Mumbai: Punit Goenka, MD and CEO of Zee Entertainment Enterprises, hinted that his company is investing over 7% of its operating profit [EBITDA] into its ZEE5 streaming platform, clarifying that he was not worried about the shutting down of ‘niche’ channels as audiences shift to streaming services.
The COVID-19 lockdowns has impacted economic activity in the country and resulted in a widespread loss of livelihoods.As consumers focus on saving cash, companies have seen a sharp decline in sales. This has in turn led them to cut back on discretionary spends like advertising, which contributes more than half of the Indian media industry’s revenue.The sharp pullback in advertising, however, is only the latest trigger in a market beset by a long-term trend of educated, urban middle-class Indians increasingly turning to online streaming to meet their entertainment needs.
Goenka pointed out during his comments on the company’s performance in Q4 FY20 that Zee Entertainment Enterprises “I do not see shutdown of niche channels having a long-term impact on our subscription revenue, because with regard to any loss there, the gains we will see on our digital platforms will be far higher”.
“At the end of the day, the audience doesn’t evaporate. The audience has moved from one platform to another. Therefore, we will get our share of that niche content on our digital platform,” he said.
He also seemed to dismiss concerns among some investors and analysts that the revenue from streaming platforms is considerably smaller than the revenue of the broadcasting industry in India. “The value of that being so small in the larger scheme of things doesn’t really impact us in the short term, medium-term or even the long term,” he affirmed.
The channels serving content in Indian languages are considered safe for now as around 90% of the audiences of such channels Do not have access to cheap, high-speed Internet access — a prerequisite for using streaming services. In contrast, a substantially larger chunk — if not the majority — of those who watch English language serials and movies have access to cheap, high-speed data.