Zee aims Zee5 breakeven by March 2026, plays down traditional TV drag

New Delhi: Zee Entertainment’s Q1 FY26 results underline the rising importance of its OTT arm, Zee5, even as the group’s overall business saw revenue and EBITDA contractions.

The company reported consolidated operating revenue of Rs 1,824.8 crore for the quarter ended June 30, 2025, down 14.4% year‑on‑year and 16.5% quarter‑on‑quarter. 

EBITDA fell 16.1% year‑on‑year to Rs 228 crore. 

In contrast, Zee5 revenue jumped 29.6% year‑on‑year to Rs 290 crore (up 5.6% QoQ), reflecting early success from its “language‑first” strategy.

“Language presence and understanding the pulse of audiences is a pivotal advantage,” CEO Punit Goenka told analysts in the earnings call on Tuesday. 

In June, Zee5 rolled out seven tailored subscription packs, priced by language. 

Goenka said these packs are already driving transactions, and that the company expects further subscription‑revenue gains in the coming quarters.

Deputy CEO & Acting CFO Mukund Galgali noted that Zee5’s operating costs fell 11.4% year‑on‑year to Rs 355.8 crore, a testament to fiscal discipline even as the platform invested in regional originals. 

Crucially, digital‑business losses narrowed sharply. Zee5’s EBITDA loss was Rs 65.8 crore in Q1 (versus a Rs 177.7 crore loss a year ago), a year‑on‑year improvement of Rs 111.9 crore and a quarter‑on‑quarter gain of Rs 9.5 crore.

By contrast, Zee’s traditional business, TV networks and studios, saw operating revenue drop 19.5% year‑on‑year to Rs 1,534.8 crore, with EBITDA down 34.6% to Rs 293.8 crore. 

Overall expenditure across the group declined 14.1% year‑on‑year to Rs 1,596.8 crore, aided by cost savings in programming and marketing.

Goenka reiterated the goal of Zee5 breakeven by March 2026, saying management’s “energies remain directed towards achieving an enhanced level of profitability.” 

Beyond language packs, Zee has inked partnerships to deepen Zee5’s content ecosystem. 

A tie‑up with startup Bullet will power a micro‑drama app, while an alliance with Ideabaaz aims to surface stories from Tier 2/3 India. 

Goenka said these initiatives, paired with “steady and stable usage and engagement,” will sharpen ZEE5’s competitive edge and drive ARPU growth without commensurate cost increases.

“As we sharpen our cost structure and roll out fresh language packs,” Goenka added, “we’re confident Zee5 will continue to offset headwinds in linear TV and help us meet our overall margin targets.”

By contrast, the earnings call offered only a cursory look at the television and studio divisions. While Zee’s general‑entertainment channels saw viewership share tick up modestly, management quickly pivoted back to digital. 

Studio revenues fell sharply on a lean theatrical slate, yet the discussion stayed focused on tightening costs and balance‑sheet strength rather than content or release plans.

With monsoon‑season ad recovery and the festive period on the horizon, Zee said it remains “cautiously optimistic” about advertising revenue.

However, it is ZEE5’s double‑digit revenue growth and rapid loss‑containment that will bear the weight of market expectations. 

As evidentiary hearings in Zee’s billion‑dollar ICC‑rights arbitration loom and traditional media markets remain soft, investors will watch closely to see if the OTT pivot can not only offset legacy headwinds but also propel Zee’s next phase of growth.