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Zee Media’s home shopping channel, Viacom18’s Colors Tamil get MIB nod

MUMBAI: The ministry of information and broadcasting (MIB) has granted a licence to Zee Media Corporation Ltd (ZMCL) to launch its home shopping channel under the name Ezmall.com in October.

The ministry has also approved the name change application of Viacom18 to launch Colors Tamil and Colors Tamil HD. Viacom18 had filed an application to change the licence name of NXT and ZAP to Colors Tamil and Colors Tamil HD.

 

The broadcaster had earlier announced that the channel will launch in the fourth quarter of 2017. Tamil will be the second market in South India where Viacom18 will have a presence. It is a leader in Kannada market with Colors Kannada and Colors Super.

Tamil Nadu is the biggest regional ad market with second-highest number of TV households after Maharashtra.

ZMCL’s entry in e-commerce and TV home shopping

In February 2016, ZMCL had acquired 80% stake in India Today group’s loss-making e-commerce and TV shopping entities Today Merchandise and Today Retail Networks for Rs 165.78 crore (Rs 1.66 billion) in tranches spread over four years.

As part of the transaction, ZMCL initially acquired 49% stake in the companies by investing Rs 39.78 crore (Rs 397.7 million) at par value with a managerial and operational control over the two companies.

Subsequently, ZMCL will increase its stake to 80% by investing up to Rs 126 crore (Rs 1.26 billion) over four years, subscribing for any security convertible into equity shares of TMPL and TRNL, at par value.

The company will launch the home shopping channel directly while e-commerce website, which is already live, has been launched through a subsidiary, EZ-Mall Online.

EZ-Mall Online has already commenced its business operations by launching an e-commerce website ezmall.com. ZMCL has already invested approximately Rs 4 crore in EZ-Mall.

According to the information on ezmall.com, it is a start-up funded by Essel Group that pioneers in video-driven commerce. It aims to enhance the shopping experience by helping shoppers discover the latest products and trends through our product videos and our expert tips.

The website has six key product categories including beauty, fashion, jewellery, kitchen, and electronics. Currently, only the desktop version of ezmall.com has been launched.

ZMCL is entering the TV home shopping segment at a time when the two key players in the market have merged. In September, Network18-owned HomeShop18 had decided to merge with Shop CJ, a 50:50 JV between South Korea’s CJ O Shopping and PE firm Providence Equity Partners.

As per the merger deal, the combination will be effected by way of a share-swap wherein the shareholders of Shop CJ will be issued 25% equity in HomeShop18, making Shop CJ a subsidiary of HomeShop18.

Post the transaction, HomeShop18 will cease to be a subsidiary of Network18 Media & Investments. However, Network18 will continue to be the largest shareholder in the combined entity.

The merger of HomeSHop18 and Shop CJ left Naaptol as the only other player in the market. Naaptol, which also has a play in the e-commerce segment, has big plans for the TV home shopping segment. In August, it had received eight TV channel licences from the MIB.

The TV home shopping business is growing through a period of slack due to the Narendra Modi government’s decision to demonetise high-value currency notes that sent the economy into a tailspin.

The cash crunch that followed demonetisation decision impacted the TV home shopping segment which is highly reliant on cash on delivery mode of payment.

Earlier, ZMCL had also received a licence from the MIB to launch Zee Uttar Pradesh Uttarakhand. The company has been on an expansion spree. On 21 July, the company launched Urdu news channel Zee Salaam to cater to more than 90 million people in the country who read and understand Urdu.

It also launched Gujarati news channel Zee 24 Kalak on 28 September to focus on the developments in Gujarat and to cater to the Gujarati community in neighboring locations as well.

One licence issued, one cancelled

Incidentally, Ezmall.com is the only channel licence issued by the ministry in October. It has also cancelled Waves 24×7, which was owned Delhi-based IAAN Creation. The licence was issued in the non-news category.

The authorised share capital of the company is Rs 5 crore while the paid up capital is Rs 3.11 crore. The company has two directors, Anuj Garg and Ritu Garg.

The ministry has granted licences to 1099 channels, as on 31 October. Of these, it has cancelled 222 TV channel licences. The total permitted TV Channels having valid permission in India remain the same at 877 including 388 news and current affairs channels and 489 non-news channels.

In September, the ministry had awarded one TV channel licence to ZMCL and cancelled five licences.

ZMCL had got the licence to launch Zee Uttar Pradesh Uttarakhand. The MIB had also revoked the licences of L And C Media’s SS Entertainment, Leader Television and Entertainment’s Leader TV, Turner International India’s TCM Turner Classic Movies, ZEEL’s Zee Cinema Middle East, and Vyjayanthi Televentures’ Mayabazar.