Rohit Gupta, CFO, Zee Entertainment Enterprises Limited (ZEEL), talks about the Q1FY21 numbers, ZEE5 and its contribution in revenue, Viewership, ad revenue, content pipeline among others during an interview with Swati Khandelwal, Zee Business. Edited excerpts:

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Q: Consolidated revenue has fallen by about 34%, however, your domestic revenue has shot up by 6.2% YoY. What were the key reasons for the same and how much did ZEE5 subscription contributed in the overall growth?

A: In this quarter, the impact of COVID pandemic was felt not only by ZEE but the entire media and entertainment industry has seen that impact. Consumer spending has been low due to the nationwide lockdown; therefore, advertisers have not spent as they have been doing in the past. Besides, fresh content was not produced due to the lockdown and that has greatly impacted our ad revenue. Therefore there is a 64% fall in the ad revenue of the quarter on a year-on-year basis. But having said that, our subscription revenue has grown 6.2% and it is showing stellar growth. However, our viewership number has been increasing and in the last four weeks, the viewership number has gone to 19.2% as against 15.8% in quarter one. This is a very important aspect. This shows the fate that consumers are giving a signal that TV will have its importance. Secondly, the revenue of ZEE5, we have provided the matrix of ZEE5 this time, has grown on both the revenue side and otherwise also. We had 39.7 million monthly active users (MAUs) in June and 4 million daily active users (DAUs) in the month. 

Q: Despite a sharp increase in viewership, your ad revenue declined in the quarter. Have you started seeing improvement here, and by when can we see growth in this revenue stream?

A: I think, viewership is the biggest matrix and we have seen that the recent viewership numbers of the past at 19.2% as provided earlier is higher even from the pre-COVID levels. And as I said, we are seeing green shoots, we are seeing advertisers coming back and there is a month-on-month improvement in our ad revenues. We are expecting that there will be a growth in H2 (second half of the year) over the last year. So this is what we are targeting and we are hoping that both in the linear and on the digital side, we will keep on saying higher viewership share.

Q: Let’s talk about the content and you have released 14 original series/ movies during this quarter. Tell us about your content pipeline for Q2FY21 and Q3FY21?  

A: Production has commended now and almost all channels are back in terms of production even in our ZEE5 production has started. So, we expect that as production resumes, we will continue to release more and more original content on our digital platform. In the liner business, we have started all original content, now. So literally we are back in action. As the festive season is coming by the end of this month that will certainly help us in our ad revenue growth. 

Q: What are the strategies you have in place for growth especially for the OTT platform ZEE5?

A: We have taken a hard look at our cost, but we have not to the side from making investments in content and the right places. Consistently, we are making the right investments. As far as our strategy is concerned then we are more focused on ad revenues in the near business. We will keep giving the content as we have always been giving to our consumers. We will be giving amazing content that we have been giving. On the digital platform, we will continue to give the right kind of content. We are taking enough and more measures to make sure that not only ad and subscription revenues grow but also our bottom line grows.

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So planning has always been our aspect and we have always been a cost-conscious company. So there is a clear focus on the margins as well.