged growth from its origins in October 1992 halted in 2000 when Murdoch‘s Star launched Kaun Banega Crorepati (KBC) and the three Balaji ‘K‘ soaps. Chandra‘s convergence game also went nowhere and kicked in losses. But Zee expanded into the regional language markets and Chandra also ventured into online lottery with Playwin.

    The rebound in the Hindi entertainment business happened slowly. Chandra appointed Pradeep Guha as CEO in 2005 and inducted his son Punit Goenka  into the organisation.

    Zee Telefilms Ltd (ZTL) got demerged in late 2006 into Zee Entertainment Enterprises Ltd (Zeel), Zee News Ltd (ZNL), Wire and Wireless India Ltd (WWIL) and Dish TV (DTH). He acquired Ten sports and has a growing sports broadcasting business.

    Chandra‘s sprawling empire is not just in India but has strong positions in different corners of the world with his Indian content.

    Even in 2012, Chandra is not in full retreat. He has passed on the baton to his son but is still around. His overwhelming personality can‘t be missed in the Zee office.

    Asked to “get off the fence” and “get in the game” as head of Zeel in 2008,Goenka has proved that he definitely is his father’s son. He ended the rivalry with Murdoch and formed a distribution joint venture company in 2011 to correct revenue leakages and lift subscription revenues. He has identified growth areas in regional, international and new media. His target: to reach a billion viewers internationally in three years.

    Punit (as he is called by his colleagues in the Zee group) is hungry to grow his charge; whether it is sports broadcasting, entertainment, overseas or in niche genres. In a tete a tete with Indiantelevision.com’s Sibabrata Das, he speaks pretty forthcomingly about the road ahead.

    Excerpts:

    Q. When did you first realise that your father was building a media powerhouse in India and that you would be part of this momentous history of television broadcasting?
    For over 12 years, he was practically handling the business by himself. He was running around, surmounting all hurdles, and being a pioneer in all ways to spearhead private satellite television in India. I never thought I would run this kind of organisation. But when he told me to get into it, I quickly became a part of the Zee culture and liked it.

    Q. Now when you look back, do you see any lost opportunities amid this explosive growth of the company?
    The company has grown so rapidly in such a short span of time that it completely overshadows everything else. Zee started in 1992 from a single channel network and two hours of original programming – and look at where it is today! In fact, the first ten years were maddening growth. We have grown to 31 channels spread across genres, languages and geographies. Our international business is also very healthy. And today Zee (read Zee Entertainment Enterprises Ltd) is one of the top ranked Ebitda delivered companies in the media sector.

    Q. What did you feel when the joint venture with Rupert Murdoch collapsed and your father bought out New Corp‘s stakes in Asia Today, Patco and Siticable?
    The split was bound to happen. Murdoch violated the JV agreement and began to show Hindi content. The pact prescribed Star to focus only on non-Indian language programming. When Zee bought out the JV companies, it was a proud moment for all of us.

    Q. You broke this 12-year divorce three years after you took charge as CEO of Zeel and inked a JV agreement for the distribution business. What made you overcome the past enmity?
    We formed Media Pro Enterprise to correct the faulty distribution structures of the analogue cable TV business. It took us almost a year to finalise the agreement. The purpose is to fix the problems of the industry. There are revenue leakages in the distribution business and broadcasters get a small share of the subscription income collected by the cable networks.

    The media industry has matured and we are living in a period of history when there is need to both compete and co-operate. That is what Star and Zee are doing in India. And it has been beneficial for all the partners. Zee and Star were growing their subscription incomes from domestic cable by 6-7 per cent when they were handling the distribution of their bouquet of channels independently. But both the companies are seeing 15 per cent growth from cable subscription income in the first year of operations of Media Pro itself. We are happy with the way Media Pro is shaping up.

     

    ‘The industry can’t survive on ARPUs of Rs 180. Broadcasters have heavily subsidised the content cost to support the DTH companies to grow. A similar trend is happening in digital cable‘

     

    Q. Media Pro is currently distributing 75 channels and more launches are planned by the JV partners. Won‘t this be too heavy a load and the logic of a distribution JV become irrelevant in a completely digitised television carriage-services environment? Are we completely different from the rest of the world where broadcast companies manage their carriage agreements independently?There is no reason why we can‘t work independently in India as well. In a transparent environment, there may not be a need. In any case, the JV agreement is only for five years. We will weigh the market conditions then and take a call after that.

