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ZEEL to invest Rs 10 bn in new Hindi GEC, launch in last quarter of FY15

MUMBAI: Zee Entertainment Enterprises Ltd (ZEEL) is planning to expand its current fleet of channels by launching a Hindi general entertainment channel (GEC) in the last quarter of the current fiscal.

The investment will be to the tune of Rs 700-1000 crore (Rs 7 billion-10 billion) over 3-5 years when the new channel is expected to break even, a fund manager who attended IDFC’s annual investor conference was told by a ZEEL official.

“There is space for a segmented Hindi entertainment channel. We have seen that in the case of Epic channel. We are targeting our new Hindi GEC launch in the January-March 2015 quarter,” the ZEEL official said.

Speaking to TelevisionPost.com on condition of anonymity, the fund manager said that ZEEL’s main investments will go towards this new GEC and no other big channel launches are planned at this stage. “We will concentrate on the new GEC launch. But I can’t give you details of the channel,” the fund manager was told.

TelevisionPost.com had earlier reported that ZEEL is planning to launch a GEC under the ‘&’ brand. It already runs a Hindi movie channel under that brand called &pictures.

Earlier this year, ZEEL had launched Zindagi, a GEC with content sourced primarily from Pakistan. The company’s flagship Hindi GEC is Zee TV while Zee Anmol operates as a free-to-air (FTA) channel.

ZEEL managing director & CEO Punit Goenka also spoke at the IDFC conference. The ZEEL head honcho said that the investment in the new GEC will be in line with any other mainstream GEC.

Since it is a mainstream GEC launch and will be competing with the incumbents in the market, its cost structure will be in line with any other GEC. Goenka, however, did not specify how much the new channel would consume in terms of investments.

Earlier in the year, Multi Screen Media (MSM) launched Sony Pal to complement its flagship GEC Sony Entertainment Television. MSM also runs SAB, a channel uniquely positioned with its comedy shows.

On the sports business, Goenka said that the losses would continue till forbearance on wholesale tariff is not implemented. ZEEL’s incremental investments in the sports business will not be substantial, he clarified. “The sports business is important from a distribution point of view, he added.

Goenka expects ZEEL’s subscription revenues to double in the next 5-6 years if digitisation is implemented in the right spirit.

On the RIO issue (Reference Interconnect Offer), Goenka said that it will be a good thing for the industry if revenue flows in to the broadcaster as content costs are climbing.

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