We Can Create Content For The World If We Get Partners To Help Us: Punit Goenka, MD & CEO, ZEEL
BW spoke to Punit Goenka, MD & CEO of Zee Entertainment Enterprises, on the likely changes that will happen once a partner comes on board
Last week, Essel Group decided to undertake a strategic review of its shareholding in Zee Entertainment Enterprises (ZEEL) with a view to maximise value for the business. BW spoke to Punit Goenka, MD & CEO of Zee Entertainment Enterprises, on the likely changes that will happen once a partner comes on board.
What prompted you to go out and seek a partner to divest part of the promoters’ stake, given that you are fundamentally strong on some of the key aspects of media?
We do believe that we understand and can create content for the world if we get partners to help us in the two areas concerning technology and geographical reach. We have captured and conquered South Asians across the world and dabbled with some of the non-Indian languages in key markets like the Middle East, South Africa, etc.
Our objective is to enable people to consider ZEE as a mainstream media company like a Disney or a Fox or NBC. Technology can be bought, although customising it to the consumer’s need requires a lot of effort. For instance, ZEE5 is our third attempt in the OTT world. Our first two platforms did not do as well as they should have.
If you look at companies like Apple or Netflix or Amazon… globally, they have tried to disrupt the traditional broadcast model, which has been ZEE’s stronghold for the last 25-plus years. Given that what would they see in a company like ZEE to become a partner?
The content capability of our company is not replicable in any way. Today, if you look at any media tech company operating in India, you’ll notice that they operate in a very niche market segment. They, at best, look at 1-2 per cent of this country because their content spread is restricted to 90-10, i.e. 90 per cent international and 10 per cent domestic. Whereas, in India, the consumption pattern of Indian consumers is their own preferred language content. Our own ZEE5 platform has 55 per cent+ content in regional languages, not just Hindi, within a short span of 6-7 months of its launch. The attractiveness of ZEE is going to be the inherent capability to create local content. Plus, ZEE5 has become the No. 2 OTT platform within six months of its launch because of the inherent value of the content that we possess and the investments we’ve made in the film libraries, etc. That’s the benefit we see.
Where does the family plan to deploy the cash? Are you looking at new business verticals? There were some talks that you might be looking at getting into the BFSI sector or launch some products there?
We are already in the BFSI sector in our SL Finance portfolio, which will be one place for us to use the capital. We want to look at other new-age technology areas where we can deploy or have aspirations to expand the business. But, that’s something perhaps better explained by Dr Subhash Chandra. I am focusing on choosing the right partner and taking ZEE to the next level over the next five years.
What kind of a partner do you have in mind?
First and foremost is the value system. Irrespective of whether the partner has the same value system as us, as long as the meaning of what the two hold are the same, it will be critical for this partnership. It’s once-in-a-lifetime kind of a partnership that we create and therefore it’s critical for both organizations to have a similar value system. Willing to give them equal partnership with the family means that they will have equal rights, because eventually we will run this business jointly.
Can your future competitors come from spheres which presently have nothing to do with the media space?
The overall media and entertainment industry is certainly going through a rapid phase of transformation. The ecosystem is evolving at a faster pace, and so are the needs and preferences of the viewers. In such a scenario, one has to constantly innovate and change as per the time, anticipating the ever-evolving market scenario. There is a very thin line of difference between media, technology and telecom companies. It is an era of co-opetition, more than competition, where one will certainly see new players emerging in the realm of media and entertainment.
But the family currently heads the business operations. So what happens to that?
I value the family’s contribution and management of the business to help bring it this far. The plans for the South Asian diaspora are already in place for the next three to five years. I don’t see any reason why those need to be changed. They can at best be shored up, in terms of bringing those investments forward. I don’t see why a strategic partner should need to get rid of the family running the current business in its current form. But, if they choose to do that, we have a very good professional management team to run each of these verticals.
How do you see the OTT space? Do you think that for broadcast companies, 10 years down the line, OTT is going to be bread and butter? That the majority of the broadcast companies of today will be OTT-driven tech media?
They would have to be, if they want to survive in the long term. If they want to remain only broadcasting companies, they will be at the bottom of the pyramid, because that’s what broadcasting will come down to. Whether that happens in 10 or 15 years is anybody’s guess.
Why do you think the distribution business needs a regulator?
Distribution business, purely in the realm of subscription, certainly needed a regulator to streamline the same. There is not a single product which has maintained a constant price-point in the last 25 years. No other industry functions on constant price points. From that perspective, regulation was certainly needed to resolve the current scenario. Most importantly, for us at ZEE, our customers / viewers are always top priority and I am glad that the regulation will empower them in terms of choice and decision making.