    But having said that, Media Pro has been set up not to just take care of revenue leakages. There are other challenges in the distribution side of the business. The industry can‘t survive on ARPUs (average revenue per user) of Rs 180. Broadcasters have heavily subsidised the content cost to support the direct-to-home (DTH) companies and allow them to grow. A similar trend is happening in digital cable. But content is worth much more and we will have to lift ARPUs.

    Q. Zeel gets subscription income of Rs 4.58 billion from content supply to 20 million paying DTH customers while domestic income from analogue cable is Rs 4.14 billion. What is the potential revenue growth from cable after the networks are digitised?
    We expect healthy growth in subscription income over the next few years. As the cable TV subscriber universe becomes transparent, the paying subscribers will automatically become much more than DTH. Zee will be able to monetise its digital cable subscribers and the revenue gains will be significant. ARPUs will also have to go up.

    Q. Since you have taken charge of Zee‘s broadcasting business, what are the future growth engines that you have identified amid new challenges of digitisation, audience fragmentation and competition from multinationals and big Indian corporates who are tiptoeing into the media business?
    We have identified three-tier strategies for our growth. On the domestic front, regional will drive growth for us. We will participate in fragmenting the regional markets. Our launch of a Bengali movie channel, Zee Bangla Cinema, is part of this game plan. We are working on other genres and in other languages.

    On the international front, we plan to expand our reach from 650 million viewers to 1 billion viewers within three years. We will not just restrict our focus on South Asian audiences; we will have to address local audiences in those geographies as well.

    We have identified Middle East as a key market for us and intend to invest between Rs 1 billion and Rs 2 billion over the next two years. We have just launched our second Arabic channel, Zee Alwan. This will complement Zee Aflam, our first Arabic channel that shows Bollywood movies dubbed in Arabic. We plan to invest $100 million in that market.

    Q. What made Zee so bullish about the Middle East market?
    We had success with Zee Aflam which is a profitable channel. We are also look aggressively at growing in Russia (digitisation by 2014 in that market) and Africa. Russian audiences love Bollywood and our drama content. Besides, we are doing extensive research for the Indonesian and Malaysian markets where we are growing in single digits.

    Q. Is new media a big growth piece for you?
    Yes, this forms the third pillar of our future growth strategy. We have launched our over-the-top (OTT) television distribution platform, Ditto TV, in India and plan to take it to the rest of the world next year. We also have India.com and will continue to offer content across leading genres. With these content formats and advanced distribution avenues, we intend to target new audience segments. I cannot give you a number (in terms of investments or revenues), but we are committed to see that these businesses become successful.

     

     

    ‘On the domestic front, regional will drive growth for us. Internationally, we plan to expand our reach from 650 mn to 1 bn viewers in 3 years.New media forms the third pillar of our future growth strategy‘

     
    Q. Digitisation will throw open a lot of growth opportunities. Will we see a more aggressive Zee launching new genre channels and addressing new geographies as distribution costs fall?
    We are getting into the kids TV segment and will be launching Zee Q. The content will aim at ‘learning through fun and entertainment.‘ In the past year, we have already launched six channels.

    But only the four metros will have digital cable. The real action will start in the second phase of digitisation when we go to the smaller towns. We have not studied the potential yet. We will have to wait for knowing the impact after the first phase of digitisation rollout. And then possibly you will see a flurry of channel launches.

    We will also have to keep in mind what we are launching and whether it is going to cannibalise on our Hindi product. And let us not forget that there may be free-to-air (FTA) opportunities in the broadcasting space as well.

    Q. Zeel is sitting on a cash pile of Rs 11 billion. Will you acquire channels to grow in a digital environment?
    We are looking at acquisition opportunities if they come at the right price and make business sense for us. But we are also aware that it is cheaper to build.

