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Zee 20:20: Of new game plans & aggressive goals

Zee 20:20: Of new game plans & aggressive goals

Author | Simran Sabherwal | Wednesday, Oct 03,2012 8:53 PM

Zee 20:20: Of new game plans & aggressive goals

India got its first taste of satellite television in 1990, when enterprising cable operators who started beaming CNN, gave viewers a minute-by-minute update of the invasion of Kuwait into their drawing rooms. And just a couple of years later, in October 1992, an animated blue snake-like-creature making its way across a desert to finally form the letter ‘Z’ marked the launch of India’s first home-grown satellite entertainment channel, Zee TV. Today, two decades later, the media conglomerate is one of India’s largest integrated media and entertainment companies and, going forward, it is now making the same impact both globally and across the burgeoning digital space.

Click here for Zee’s 20 years journey

Going videshi with a desi tadka
In the last two decades, Zee has had many firsts – the first Hindi GEC, the first to go regional, the first to go international, the first to launch in the direct-to-home segment and HITS space and a lot more. Zee, in fact, made its international foray way back in 1995, with the launch of Zee TV UK, with the aim of reaching out to the sizeable population of the Indian diaspora and people of South Asian origin. This was soon followed by launches in other markets such as America, Africa, Middle East and South East Asia. However, the company has now changed its focus and is looking to capture the eyeballs of the local population in those countries. Says Punit Goenka, Managing Director and Chief Executive Officer of Zee Entertainment Enterprises, “The biggest opportunity and challenge we are working on is to expand our territory from being a South Asian content-owner to addressing non-South Asians too.”

With that in sight, Zee launched its first ‘Arabised’ Bollywood channel, Zee Aflam, four years back. The free-to-air channel, showcasing Hindi movies with Arabic subtitling, is today among the top three channels among the local female audience. Buoyed by this success, Zee launched its second Arabic channel ‘Zee Alwan’, a general entertainment channel, last month. With its huge library, the company will dub and modify its Hindi content to suit the taste of the local audience. According to Goenka, the strategy behind this is that the company has chosen markets that don’t have many local productions and the major chunk of content consumed here is imported from other Middle Eastern countries. The company is betting on this to make the channel a success as the local populace is used to consuming foreign products in the local language. The company has replicated the same formula in Russia by launching a Russian version of Zee TV, Zee Russia.

The next big initiative for the channel is creating fresh content for specific markets abroad, with the channel already looking at an Arabic show for Saudi Arabia. Besides this, the channel is also looking at targeting second and third generation Indians by creating an English language product for South Asians. This would be original programming, which could be produced in India or in the concerned market.

A ‘mall’ in the digital world
Besides this thought-through yet rapid international expansion, Digital is the other top priority for Zee under Goenka’s leadership. The company has already taken big steps by launching in 2010 and Ditto TV, an OTT (Over-The-Top) distribution platform in 2012. With entertainment being at the core of all the company’s ventures, it’s not surprising that the spotlight remains on entertainment, along with news, on the web portal,

However, the portal has seen traction in the news section too. The company looks at its digital platforms as a ‘mall’ in the digital space and aims to address all possible needs of the viewer. So while entertainment and news are the primary drivers, the company has tied up with various portals in this effort. The portal looks to monetize revenue by pushing traffic from its website to its partner websites, especially in the non-focus areas. However, the website faces stiff competition from established players such as Times Internet, Network18 and

The ‘mall’ concept is also applied to Zee’s other set-up in the digital space launched earlier this year, Ditto TV, an online subscription service. With an OTT distribution platform, the company currently offers primarily live TV but looks to offer video-on-demand across various platforms soon. Ditto TV currently offers live TV not just from the Zee stable, but also of its competition. Goenka sees no conflict of interest here: “Why should we restrict it only to Zee if we can monetize better by selling other channels as well? This is similar to channels giving their content to a Dish TV or a Tata Sky, so it works well as long as we are willing to share the revenue with the content provider,” he asserts.

However, Goenka is looking at movies-on-demand to drive the business and not live TV. He explains, “We will make more money from video-on-demand and movie-on-demand than linear channels because the cost of running a linear channel on this platform is very high. The entire delivery network costs money whereas VOD and MOD are much cheaper and enable more revenues.”

Goenka is candid to admit that that Zee, like most other companies at the moment, is still learning the ropes in the Digital sphere. He expects the current phase to help the company understand the business and analyse the consumer better, and foresees various opportunities to make money from these streams soon. In fact, Ditto TV, which is at the moment only available in India, already has 8,000-9,000 paying consumers and will be launched in the UK by the year-end followed by its US launch.

Conquering the regional space
Six local GECs targeting viewers across six states has helped Zee gain a strong foothold in the competitive regional space. The company looks to grow these properties that it has started from scratch, organically. Goenka explains, “A lot of inorganic opportunities came to us, but the mismatch in pricing versus what we were willing to offer was vast and we feel that it is probably cheaper for us to do it organically.” Going ahead, the company looks to strengthen its reach in the Southern region before launching a Malayalam GEC, post which Zee will be present across all four major southern regional languages. The focus on regional entertainment also led the company to launch a 24-hour movie channel, first in Marathi and recently in Bengali (Zee Bangla Cinema was launched on September 23, 2012).

Besides the regional space, Zee’s expansion plans on the domestic front will be in the niche genres. Having launched Zee Khana Khazana and Ten Golf, Zee is now looking at launching more English channels. With Digital also coming into play and digitization just round the corner, this is one genre that could benefit the most. Niche channels like Ten Golf will target high-end viewers and will be primarily subscription-driven with premium advertising. Meanwhile on the Hindi front, the company is also contemplating a second GEC, which would be different from its earlier attempt with ZeeNext that was not successful for the channel. ZeeNext was launched with much fanfare in December 2007 but shut down with a year of its operations.

Race to the No. 1 spot
For the most part of 2012, competition between the top Hindi GECs has kept them barely a few rating points apart, making the race for the leadership position a hotly contested one. Zee TV itself has occupied the top spot on a couple of occasions. However, for Zee, profitability rather than being No. 1, has been of primary importance. Even when Zee slipped on the ratings, in the mid 2000s, the company always remained profitable. According to Goenka, the incremental rating points come at a high cost and with no return on investments; thus the channel does not pursue it. Goenka also feels that too much importance is placed on Zee TV, the flagship brand, and its performance, while the overall performance of the group -- especially the regional channels -- is overlooked. He adds, “We monitor our business on five buckets -- national channels, regional channels, sports, business and international. Each of these buckets is equally important to me; one is not less than the other.”

Content creator and not just broadcaster
In all of Zee’s ventures, the main priority is on content, whether creating new content or re-packaging their library in an effort to attract new audiences. In short, content remains the core of the business. As per Goenka, “We have transitioned in the last few years from being a broadcaster to being a content company. We are in the business of creating content for the entertainment space and we will target audience space so that we end up on any screen of theirs.” It is the quality and variety of content that will decide the future course for many media conglomerates post digitization.
According to Goenka, there is severe dearth of good content in India with broadcasters ignoring the tastes and needs of about 75% of the population. A prime reason for this could be the inadequacy of the measurement and rating system to gauge audience tastes and preferences. But, a clearer picture post digitization and different data points could see broadcasters creating new content and launching new channels to cater to specific segments of the audience.

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