Profits over points

Winning the viewership race on television,specially in the GEC genre,comes at a hefty cost. Players such as Star Plus and Colors have invested millions in buying or producing glitzy shows that would immediately catch viewers’ fancy. These channels also have a slew of expensive reality shows hosted by celebrities that charge a bomb to make an appearance on the small screen. After getting Amitabh Bachchan and Shah Rukh Khan to host Kaun Banega Crorepati between 2006 and 2008,Star Plus has had celebrities like Hrithik Roshan and Akshay Kumar hosting shows such as Just Dance and Master Chef. Likewise,Colors’ flagship from the time it was launched called Khatron Ke Khiladi has been hosted by Akshay Kumar and Priyanka Chopra. It also airs Bigg Boss that has been hosted by big shots such as Amitabh Bachchan and Salman Khan in the past. “Such shows,obviously,cost several crores of rupees and the fee paid to celebrities hosting the shows spikes the costs manifold,” say media planners. According to estimates gathered from the market,the cost of producing big ticket show such as the one mentioned above ranges from Rs 1 crore to 4 crore per episode. Top rung actors such as those mentioned above charge anywhere between Rs 2 crore and Rs 4 crore per episode. “Such shows may help channels secure good viewership ratings and also,number one or two slots in the winners’ list but they do dent the channels’ profitability,” says a media expert.

Zee TV has,so far,stayed clear of investing in expensive shows. The channel,in fact,doesn’t have any reality show hosted by Bollywood biggies save one dance reality show hosted by yesteryear actor Mithun Chakraborty. “We do not buy the number one slot by spending heavily on flashy shows,” says Goenka. “We would rather move on the strength of our content than ride a celebrity. Chairman (reference to his father) of the company also feels and has always felt that we are star makers. We,therefore,do not need expensive star-led shows to be successful,” he says.

Goenka’s stand on “not buying leadership” and being profitable may be corroborated from the fact that despite having lagged Star India in viewership race,Zee Enterprise’s revenues and profits have been comparable with its rival. In the year ended March 2011,Zee Entertainment Enterprise Ltd’s total revenues were Rs 3098.69 crore and profits stood at Rs 625.69 crore against Star India’s estimated revenues of Rs 3,000 crore and profits of Rs 650 crore.

Instead of making mindless investments into expensive shows,Goenka is making efforts to find newer ways of connecting with viewers. In a bid to renew its bond with viewers,the group recently went for a brand makeover. Along with its advertising agency DraftFCB Ulka,Zee conducted an extensive research for nearly 11 months before the new corporate identity was unveiled. Nearly 1.4 million people were interviewed regarding the brand and their expectations of it. “In 2005 the new logo was unveiled by Shah Rukh Khan. But this time we did not rope in any celebrity. We believe our viewers are our celebrity”,says Goenka. Under the new revamp,logos of 27 channels barring the sports were changed. The company has adopted a new tagline “Ummeed Se Saje Zindagi”. The Zee logo which was earlier in a box has now got a new ‘swan’ like shape and represents agility and grace. The exercise cost the company around Rs 20 crore.

Harish Bijoor,brand expert & CEO,Harish Bijoor Consults,says,“The revamp works partially at the level of creating visual dissonance with what one has been used to. People will sit up and take note. The logos are irreverent,casual,different and most certainly fun. More fun than the channel has portrayed thus far in its 18 years.”

Some observers,however,feel that to be able to make an emphatic comeback,Zee Entertainment needs to do more than merely effecting cosmetic changes. Anand Halve,co-founder,Chlorophyll,the brand and communication consultancy agency,says,“Many ways the term ‘rebranding’ is misused. It’s like a person who goes for a haircut. Of course,there will be some change in the appearance but that change can’t be mistaken for a fundamental or broader transformation. Similarly,what Zee has done looks like a fresh coat of paint. But the fundamentals remain the same. So to me this new change is extremely superficial.”

A section of media observers also feel that alongside changing its look and feel,Zee needs to have a fresh approach towards programming. “The formula of low-cost programming worked brilliantly for Zee for many years. But now it has become monotonous. Being the first satellite channel in the country,Zee should have been the trendsetter. But in terms of programming it’s status has reduced to a follower and not a leader,” says a media buyer.

In many cases the first one in the business is more successful. But Zee is scared to adopt big changes. They do not want to mess around with the menu. If one scrutinises the content on the channel then the content of daily soaps in not very different from others like Star Plus,Color or Zee. But it lacks the finesse,and style like Star Plus and Colors,” says Halve. It is true while in early 2000s Star Plus stole the show with soaps such as Kyunkii Saas Bhi Kabhi Bahu Thi, and Kahani Ghar Ghar Ki. Later Colors stole the march over Zee with disruptive programming with shows such as Balika Vadhu and Na Aana Is Des Meri Lado.

Goenka,however,is unfazed by this criticism and is looking at newer ways of strengthening the company’s profitability. A few months ago,he signed a first of its kind distribution deal with rival Star Den wherein the two partners decided to distribute their entire bouquet of channels together. The idea was to strengthen subscription market and curb piracy that gobbles up a large part of revenues meant to reach broadcasters. “The distribution business in India wasn’t shaping up well. Lack of robust subscriptions led broadcasters to depend on advertising heavily. We wanted to check this anomaly and hence,the deal,” says Goenka. “Our new company MediaPro will help curbing piracy and also expedite digitisation and bring in addressability. If achieved these will drive higher subscription revenues,cut costs on carriage and also increase efficiencies in the entire distribution business,” he adds. The entire subscription universe is estimated at Rs 16000-18000 crore. It has been alleged time and again that local cable operators under-declare the subscribers numbers by almost 70%-80%,and broadcasters’ due share in the pie never reaches them.

Besides trying to strengthen subscription market at home,Zee is also aggressively expanding its footprint in global markets such as the US,UK,Africa and other Asian markets. These markets bring in handsome subscription revenues and it is estimated that approximately 37% of Zee’s annual revenue comes from this segment.

While happy with his position in the Hindi GEC space,Goenka is now looking at entering newer niches such as specialty channels. He believes with digitisation around the corner,the future of television in India belongs to niche channels. The Group recently launched a 24-hour food channel Khana Khazana and plans to launch a Golf channel. He eventually wants to have at least 10 niche channels in his bouquet. “I think genres such as travel,lifestyle,food will grow in the near future. And I feel genres like music and sports will get fragmented,” he says.