Punit Goenka, MD & CEO, Zee Entertainment Enterprises Limited (ZEEL) is articulate, precise and to-the-point as he talks to exchange4media during this interview. He is excited about Zee’s soon-to-be launched channel Zindagi, for which content will be sourced from Pakistan. Here are excerpts from the conversation, which encompasses Zee Network’s overall performance, &Pictures, BARC, dissolution of MediaPro and more...
Another new channel in Zee’s bouquet, Zindagi. What is the thought process behind it?
We realised that we could not map our target audience according to traditional methods of SEC. Our research showed the need to move away from these methods to begin mapping audiences according to their mindset, as other GECs cater mostly to the traditional mindset. We had to create content to cater to the progressive mindset. Our research also showed that such content is already being created in other geographies, Pakistan being one of them. We have also seen content from Turkey, Egypt and several countries in Latin America. For Zindagi, while the initial phase of launch will have serials that are already being shown in Pakistan, we will soon get into active production, taking rights of novels and books either in India or overseas.
Is India, especially Maharashtra, ready to accept content from across the border? Are you wary of protests on account of the content being from Pakistan?
Well, I most certainly think we are ready to accept content from across the border; we have been doing it for so many years. We accept content coming from Hollywood, we accept content from studios in the West and the East. So there is no reason why just because it is coming from Pakistan, it should be facing any protest. Yes, I would think that if it started to impact the local industry here, if productions stopped in India and the talent and creative people stopped getting enough work, then there is cause for protest. But that is not the case. This is creation of a new category in itself, which should lead to more work and different work than is currently being done. There will always be some individuals who would want to use this opportunity to get their name in the media.
What is the marketing plan for Zindagi and what kind of advertisers do you expect on the channel?
Marketing plans are in line with any GEC launch that we see in the country. The kind of advertisers that we are looking for are premium advertisers, because this is a premium product with critical mass available. Hence, the advertisers may not be that different but the brands that they bring in will be quite different from what is there or the current level of their presence on television today. When you create a new category, you also create a new category of advertisers.
What is your assessment of Zee’s overall network performance over the last one year?
It has improved significantly over the last year or 18 months. Would I have liked it to be better? Absolutely. But it has improved significantly and that you can see in our result itself where we have beaten the market in terms of growth levels, both on domestically as well as internationally.
Are you looking at leadership position in any of the genres that you are operating in, or is being No.1 not so important?
In the regional space, Zee Marathi is a clear leader. In fact, if I combine the viewership of Zee Marathi and Zee Talkies, we beat any network in Maharashtra, including Zee TV. In West Bengal, we are a very strong No. 2 player, therefore I do not have any cause to worry. In the cinema genre, we are leaders and we have been leaders for the longest period of time. Nobody has been able to topple us. In the South, we are definitely ahead of competition in Andhra Pradesh. But in other markets, our entrance has been much later than the competition; hence, we are catching up with them.
Coming to Hindi GEC, which is obviously tracked more… leadership in a genre is important, very important, but leadership at any cost is not doable. We believe that leadership has to be at a prudent cost, which will give returns to share-holders at the end of the day. Protection of share-holders’ value is also a key KRA for me to deliver. Therefore, we are very cautious in what we do. Having said that, we have had some team leadership issues in the past. If you recall, may be four or five years ago, Zee had almost attained leadership in the Hindi GEC space, but due to some internal issues, we had a setback. Further due to the economic slowdown of 2008-09, we had to prune a lot of our costs. Now we are ramping up again and I do believe that in the network strategy game, we will be leaders.
Barring TEN, all your properties tie back to the mother brand Zee. You had mentioned in an earlier interview that you don’t subscribe to the philosophy of a separate brand under Zee. What is your comment then on &Pictures?
That is my personal view, not the company view. The company’s objectives come before my personal objectives. So, while personally I may have wanted everything under the mother brand, the logic was strong enough to change my view, accept what the company wanted to do. Similar was the case when we acquired TEN Sports. I could easily have changed the branding to Zee Sports and continued it. But when we studied the brand, when we went to the market, we realized that TEN Sports has brand equity of its own and therefore we should capitalize on it, rather than trying to change it. It was a similar case with the &Pictures brand, where I have been proven wrong by my team, as &Pictures has been doing well since the launch.
What do you think will be the game-changers for ZEE going ahead?
The whole idea of category creation is going to be a game-changer and that does not apply only in this market but even overseas, where those markets having potential were not being tapped so far. That will be the game-changer going forward.
As chairman of BARC, tell us how the entity is shaping up and what are the challenges in the way of its being functional in October?
The biggest challenge is this whole IRS debacle. Because based on that study, panel design will happen. Until my panel is designed, I cannot recruit the panels. So we are facing some issues on that front. But I am still working towards the deadline of this year and not going beyond this year to make BARC functional. We are glad that we finished the funding process of BARC. All the vendors are in place now. We have not announced a few names but that will come out next month once the board gives the formal clearance. So everything is in place and as soon as this IRS issue gets resolved, we will be in full-fledged implementation mode. The meters are being manufactured as we speak and things should be as per plan, but with minor deviations, if any. As per government guidelines, it has to be a 20,000 homes panel, that’s the number we are looking at. To deliver a 20,000 home panel, we will have to put in place 23,000-25,000 meters. The funding has come from the industry, I would believe that if they are willing to put up money, then they are behind BARC.
What are your expectations from BARC?
A transparent robust system for the television industry is my only expectation from BARC.
What do you think should be done to increase ARPUs and go up the value chain while providing value to the subscriber at the end?
If the industry can implement packaging, that in itself will drive ARPUs. Just study the historic data of DTH, from an ARPU level of 110-120, today the DTH ARPUs levels are at almost 180-190. So nothing had to be done, the industry itself did it. Today the fear of losing subscribers from one to the other is the cause of the basic concern and the LCOs have a field day on that. So until packaging is implemented, nothing can be done to save distribution.
Are you disappointed with the recent TRAI ruling on content aggregators and the dissolution of MediaPro?
No, I am not unhappy about it; it’s not something that bothers me too much. The regulation in order to fix MediaPro has messed up the interests of the industry. But that is life; I guess we have to live with it. Where the objective of the regulation was so that two large broadcasting houses like ZEE and Star cannot come together, it has actually left the smaller broadcasters in a lurch. The vultures will be out, the MSOs and LCOs, to see how to take advantage of that.
What is the current scenario in the distribution space? Do you think TRAI is micro-managing the scenario?
TRAI is doing what any other regulator will do, so I cannot fault them in any way. Because the industry is divided, each part of the industry has its own biases or interests and we cannot come together for a common cause, that is what impacts us. When TRAI tries to take care of all interests, it ends up hurting one or the other. I cannot fault them for what they are doing, that is the regulator’s job and it’s for the industry to work together and shape regulation along with TRAI, which is lacking.
What are the challenges that you have faced last year and the challenges you foresee for the coming year?
The biggest challenge has been digitisation and it continues to be digitization. The other challenge has been price forbearance and it continues because the process will take some more time. The biggest challenge that our industry faces is that our policies are such that they equate a gadha and a ghoda as equals. I wish somebody would apply some logic and reason to those regulations and differentiate between a serious player in the business versus a player who is in the business not for profits but for other reasons. I do not understand how with a capital of Rs 5 crore, you can become a broadcaster in the country. Those are the challenges that one has to face and address going forward sooner or later.