While there are all kinds of speculation around the distribution company that STAR India and Zee Entertainment Enterprises are forming, the two companies are yet not speaking on the nature of this alliance, or what can be expected from it. A senior industry source said, “It is understandable that they would speak once all details are in place because, if done right, this has all the makings of changing the game of the distribution scenario in India.”
Sources close to the situation informed that STAR India and Zee Entertainment Enterprises Ltd are joining forces to create a distribution joint venture that will house all of STAR Network channels and all channels from the Zee-Turner bouquet. The JV would be headed by Arun Kapoor, who is Director of Distribution Businesses and Heads the subscription and placement for ZEEL, WWIL and Zee Turner Ltd. It is understood that key roles would be divided between STAR and Zee personnel.
Another senior distribution industry source said, “There are talks of other companies also to be a part of this company including the likes of OneAlliance.”
There was also no clarity on whether the STAR-Zee JV would be involved in the international distribution of the channels of the two companies as well, and whether it would be able to connect various kinds of distribution platforms than just cable & satellite.
At present, all STAR channels lie with STAR DEN, the JV between STAR India and Digital Entertainment Networks. There is also speculation that STAR will exit the STAR DEN JV but once again neither company’s officials replied to any queries on this, offering any details on how this relationship would change or what could be DEN’s role in the new distribution company.
A Monopolising Move
The one word that most industry observers said while commenting off-the-record on the JV was monopoly. Some say ‘monopoly’ may be exaggeration, but there was no denying that the coming together of these two media giants would corner a sizeable share of the market. If more players are added to this bouquet, it would form a strong voice that will change the current cable industry dynamics.
As is known, the STAR bouquet includes Star Plus, Star One, Star Gold, Star Movies, Star World, Vijay TV, Star Utsav, Star News, Star Ananda, Star Majha, Star Pravah, Star Jalsa, Channel [V], National Geographic Channel, Fox History & Entertainment, Fox Crime, FX, Nat Geo Wild, Nat Geo Adventure, Nat Geo Music, Nat Geo – HD, Baby TV, Asianet, Asianet Plus, Sitara, Suvarna, Star CJ Alive, NDTV 24x7, NDTV profit, NDTV India and NDTV Good Times.
Zee’s brands include Zee TV, Zee Cinema, Zee Premier, Zee Action, Zee Classic, Zee Smile, 9X, Ten Sports, Ten Cricket, Ten Action+, Zee Cafe, Zee Studio, Zee Trendz, Zee Jagran, Zee Salaam, Zing, ETC Music and Zee Khana Khazana. The company’s regional presence includes channels such as Zee Marathi, Zee Talkies, Zee Bangla, Zee Telugu, Zee Kannada, Zee Cinemalu and ETC Punjabi. The Zee Turner bouquet also includes channels like Cartoon Network, Pogo and HBO.
Between the two bouquets, if the channels are not competing with each other fiercely like in the Hindi GEC or movies or regional languages space, they complement each other like STAR’s lifestyle and infotainment channels or Zee Turner’s kids’ channels.
Between the two, the bouquet will have over 90 channels in its command and the combined might of the bouquet is seen to be around 40-45 per cent of the industry. A senior distribution industry leader said, “Imagine the terms they can command in the marketplace. No cable operator would be able to do without this company.”
The monies involved itself raises the stakes of the game significantly. To give an indicator, total revenues for STAR DEN’s Financial Year 2011 were over Rs 1000 crore, and the bulk of this was coming STAR channels. If Zee and STAR combine forces, the proverbial sky would indeed be the limit to what the companies can make from subscription revenues.
Changing Nature of the Game
As the broadcast industry evolves, industry leaders are clear that the future of the business lies in subscription revenues. The more mature companies such as Zee and STAR are already making 35-40 per cent of their overall revenues from subscription.
And the industry is headed in that direction aggressively. This was evident when last year a similar move was seen from Network18 and Sun Network to create Sun18 North and Sun18 South. The partnership there was comparatively simpler, as the conflict between the two companies – SUN and Viacom18 was far lesser than the conflict between STAR and Zee.
In an interview with exchange4media Group, Haresh Chawla, CEO, Viacom18 had said that in 2011, distribution, and hence subscription revenues, would be one of the strongest areas of focus for the company.
Another move came in January 2011, when Bennett, Coleman and Company Ltd formed a joint venture with Yogesh Radhakrishnan, a veteran in the Indian Cable and Satellite industry, called Media Network & Distribution India Ltd (MNDIL). MNDIL launched Prime Connect, an independent distribution platform. MNDIL will organise and distribute channels in India through various platforms such as MSOs, DTH, IPTV and emerging digital platforms that connect homes and commercial establishments. While MNDIL is an exclusive distributor for The Times Group Channels such as Times Now, ET NOW, Movies Now and Zoom, it also intends to expand its bouquet by including more third party channels for distribution.
Alliances are not new to distribution domain - after all Zee-Turner or even STAR DEN are collaborations, in some cases, collaboration despite competing channels. If the distribution domain in India was not seeing enough action, the STAR-Zee JV will take the stakes to another level altogether.