Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.

Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Zee Television: Can it comeback? - Views on News from Equitymaster
  • E-MAIL
  • A  A  A
  • Jan 6, 2001

    Zee Television: Can it comeback?

    Murphy couldn’t have asked for a more high profile client than Zee. Everything that could go wrong with the company last year did go wrong. The company, which had one of the highest market capitalisations (Rs 672 billion; US$ 14.4 billion) in February 2000 ended the year with a market capitalisation which was nearly a sixth of that. But it did not start this way though.

    Last year, the company integrated into broadcasting by buying out its erstwhile partner Star TV in its joint venture Asia Today Ltd. The company then announced an ambitious plan to upgrade its cable company Siticable’s network in 26 cities. What Zee had in mind was to control the last mile access in millions of homes via Siticable, provide them value added services such as Internet over cable and charge them a sum of nearly Rs 1,500 per home (US$ 32). It also set up a horizontal portal Zeenext.com.

    It planned to ramp up its content and expand its network to 27 channels. Besides, the flagship channel would also become a pay channel by July 2001. From being a content provider to a broadcaster and then a cable company to being an Internet play, Zee had it all. There was nothing that it could do wrong.

    And then came ‘Kaun Banega Crorepati’ – Star TV’s Indian version of ‘Who wants to be a Millionaire’. Not only did it bring introduce a new genre of programming in the country but it also went on occupy the top notch among the prime time programmes. Zee, which had seven of its programmes among the top ten programmes in the cable and satellite universe (till July 2000) was the hardest hit. Four of its programmes lost their coveted slots among the top programmes. Advertisers were willing to pay rates almost six times they were paying to Zee to get a slot on Star Plus’ game show.

    Zee replied with a game show of its own. Billed as the biggest game show on earth with prize money potentially ten times bigger than Star’s game show went on air during Diwali. However, Zee shifted its most popular programmes to a later slot in order to take Star Plus head on. The verdict was unanimous: It was a flop show. One reason for this was that though the game show was far more sympathetic to the player, it was confusing for the viewer. Moreover, the sets looked far too similar to those of Star Plus’ game show. What was more critical was that Zee lost the prime time slot to its rivals as it had already shifted its popular programmes to a later slot to make way for the game show.

    This was not the only unkind cut. Zee’s plans for its sports channel also went awry. This was after it lost the bid to bag the telecast rights of international cricket events for seven years to the WSG group. (Rupert Murdoch’s Star TV was part of this combine.) With sports in India being linked to cricket and the rights for cricket telecasts over the next five year’s already having been snapped up either by Doordarshan or the Star Sports–ESPN combine, the content for Zee’s sports channel would have been a problem.

    By the end of the year, Zee announced a curtailment of investments in the broadband project, syndication of programmes for its flagship channel Zee TV and restricting its portal Zeenext.com to offering streaming video (the group had plans for a horizontal portal earlier). The group has whittled this capex plan to Rs 8 billion, with upgradation of the Hybrid Fibre Cable network restricted to 8 cities. (The management however will have to make a placement in Siticable to finance these moves.) It also announced the divestment of Buddha Telefilms Private Ltd. (BFPL) which owned the sports channel. The Zee group however, in a statement said “In the recent past, the mega appeal and power of cricket got sullied and soiled…BFPL will focus its strategy around soccer.”

    The announcement of restricting Zee’s capex also puts a question mark on the group’s plan to make Zee TV, the flagship channel, into pay channel. The rationale for converting Zee into a pay channel was that the enhanced revenue streams that would accrue after Zee TV goes pay would help the company meet the increased programming costs. With Zee losing prime time slot to competition (read Star TV), it is quite possible that if Zee goes pay but its rivals Star TV and Sony continue to remain free–to–air, this move could mean a further loss of market share for Zee.

    The company now seems to be taking steps in the right direction. It has yanked off its game show, brought back its successful prime time programmes on the same time slot that they occupied prior to its game show going on air. Whether these programmes are able to recreate the magic for Zee and get advertisers back remains to be seen.



    Equitymaster requests your view! Post a comment on "Zee Television: Can it comeback?". Click here!


    More Views on News

    Zee Ent: GST Short term Negative but Long term Positive (Quarterly Results Update - Detailed)

    Aug 14, 2017

    The management believes that GST will aid the advertising spends in the long-run.

    GTPL Hathway Ltd. (IPO)

    Jun 21, 2017

    Should one subscribe to the IPO of GTPL Hathway Ltd?

    S Chand and Company Ltd. (IPO)

    Apr 26, 2017

    Should you subscribe to the IPO of S Chand and Company Limited?

    Zee Ent: Advertising drives revenues (Quarterly Results Update - Detailed)

    Aug 1, 2016

    Zee Entertainment has announced its results for the first quarter of the financial year 2016-17 (1QFY17). The company has reported 18.5% YoY growth in sales and a 13.7% YoY growth in profit after tax.

    Zee Ent: Operating Margins Continue Expansion (Quarterly Results Update - Detailed)

    Jun 9, 2016

    Zee Entertainment has announced its results for the fourth quarter of the financial year 2015-16 (4QFY16). The company has reported 14% YoY growth in sales and a 13% YoY growth in profit after tax.

    More Views on News

    Most Popular

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    The Most Important Innovation in Finance Since Gold Coins(Vivek Kaul's Diary)

    Aug 10, 2017

    Bill connects the dots...between money and growth, real money and real resources, gold and cryptocurrencies...and between gold, cryptocurrencies, and time.

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    Bitcoin Continues Stellar Rise(Chart Of The Day)

    Aug 10, 2017

    Bitcoin hits an all-time high, is there more upside left?

    5 Steps To Become Financially Independent(Outside View)

    Aug 16, 2017

    Ensure your financial Independence, and pledge to start the journey towards financial freedom today!

    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms


    Aug 22, 2017 (Close)


    • Track your investment in ZEE ENTERTAINMENT with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
    • Add To MyStocks



    Detailed Financial Information With Charts