FY20 will be the year of peak investment in ZEE5, says Punit Goenka
MUMBAI: ZEEL MD and CEO Punit Goenka has said that the financial year FY 2019-20 will be the year of peak investment in its video on demand (VoD) platform ZEE5.
“This year will be the peak investment. I’m not guiding for any specific number for ZEE5,” Goenka told analysts during the Q1 earnings conference call.
The company has given a guidance of 30% plus EBITDA margin which Goenka said factors in the losses on account of ZEE5. He also said that ZEE5’s revenue is on target, however, it is not significant enough to impact the top line.
“Our margin is factoring in the losses on the account of ZEE5 or any other investment that we may have. The numbers on revenue are not significant enough for them to make a significant impact on the top line, but it’s in accordance with our plan and targets,” said Goenka.
On being asked about the mobile-only plan for ZEE5, Goenka said that the “mobile-only package does not mean that it’s only a pricing reduction it also means a large part of the content will not be available on the mobile handset”.
The idea behind the mobile-only plan is to create more packages and bundles for people to choose from. “And who are not coming into the INR 999 bouquet, we are creating just another option for them to come and sample using some content, may not be all of it, but obviously, our strategy will be to keep pushing them towards the full bouquet of content, just like we are doing on our broadcast side as well.”
Queried about ZEE5’s daily active user (DAU) to monthly active user (MAU) ratio, Goenka said it is about 8% or 9%. He further stated that he is not happy with this sort of a conversion number. “No, no, we are absolutely not happy with the number. The industry standard is 25% range. And given that we are just about 1.25 years old in this business, we expect to be in line with the industry over the next maybe 6 quarters or so.”
In terms of telco partnerships, he said that ZEE5 still does not have a deal with one large telecom operator. In another telco deal, the full integration is yet to happen. “So I would say, of the 3 telcos, 1.5 are done, 1.5 yet to be done.” He, however, refused to give a timeframe for when this deal would happen.
Goenka also noted that the MAU growth for ZEE5 in the first quarter came from both India as well as overseas markets. “So a part of the earlier quarter the number I gave you is only India numbers. Now that International is launched, that also contributes to the MAUs.” While India saw a significant increase in MAUs it got further strengthened with international numbers. He also mentioned that the app went live on the KaiOS platform, which helped the significant increase.
In the month of June, ZEE5’s MAUs and DAUs stood at 76.4 million and 6.6 million, respectively. ZEE5 released 18 original shows and movies during the quarter and is on track to achieve its commitment of over 72 original shows and movies in fiscal 2020.