New-Look Zee Courts The Youth

25+ is too old. The channel wants more 18-year olds to watch it. That's the view of Puneet Goenka, MD and CEO of Zee Entertainment Enterprises (Zeel).

The profitable, but stodgy, entertainment network, is getting younger. The group has just unveiled a new logo for its more-than-two-dozen channels — an abstract ‘Z' with a flourish in aqua blue — to mirror its attempt to look young and "new-age".

The last time Zee reinvented itself was in 2005, when ad-man Pradeep Guha took over as CEO and rescued a floundering ship with sharp marketing practices and a slew of new-look shows.

The current branding exercise comes with some new shows too. Hoping to repeat the success of Jhansi Ki Rani, Zee TV has launched another historical, Shobha Somnath Ki, based on the legend of a Gujarat heroine who stood up to the rampaging hordes of Mahmud of Ghazni. The second serial Kaushik Ki Paanch Bahuein is a saas-bahu drama on a doting mother's search for a perfect bride for her fifth son. And finally there is a reality show in September, India Ke Jaanbaaz, that will feature stunt artists of Bollywood.

Behind the new hard-sell is also the realisation that Zeel has to spend more if it is to gain viewership from other entertainment biggies such as Star Plus and Colors. "Yes, we intend to spend more on fresh programming," Goenka told BW. "Star Plus has 40 hours of fresh content every week. We have just 30 hours. We will have to invest more to push it up to 35 hours a week this year."

Zee TV, the flagship channel of the Zee Group, stands at No. 3 behind Star Plus and Colors with an average channel share of 23 per cent (for January-March 2011). Goenka is hoping that the new push will help Zee TV reach No. 2: "This is going to be a spend year for us; and we hope to reap the numbers next year."

Compared to other market leaders, Zee TV has followed a tight-fisted policy for programming. Where Colors has drafted filmstar Akshay Kumar for its reality show Khatron Ke Khiladi for the 4th season, and Hrithik Roshan is on Star Plus with Dance India Dance, Zee TV has used relatively inexpensive TV actors or small-time celebrities to anchor its shows.

This has given the channel better margins than its competitors. For instance, in FY2011, Zeel notched up an operating profit of over Rs 800 crore on revenues of Rs 3,000 crore. In contrast, Sony Entertainment Television makes marginal profits, and after three years Colors has just about broken even.

However, the re-launch message from the Zee camp is that it is willing to up the stakes and compete for a higher market share too. In a long-term game that is a sensible road-map.

The challenge for higher margins, for Zee TV and for other broadcasters, has become all the more difficult with advertising revenue remaining flat. The joint venture between the Zee-Turner alliance and Star-DEN for distribution has to be seen in the context of increasing desperation by the channels to garner higher subscription revenue.

Traditional rivals Zee and Star, recently buried their hatchet to face the cable operators. A united front to squeeze out more subscription revenue from cable operators, who under-report cable subscribers, is the need of the hour, concedes Goenka. "The revenue share from domestic subscription is 27 per cent. We hope to take that over 50 per cent in years to come," he says.

(This story was published in Businessworld Issue Dated 04-07-2011)