ZEE5 will break-even in five years: Punit Goenka

MUMBAI: ZEEL MD and CEO Punit Goenka has said that the company’s video on demand (VoD) platform ZEE5 will break-even in five years. Goenka also said that his company will not do deals with telecom operators unless it gets the right value. He also noted that ZEE5 will be rolled out globally in a phased manner.

Goenka also said that the paid subscribers will increase as it releases original content. The platform plans to launch 90+ originals in FY19. It has so far released 15 originals across six languages. It also plans to premiere 150 exclusive movies across languages over the next twelve months.

“As far as break even timelines are concerned, we are still in investment mode, not just as ZEE5 but as an industry. As I had said, generally when we invest, we look at a 3-5 years horizon for breakeven. In this case, I would like to be a little conservative to say that it will be towards the 5 years. It will definitely not breakeven in the first three years,” Goenka told analysts during an earnings call.

Queried about ZEE5’s global launched, Goenka said, “ZEE5 global launch will happen in a phased manner. By the end of the FY19, it will be available globally across the world.”

Talking about the deals with telcos, he said, “We have not yet signed any telecom deal for ZEE5 in India or overseas. That’s a process of negotiations and till we get the right value of our content we will not do the telecom deals.”

Goenka also said that he is not worried about cannibalisation of subscription revenue by ZEE5 in international markets. “I think if ZEE5 does cannibalize our existing subscription revenue in international markets I will be very happy with that. Because that’s a direct ownership of the customer that the company gets rather having it through a distributor. So that’s a good problem if it happens that way and that is one of the parts of our strategy of going global with ZEE5,” he noted.

ZEEL, he said, is all set to launch the Malayalam GEC in September subject to regulatory approval from the ministry of information and broadcasting (MIB). The company is also working on a Punjabi GEC besides the spate of regional movie channels.

“On the regional channels, we will be launching a Malayalam channel this year for certain. We are still awaiting regulatory approval for that. Subject to regulatory approval, we are ready to launch in September. We are actively evaluating other regional markets as well,” he stated.

He also said that the company is working on the licensing front and the library accumulation front.

ZEEL will also strengthen the existing channels including Tamil, Kannada, Telegu, Bengali, Marathi, Bhojpuri, Oriya, so all of these places we will work. “The endeavor is to continue to strengthen our share and also enter some of the new markets,” he noted.

Goenka also revealed that the company has started the conversation with our distribution partners on implementing the new tariff order. He also said that the share of broadcasters’ pay-out will range between 25-30% going forward.

He also asserted that consumers are not going to do à la carte selection of channels. The number of subscribers who will opt for channels on a la carte will be minuscule.

“Eventually, bouquets will only sell. Whether it is broadcasters’ bouquet or DPO’s bouquet depends on the construct and I’m sure all DPOs are smart enough that they would want their packages to sell rather than directly broadcasters packages and hence, that is the way I think it will play out,” he averred.

He also said that the content provided to Reliance Jio’s OTT app Jio TV is restricted to the mobile screen. “We are not allowing them any rights to take our content from the handsets and cast it to the TV. The content is restricted that way and married to the sim card. Therefore, we treat them as a very different consumer than a household consumer,” he said.

Queried about the impact of Jio GigaFiber on cable and DTH ARPUs, Goenka said Reliance will have an input cost of getting to the homes. Then there will be a content cost that they will have to pay to broadcasters for getting the content to rollout.

“How long will they want to subsidise the business model is something we will have to wait and watch and see what they are doing. From my perspective it doesn’t change much because if I am getting a particular yield on cable I should get that same yield on whether it is FTTH or it is regular coaxial cable,” he pointed out.

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