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ZEEL’s subscription revenue scenario

MUMBAI: After unloading its sports broadcasting business to Sony, Zee Entertainment Enterprises Ltd (ZEEL) will see its subscription revenue come under some pressure but the positive feature is that collections from Phase III and IV areas of digital addressable system (DAS) will see growth in future.

In FY17, ZEEL’s sports segment posted subscription revenue of Rs 393 crore and accounted for 17.4% of the company’s total pay TV income. This was 21.6% of ZEEL’s domestic subscription income.

“ZEEL’s effective per subscriber realisation will be impacted in FY18 after the exit of sports business. But domestic subscription revenue will be aided by higher number of paying subscribers in DAS Phase III and IV areas in future,” a media analyst said.

ZEEL also believes that it will be able to navigate the Telecom Regulatory Authority of India’s (TRAI) new tariff and interconnect regulations without much disruption to its subscription revenues. TRAI’s new tariff order and interconnect regulations is currently contested in the courts.

In FY17, ZEEL collected close to 18% of its domestic subscription revenue from related parties. Domestic subscription revenue grew 11.2% to Rs 1,822.6 crore in the fiscal ended 31 March 2017.

ZEEL received subscription revenue of Rs 322.8 crore from related parties in FY17 compared to Rs 252.7 crore a year ago. This represented a growth of 27.74% year-on-year (YoY).

Dish TV contributed Rs 231.3 crore, up 26% from Rs 183.9 crore in FY16. ZEEL collected Rs 70.7 crore from Siti Networks in FY17, up 4.6% from Rs 67.6 crore a year ago. Other related parties contributed Rs 20.8 crore compared to Rs 1.2 crore in FY16.

After selling its sports broadcasting business to Sony, ZEEL will face a revenue fall of over Rs 630 crore a year. This will include nearly Rs 400 crore of subscription revenue.

In FY17, advertising revenue from the sports segment stood at Rs 107.2 crore. Other sales and services amounted to Rs 130 crore.

After selling its sports business, ZEEL will look to augment revenues from its existing channels while preparing the ground for new channel launches. Out of the company’s total revenue of Rs 6,434.1 crore in FY17, sports contributed Rs 630.1 crore.

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