Churn. The television industry has been going through turbulent times with the economy downsliding and ad growth decelerating. Like its peers Zee News Ltd (ZNL) too has been riding the wave of turbulence with its unique mix of national news and regional language channels. While Zee News, Zee Marathi and Zee Bangla have been growing rapidly and notching up profits, Zee Telugu has turned operationally cash positive. The management has managed to keep losses from its 'new businesses' (channel launches in the south and Zee Talkies) under control; full fiscal loss forecasts stay unchanged at Rs 700 million, even though it is planning to launch a regional channel targeted at Uttar Pradesh. Simultaneously, it has decided to pull the shutters down on Zee Gujarati from 30 April as it was bleeding.
ZNL is also pursuing growth through the franchisee model, an experiment not tried yet by the other news broadcasters. After partnering with SB Multimedia for a regional news channel in Chattisgarh, the company is keen to tap local entrepreneurs who desire to get into the TV news space in regions which do not occupy Zee's immediate direct expansion plans.
In an interview with Indiantelevision.com's Sibabrata Das, Zee News Ltd CEO Barun Das talks about the success of the Zee News channel following a repositioning exercise, the turn around of Zee Business, the emergence of new driver channels within the bouquet, the challenges of tiding over the global economic turmoil, and the company's growth plans.
Excerpts: |
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Media companies are reeling under a severe ad slowdown. How has Zee News Ltd bucked this trend so far? |
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Isn't the economic downturn affecting regional markets as well? |
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Is this the time to take hard calls like shutting down Zee Gujarati? |
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Has the break even success of the Telugu general entertainment channel put you in a comfort zone in the southern region to launch more channels? |
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How bullish are you about cracking the Tamil market, particularly when the Marans (Sun TV promoters) and DMK party chief and Tamil Nadu chief minister M Karunanidhi have smoked the peace pipe?
What makes us stay bullish is that Tamil Nadu is the biggest regional market. Besides, there is only one player (Sun TV) in that market, giving us space to climb the ladder. We feel we have a good opportunity to be a strong No. 2 or No. 3. Also, we have started understanding the nuances of the southern market from our experience, planning and research in running a Telugu and a Kannada channel. |
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How much is ZNL going to lose from its new businesses this fiscal? |
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With the Indian economy coming under the shadow of a global recession, have you shelved plans to launch an English news channel? |
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Marathi movie channel Zee Talkies got transferred from Zee Entertainment Enterprises Ltd (ZEEL) to ZNL. Will the company launch regional movie channels in each market where it runs a GEC? |
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Will you be expanding in the near future through the franchisee model? |
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Is the flagship Hindi news channel growing at a slower pace? |
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How are you planning to push Zee Business which is considered as a laggard in comparison to its competitive channels?
In fact, 2008 is also the year when 24 Ghanta went ahead to emerge as a leader in the Bengali news market with its focus on content, events and communications. We nullified Star Ananda's strength in football coverage by acquiring the rights of the National Football League. |
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Do you have plans to launch add-on channels like Tez to guard your flagship Hindi news channel? |
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Is subscription revenue looking positive with the entry of more DTH players?
DTH is a growing segment and we stand to benefit from it. It currently accounts for 32 per cent of our subscription income. |
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Will carriage costs continue to climb as more channels launch and continue to jostle for space on cable networks?
With digitalisation growing, carriage rates will continue to slide. The downturn will bring in corrections not just in carriage, but in every other aspect. |
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Including downsizing staff?
Retrenchment is not required. But going forward, we will see how much we need to rationalise on our costs. We will scrutinise every cost, review every deal, and re-negotiate with our suppliers. |
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In such a tough market, will you cut down on rates and play the volume game to consume ad inventory?
The right strategy would be to provide better value than cut rates. Our plan is to offer tailor-made solution for clients and work on innovations. We are, for instance, getting four co-branded programmes on Zee News channel. The truth is that all of us have to stretch more than what we have ever done so far. |
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How do you plan to survive the woes of 2009-10?
It will probably be the worst year any of us have ever seen. Our endeavour will be to strongly hold on to the ground and use this period to prepare ourselves for being able to take the next big leap when we finally move out of the global recession. |
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