There's scope for improvement in Hindi, Tamil, Marathi GEC markets: Rohit Gupta

Zee Entertainment Enterprises Ltd (ZEEL), Chief Financial Officer, Rohit Gupta, during the company’s Q4 FY21 earnings calls told the analysts that ZEEL had contingency plans in place for shooting in case lockdowns were implemented and they were able to execute those in Hindi and Marathi markets. 

He also said that channels in these markets have continued with original programming since the lockdown in Maharashtra was announced. “Such a mitigation strategy might not work now in some markets as most states have announced lockdowns and there might not be feasible locations to which shoots can be shifted. However, we are trying to minimise the impact of lockdown on our programming. We are happy to spend more on content on account of change of shoot locations, maintaining bio-bubble, and taking other safety precautions,” Gupta informed. 

During the quarter, ZEEL’s television network improved its all-India viewership share by 70bps to 18.9% and continued to be India’s number two TV entertainment network. Gupta shared, “While the performance in markets like Bengali, Kannada, Telugu, and movies was strong, in markets like Hindi general entertainment, Tamil and Marathi, we believe there is scope for improvement and our teams are working to fix the gaps in content that their research has identified. The new channels which we had launched around 4 quarters ago have already established strong positions in their respective markets.” 

Gupta said that ZEEL’s business had seen a sharp rebound in the third quarter and that recovery continued in the fourth quarter as well as things on the ground became close to normal. He said that this is also visible in the network’s ad growth numbers where they have seen 9% growth on a YoY basis. 

“The spike we had seen on account of the festive season in Q3 normalized, but the demand from advertisers continued to be strong during the last quarter. However, the demand has softened a bit during the current quarter as lockdowns have come into effect in a staggered fashion around the country. But looking at the demand we saw during the fourth quarter, we are confident that as soon as the restrictions ease, we will see a rebound as we had seen last year,” said Gupta.  

Coming to ZEE5, Gupta shared that the global MAUs and DAUs for the month of March were 72.6 million and 6.1 million respectively. During the quarter, ZEE5 released 14 original shows and movies. Over the last 12 months, despite the pandemic halting production for around 3 months, ZEE5 has released 75+ original shows and movies. “ZEE5 is home to the biggest Indian language digital exclusive content library, and it further enhanced consumer value proposition with the new pricing of the annual pack. We expect that it will enable us to upgrade consumers to the 12-month pack instead of monthly subscriptions. The revenue and EBITDA loss of ZEE5 for the quarter was Rs. 1.1 billion and Rs. 1.6 billion respectively,” he added. 

Meanwhile, the plans of Zee Studios continued to be impacted due to varying degrees of restrictions on cinema halls during the quarter, said, Gupta. Zee Music Company continued to be the second most subscribed Indian music channel on Youtube and the label witnessed a 50% growth in Youtube video views on a YoY basis, he told to the analysts. 

The companies’ domestic subscription revenue saw a like to like growth of 5.6% YoY and the EBITDA for the quarter was Rs 5.4bn with a margin of 27.5%. 

“For the full FY21, while the first half saw domestic advertising revenue decline by 46%, the second half grew by 8.2%, resulting in a full-year decline of 20%. Subscription revenue grew by 6% on a comparable basis, driven primarily by the digital business. The EBITDA for the year was 17.9bn, with a margin of 23.2%. The cash and treasury investments for the company were 18.8 bn as on March 31 which includes a bank balance of 7.5bn, fixed deposits of 3.4bn, mutual fund investments of 7.4bn and NCDs worth 505mn,” he concluded.