    Q. Zee has always been conscious of its costs and its Ebitda margins from non sports business is around 34 per cent and is higher than Star‘s. But with plans to increase original content hours on flagship Hindi GEC Zee TV and more channel launches in the pipeline, will Ebitda margins fall?
    There should be some fall. Even in this fiscal, we are increasing our original content from 24.5 hours to 32-34 hours. This in itself will amount to a rise in content cost by 14-15 per cent. Our revenue in the first quarter of this fiscal has also seen strong growth.

    Q. Zee has already renewed the South Africa and Zimbabwe cricket boards at around 10 per cent inflation cost. But Star has bought out Disney‘s stake in ESPN Star Sports and Sony, deprived of the BCCI rights, will be hungry for acquiring cricket rights. There is also the threat of ESPN entering the marketplace after the two-year non compete contract with Star is over. So will we see Zee bid aggressively to renew the rights for the three boards that are going to come up?
    We are in active negotiations with two boards. But we will be aggressive up to a reasonable level. We realise that sports is a strategic business for us. It gives us dedicated youth and male audiences and adds to our viewership base.

    Q. Will forex fluctuations affect the earlier target of the sports business turning around in FY‘14?
    Yes it could, as most of our sports content is contracted in dollars. But we expect our sports business to come out of the negative zone. We also realise at the same time that sports broadcasting across the world is a low Ebitda margin business.

    Q. Is Zee News Ltd planning to launch an English-language general news channel?
    At ZNL, we are working on our English language strategy. We believe the news channel business will go through a phase of consolidation.

  • Zee News Ltd to shutter Telugu news channel

    Zee News Ltd to shutter Telugu news channel

    MUMBAI: Zee News Ltd (ZNL) is retreating the Telugu news market. Zee 24 Gantalu has decided to close down next month as it struggled to become economically viable in a crowded marketplace where there are too many politically-oriented channels.

    “24 Gantalu will close down on 20 September. There are 14 Telugu news channels operating in that market and two more are launching. They are politically driven and it does not make sense to continue in that market,” a source familiar with the development said.

    The TV Telugu news ad market is pegged at Rs 1.2 billion. The market leader TV9 takes away a major chunk of this amount, according to an industry source. Price wars are rampant, making channels sell to advertisers at miserable rates.

    “The entire Telugu TV news business is becoming unviable because of too many players and abnormally low ad rates. Other interests rather than business seems to be the primary motive,” says a senior news channel executive.

    ZNL’s decision also comes ahead of its plans to launch an English-language general news channel that will consume heavy capital. The closure of 24 Ghantalu will help cut down ZNL’s losses from new businesses and ease pressure on the company’s operating profit if it goes ahead with the launch of the English channel.

    Indiantelevision.com had reported that ZNL is planning to launch an English news channel towards the exit quarter of the fiscal as digitisation settles in the four metros.

    The operating loss of 24 Ghantalu in FY’12 stood at approximately Rs 140 million, the source said.

    ZNL had reported losses of Rs 227.4 million on a revenue of Rs 131.9 million for the fiscal from its new businesses that include Zee News Uttar Pradesh/Uttarakhand and 24 Gantalu.

    “If the English channel launch is on, the shutting down of a loss-making channel will be seen as a positive move. It will soften ZNL’s pressure on Ebitda from the launch of an English news channel that will consume anywhere between Rs 2.5-3 billion over the first three years,” a media analyst said on condition of anonymity.

    ZNL had reported Ebitda of Rs 533.5 million in FY’12 on a consolidated operating revenue of Rs 3.07 billion. The company runs a cluster of channels including Zee News, Zee Business, Zee 24 Taas, Zee Punjabi and 24 Ghanta.

  • Broadcasters get breathing space as Tdsat stays Trai’s ad cap rule

    Broadcasters get breathing space as Tdsat stays Trai’s ad cap rule

    MUMBAI: Broadcasters have earned a five-week vacation from the upsetting regulation of limiting ad time on their networks, as Tdsat has stayed the Trai notification till the hearing comes up on 17 July.

    For a while, broadcasters will at least not have their ad revenues hanging by a thread, its future determined by a 12-minute ad cap per hour fixed by the Telecom Regulatory Authority of India (Trai). Stressed by a slowdown in the ad economy and anxious about the implementation of cable TV digitisation, the least they want to do is cut down on commercial time and take up the troublesome task of upping advertising rates.

