When it rains, it pours. There is no end to the woes of Zee TV, which has been undergoing a harrowing time since the launch of the Star game show. The company in the latest quarter ended December 2000, reportedly, does not have a single programme among the top ten programmes in the cable and satellite universe!
Infact, it seems unbelievable that the same channel had seven of the top ten programmes in the cable and satellite universe just six months ago. Just goes to show how fickle the remote control can be!
The channel on its part has replaced itís game show with its popular programmes (that were earlier shifted to the 9.30 pm slot) but it could take anywhere upto a month to show up in the ratings. The stock price seems to be mirroring these trends as it touched its new 52 week low of Rs 220 yesterday.
The company is slated to announce its third quarter results on January 25, 2001. We expect a net profit in the range of Rs 200ĖRs 250 m for the third quarter for Zee Telefims, on a stand alone basis.
We have mentioned earlier that the critical development that has to take place to put Zee on the growth path is the change in the underlying structure of the business model that is existing in the cable and satellite business. The management believes that this will happen due to:
customer demand for broadband access and interactive value added services which would require increasing investment in infrastructure from cable operators and
increasing payout from the cable operator to the pay channels that would squeeze the cable operatorís margins
These are likely to lead to a consolidation in the sector and would benefit the larger cable operators such as Siticable. How soon will this happen remains to be seen?
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