Punit Goenka is in control of the media empire that patriarch Subhash Chandra built assiduously over almost two decades. He is quick to take decisions, is unruffled by temporary ups and downs, and believes in continuity.
The elder son of Chandra digs deep into the Zee culture, has his own ways of finding solutions and does not hesitate to bet on sports as he takes up the responsibility of shaping Zee‘s broadcasting business.
"I have learnt a lot from my dad. He is no more hands-on. See, he has not called me for over an hour (during the interview). I have my own style," says Goenka, a grin on his face.
Soft-spoken and shy, Goenka is a people‘s man. He backs his senior team, even when certain decisions do not work in the short run.
In an environment of raunchy reality TV shows, he believes in clean content and explains that Zee TV, the flagship channel, is designed for family viewing.
Goenka crafts strategies that focus on profitability; he hardly plays to the gallery.
Under his leadership, Zee ended its 12-year-old rivalry with Star to float a joint venture distribution company named Media Pro Enterprise India. The aim of the JV: to pave the path for consolidation and hasten the need for digitisation in the sector.
In an interview with Indiantelevision.com‘s Sibabrata Das, Zee Entertainment Enterprises Ltd managing director and CEO Goenka talks about the lack of opportunity in the marketplace to make the right purchase, the need to bet on sports broadcasting and to stick to profitability in a high-cost environment.
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Zeel is sitting on a cash pile of Rs 14 billion (as of 30 June 2011). Are you looking at acquisition opportunities?
As a company philosophy, we have decided to keep aside a cash of Rs 10 billion at any stage for organic or inorganic growth opportunities. |
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But isn‘t this the right time for consolidation in the industry?
However, for the benefit of the industry, consolidation is the answer. The sector is sized at Rs 300 billion and there are 500 television channels in the country earning an average ARPU (average revenue per user) of $3. That is why we have become an unprofitable industry. |
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In a drive to consolidate and digitise the industry, Star India and Zee Group recently ended their 12-year divorce to create a distribution company. Has the joint venture been able to shake up the pay-TV market? |
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How deep in terms of percentage growth?
A large part of the deal plays out in analogue cable. In case of DTH, both of us are in any case growing independently. |
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How painful has been the integration process? |
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Media analysts say Zeel’s share price will get a boost if the sports broadcasting business is hived off and capital raised by offloading equity. Has any investment bank got the mandate to hunt for an investor for the sports business? |
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When do you expect the sports business to turn around? |
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Zeel‘s sports losses for FY‘11 stood at Rs 2.08 billion on a revenue of Rs 4.4 billion (excluding a one-time revenue gain of Rs 700 million as one-time fee for the pre-mature termination of rights for AIFF). So what will drive this to profitability?
Ad revenue is heavily dependent on cricket. And within that segment, it is India cricket. While advertising revenue is cyclical, subscription income is consistent throughout the year. |
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Zeel has bagged the eight-year Cricket South Africa (CSA) television rights for $180 million. Considering that the earlier five-year rights went for $75 million, isn’t the new price tag on the higher side? |
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We get to learn from sources that the Zimbabwe board rights have been retained for $20 million (earlier it had gone for $6 million for four years). But Zeel will be able to give its sports business maximum firepower when it is able to retain the telecast rights for the other three boards – Sri Lanka, Pakistan and West Indies. So will you bid aggressively? |
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When is the golf channel getting launched ? We are awaiting government approval. We are ready to launch the golf channel within 60 days of obtaining the regulatory clearances. |
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Will Comcast be a partner for the channel? |
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When are you launching a full-fledged HD channel in sports? |
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Are there other HD launches planned? Zee TV, Zee Cinema and Zee Studio will be launched in HD format soon. |
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Zeel has posted a measly 0.5 per cent ad growth in the fiscal first-quarter. Do you see the market improving?
Subscription revenues will continue to have a similar growth trajectory, both on analogue cable and DTH. Our international revenues should stay flat. |
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International subscription income actually de-grew two per cent in FY’11. Do you have any plans to fix the international business?
In the other markets like the US, We are seeing growth. |
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Is your localisation strategy working?
The other experiment we have carried out is in Russia. The audiences there love Bollywood, soaps and dramas. However, it is early days yet.
We are also planning to launch in 3-4 other markets. |
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Zee TV has slipped to fourth position as Sony Entertainment Television rejuvenated on the back of its big-ticket game show Kaun Banega Crorepati (KBC). Will you change the programming strategy and bring in celebrity-backed reality shows?
A large part of a particular channel‘s growth still comes from one show. A reality show may bring in spikes but we will wait to see what happens after that concludes. We will not take to celebrity-based reality shows unless we feel that we have a concept that needs to engage them. We are happy with our homegrown formats.
Our prime competitor is Star. And as a network, we are in close competition. |
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Will you increase the programming hours of Zee TV as you fight back to regain market share? We will be increasing our original hours of content from 28 to 33 hours per week. There has been some delay in that because we have had a few bad launches and we want to first fix those slots. We have also had a slowdown in the advertising market. |
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Zee has kept away from purchasing big movie titles. Will that affect Zee Cinema when Viacom18 launches its movie channel?
Big titles give rating spikes but they are first run on GECs rather than on movie channels. The Hindi movie channel genre has become cluttered and unprofitable due to high acquisition costs. But we have stayed profitable. |
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Star Gold has reduced ad inventory on the channel by 33 per cent and is showing six fresh movies a day. Will you follow suit? Such a move has to be compensated with an increase in ad rates. In the current market scenario, this may not be easy. But we are working on reducing the ad time on the channel. And don’t forget that Zee Cinema was the first channel to show five fresh movies a day. |
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Sun TV is under attack from the Jayalalithaa government. With the launch of the state-owned Arasu cable, will you make aggressive investments in the Tamil Nadu market? With Zee Tamizh, we have a foot in that market. Arasu has got presence in some pockets of the state. It is still early days and we have to wait and see how the market gets impacted. But if we get more distribution, we will get more aggressive. |
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Isn’t Zee under attack from Star in the Bengali and Marathi regional language markets?
Regional news, on the other hand, is easily doable. |
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Isn’t the news genre too cluttered?
There should be more stringent norms in this genre as entertainment is also passing as news. We have positioned ourselves as a serious news channel and are seeing decent growth. Unlike other players, we also have a strong pay revenue from our news business.
It is the regional markets that are getting cluttered. The Andhra market, for instance, has seen too many launches. Some national news broadcasters are also having issue over cost structures. |
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Will you launch an English general news and business news channel or you feel the balance sheet of Zee News Ltd has to further strengthen before you go in for these high-cost launches? The balance sheet can support these launches. But strategically, we will focus on Hindi and regional news channels. Yes, we have two critical genres left. But we will first fill up the regional space. |
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Are you looking at expanding through the franchise route? We will take the franchise route only if editorial content is with us. After all, that is what impacts our brand. |
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When you started, you were part of the Agrani satellite project. Do you still nurture the ambition of owning a satellite? Agrani was a good project but the policies were not supportive. Banks also had no clue how satellite funding works. Owning a satellite doesn’t make sense now; it is more feasible to lease transponder space on a satellite. |
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