News as it is -

Best Media Info

Partner Content

Optimistic start to new fiscal as key advertisers gear up for increased spending: Zee's Punit Goenka

Speaking about the merger with Sony, Goenka said that legal matters are consuming a considerable amount of time in the overall process

Punit Goenka

The financial year 2022-2023 saw the media and entertainment industry battling the macroeconomic headwinds with resilience and focusing on investments in further strengthening the business fundamentals. At Zee as well, the year was one of concerted efforts to enhance the strategic aspects across all our key businesses, Punit Goenka, CEO of Zee Entertainment Enterprises, said.

“The new fiscal brings in optimism, as we witness the overall market sentiment improving with the key advertisers set to increase their spend,” Goenka stated during the Q4 earnings call.

"Despite the headwinds, we remained undeterred in our strategic approach towards the quarter. Our focused efforts and investments in content reflect our long-term strategic intent to further strengthen our market position. We further fortified our position as the number 2 entertainment network in the country. In fact, during the quarter, our viewership share gain was higher than the competition. We also witnessed an increase in viewership share across our linear channels in key markets, including South, North and East," he added.

Speaking about the merger with Sony, Goenka said that the legal matters are consuming a considerable amount of time in the overall process.

"We are evaluating all legal options present before us to overcome any further hurdles," he added.

He added, "The NCLT has recently dismissed the plea filed by a financial institution against Zee, which is a noteworthy development. With these matters in the NCLT, that are even remotely connected to the company have been addressed. The ones remaining in the tribunal are not pertaining to Zee. We have the best of legal teams advising us, and I'm most certain that we are in safe hands. Hence, my focus continues to be on enhancing the business performance and completion of the merger."

The merger has already received most of the regulatory clearances, including the ones from the shareholders, which reinforce the fact that it's value accretive for the industry at large, he added.

Significant efforts have been made in terms of content strategy for the Marathi market, and the company is expecting that to translate into positive results over the current financial year, Goenka stated.

"On digital, ZEE5 has been gaining ground quarter-on-quarter across all metrics. We had recently announced an expansive content slate of 111+ titles for ZEE5, which includes compelling originals, direct-to-digital films and theatrical releases in collaboration with renowned content creators. I'm certain that this will further enhance our unique value proposition to the consumers and attract new audience segments to the platform," he added.

Furthermore, he went on to say that several industry reports peg the segmental growth of the digital ecosystem to be around 20% to 25% CAGR over the next eight years. At Zee, the company is significantly outpacing this growth and has doubled its quarterly revenue run rate in the matter of eight quarters. That said, sustained investments in the long-term amidst navigating the macroeconomic headwinds strained its near-term financial performance. However, the company has formulated a plan that is focused on higher growth and the company remains well poised to capitalise on opportunities emerging across business segments during the year.

"Taking a long-term view, I remain cautiously optimistic on the future as the inflationary headwinds ease and NTO-3.0 benefits flow in, resulting in positive signs of demand and growth. I am confident that we are well placed in the financial year 2023-2024 to capitalise on growth opportunities. Our focus remains on generating higher shareholder value year-on-year, and we will strive to only grow higher from here," Goenka said.

Rohit Gupta, Chief Financial Officer, ZEEL, said that FY23 was a challenging year for the entire Media and Entertainment industry given weak ad spending, prolonged delay in NTO implementation putting pressure on linear TV subscription revenues, and relatively subpar movie content performance. This operating environment has adversely impacted Zee entertainment’s performance for the year.

"In FY23 we also withdrew Zee Anmol from FTA, sacrificing revenues and viewership towards our long-term objective of strengthening the pay TV ecosystem. While we navigated these headwinds, we continued to invest in the enhancement of our capabilities across digital (ZEE5) and sports. Both these segments being relatively nascent, have needed investments in content, marketing and technology, intensifying impact on our overall profitability," Gupta stated.

"We believe these investments are critical to being able to serve and delight our viewers and advertisers. Overall, in FY23 despite all the headwinds we have strived to balance near term financial profile of the business while making room for longer term strategic investments," he added.

Speaking about the Q4 operating environment, he said, "We continued to see muted ad spending by FMCG brands during the quarter. On Subscription side, while NTO 3.0 came into effect from February 1st, 2023, there were a set of DPOs who went to courts challenging NTO 3.0 and did not sign the interconnection deal with broadcasters as per the provisions of NTO 3.0. This left us with no choice but to switch off our channels to these DPOs. While the standoff ended eventually with these DPOs signing new agreements, this situation impacted our Ad and Subscription revenues adversely during the switch-off."

On linear business the company continues to be India’s number 2 TV Entertainment network and gained a healthy 40 bps viewership share during Q4-23, taking its viewership share to 16.6%.

"In FY23, we have had a good year in terms of linear viewership gains in most of our key frontline GEC channels. We have gained viewership share in FY23 over FY22 in Zee TV, Zee Tamil, Zee Telugu, Zee Kannada, Zee Bangla, Zee Odia, Zee Punjabi and Zee Keralam. We are focused on maintaining the momentum and hope to see Zee Marathi join the list as well in FY24," Gupta stated.

Post a Comment