Punit Goenka CEO, Zee Entertainment Enterprises

With a population of more than 1 billion people, India is one of the world’s biggest and most dynamic broadcast markets. The country continues to expand the size of its potential DTH subscriber base, and for broadcasters this is good news, as pay-TV subscribers are hungry for more content.

Operators such as DishTV, Tata Sky, Bharti Airtel and Reliance Communications have all seen phenomenal growth as the demand for pay-TV services has increased exponentially in the last few years. DishTV, the market’s leading DTH operator, launched HD services in 2010 and passed the 10 million subscriber mark last year. Tata Sky also launched HD services in 2010.

While the DTH market has been dominated by low-cost offerings, operators have been working on developing their HD offerings to the market. With such competition, the demand for better channels has put the onus on broadcasters to deliver more channels to platforms. A broadcaster such as Zee Entertainment Enterprises (ZEE), will play a key role as India’s pay-TV market continues to grow. As customers have new demands for how they access content, this will also bring new challenges to broadcasters such as ZEE.

The insatiable appetite of these subscribers for more pay-TV content has been good news for regional broadcasters. Punit Goenka, CEO, Zee Entertainment Enterprises, shares his perspective of the regional market environment as the leader of one of India’s largest broadcasters. 

VIA SATELLITE: What are the main challenges facing ZEE during the next 12 months?

Goenka: There are a number of challenges and opportunities for Zee during the next 12 months, largely due to the digitization process that is going on right now. In the next 12 months, you will see two phases of digitization being activated. The first phase, which will start on July 1, will have four metropolitan areas moved to the mandatory digital addressable system. This will cover roughly 10 million digital homes. We forecast that 3 million homes have already converted to DTH and cable. There are another 7 million homes that need to be converted by July. The second phase, which will start on Jan. 1, 2013, will have another 38 cities, each with a population of more than one million people, which will be added to the digital addressable system. This is a challenge because the industry needs to convert broadcasts by these dates. Given the reception available, I think the first phase may not be completed until August or September. 

VIA SATELLITE: With a number of DTH platforms launching in India, how is this impacting the broadcast market and your demands for satellite capacity?

Goenka: It has impacted us in a very positive way. There are seven major DTH broadcasters in the country, six of which provide commercial services on a nationwide basis. This has enabled us to reach more than 30 million homes. The reach we have for our channels is immense.

We are a big buyer of satellite capacity, but I don’t think we will see a huge increase in our demands for capacity. I don’t think it going to significantly go up from where we are today. But, one of our sister companies in the DTH business, DishTV, will increase their satellite capacity. They are currently the largest buyer of satellite capacity in India. As a group, we are the largest buyers of satellite capacity. 

VIA SATELLITE: What is your strategy in catering to iPads and other tablet devices that have become just as popular as televisions for viewing content?

Goenka: I think the penetration of smart devices is going to increase significantly during the next few years. The pricing of smart devices is going down. Revenues will be small in the next few years, but in a four to five year scenario, we are expecting 10 percent of our revenues to come from digital and media services, so OTT, on-demand, smart devices, etc.

VIA SATELLITE: What are the major growth opportunities for your business?

Goenka: There are three or four areas where we can grow the business. In India, the digital addressable system will be an automatic growth story for us given the fact that we suffer from certain piracy issues in country. This will definitely give us a large presence in the market. The addressable system will create opportunities for more niche content to be bought onto platforms.

On the international side, I think we have very successfully adapted to this market so far, but we will now look to offer more local content. We have to stop thinking of ourselves as a South East Asian broadcaster, but instead look at the content needs of local people living there. For example, we have a launched a lifestyle, health and living channel, “Veria Living HD” in the United States. That catered not only to South Asians but also to the American population. Similarly, in the Middle East, we launched a movie channel four years ago primarily catering to females in the Saudi Arabian market, and we can say that this is the third ranked channel in terms of all females across Saudi Arabia. 

VIA SATELLITE: What impact is over-the-top (OTT) broadcasting and streaming technologies having for traditional broadcasting?

Goenka: Typically, we don’t think there will be too much overlap in terms of traditional broadcasting. We think a new set of audiences will emerge with OTT who do not have the patience to consume TV in front of the TV set. Therefore, it is a new customer base that will be tapped into. The penetration in international markets is already growing. We see ourselves tapping into that in a big way. In India, considering the bandwidth issues, the numbers will be relatively small, but we have pre-emptied the market. We were the first OTT platform to launch in India with the brand “Ditto TV” in February of this year, but we have been using these technologies to get ourselves ready for these new audiences. 

VIA SATELLITE: Where are you in terms of your transition strategy from SD to HD? Is everything now being produced in HD?

Goenka: We already have a number of our key channels in HD. For example, our flagship channel, Zee Entertainment Enterprises is already in HD. We also have our movie channel Zee Cinema in HD and Zee Studio HD on the English language offering. We have a lifestyle channel called Veria Living HD, as well as a sports channel Ten HD. Our goal is not really to replace the SD channels to HD. Around 6 percent of new subscriptions, whether they are DTH or cable, are HD ready, so there is still more than 90 percent of the subscriptions where it is just about an SD signal. Most people are still opting for the SD service, so we will continue to provide these services in both formats in India. However, in the international market, I think it is true that things will transition from SD to HD. Those markets are far more advanced in terms of HD penetration, the consumer and HD ready equipment, but eventually, in the Indian market, more platforms and on-demand services will offer HD. We will continuously be upgrading more services into the HD format.

VIA SATELLITE: What major infrastructure projects is Zee working on? What technologies are you looking to implement in your broadcast systems?

Goenka: I think the biggest one we have been working on during the last several years is what we call our digital asset management system. It converts analog broadcasts into the digital format. So, given that ZEE has more than 110,000 hours of content already in its library, we have successfully been able to convert 60,000 hours so far. I think in the next two to three years, we will be able to convert the entire library. This will allow us to leverage our media across the organization and help us deliver content and media in different formats for different screens, as well using social media. 

VIA SATELLITE: What trends do you see emerging in broadcasting during the next 12 months?

Goenka: India is ready for consolidation. This is the only other thing I see happening in this market. Currently, there are four or five large broadcasters, but several smaller broadcasters. Slowly, I think you will see some consolidation take place.

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