 "Punit Goenka, MD & CEO at Zee Entertainment Enterprises")
Zee Entertainment Enterprises is one of the largest Indian broadcasters, with a 17 per cent audience share and ₹8,766 crore in revenue (2023-24). Over the past three years, even as streaming redrew global and Indian markets, Zee was going through its drama. A failed merger with Sony, a share price in the doldrums, and a founding family that lost control were among the key episodes. Zee, which pioneered satellite television (TV) broadcasting in India, was set up by Subhash Chandra in 1992. But his son, PUNIT GOENKA, who became chief executive officer in 2008, shaped it into what analysts call a “cash machine”. Vanita Kohli-Khandekar had a long chat with Goenka (49) at his Mumbai office about what’s next for Zee. Edited excerpts:
In December 2021, Zee and Sony signed up to merge. In January 2024, the deal fell through. What has happened since then?
When the merger failed, we realised that over two years, we had built up the organisation for the merged entity. We had taken our cost structures to a level that would not have yielded results in the long term. There were one-time costs — legal, finance, etc. So until October (2024), we were purely focused on bringing our cost structure back to where it was. Our target is that by the end of the next financial year, we should have around a 19-20 per cent earnings before interest, tax, depreciation, and amortisation (Ebitda) margin. We have reached 16.1 per cent (third quarter of 2024-25).
What happened with the merger?
I think the merger took longer than anticipated. While we did everything in our power to get things done, every step took longer than expected. The most time was spent on settlements with parties who raised objections that were sometimes not even related to Zee — for example, Siti Cable and Zee Learn debt. We went ahead and settled those to expedite the merger. But time is time, and courts are courts.
Was Sony on board with the $940 million deal you made with Star for the International Cricket Council (ICC) rights? Was that a deal breaker for the merger?
I would not like to believe that it was the deal breaker. But if it was within their (Sony’s) system, I can't say. The day we got it, we informed them, and they signed on to it. That deal was made with the understanding that they had a large sports network (Ten Sports) but no marquee property. I was also bidding for the Indian Premier League, but at a certain point, I withdrew because it was going beyond our prudent approach. The ICC matter is sub judice, so I would not like to say anything more.
What happens after you reach 19-20 per cent Ebitda? The logic of the merger remains — it is a hugely consolidated market. Your competition is no longer just other broadcasters. It is Meta, YouTube, JioStar — firms that are 2-3x your size. The problem of scale still exists.
This challenge has persisted for the 20 years that I’ve been in this industry. We simply have to compete with them. In the past, we were competing with the biggest multinationals from the linear world. Now we have to compete with Meta and YouTube. I have to find my space to compete with them. The question is — what is it?
But first, we need to focus on the core business. We can't let that go. For example, with Zee5, we overspent aggressively because we thought we were competing with the who's who of the digital world. I have now realised that’s not the way to go. The core audience of Zee does not need big stars and names. We need to find our sweet spot in terms of content that resonates with our audience and offer that. Similarly, on free platforms like Meta and YouTube, we have to find a space there as well. Have I found it? Not yet, but we are working on it. We can’t just mirror what they are doing. They rely entirely on user-generated content. They have no intellectual property. Finding our differentiator is key.
How bad is the decline in TV overall?
The advertising drop is currently close to 17-18 per cent. How much of that is due to market conditions and how much is structural is not clear. It might just depend on the individual who decides on advertising budgets. He says, “I will go to quick commerce or ecommerce and get so much sales”. It’s no longer about brand building — it’s all performance-related. But eventually, brand building will remain core. TV is still a 900-million-people medium.
Advertising has been soft for some time now. How do you get growth?
I am a bit concerned about advertising. Our degrowth is the least compared to the industry. In the last quarter, our (ad revenue) degrowth was about 3.5-4 per cent, whereas the industry declined by 12-13 per cent. We have to reduce our dependence on national brands. Fast-moving consumer goods (FMCG) still contribute 60 per cent, but within that chunk, local FMCG is becoming reasonably sized. It requires more effort, but the local guy is willing to pay a 50 per cent premium over the national one.
Did withdrawing Zee Anmol from DD Free Dish hit harder than expected?
That was an industry-led decision. We all did it for pay TV revenues, but the pay ecosystem remained the same. And we stayed out of the free-to-air market for two years. In April, we are planning to bring Anmol back on DD Free Dish and capture that audience base we have been losing.
Is it too late? Dangal and Goldmines have raced ahead on DD Free Dish.
Nothing is too late in the media and entertainment industry. If you get the content right, the audience will follow. Dangal and the others are selling ads at 60 per cent of the value I was selling them at on Anmol. As a network, we have to go back and show advertisers that we are delivering value, especially in Tier-II and Tier-III towns.
Any other businesses you see yourself getting into?
Right now, our focus is on four verticals — linear, digital, movie, and music. Gaming is a big one that we are evaluating.
Zee remains a lone ranger. Do you think you need to partner somebody?
I have a team of 3,800 people. If somebody walks through this door and says, “I have a great value proposition for you — for investment, merger, or any kind of deal”, I am open to evaluating and discussing it. It has to benefit my shareholders, my people, and me — in that order.
Do you have any appetite for a buyback? Are you trying to raise money?
As an entrepreneur and a promoter, the urge is always there. But that doesn’t drive me. I am running this company because of my passion for it, for these people (employees), and my shareholders. Today, my shareholding is 4 per cent. Tomorrow, it could be 0.4 per cent. I will still come here with the same passion.
Zee is now institutionally owned. Will there ever be a time when there won’t be a Goenka (the founding family) in charge at Zee?
Why not? It's quite possible.
