Regional helped ZEEL to prevent ad de-growth in FY20: Ashish Sehgal
MUMBAI: 2019 has been a difficult year for the TV industry on account of the new tariff order (NTO) in the first part of the year and then the economic slowdown in the second part of the year.
At a media roundtable to announce the launch of four regional channels, ZEEL chief growth officer – ad revenue Ashish Sehgal said that the company will manage decent single-digit ad revenue growth in FY20 with still a quarter to go. Sehgal expects his company to once again outpace industry growth.
He noted that this year there has been a dual impact on advertising. One, he noted, was the NTO and though time spent on TV went up there was confusion in the market that persisted. The other being the economic slowdown. “That brought down the total ad pie in the initial months of NTO. Then the economic slowdown happened and we felt that impact since June, July. Post that the impact of a slowdown started. Because of that, the growth cycle that was there within the TV industry has slowed down,” Sehgal stated.
Queried about ad revenue growth projection for FY20, Sehgal stated, “Coming to what Zee is doing. Everybody is doing their best and we are used to high double-digit growth rates. Obviously we did not see that kind of growth this year. We will also be in a single-digit number. With one quarter to go, I cannot give you an exact number. However, we will still be better than the market. That is how we look at it.”
He said that regional is the only genre where ad rates are growing as Hindi has plateaued. He is thankful that the regional slowed down the decline of ZEEL’s ad revenue growth. “The de-growth has been stopped by the growth of regional. This is because markets like Bengal, Maharashtra, Karnataka, Tamil Nadu, Kerala, Bihar have grown substantially. This helped us counter the deceleration in certain other genres,” Sehgal noted.
“Ad rates are growing only in regional. The Hindi market has been stagnant for some time and primarily because of the way BARC has projected that market. The reach of that market has not grown for the last couple of years. Regional is one of the main genres in television.”
Sehgal said that the local contribution to advertising in a market it varies from 10-25%. Tamil Nadu is at the higher end where 25% of the revenue comes from local businesses.
ZEEL CMO Prathyusha Agarwal noted that the big advertisers recognise the fact that the next big tranche of growth is coming from the regional markets. “They are interested in creating strong bonds and raising concentration levels in these regional markets. I think that our regional sales teams do a great job of creating those customised solutions for the national scale advertisers and growing the retail pie there. Clearly there is demand.”
She noted that ZEEL’s sales teams provide national solutions which have a regional customisation so that brand strength and business deliveries grow not just at a national level but also at a regional level. The aim is to partner beyond just FCT. She gave the example of L’Oreal in Maharashtra.
On the NTO, she said that brands that have a strong pull have ensured that their reach has pulled up and settled down. This she noted is especially true in the regional markets. “Wherever you are number one customers despite all the last mile issues have asked for it and have ensured that it is a part of their repertoire and so the reach came back to original levels. There is obviously still the fact that this category has discovered pricing for the first time.”
Since this did not exist earlier the value chase will go through a couple of cycles to figure out unit pricing and bundled pricing. She expects it to take a bit of time to stabilize but for ZEEL most of the reach is coming back. She is confident that the minor things that need to be ironed out will be ironed out. On English, she noted that subscription has come in so one knows how many are purchasing.
ZEEL cluster head Regional HSMs Amit Shah maintains that while the English genre was affected at the start of the NTO it has started to grow is reach numbers over a period of time. In DTH exponential growth has happened. In the cable world, there will be challenges due to the way channels in that genre are placed in different packs. At the same time, there are interactions and discussions that keep happening by ZEEL’s distribution team with all the cable partners. “Therefore there has been an improvement in the past two to three months. But at an overall level if you ask there is a gap between the earlier reach to now compared to the regional channels which have come back to pre NTO levels.”
Giving an overview of ZEEL’s plans in regional Agarwal noted that the company has been a dominant leader in Marathi for seven years now. The East cluster is once again in the leadership space. In the South, while ZEEL has just five chanels it has managed a 15% market share driven by GEC.
Zee Kannada, she noted, has turned the tables on the competition while Zee Keralam has been the most successful GEC launch in five years and the differentiated strategy of fiction launches helped. The Malayalam GEC has zoomed past Sun TV Network’s Surya TV. The idea behind launching three regional movie channels, she noted, is to capture marketshare and there is an excellent opportunity here.
In the north, she noted that it has always been a Hindi market but Punjab is a high potential market. Already 18.4% of content consumed is in the local language. This provides a huge headroom for growth. “In each of these regions we have seen that wherever we have supplied quality, original content and told stories from the culture and characters that are unique and relatable we have grown the category and share.”
The aim is to get the cultural soul of each region to the screen. It is about telling stories of the passion areas from each region. She also said that Punjab is a more affluent state compared to some others so advertisers would want to take advantage of the opportunity.
Shah noted that the consumption of Punjabi content has doubled in the last two years. That, he said, is the affinity for language content in that market. “Whenever content is made available in their language they lap it up.”
He noted that according to a qualitative study done people want to see their own stories, culture, nuances in their own language. “Haryana has 18% viewership from the Punjabi language. Delhi meanwhile has 4% content consumption in the Punjabi language. So in many states, Punjabi as a language and content is being lapped up by audiences. That gives us the confidence to foray in this direction.”
He also noted that in Punjab music and movies are equally important. So the FPC ensures dedicated timebands for both. Movie premieres will play an important role. Music plays in the morning from 6-8:30 am. A movie will play every night once a fiction show ends. He noted that there is no Punjabi channel that airs fiction shows. He said that a Punjabi movie channel could be looked at some point in time. The focus though now is on getting the Zee Punjabi channel right first and entrench itself well in the market.
ZEEL South cluster head Siju Prabhakaran noted that the big realisation for the South has been that the current incumbents have only been able to tell the viewers about their movie library. But in the South movies are more than product delivery. It is about emotion and ZEEL is looking to tap into this. The aim he explains is to build an emotional connect with audiences.
Agarwal noted that Bhojpuri content consumption goes beyond Bihar into Metros and mini-Metros. “That is a great opportunity. We have an enviable library and we have roped in the three big stars as the face of our brand campaign. Be prepared for fireworks. Slots are custom made for Bhojpuri audiences.”