Punit Goenka does not allow the fact that he is son of the owner of Zee TV to weigh heavily on him. He refers to Subhash Chandra as the chairman, and only when strictly necessary. Goenka, 35, is his own man and has reputation for being a team player. Along with former CEO Pradeep Guha, Goenka has been responsible for turning around Zee Entertainment Enterprises Limited (ZEEL), the broadcasting arm of India’s second largest media company.
ZEEL revenues touched Rs 2,196 crore in March, an impressive 45 per cent of it coming from subscriptions in India and abroad. That is unusual for an Indian broadcaster, most of whom manage just 10-20 per cent from pay TV. Last year, the profitable language broadcasting business, so far part of Zee News Limited, was merged with ZEEL to create a national portfolio. Marathi, Bengali and other languages now account for about 16 per cent of revenues. Vanita Kohli-Khandekar spoke to Goenka about ZEEL’s growth plans. Excerpts:
On what do you spend the bulk of your time these days?
The biggest chunk of my time goes into programming. At the end of the day, that is our product. The sales guys can’t sell unless the ratings are delivered. And I always tell the programming guys that you are only as good as your last show.
Earlier, soaps would run for an eternity. Now, they can’t run for more than 200 episodes, or say 2-2.5 years. The attention span has changed so much. Earlier, one season of Saregama (a show on ZEE TV) would run for 40 weeks. Now, it goes on for only 16 weeks.
India is a hyper-competitive market, but at the end of the day that is the steroid, the kick to stay on top. When I joined (in 2006), Zee TV was at 98 gross rating points (GRPs). My board asked me when I would be able to turn it around. I said I didn’t know. They asked me how I would do it. I said, “Slowly and painfully.” So, there is no overnight success.
Is there anything missing in ZEEL’s portfolio?
We are targeting non-South Asian markets — in the Middle East, Malaysia and Russia. However, 90 per cent of what we are showing is programming dubbed in those languages. Eventually, content has to be localised (meaning Zee will have to create local language programming for these markets). If News Corporation or Viacom can come and do that in our markets, why can’t we do it in other markets too?
Isn’t outsourcing cheaper in India because the content supply is a fragmented market?
This is not about cheap content. This is because we would like to control the value chain. In the last six years, content costs have doubled. So, there will be costs savings of about 20-30 per cent. Right now, we do only in-house reality shows. But we would also like to make soaps.
Last year, the language business (Zee Marathi, Bangla and four other channels) was demerged from Zee News. What kind of synergies does it have with your existing businesses in terms of cost and revenue?
On the sales side, there are a lot of synergies. There are the cross-benefits of moving national advertisers to the language portfolio and regional advertisers to the national one. Plus there is the idea exchange on programming and cross-marketing.
What is the advantage of the combined portfolio in terms of rates?
As a rule, we don’t bundle our products. However, my expectation is that we would grow by more than the expected industry growth rate of 12-14 per cent in advertising.
What is the logic of the 9X acquisition?
We always wanted to get into a second general entertainment channel with a free-to-air channel for the repeats from our main channel. Especially now that we are not part of the basic bouquet in the CAS/DTH scenario. (A channel has to be free to air to be part of any distributor’s basic offering; Zee TV is a pay channel.) We don’t want to lose that audience. Plus there was all the programming they had — I can use that for my international channels.
The India Cricket League did not work out. What is your outlook on sports programming?
ICL was a failure because of bureaucratic controls on sports. But on the broadcasting side, we have Ten Sports, which we acquired in 2006. Now, we have five cricket boards. That is about 70-80 days of cricket in a year.
How can you crack revenues from analog cable?
If you add up all the broadcasters’ prices for analog cable, it is Rs 1,000 (per subscriber). We get Rs 85 from them and Rs 20 from direct-to home (DTH) operators. As per regulation, we can charge 50 per cent of the analog price from DTH; yet most broadcasters don’t. They are supporting faster digitisation and, therefore, DTH. Because the bet is that volumes on DTH will make up for the value. We want it to hit 20 million and more. It is a volume game.
With the spread of TAM in smaller towns and growth of language media, there are changes in the texture of the market. Do you see any patterns emerging?
Compare it (broadcasting) with print. Overall, print has about 40,000 advertisers. While TV has only 1,000 advertisers even today. Look at where the market has to go to. Regionalisation will get us there. We have only seen the tip of the iceberg. If the US can have 600 channels, we can have 10 times that number because we are such a heterogeneous market.