TELEVISION: The company will expand on its own, through joint ventures as well as franchises.
Zee News, which operates regional news channels as well as regional general entertainment channels, is getting ready to launch news channels in Uttar Pradesh and Andhra Pradesh. “The UP news channel is a unique initiative, given the importance of UP in the coming Assembly elections and the potential of the state’s ad market. Together with Uttrakhand, the state is very critical for marketers,” says Zee News CEO Barun Das. The UP news channel would be followed by a 24-hour Telugu news channel.
At the moment, Zee News runs entertainment channels in Bangla, Gujarati, Marathi, Punjabi, Telugu and Kannada. More recently, it launched a Tamil general entertainment channel. In the language news space, it operates 24 Taas (Marathi), Zee Telugu and 24 Ghanta (Bangla).
In its latest report on media companies, investment firm Edelweiss notes that “Zee News has a strong regional focus and is the leader in top advertising markets such as Maharashtra, Bengal, and Gujarat. It has gained impressive market share in Karnataka and Andhra Pradesh and has successfully launched its Tamil venture, Zee Tamil.”
Not surprisingly, Das is putting all his energy behind growing the news channel portfolio as he feels that the genre offers a better scope in regional languages. “In news, content composition is a distinct differentiator since nearly 70 per cent of the content is local. So, potentially there could be a regional news channel for every state depending on business viability,” he says.
To grow its regional news business, Zee News is adopting different business models — it is either launching channels that are 100 per cent owned by the company or are joint venture projects. However, its newest channel in Chattisgarh, Zee 24 Ghante, has been launched with a local franchisee. “The franchisee model will be adopted in markets where equity participation is not a viable option in terms of returns,” explains Das.
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For Zee 24 Ghante Chattisgarh, launched by a local businessman, Zee News lent its brand name for a fixed fee. It also charged a consultancy fee for setting up the channel. “We leveraged the brand. It is a win-win as the revenue goes straight to the bottomline. Also, the national advertising sales function for the channel is managed by Zee News for a commission,” says Das. However, since the company lent its brand name, it appointed its own editor to keep editorial control over news content.
According to independent news broadcast consultant Sanjay Salil, “It is creditable that a conservative company like Zee is expanding through the franchisee route. That’s the way to grow the regional news market,” he believes. The franchisee model will help Zee News achieve quicker and deeper brand penetration and build a channel without any investment, Salil observes.
It’s not difficult to see why Zee News is focusing on the regional entertainment and news genres. Together, they form the fastest growing verticals in the TV media and are estimated to command about 44 per cent of the total TV viewership and 37 per cent of the total TV advertisement pie. “This has grown from 36 per cent and 25 per cent, respectively, since 2004,” claims Das.
More recently, Zee News bought a 26 per cent stake in Sky B (Bangla) Pvt. Ltd which operates Akash Bangla. Not difficult to see why. East India, led by Bengal, accounts for around 19 per cent of the total TV viewership in India. “Bangla news and entertainment market is growing as even the elite classes prefer consuming media in their own language,” observes Das. With a stake in Sky B and a JV with 24 Ghante, Zee is expected to “emerge as the single largest media player in the Bengal market, with an almost 70 per cent viewership share in the near future,” says Das. He is also looking at the slowdown as an opportunity “to evaluate acquisitions.”