Zee Television Ltd has finally decided to enter the Rs 300-crore revenue southern satellite channel market in full force. The company, through its wholly owned subsidiary Dakshin Media Ltd, recently launched Bharathi TV – a Tamil channel. Plans are afoot to launch a Telugu channel very soon.
With this, Zee is the second group to have a channel in all the four southern languages after Sun TV Networks. Currently, Zee is present in Karnataka through Kavery TV, owned by Kavery Entertainment Ltd, and is on the lookout for a strategic partner. In Kerala, it has Asianet via a strategic alliance with Asianet Communications Ltd.
Barring the Malayalam language where Asianet is the leader, all other languages channels belonging to Sun TV Networks, excluding its two news channels – Sun News (Tamil) and Udaya News (Kannada) – are doing extremely well. The Kannada channels of the network, Udaya and Ushe, and the Telugu ones, Gemini and Teja, are leaders in respective segments, grossing handsome revenues.
According to industry sources, Gemini commands nearly 80 per cent of the Rs 70 crore Telugu market. Zee also has to reckon with ETV of Eenadu group in Andhra Pradesh.
With both the networks having deep pockets, the competition is expected to be very stiff. For the debt-free Sun TV Networks, cash is not an issue. But for Zee, tough days have already started.
Zee is slowly losing its premier position to its rivals Star TV and Sony TV in the Hindi heartland. It is rejigging its programs. To improve viewership, it soon plans to air a reality show on the lines of AXN's Survivor. Sizeable investments have also been made in channels under the Alpha brand.
According to industry sources, the group's cable arm Siti-Cable is also losing its hold over the market. Its stock is being hammered down at the bourses mercilessly.
But the important question is will its latest venture, Bharathi TV, succeed in attracting viewership? Will it be able to capture 30 per cent share in the Rs 170-crore Tamil satellite channel advertisement market as projected by Arvind Kumar, the deputy chief executive officer – southern channels, Zee Network.
Currently, 80 per cent of the Tamil ad market is captured by Sun TV and six channels are fighting it out. Bharathi TV is the seventh one to join the crowd.
Success of a channel depends on the kind of program collection it has. And Sun TV is quite ahead in this. It has a phenomenal collection of programs that beats other competitors by miles. This is true in respect of all its channels. Even its cable channel in Tamil Nadu, SCV, is clocking better TRP ratings than a couple of other channels. Given this position, it remains to be seen how good will Bharathi's program library be.
Assuring that Bharathi TV's library has around 200 movies of mixed vintage, Mr Kumar is confident that investments in sourcing quality content will beef up the channel's program content.
Admitting that the channel suffers from a shortage of films, a Dakshin Media official points out that mix of serials and other programs will overcome the handicap. The channel, apart from in-house production, will also fund outsiders to produce the required programs.
But good content costs money. "Tamil is a well-developed market. Substantial investments have to be made to make some inroads. Though we haven't frozen any amount, we plan to make investments over Rs 100 crore in promotion and acquiring content for Tamil and Telugu channels," says Mr Kumar. But an official with Sun TV Networks says that other players are not going to sit tight while Bharathi TV bags software.
Unwilling to specify the actual investment made in Bharathi TV, Mr Kumar projects that the channel will break even in three years.
"We are not targeting the top slot in Tamil now. Our eyes are on the number two position," says a confident Mr Kumar. Accordingly, the channel has fixed a price of Rs 12,000 per 10 seconds as its prime-time advertisement tariff, a notch lower than Sun TV but higher than others in the field. So that's pitching for Vijay TV's current position.
"Vijay TV occupies the number two slot in revenue and viewership," claims Rohit Adya, chief executive, Vijay Televisions Ltd, Chennai. However, he refused to comment on Bharathi TV's proposed plans to attain the number two slot soon.
It may be recalled that under Mr Adya, Vijay TV altered its focus from a youth channel to a family entertainment channel. Vijay TV also tied up with Discovery Channel to offer the latter's programs with Tamil dubbing.
Meanwhile Mr Kumar's statement of becoming the number two in Tamil channel market is termed as apologetic to Sun TV Networks for entering the latter's home ground. It doesn't want to rub Sun Cable Vision (SCV), the multiple service operator (MSO), and the cable arm of Sun TV Networks on the wrong side since its has a phenomenal reach in Tamil Nadu. This will be vouched by Jain TV officials. (See related story, Zee's Tamil channel blacks out Jain TV in Chennai)
It will be interesting to recall a bit of history now. More than a decade ago, Kalanithi Maran, head honcho of Sun TV Networks, sought a business partnership with the Zee group. But a junior official with Zee dismissed the proposal. The transformation of Mr Maran into the southern media mogul is now history (See related story, The makings of a TV baron).
Zee's fear of SCV's reach is evident when Mr Kumar opines that a pay channel in Tamil will be a risky proposition with the presence of only one MSO in three major cities in the state. Adds Mr Adya, "First, the regional language channels have to build their viewership base. Presence of a single MSO has no connection for a channel to turn into a pay one." According to Mr Adya, Vijay TV has no plans to turn into a pay channel in the near future.
Mr Kumar is of the view that viewer demand will force SCV to offer his channel in the same band as it offers other Tamil channels. Now, Bharathi TV is offered in hyper band, way down in the channel band.
Speaking on the channel's distribution, Mr Kumar says 45 per cent of the cable operators in Tamil Nadu have bought decoders from Dakshin Media. And those who already have digital decoders have started relaying the channel on their network, he adds.
With a channel presence in all the southern states, is it not the right time for Siti-Cable to start operations in Tamil Nadu? The network is already present in Andhra Pradesh and Karnataka. But Subhash Chandra, chairman, Zee Group, says he has no such ideas.
An intriguing relationship
For industry watchers, what is interesting to note is the relationship between Zee Television and Asianet Communications Ltd. "We now have a strategic long-term alliance with Asianet group whereby programs are shared free of cost," explains Mr Kumar.
It may be recalled that Zee Group's attempts to buy 51 per cent in Asianet Communications for Rs 400 crore had failed for inexplicable reasons. "The deal fell through as Siti-Cable couldn't expand its network," remarks Mr Kumar.
That apart, the former promoter of Asianet Communications, Sashi Kumar Menon, raised objections to the Zee-Asianet Communications deal on the ground that he was short-changed by Dr Raji Menon, his uncle and co-promoter of Asianet Communications. (See related story, `I have been short changed,' says former Asianet promoter)
To a specific question as to whether Sashi Kumar's objections to the original deal between Zee and Asianet is the factor for a complicated relationship between the two, Mr Kumar categorically denies any such links. "Can't there can't be any strategic alliance between two media networks with any financial outgo" he counters.
According to him, Asianet Communications did the preliminary work for the Tamil channel and later transferred all the assets and contracts to Dakshin Media, without any money changing hands. Interestingly, Prem Menon, vice president of Dakshin Media, was earlier with Asianet Communications.
Similarly, the group's Kannada channel, Kavery, was floated by Asianet and Zee combine and is now under a separate outfit, Kavery Entertainment. "Even I don't know what is happening. May be Zee-Asianet combine fear my objections," responds Sashi Kumar, who initially thought of taking Zee Group and Asianet Communications to the court.
Meanwhile, Bharathi TV, like Zee's Kannada channel, Kavery, is sporting Asianet Communications' logo for a royalty that is yet to be decided.
So how far will the sau crore gamble will pay off for Zee Networks, remains to be seen!
also see : I have been
short changed,' says former Asianet promoter