|
Through its successful "Thursday Premier" prime time
slot, Zee is generating revenues equivalent to approximately 100
percent of the movie cost in the first viewing while amortizing
the cost over 60 months (or license period, whichever is lower).
But, Zee Telefilms has had a bad 2QFY03 and will face a tough 4QFY03
due to the World Cup cricket 2003.
The report estimates that a mere 2x jump in viewer ratings could
increase profits by over 100 percent in one year. However, given
the huge gap between the leader (Star Plus) and Zee, this is unlikely
to happen overnight.
The report also mentioned that Zee has over the past two years
lost its core channel identity as a family channel - identified
by both the masses and the classes. It adds that the frequent changes
to its programming lineup (changes in the FPC), redefinition of
its target audience and some poor content (Sawal Dus Crore Ka)
have exacerbated the problem.
The report reasoned that if Zee had to rebuild goodwill, a strong
channel driver program (such as Friends or Who Wants to
be a Millionaire?) is needed. More importantly, to break Star's
hegemony, attractive programming content across prime-time bands
needs to be developed, it adds.
The report also claimed that Zee TV had acquired worldwide satellite
broadcast rights for approximately 16 movie properties (cost approx
Rs 300 million) to stem the tide of declining share and low ratings.
The report mentioned that the broadcast of these movies (every
Thursday from 10 October 2002 to 23 January 2003 as per the current
schedule) has been successful in generating significant advertiser
interest and stemming the slide in ratings. At a recent AGM, Zee's
chairman indicated that based on ad spot bookings, the cost of the
movies (plus a small profit) was being recovered in the first showing.
The report also mentioned that this development gives Zee a significant
cushion to invest in improving its content and enhancing the overall
viewer experience. It also mentions that there have been some recent
improvements in the quality of channel promotions and interstitials.
However, the report cautioned that the follow-through has to be
an important element of Zee's movie strategy as the movie-based
content was unlikely to effect a long-term shift in viewer habits
for a general entertainment channel due to issues of cost and scarcity
of supply of movie-based content.
The report also added that the rating points of advertisements
aired during movie breaks compared to ads aired during top-rated
TV serials indicate that it continues to be more cost effective
to advertise on regular shows than on movies.
The report mentioned that a cola advertisement on Star Plus generated
ratings of 11.61, the same advertisement when aired during Zee TV's
Thursday movie slot generated ratings of only 3.57. Movie-based
content strategies have been used in the past by all channels to
either strengthen their brand (Star Plus 1999-2000) or increase
visibility and connectivity (Sony) or to counter falling ratings
(Zee TV 1999 and 2002).
The report also mentioned that a key metric to evaluate the success
of the new movie strategy was related to the incremental viewer
numbers the "Thursday Premier" strategy could generate
for Zee's other prime time shows and how sustainable that is through
the World Cup Cricket months of February and March 2003.
The report also saw a risk in advertising revenue growth in 4QFY03
as ad spends shift toward sports channels from general entertainment
channels.
Zee's new movie strategy, while likely to yield strong revenue
growth in 3QFY03, is unlikely to engineer a long-term shift in viewer
patterns. Content that attracts viewers on a daily basis in SSB's
view is the only strategy to retain viewers and attract advertiser
interest.
See related story
SSB report claims that
Zee Telefilms 4QFY03 to be hit
|
