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ZEEL to wait for SC verdict on inflation linked tariff hike before taking call on RIO

MUMBAI: Zee Entertainment
Enterprises Ltd (ZEEL) will wait for
the Supreme Court verdict on the 27.5
per cent inflation-linked tariff hike
for non-addressable systems before it
decides to take a final stand on
offering its television channels to the
multi-system operators (MSOs) only
on a la carte basis.
The matter is pending before the apex
court and is scheduled to come up for
hearing on 21 July. The case relates
to the Telecom Disputes Settlement &
Appellate Tribunal (TDSAT) order that
set aside the Telecom Regulatory
Authority of India’s (TRAI) 27.5 per
cent tariff hike.
ZEEL is weighing options to offer its
channels only on RIO (reference
interconnect offer) basis to MSOs.
Star India has already taken this step
and others like IndiaCast (distributor
of TV18 and Viacom18 channels) and
Multi Screen Media (MSM) are
examining ways to follow suit.
ZEEL believes that the average
revenue per user (ARPU) at the
consumer level has to go up and RIO
will help achieve that.
Digital addressable system (DAS) in
Phase III will lead to subscription
revenue growth for broadcasters.
Initially, there could be fixed-fee
content deals with MSOs but pricing
will reach Phase I and II levels in
these areas after 18–24 months of
DAS, ZEEL believes.
“Phases I and II will be value-driven
and Phases III and IV will be volume-
driven subscription growth,” a senior
ZEEL official said.
Increasing programming hours for
Zee TV, the company’s flagship Hindi
general entertainment channel, has
30 hours of original programming per
week. While this proportion will be
maintained, &TV’s fresh programming
hours will be expanded from 22 hours
to 30 hours per week.
The company will keep investing in
big-ticket shows and big film stars
for &TV till the channel’s viewership
stabilises. Once the channel moves
into double-digit market share in the
Hindi GEC space, it could break even.
Zee TV, the third-most-watched Hindi
GEC, has witnessed some market-
share loss. However, the management
is confident that the channel will be
back to a strong No. 2 position once
TV rating agency BARC extends its
coverage area. Currently, BARC data
is only for 0.1 million+ towns, and
parts of urban and rural India are yet
to be added.
Capex in FY16
ZEEL’s capital expenditure in FY16 is
expected to be Rs 120 crore (Rs 1.2
billion), similar to what it was in the
previous fiscal.
ZEEL had launched Hindi GECs &TV and
Zindagi in the previous fiscal.
Expanding into the Odia GEC market,
ZEEL acquired market leader Sarthak
TV for Rs 115 crore (Rs 1.15 billion).
The Odia GEC has a 25 per cent
viewership share in that market.
ZEEL has Rs 17.83 billion in cash and
cash equivalents on its books.
Sports business
ZEE will be bidding for the Indian
Premier League (IPL) rights, the
company told media analysts. The
company expects the sports business
loss to be less than Rs 100 crore (Rs 1
billion) in FY16. The earlier loss
guidance was Rs 100 crore.
Syndication has emerged as an
important revenue stream in the
sports business.

ZEEL to wait for SC verdict on inflation-linked tariff hike before taking call on RIO

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