30 years of Zee: How the Indian M&E industry has evolved since 1992
According to ZEEL MD & CEO Punit Goenka, Zee has been the nucleus of the Indian M&E industry, and it is set to shape the next era of entertainment
2nd October, 2022, marked the 30 years of private satellite broadcasting in India. Zee TV, India's first indigenous satellite channel, also celebrated its 30th anniversary on this day. In a way, the growth of Zee as a media company and the private TV broadcasting sector has been intertwined.
What started out as a single channel in 1992 has transformed into a gigantic TV network comprising over 60 channels across entertainment and news genres. From being a pure-play broadcasting company, Zee Entertainment Enterprises Limited (ZEEL) has widened its footprint by entering new segments. Today, the company has five lines of businesses namely broadcast, digital, films, music, and live entertainment. It has also spread its reach to global markets with a presence in 170+ countries. The network reaches 1.3 billion viewers globally.
ZEEL MD & CEO Punit Goenka, who has been spearheading the media conglomerate's expansion since 2008, asserted that the company would continue to drive the growth agenda for the media & entertainment (M&E) industry. “Zee has been the nucleus of the Indian M&E industry for 30 years, and we are all set to shape the next era of entertainment," he stated.
Zee has grown in tandem with the Indian M&E sector, which has become the fifth largest M&E market in the world after the US, Japan, China and the UK. According to a FICCI-EY report, the Indian M&E sector has attained a market size of Rs 1.61 trillion ($21.5 billion) in 2021 and is touted to grow at a CAGR of 11 per cent to reach Rs 2.32 trillion ($30.9 billion) by 2024. The M&E sector comprises broadcasting, film, print, digital, radio, OOH, gaming and animation segments.
There has been a sea of change in the Indian TV broadcasting sector over the last 30 years - be it technology, content, or the regulatory environment. In 1992, TV distribution mostly happened through analogue cable. Cut to 2022, the entire country has moved to the digital addressable system (DAS).
The country has also witnessed the emergence of multiple modes of content distribution like direct-to-home (DTH), digital cable, head-in-the-sky (HITS), Internet Protocol Television (IPTV), and the recent phenomenon of over-the-top (OTT), which has taken the media industry by storm. The growing convergence between media and telecom has meant that the traditional boundaries between the two segments are blurring.
The last three decades have also seen the creation of a thriving content industry, be it film or TV, which is driving India's soft power on the global stage. Zee Entertainment has also played a key role in taking Indian content globally by launching channels targeted at the Indian diaspora and dedicated channels for local audiences in foreign markets.
The consumer preference for content has also seen a drastic change. Until recently, content consumption was based on appointment viewing during prime time. That has changed with the emergence of OTT platforms as consuming content anytime and anywhere is the new norm. The culture of binge-watching is also gaining traction.
On the regulatory front, the Telecom Regulatory Authority of India (TRAI) has come out with a common regulatory framework for all addressable platforms. In the past, the regulator prescribed different tariff frameworks for addressable platforms, non-addressable platforms, and commercial establishments.
The nature of content deals inked between broadcasters and platforms has also changed with negotiated deals making way for the current MRP regime where every channel/bouquet is available at the same price for all the distribution platforms.
Foreign investors bet big on India
Faced with restrictions in the China market, the Indian M&E sector emerged as a magnet for foreign media companies and investors who were captivated by the sheer opportunity that the country had to offer.
From Walt Disney, 21st Century Fox (which has merged into Disney), Sony, Viacom (now Paramount), and Turner to British pubcaster BBC, most of the global media powerhouses have set up shop in India to take advantage of the growing media consumption in the country. Global OTT giants like Netflix and Amazon Prime Video are also investing aggressively to grab a slice of the burgeoning Indian digital video entertainment market.
According to the Department for Promotion of Industry and Internal Trade (DPIIT), the Information & Broadcasting sector, including print media, has attracted foreign direct investment (FDI) worth Rs 59,712 crore ($10 billion) between April 2000 to June 2022.
In order to attract more FDI in the M&E sector, the government has been gradually opening up the sector. It has allowed FDI limits up to 100% in Teleports, DTH, Multi-System Operator, mobile TV, and HITS. The FDI limits in print and digital media remain capped at 26% while the foreign investment cap in TV news is 49% through the approval route.
The impending merger deal between Zee and Sony networks is one of a kind in the history of the M&E sector in India. Awaiting clearance from the Competition Commission of India (CCI), the Sony-Zee deal will lead to the creation of a $10 billion media behemoth that will have a strong presence in TV, OTT, film, and content production space. Sony will be infusing $1.57 billion into the merged entity.
Experts say that the merger deal between Sony-Zee and the fund infusion by the Japanese conglomerate into the merged company will pave the way for the creation of a media company that will have the size, scale, and financial wherewithal to compete in a rapidly changing media landscape.
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