    True, none of the broadcasters are willing to obey the Trai order as they feel that the broadcast watchdog is overreaching its powers by regulating TV ad time.

    Still, the Tdsat’s stay order comes as a major source of relief at a time when the least that the media industry wants is more headaches.

    “We got a stay from the Telecom Disputes Settlement and Appellate Tribunal (Tdsat) today. The hearing is due mid-July,” says Star India chief executive officer Uday Shankar.

    News broadcasters have horrible woes. If there is a way for them to wriggle out of the mess that they have themselves created by coughing out high distribution costs, cutting ad rates amidst competition amongst themselves and living under high staff costs, it is by giving more commercial time to advertisers.

    Hindi TV news, the most fragmented of the lot, dedicates on an average 20-24 minutes of ad time per hour. Even with this abundant supply, news broadcasters find their ad revenues crawling at below 10-per cent growth and their profitability under attack.

    Zee News Ltd (ZNL) chose a different path to tread this year, cutting the commercial time of its flagship Hindi news channel, Zee News, by 30 per cent while upping the ad rates by 40 per cent. However, the ‘Maximum News, Minimum Break‘ journey from 2 April has been a bumpy one.

    “The ratings have not seen much impact. And we have ended up producing more content. Perhaps, this experiment needs more time to yield results. We will wait for a couple of quarters more before we take a call on whether we want to go back to our old route,” says Zee News Ltd chief executive Barun Das.

    Let‘s not forget that Zee News’ slash in ad time of eight minutes for every half-hour slot is still above the ceiling of Trai’s prescription of 12 minutes of commercial time per clock hour. So imagine the misery news broadcasters will be in if they have to swallow Trai‘s medicine!

    In the tangled financial problems that the news broadcasters face, it is the timing of Trai’s regulation that comes under question. News channels need more time to weed out the ad inventory flab that they have created due to economic compulsions, much to the irritation of the TV audiences.

    Says TV Today Network CEO Joy Chakraborthy, “Trai’s so-called radical step would jeopardise the business models of news channels. Less ad time would mean more content costs. Besides, scaling back on ad inventory by 40 per cent (from our average of 20 minutes per hour to 12 minutes) would mean demand outstripping supply and, hence, higher costs. This will discourage small and local advertisers, who form a fair bulk of clients for news channels, to come on board. These steps suggested by Trai should come when the digitisation rollout is complete. We can’t fight on all fronts.”

    The ad time on news channels varies from month to month.TV Today Network, for instance, offered 22 minutes of commercial time per hour in March. This came down to 18 minutes in April.

    News and sports broadcasters consider another regulation by Trai as retrograde at this stage of maturity: the ban on part-screen and drop-down advertisements.

    “We use scrolls on a positive sense. For Olympics, we, for instance, will run scrolls. We earn Rs 120-140 million from the part-screen and drop-down ads,” says Chakraborthy.

    Trai’s ad regulation will also pinch hard the sports broadcasters. According to the broadcast regulator’s prescription, the ads during live broadcast of a sporting event should be only during the breaks in the sporting action.

    A clock hour measurement system, however, does not suit this genre of channels as live content is seasonal and limited to a specific period.

    Entertainment TV networks have also objected against the capping of ad duration on their channels.

    “It looks like Trai is linking digitisation to shrinkage of advertisement space. There is no logic in this and it is very untimely,” says the head of a broadcasting company on condition of anonymity.

    Trai’s control in ad diet is something that TV viewers would, indeed, love to have. Broadcasters, however, feel that the best route to maturity is self-regulation in content and ad inventory management.

    “Trai’s order is ridiculous. It is like putting the camel’s nose in the tent. Every independent player should decide on what course of action to take. Market forces know best how to play the balancing role,” says Times Television Network MD and CEO Sunil Lulla.

  • Zee News Ltd Q3 net up 61% to Rs 99.7 m

    Zee News Ltd Q3 net up 61% to Rs 99.7 m

    MUMBAI: Zee News Ltd (ZNL) has posted a fiscal third-quarter consolidated net profit of Rs 99.7 million (after minority interest), even as its advertising revenue has degrown marginally compared to the year-ago period.

