ZEE ad revenues grow 34 pc in a slowdown year

In addition to increased spends from sectors such as consumer durables, e-comm & mobile, Sony's slide also helped ZEE eat into the market share. New channel launches also helped the group

e4m by Abhinav Trivedi
Updated: Jan 23, 2014 8:32 AM
ZEE ad revenues grow 34 pc in a slowdown year

Zee Entertainment Enterprises has reported consolidated revenues of Rs 11,884 million for the third quarter ended December 31, 2013, a growth of 26.6 per cent over the corresponding quarter of the previous fiscal. Profit after tax for Q3 FY14 stood at Rs 2,136 million, a growth of 10.5 per cent over Q3 FY13.

Advertising revenues for the quarter were reported at Rs 6,843 million, recording a growth of 34.3 per cent over Q3 FY13.

Subscription revenues were up 11.4 per cent at Rs 4,565 million in Q3 FY14. During the quarter, domestic subscription revenues stood at Rs 3,322 million, while international subscription revenues were Rs 1,243 million.

Consolidated operating profit (EBITDA) for the quarter stood at Rs 2,907 million, recording a growth of 11.3 per cent over the same period of the previous fiscal. The EBITDA margin for the quarter stood at 24.5 per cent.

Punit Goenka, Managing Director and Chief Executive Officer, ZEE commented, “ZEE has had a satisfactory quarter on the operational front. During the quarter, we have seen a robust growth in our network viewership share. The two new launches – &Pictures and Zee Anmol – have made handsome gains and have added to the network strength. The company has shown a healthy increase in advertisement revenues even though there has been a reduction in inventory across the board as per TRAI regulation. Once again we have outperformed the television industry advertising revenue growth and have delivered 34 per cent YOY growth, supported by good contribution from sports business. Operating margins were lower due to higher losses in sports business, due to a heavy event calendar. Rupee depreciation earlier this year has also had a negative impact on the sports business performance. We are hopeful of improved sports performance in the years ahead.”

Commenting on the advertising inventory regulation, Goenka added, “This quarter saw the implementation of advertising inventory cap as per TRAI regulations. From October 1, 2013, we have reduced ad inventory to 12 minutes per clock hour across our network. We are glad to report that the transition has been reasonably smooth. Ultimately, ad inventory reduction is better value to both consumers and advertisers. I believe that a cap on advertising, while being negative in the short term especially for smaller broadcasters, will in the long term prove beneficial for the industry by restricting inventory and eventually raising value.”

What prompted the increase in ad revenues?
In the era of slowdown and when advertisers are curtailing their ad spends, how has ZEE managed to increase its ad revenue? Ashish Sehgal, Chief Sales Officer, ZEE shared, “There have been various parameters. We launched many new channels this year. &Pictures and ZEE Anmol have added to our revenue share. Apart from this, there has been an increase in all genres. Citing 10+2, we had curtailed our inventory as well.”

ZEE had increased its ad rate by 25-30 per cent as a result of cutting down inventory. Sehgal also added that sectors such as consumer durables, e-commerce and mobile also increased their ad spends, in addition to FMCG. “Finance and insurance sectors also opened up a bit as compared to the last two quarters,” he further said.

“In addition to this, we also ate into the market share a bit. To a certain extent I think Sony’s fluctuation also changed the tide of the market,” he added.

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