Zee Entertainment bets on subscription growth under new TRAI tariff regime

Varun Aggarwal Mumbai | Updated on August 09, 2019 Published on August 09, 2019

While most of the general entertainment channels in the country have seen a slight dip in subscriptions since the TRAI tariff order came into effect, Zee Entertainment claims that the move has actually benefited the media group in a big way.

“In the last three years, the television industry grew 13-14 per cent. This year, being an optimist, I think it’ll still grow at 7-8 per cent. Subscription will be a great ride for us,” Punit Goenka, CEO, Zee Entertainment, told BusinessLine.

According to Goenka, while the TRAI tariff order would lead to some short-term pain for advertising on television, in the long run, it’ll be beneficial. In fact, for Zee, domestic subscription revenues grew 46.7 per cent last quarter, despite advertising revenue growth slowing to 4.2 per cent.

“Some of the peers are not seeing the full benefit of it because either they got their pricing wrong or their bouquet mix wrong,” Goenka said. “We went with one pricing without giving any further discounts. The power of content is what we played on. The regional bouquet strength is so strong with Zee that no one can match it.”

Goenka feels the overall television viewers remain the same despite turmoil in the industry. “Earlier, for example, 100 people were being offered all channels for ₹100. Of this, 60 were watching Zee and other 40 were not watching it even if they were getting the channels. Today, what has happened is that only those 60 are getting the Zee channel. Some are saying that there is a drop in TV viewership. But it has not. The overall universe is the same.”

According to Goenka, “the only person who’ll lose with the tariff order is the last mile operator. Because he was keeping the unfair share of the money with himself.”

OTT platform

Zee Entertainment has been able to balance some of the slowdown in its television business with the growth in its OTT platform Zee5, which competes with the likes of Netflix and Amazon Prime.

“We have TV plus strategy. The day anyone gets bored of linear TV you can shift to our OTT platform. For example, if someone wants to watch restricted content, which I will never show on TV, then he can watch the OTT content,” Goenka said adding that instead of investing hundreds of millions of dollars on producing big budget shows, Zee will focus on shows with good stories.

Commenting on Netflix’s investments in content in India, he said Zee can produce the same content at half the cost, being a cost-sensitive Indian company.

“We are very focussed on stories. I don't believe I need a Saif Ali Khan to make a good series. I can do a good story with Arjun Rampal. Why do I need to spend ₹4 crore on an episode when I can give you the same story, same quality at half the cost. I could have made Sacred Games with same actors, same director, same everything at 30 per cent cheaper,”Goenka said.

Published on August 09, 2019
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