We have diversified our revenue base and have established several new platforms on the advertisement revenue to keep a tab on our revenue and brought planning and execution process under our control, says Sumit Kapoor, Chief Financial Officer (CFO), Zee Media Corporation Limited (ZMCL). In an interview with Anil Singhvi, Managing Editor, Zee Business, Mr Kapoor said, our digital platforms are doing good and we have plans to bring a mobile app for WION to expand our viewership in the international market. Edited Excerpts: 

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Q: What led to this continuous quarter or quarter (QoQ) 10% growth in the margins of the company?
A: We have been working on a strategy for last 18-months and in the process have diversified our revenue base significantly. Usually, a media company talks about advertisement revenue, which is a very important line item for our revenue. But we have established several new platforms in ad revenue segment to ensure visibility of our revenue. Besides, we have also brought our planning and execution control to us. This control is helping us in establishing our rates, entering new markets and positioning ourselves. Apart from this, we are also able to establish our revenue rates and revenue volumes amid this changing environment in the market like the introduction of new tariff order from TRAI and the ongoing slowdown in the real estate and auto sector. This is helping us to grow in every quarter especially in terms of revenue, which is reaching a new level. For instance, we have established a new section, which was already present in the company, but we focused a lot on its growth. If we have a look at our performance in the first quarter, then we have executed several events – value-wise – which is almost 70% of the previous year’s performance.

So, we are establishing a new benchmark on the front of performance to ensure growth in our revenue and keep creating a new benchmark for us. As far as cost is concerned, then we look at cost optimization perspective following the pace at which our revenue is growing. In the process, we have created several new platforms in our business in the last 3-4 quarters which is now gradually giving us the results. However, these platforms are not a big thing, but we are focusing on the integration of our operations. Today, we are running 13 channels and there are several things in these channels are common in nature and we are trying our best to integrate all of them at every level to make sure that the resources are optimized to its best levels. It is helping us in increasing our control and optimization on cost. 

As far as margins are concerned, then we have always focused on margins for last 1-1.6years and if you have a look on our performance then you will find our margins, which once stood around 21-22% has gone up to 25-26% in last one year. Besides, we have always said to our investors and stakeholders that we want to improve it at a continuous pace in which we will have a target to take it to 28% and gradually to 30%, where it will be consolidated. 

Q: What is the trend in viewership and revenue amid TRAI’s new tariff order that has settled by now?  
A: TRAI’s order had an impact for a month on the entire media industry may it be entertainment or news or business channels as it influenced their reach. However, there was an improvement in our reach and performance from mid-February 2019 onwards. As far as advertisers are concerned, then advertisers need a relevant platform where they can showcase their products and services to develop their market and grow. Under the existing regime, even news channels can provide an effective reach with that to at very competitive prices. So, the key news channels like Zee News or Zee Business are a prominent name in the market today. Similarly, if I talk about regional channels then we have Zee MP & Chhattisgarh that had enjoyed the privilege of being at number 1 position for continuous 100 weeks in its market. So, this type of channels with the type of performance along with viewership pattern can align advertisers, who are ready to spend on these platforms. However, they are also having an eye on the reach of these channels but over a period, our reach has improved.  Besides, we are also trying to increase our reach in certain areas by changing our packages or by optimizing LCN (local Cable Network) and we will keep it doing. 

Q: Do you have any plan to open a few more regional channels and what is your CapEx for the year?
A: We have our presence from Jammu and Kashmir in North to Maharashtra in West to Odisha in East to Madhya Pradesh, Chhattisgarh in Central India. So, we are covering entire India. Interestingly, our presence is providing limited access to South India and is increasing our presence in the North-Eastern part of the country. At this stage, we don’t have any plan to open any new channel but if we get an opportunity in time to come, where it seems that we must evaluate the market then we are positive and would like to understand it. When it comes to CapEx, then our business is mainly standing on two pillars and they are content and technology in which content is a product or offering for our clients, which sustains our rating and viewership and increases it. It provides relevance to us in its respective market. As far as technology is concerned, then it is a medium that helps us in aggregating and collect news, that is disseminated to our viewers in the form of information. Currently, we will focus on strengthening our content platform and have been doing so and this is a reason that many of our regional channels are market leaders in its segment since last 8-10 quarters, in respect of average time that a viewership spends on our channel.

Technology is an area where we have slowed our investment in last few years and on that front, we are looking towards points/areas where there is a need or up-gradation or there is a need to change the existing technology because time is changing. Nature of technological equipment or the nature of CapEx will depend on time and the kind of changes that should be brought in in the segment to make sure that our expenses are optimized, there is a growth in our operations, and we can provide a qualitative experience to our viewers and stakeholders. 

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Q:  Update us about the kind of footfalls or people who visit zeenews.com and zeebiz.com and do you think that digital revenue will go up soon?
A: If you have a look on the digital platform in the aspect of page views and unique visitors - which are the two major criteria to track them - then it is improving at a regular basis. If we have a look at last one-year performance then our three digital entities, namely zeenews.com, zeebiz.com and wionews.com, have performed well. There is a three-time increase in the pageviews of zeenews.com and zeebiz.com has pulled the interest of people based on pageviews and we are also receiving queries as far as advertisement spends are concerned. We can establish a platform to provide a package for the channel as well a digital property to our customers in the form of a deal.

We are very positive towards our digital platforms because they have turned up to be very relevant amongst viewers. There is an improvement in our zee news app, and we have plans to launch an app for WION to make sure that we are just not limited in India but eventually take it to our viewers in the international market and increase our reach simultaneously. Having an eye on this performance, we are very positive that our revenue will increase in our digital properties.