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MUMBAI: Zee News Ltd (ZNL) is retreating the Telugu news market. Zee 24 Gantalu has decided to close down next month as it found too many politically-oriented channels operating in a crowded marketplace.
"24 Gantalu will close down on 20 September. There are 14 Telugu news channels operating in that market and two more are launching. They are politically driven and it does not make sense to continue in that market," a source familiar with the development said.
ZNL's decision comes ahead of its plans to launch an English-language general news channel that will consume heavy capital. The closure of 24 Ghantalu will help cut down ZNL's losses from new businesses and ease pressure on the company's operating profit if it goes ahead with the launch of the English channel.
Indiantelevision.com had reported that ZNL is planning to launch an English news channel towards the exit quarter of the fiscal as digitisation settles in the four metros.
The operating loss of 24 Ghantalu in FY'12 stood at approximately Rs 140 million, the source said.
ZNL had reported losses of Rs 227.4 million on a revenue of Rs 131.9 million for the fiscal from its new businesses that include Zee News Uttar Pradesh/Uttarakhand and 24 Gantalu.
"If the English channel launch is on, the shutting down of a loss-making channel will be seen as a positive move. It will soften ZNL's pressure on Ebitda from the launch of an English news channel that will consume anywhere between Rs 2.5-3 billion over the first three years," a media analyst said on condition of anonymity.
ZNL had reported Ebitda of Rs 533.5 million in FY'12 on a consolidated operating revenue of Rs 3.07 billion. The company runs a cluster of channels including Zee News, Zee Business, Zee 24 Taas, Zee Punjabi and 24 Ghanta.
Indiantelevision
"24 Gantalu will close down on 20 September. There are 14 Telugu news channels operating in that market and two more are launching. They are politically driven and it does not make sense to continue in that market," a source familiar with the development said.
ZNL's decision comes ahead of its plans to launch an English-language general news channel that will consume heavy capital. The closure of 24 Ghantalu will help cut down ZNL's losses from new businesses and ease pressure on the company's operating profit if it goes ahead with the launch of the English channel.
Indiantelevision.com had reported that ZNL is planning to launch an English news channel towards the exit quarter of the fiscal as digitisation settles in the four metros.
The operating loss of 24 Ghantalu in FY'12 stood at approximately Rs 140 million, the source said.
ZNL had reported losses of Rs 227.4 million on a revenue of Rs 131.9 million for the fiscal from its new businesses that include Zee News Uttar Pradesh/Uttarakhand and 24 Gantalu.
"If the English channel launch is on, the shutting down of a loss-making channel will be seen as a positive move. It will soften ZNL's pressure on Ebitda from the launch of an English news channel that will consume anywhere between Rs 2.5-3 billion over the first three years," a media analyst said on condition of anonymity.
ZNL had reported Ebitda of Rs 533.5 million in FY'12 on a consolidated operating revenue of Rs 3.07 billion. The company runs a cluster of channels including Zee News, Zee Business, Zee 24 Taas, Zee Punjabi and 24 Ghanta.
Indiantelevision
