ZEE5 recalibrates its original content strategy

MUMBAI: ZEE5, the video on demand (VoD) platform of ZEEL, has recalibrated its original content strategy after the running short of its target toll roll-out 90 original shows/films in FY19.

Against the targeted plan of 90 original shows and films, the VoD platform has been able to launch only 31 pieces of content till December. Additionally, it did 38 movie premieres for the same period.

The reason behind the shortfall is the mid-way course correction undertaken by ZEE5 based on the content consumption pattern of the users. The platform even dropped a few shows as part of the course correction.

“So, the 90 shows that we have planned was a combination of multiple formats of shows. And we quickly realised within three to four months of content being launched on the platform what kind of content is actually getting traction. So we have kind of repositioned our content strategy to pursue that,” ZEEL MD and CEO Punit Goenka told analysts during the Q3 earnings conference call.

“We will be doing a lot more of a tentpole. I think we have talked about one tentpole a quarter, but we will be doing a lot more tent poles in multiple languages going forward now.”

In FY20, ZEE5’s endeavour will be to launch 72 originals shows/films across six languages. The strategy is to focus on tentpole shows and launch six web series a month in each of the six languages, Hindi, Marathi, Bengali, Tamil, Telugu, and Malayalam.

“Going forward, our endeavor is that in the next fiscal we should be running at about six web series a month that we want to target in the six languages that we have talked about. So that is 6 times 12, 72 is the minimum that we want to look at for the coming fiscal. For movies, they are still in the pipeline of acquisition, so I can’t give you a number right now. So that is what it looks like on the content side,” Goenka stated.

The VoD platform will also ramp up its international content going forward. ZEE5 is building its content slate through the acquisition of Hollywood and other international content. “And then we will be commissioning even digital films that will be exclusive to our platform as ZEE5 exclusive and original films,” said Goenka.

On the international launch plans, Goenka said that ZEE5 has been soft-launched in the international markets. However, the first commercial launch will be in the Asia Pacific region in Q4 followed by the entry into other markets in Q1 FY20.

“Barring the United States, by the end of first quarter, next fiscal, we should have launched in the other territories commercially,” he commented. The subscription price in the international markets will be in the range of $2 to $10 depending on the territory.

Even as the investment phase continues, the revenue flow for ZEE5 has started to happen with contributions from both ad and subscription side. ZEE5 played a role in the 21% domestic ad revenue growth. It has also started booking the subscription revenue from telcos.

“I think there is a long way to go for us to drive that to a significant number for the company over the next three to five years that I have guided for. Having said that we will be investing back all of the revenues as well as more cash flows behind the ZEE5 content and marketing,” Goenka added.

Goenka also stated that the ad inventory on digital is much lower compared to TV. The fill rates on the two mediums also have a wide variation. TV channels air 12 minutes of ads in an hour while on digital the ad inventory is restricted to three ads per show of 22-minute duration.

“Even at today’s level, we will see that 54% of fill levels on the digital side. Whereas on the TV, it will be upwards of 90% fill levels on the ad loading,” he explained.

Asked whether the number of ads on digital platforms will go up further, Goenka said that the digital ecosystem doesn’t support ad inventory more than this, and ZEE5 wants to stick with three ads per show.

He also noted that ZEE5’s impression count is at six seconds as against the norm of counting three seconds in the digital ecosystem. This method is friendlier for advertisers compared to other digital mediums.

He also feels that the fill levels definitely will improve over a period of time. “I think we can expect it to be reaching the 80% to 90% levels in the coming year itself. But I do not expect to increase the load of inventory, at least in the foreseeable future.”

On the stagnation of time-spent at 31 minutes, Goenka said that this is due to the push on growing reach because the total time spent then gets divided over a larger base.

Despite incurring losses on ZEE5, Goenka is confident that ZEEL will deliver 30% plus EBITDA margin in FY19.