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ZEEL buyout of 9X a positive move, say media planners

29-April-2010
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ZEEL buyout of 9X a positive move, say media planners

The news about ZEEL in the process of acquiring 9X channel has been greeted by media planners in general, who feel it is a win-win for both the companies. It may be noted that on the Board of Directors of Zee Entertainment Enterprises Ltd (ZEEL) had April 20, 2010 given its approval to the acquisition of 9X general entertainment channel business from INX Media Pvt Ltd by way of a Scheme of Arrangement, under which the 9X channel business undertaking would be demerged from INX and vested with ZEEL.

The Board is meeting again on April 29, 2010 to consider the terms of the scheme, share swap ratio, appointed date, and so on.

When contacted by exchange4media, media planners by and large were positive about this buyout. But how will this buyout impact the overall GEC pie and what are the implications for ZEEL as well as INX Media? exchange4media finds out more.

Avinash Pillai, National Buying Head, Mediacom, had three observations to make on this development. He said, “Firstly, ZEEL would get a second GEC channel to compete with the likes of Star One and SAB TV. Secondly, it might decide to target an alternate audience, which is slightly younger and who wants to see a different kind of programming.”

He further said, “The implications for other channels will depend on the programming line ZEEL decides to toe. Chances are that the second line of GECs is more likely to feel the effect of viewership erosion. If the programming manages to catch the imagination of the flirting viewer, then it will surely result in a slight increase in the genre viewership pie.”

This means that INX Media will have more money to pump into their existing channel after this buyout, which will result in a positive implication for it.

According to Sanjay Sharma, Director, Synergy Media, “9X never had a substantial ratio in the GEC pie and the buyout by ZEEL is a positive move for both the companies. ZEEL has a good distribution system and INX Media can use the money to focus on 9XM. It’s a win-win situation for both.”

Rajiv Gopinath, COO, Madison Media Infinity, pointed out that as per media reports, ZEEL would get a tax benefit of Rs 170 crore from this buyout. He further said, “I don’t see any content benefits that ZEEL will get as the content on 9X is more than 18 months old.”

Talking about the deal from the INX perspective, Gopinath said that after paying out its creditors, INX Media could start afresh with its plans of regional music and youth focussed media. “INX will keep music and youth surround media as its core focus, which will also be a low investment burn for it,” he noted, further adding that the buyout would have no overall implications on the GEC pie and that he did not foresee Zee investing in 9X from a GEC point of view. “However, it will give them a channel, which they can use for any future venture of theirs,” he concluded.

This acquisition will give a fresh lease of life to 9X, which has been one of the first channels to feel the heat. It will be interesting to see how ZEEL manages to revive the channel and what kind of a programming strategy it plans out.

Also read:

ZEEL Board okays 9X channel acquisition

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