JitendraKumar
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MUMBAI: Zee Entertainment Enterprises Ltd (ZEEL) will wait for the Supreme Court verdict on the 27.5 per cent inflation-linked tariff hike for non-addressable systems before it decides to take a final stand on offering its television channels to the multi-system operators (MSOs) only on a la carte basis.
The matter is pending before the apex court and is scheduled to come up for hearing on 21 July. The case relates to the Telecom Disputes Settlement & Appellate Tribunal (TDSAT) order that set aside the Telecom Regulatory Authority of India’s (TRAI) 27.5 per cent tariff hike.
ZEEL is weighing options to offer its channels only on RIO (reference interconnect offer) basis to MSOs. Star India has already taken this step and others like IndiaCast (distributor of TV18 and Viacom18 channels) and Multi Screen Media (MSM) are examining ways to follow suit.
ZEEL believes that the average revenue per user (ARPU) at the consumer level has to go up and RIO will help achieve that.
Digital addressable system (DAS) in Phase III will lead to subscription revenue growth for broadcasters. Initially, there could be fixed-fee content deals with MSOs but pricing will reach Phase I and II levels in these areas after 18–24 months of DAS, ZEEL believes.
“Phases I and II will be value-driven and Phases III and IV will be volume-driven subscription growth,” a senior ZEEL official said.
Increasing programming hours for &TV
Zee TV, the company’s flagship Hindi general entertainment channel, has 30 hours of original programming per week. While this proportion will be maintained, &TV’s fresh programming hours will be expanded from 22 hours to 30 hours per week.
The company will keep investing in big-ticket shows and big film stars for &TV till the channel’s viewership stabilises. Once the channel moves into double-digit market share in the Hindi GEC space, it could break even.
Zee TV, the third-most-watched Hindi GEC, has witnessed some market-share loss. However, the management is confident that the channel will be back to a strong No. 2 position once TV rating agency BARC extends its coverage area. Currently, BARC data is only for 0.1 million+ towns, and parts of urban and rural India are yet to be added.
Capex in FY16
ZEEL’s capital expenditure in FY16 is expected to be Rs 120 crore (Rs 1.2 billion), similar to what it was in the previous fiscal.
ZEEL had launched Hindi GECs &TV and Zindagi in the previous fiscal.
Expanding into the Odia GEC market, ZEEL acquired market leader Sarthak TV for Rs 115 crore (Rs 1.15 billion). The Odia GEC has a 25 per cent viewership share in that market.
ZEEL has Rs 17.83 billion in cash and cash equivalents on its books.
Sports business
ZEE will be bidding for the Indian Premier League (IPL) rights, the company told media analysts. The company expects the sports business loss to be less than Rs 100 crore (Rs 1 billion) in FY16. The earlier loss guidance was Rs 100 crore. Syndication has emerged as an important revenue stream in the sports business.
ZEEL to wait for SC verdict on inflation-linked tariff hike before taking call on RIO | TelevisionPost.com
The matter is pending before the apex court and is scheduled to come up for hearing on 21 July. The case relates to the Telecom Disputes Settlement & Appellate Tribunal (TDSAT) order that set aside the Telecom Regulatory Authority of India’s (TRAI) 27.5 per cent tariff hike.
ZEEL is weighing options to offer its channels only on RIO (reference interconnect offer) basis to MSOs. Star India has already taken this step and others like IndiaCast (distributor of TV18 and Viacom18 channels) and Multi Screen Media (MSM) are examining ways to follow suit.
ZEEL believes that the average revenue per user (ARPU) at the consumer level has to go up and RIO will help achieve that.
Digital addressable system (DAS) in Phase III will lead to subscription revenue growth for broadcasters. Initially, there could be fixed-fee content deals with MSOs but pricing will reach Phase I and II levels in these areas after 18–24 months of DAS, ZEEL believes.
“Phases I and II will be value-driven and Phases III and IV will be volume-driven subscription growth,” a senior ZEEL official said.
Increasing programming hours for &TV
Zee TV, the company’s flagship Hindi general entertainment channel, has 30 hours of original programming per week. While this proportion will be maintained, &TV’s fresh programming hours will be expanded from 22 hours to 30 hours per week.
The company will keep investing in big-ticket shows and big film stars for &TV till the channel’s viewership stabilises. Once the channel moves into double-digit market share in the Hindi GEC space, it could break even.
Zee TV, the third-most-watched Hindi GEC, has witnessed some market-share loss. However, the management is confident that the channel will be back to a strong No. 2 position once TV rating agency BARC extends its coverage area. Currently, BARC data is only for 0.1 million+ towns, and parts of urban and rural India are yet to be added.
Capex in FY16
ZEEL’s capital expenditure in FY16 is expected to be Rs 120 crore (Rs 1.2 billion), similar to what it was in the previous fiscal.
ZEEL had launched Hindi GECs &TV and Zindagi in the previous fiscal.
Expanding into the Odia GEC market, ZEEL acquired market leader Sarthak TV for Rs 115 crore (Rs 1.15 billion). The Odia GEC has a 25 per cent viewership share in that market.
ZEEL has Rs 17.83 billion in cash and cash equivalents on its books.
Sports business
ZEE will be bidding for the Indian Premier League (IPL) rights, the company told media analysts. The company expects the sports business loss to be less than Rs 100 crore (Rs 1 billion) in FY16. The earlier loss guidance was Rs 100 crore. Syndication has emerged as an important revenue stream in the sports business.
ZEEL to wait for SC verdict on inflation-linked tariff hike before taking call on RIO | TelevisionPost.com
