The consistent surge in subscription revenues for the past few quarters at Zee Entertainment Enterprises Ltd. (ZEEL) might have come as a surprise to its competitors and stock market analysts, but for the ZEEL top brass, it’s an affirmation of their strategic goal set many years ago. Their subscription revenues surpassed advertising revenues consecutively in the last two quarters assuring ZEEL management that their long-term goal of achieving 70 per cent of total revenues from subscriptions is not far off now.
Subscription revenues made up 51 per cent of ZEEL’s total revenues in April-June quarter. That’s an 11 per cent jump compared to the same period last year. Its peers now see ZEEL carving out a new business model for the broadcast industry.
Traditionally, broadcasters in India have relied almost entirely on advertising revenues to shore up their numbers. That’s not without reason: Before DTH and digital cable arrived on the scene, subscription revenues came entirely from the unorganised analogue cable industry where under-declaration of subscribers has always been de rigueur. Even though India has about 72 million analogue cable homes today, broadcasters get paid for only five to six million of them. “Six to 7 per cent is the national average for declaration of paid cable homes in India,” concurs Executive Vice-President, Corporate Strategy and Business Development, ZEEL, Atul Das.
Hence, most Indian broadcasters have focussed on the programming mix and on launching multiple channels to attract more advertising. But ZEEL additionally worked quietly towards increasing its paid subscription base.
Subhash Chandra, chairman at ZEEL, was among the first broadcasters to turn pay in the 1990s. He also became the first to install equipment at the cable operators’ end to know just who were watching his channels. In 1995, the ZEE group entered the cable distribution business by launching Siti Cable (now called Wire and Wireless India Ltd.). In 2004, it launched a DTH company, Dish TV, in an attempt to control the entire value chain of content production, broadcast and distribution.