It hasn’t been a good year for Zee Entertainment Enterprises Ltd (ZEEL). The Rs 3,040-crore flagship of the Rs 5,647-crore Zee Group, India’s largest media conglomerate, seems to be making several bad calls on programming. As a result, ratings for its flagship channel Zee TV have been soft. In 2008, the Zee network, with its 25-plus channels, was running neck-and-neck with Star and Sun with 16-odd per cent of national viewing time. Five years later, in the first quarter of 2012, the network had slipped to just over 13 per cent, a distant number two to Star’s 20-odd per cent, according to TAM Media Research data. Its sports ventures — ICL, Ten Sports and more recently Ten Golf — have simply drawn criticism from analysts and investors. More importantly, international revenues, which bring in roughly seven per cent of top line and a lot of the profits, are stagnating. Punit Goenka, managing director and chief executive officer, ZEEL, spoke to Vanita Kohli-Khandekar on how Zee planned to tackle its challenges. Edited excerpts
What are the issues that occupy you now versus four years back when you took over as CEO?
Four years back, the question was what to do in the Indian market. Now, we are increasingly focussed on the global market. Currently, we reach 550 million people.
In the next three to five years, we should reach a billion people. Eventually, we must reach one-third of humanity. That is our big hairy, audacious goal. If NewsCorp can come here, why can’t we go there. We want to be one of the big media companies of the world.
Why is the international business losing steam?
The international business has plateaued because the second and third generation of Indians are not interested in us. We now need to localise in these markets to reach out to this audience.
What markets have you localised in and what seems to work?
The biggest success we had in recent years is Zee Aflam. On this, we air Zee shows dubbed in Arabic. But it is not just plain dubbing. You have to figure out which accent has to be used — Egyptian, Syrian.... They watch 60 episodes. So we have to crunch a 250-episode show to 60 episodes. Now, we are launching a second Arabic channel, Zee Alwan. The Russian population has an affinity to Indian content. We have done a lot of research in Russia and we want to target women. Then we are looking at Indonesia. In the US (where Zee is on the Nielsen system), we are largely limited to ethnic advertisers. The mainstream guys are still to come on. So we have set up studios in New York.
Why is Zee looking so complacent on programming?
My usual target is that if we launch 10 new shows, we should get six right. But in the last 18 months, a series of shows launched back-to-back kept failing. The rebranding (done last year) worked, but the new shows did not. We have made changes now and Ajay Bhalwankar (who used to be with Zee earlier) has been brought back. We need people willing to accept failure. If a programming person falls in love with his show, then we have to remind him that this is not just about the show but also about the rating. The second thing we are trying to do is have a robust pipeline.
What is missing?
Lots of niche content. For instance, we have launched golf and food, but we are not allowed to price it well. For golf, we want to charge Rs 500 per month but are allowed to charge only Rs 200. For food, Rs 90 is a good price but we can charge only Rs 20. Also, eventually, we want to get into production of TV content. The big decision there was make or buy (acquire) and we have decided we will make it in-house. We hope to start production this year.
Why is Zee’s sports business so jinxed?
If we start adapting to the thing of keeping only the profitable channels, we would have only six-seven channels. Therefore, there is no reason to worry even if we lose money for two years. Our subscription revenue tripled last year purely because of sports, which was sold separately under MediaPro. (a distribution joint venture between STAR and Zee)
What is the idea behind Ditto TV? (an app that offers programming from different broadcasters).
We have had 75,000 downloads so far and four per cent were paid. So, that is not a bad number
On digitisation and its impact on Zee’s top line
On July 1 (the analog switch off date in the four metros is June 30), there may not be enough (set-top-boxes). But the catch up will not take more than six months. As a broadcaster, I am willing and committed to switching off (analog signals) at midnight on June 30. That is the only way it (digitisation) is going to happen. Its impact on top line? Well, the only metric is DTH (direct-to-home, the only form of digital TV with a large penetration in India). Our yield per sub on DTH is Rs 9, while on cable it is less than Rs 5.
How is the advertising slowdown treating you?
The ad growth rate for the industry is pegged around 9-10 per cent. Zee will do better than that.
