ZEEL chief expects pay-TV growth due to pull-out from DD FD, price cut by DTH ops

ZEEL head honcho Punit Goenka is expecting the pay-TV growth to bounce back due to the pull out of Hindi GECs from DD Free Dish and the price cut initiated by the direct-to-home (DTH) players for entry-level packs.

In March, India's leading broadcasters Disney Star, Sony Pictures Networks India (SPNI), Viacom18, and Zee Entertainment Enterprises Limited (ZEEL) pulled out their channels from DD Free Dish, the free DTH platform which has an estimated 43 million customers.

Responding to questions from media analysts about whether broadcasters are reconsidering their decision to pull-out GECs from DD Free Dish, Goenka said it is too early to talk about the impact of the pull-out on the subscriber addition of pay DTH platforms.

"Firstly, on the FTA side, we have taken a collective call as an industry. It's not about just one player or two players that we will support in favour of the subscription revenue growth that we want to see. As the removal has been just about 4 months, still early to talk about the impact it would have had. In normal circumstances, we had anticipated that at the end of 1 year, we could have recouped at least 40% odd from the subscription uplift that the DTH operators were estimating and the balance part of that would have to be recouped from the advertising piece," he stated during the company's Q1 FY23 earnings call.

Goenka opined that the industry must wait patiently for some time to see the full impact of the pull-out on subscription revenues. He also pointed out that the leading pay DTH platforms have slashed the prices of their entry-level packs to lure more customers.

"I think we have to give it a patient test of the trial whether the Pay TV market comes back or not I don't know; you may have seen already a lot of DTH operators have slashed their entry prices by anywhere between Rs. 50 to Rs. 75. We do believe that this should see a revival in the Pay TV households again," he noted.

If the subscription revenue doesn't see any appreciable gain, the broadcaster will go back to the drawing board and come up with a new strategy for the FTA market. "But we'll have to be patient and if we realize that is not the case then we will re-evaluate whether to go back in the FTA space and in what way to go back in the FTA space. It does not have to be just re-runs of our existing shows. We may have another strategy there," Goenka said.

Answering queries about the decline in the company's network share, Goenka said that the pre-Covid and post-Covid numbers are not comparable because the BARC Universe keeps changing. While admitting that the overall TV impressions have fallen, he said that the power cuts are one of the key reasons for the drop.

"In 2021, we had a reset in the BARC Universe where they had added based on the IRS survey that was conducted in 2019. Impressions have fallen this quarter but it's largely on account of time spent and which is impacted due to the severe power shortage, a large part of the country is witnessed during this summertime and we are hopeful that, that will correct over a period of time," he informed.

On being queried whether the increase in the media rights value of the Indian Premier League (IPL) and the aggressive monetisation by the rights owners will impact non-sports channels going forward, Goenka stated that the advertisers need to have a presence throughout the year to maintain high recall among consumers.

"As far as the advertisers thinking that because they have to shell out more money on IPL, they would not have money for spending on non-sports channels. Very difficult for me to understand how can an advertiser advertise for 60 days and then for the rest of the year not advertise at all. At the end of the day, they are in the business of selling product every month, every day and therefore the advertising function is also of every day and every month," he stated.

ZEEL is focussing on Hindi, Marathi, and Tamil markets to grow its viewership share. "On the market share side, the only way to get it back is to do better content that is far more engaging with the viewers and we are focused on the markets of the flagship Hindi, Marathi, and Tamil. These are the three areas where we are completely focusing on. In terms of kind of content, as you know the obvious mix is still soap operas dominate the content on these GEC channels of course sprinkled with some garnishing of the non-fiction shows and we will continue the same route," he stated.

Goenka also said that the advertising segment continues to be under pressure despite positive signals in Q2. "On the inflationary pressures, because Q2 has just started, we have seen some amount of positivity but nothing that gives me a trend that the worst is behind us. I think we have to still wait and watch for a few more months."