    Advertising revenue dipped 4.2 per cent as the effect of festival season overlapped with previous quarter. Subscription income, however, grew 3.7 per cent growth.

    ZNL said that the real growth in subscription revenues was higher as they were booked net of expenses.
    “This change was necessitated due to the formation of Media Pro, a joint venture, which pays subscription revenues to Zee, net of expenses. Hence, the numbers are not comparable to those of corresponding period last year,” it said.

    The company posted a revenue of Rs 782.74 million for the three-months ended 31 December, up 5.1 per cent.

    ZNL’s Ebitda margin was at 24.6 per cent, compared to 18.1 per cent in the corresponding quarter of the previous fiscal. This includes the losses from the new business. The margins stand at 33.3 per cent for the existing businesses.

    ZNL had posted a net profit of 618.4 million for the third-quarter of FY’11 on a revenue of Rs 744.44 million.

    The company, which operates the news channels of the Zee brand, said that the corresponding quarter financials are not comparable as it discontinued the Tamil channel Zee Tamil on 31 March last year.

    ZNL chairman Subhash Chandra said, “The Indian economy has been facing headwinds of increased inflation, interest rate hikes and bearish markets forcing the GDP growth forecast to pare down to 7 per cent or so. My faith in the Indian economy for the long term remains intact. While there are as many views of impending slowdown in the economy as there are of bounce back, I remain cautiously optimistic in the short run that the situation is likely to improve in the next few quarters. The Company continues with its focus on innovative growth and I have full confidence that we will be able to come out stronger than most in the current year, in line with the trend of our past performances.”

    He added, “As has been pending for a few years, the media industry has begun to consolidate. This is obvious from the various deals being announced over the past few months. We see this consolidation as a confident step forward towards making this industry more profitable.”

    ZNL MD Punit Goenka added, “While the investment related policy decisions have been under pressure due to current political environment, Parliament’s clearing of cable digitisation signals the establishment’s commitment to make the media industry more efficient. The ad industry, meanwhile, has been hit as the advertisers have increasingly become choosy about their spends. The euphoria of a sustained industry growth which was prevalent at the beginning of the year has been dampened considerably. However, ZNL has shown exceptional operational efficiencies and posted strong financial results for the quarter. Going forward, we hope to maintain the edge in our performance.”

    Ebitda for the quarter under review stood at Rs 192.7 million and profit before tax at Rs 162.4 million. In the previous year quarter, Ebitda was Rs 134.5 million and PBT Rs 103.6 million.

    ZNL’s advertising revenue stood at Rs 518.8 mn for the quarter ended 31 December, as compared to Rs 541.7 million in the year ago period. Subscription revenue for the quarter was at Rs 192.7 million, which constituted 24.6 per cent of the total revenue.

    The expenses of the company stood at Rs 590 million, slightly lower as compared to the year-ago period when the expenses were Rs 609.9 billion.

    ZNL posted Ebitda profit of Rs 249.8 million (225.2 million in the year ago period) from its existing business (Zee News, Zee Business, Zee 24 Taas, Zee Punjabi and 24 Ghanta). The company’s Ebitda loss from new business has come down to Rs 57.1 million (from a loss of Rs 90.7 million in the year ago period) from its new business (Zee 24 Gantalu and Zee News UP).

    ZNL CEO Barun Das said, “We had sensed the slowdown in the industry by the beginning of the last quarter and made adjustments in our operations accordingly. Our top lines and strict vigil on our costs has resulted in our margins being strong at 24.6% despite slowdown, which is likely to be an exception. With the Media Pro initiative settling down, our subscription revenue has shown growth towards the end of the quarter and it is a trend that is likely to continue. We remain confident regarding our ability to grow in the current financial year.”

  • ‘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.
     

  • ‘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 24 Ghantalu to now launch in February

    Zee 24 Ghantalu to now launch in February

    MUMBAI: Zee News Ltd (ZNL) has rescheduled the launch of its Telugu news channel for February this year. Earlier, the company was planning to launch the channel by November 2008.

    The channel, christened Zee 24 Ghantalu, has incurred a loss of Rs 9.26 million during the nine-month period ended 31 December 2008.

    ZNL is also planning to launch a regional news channel in Uttar Pradesh during the fourth-quarter of this fiscal.