CAS might save plunging Zee scrip, say analysts

MUMBAI: The cricket World Cup has taken its toll on Zee, notwithstanding its aggressive promotions that include the Daily Dhoom Megawin Zee promo. The Zee Telefilms scrip has fallen from Rs 97.50 (31 December 2002) to Rs 67.05 (on 28 March 2003) on the Bombay Stock Exchange (BSE); and from Rs 97.55 (31 December 2002) to Rs 67 on the National Stock Exchange (NSE).

On the BSE, today, the Zee scrip opened the day at Rs 68.35, fell by 1.90 per cent to end the day at Rs 67.05. The total volume of shares traded was 820,458. On the NSE, the scrip started the day at Rs 68.05, fell by 1.90 per cent to end the day at Rs 67 with heavy volumes of 1,556,319 traded shares.

However, certain media analysts feel that the company's fortunes should improve as the country heads towards a conditional access system scenario. However, this would be dependent on several other factors.

JP Morgan's latest report (dated 19 March) on the impact of conditional access system, however, claims that it is very difficult to assess the impact of CAS on Zee as its strategy might change with the offtake of encrypted signals. The report has given an overweight status to the Zee Telefilms scrip at the Rs 72-level mark.

The report mentions that in a scenario where Zee (along with the other broadcasters, Star and Sony) remains pay, one cannot expect any downside to Zee's revenues. Additionally, Siticable revenues will get a boost from the revenue sharing with broadcasters, which should give a fillip to Zee's earnings, the report says.

The report also says that Zee currently has a declared subscriber base of around 4.5 million subscribers. This is out of the estimated 30 million people who might effectively be watching the channel.

The report questions as to how many of the 30 million will take Zee channels in the CAS regime. Additionally, another important question is whether it is likely that any, or all, of the major players (and hence Zee) will go free-to-air?

The report also points out that Zee's estimated subscription revenue is around Rs 1.5-1.55 billion for FY03 - much lower than the subscription revenues of its competitors, Sony and Star. Thus, it would hurt these players considerably if they went free-to-air. Zee's management has indicated that they will not go free-to-air. However, the JP Morgan analysts believe that the final company strategy will be decided after the initial CAS rollout.

The report also mentions that a low offtake of encrypted signals will likely lead management to rethink their pay strategy. Options like splitting the flagship channel into a premium pay channel and an FTA channel might surface.

The report concludes that it will be very difficult to predict the impact of CAS till Zee's strategy and that of its competitors is finalised. In a scenario where none of the channels go FTA, there will not be too much of an impact on Zee's revenues. JP Morgan has projected an advertising revenue growth of 5 per cent of 1H FY04 and 8 per cent for 2H FY04.

The report is confident that these figures can be met post a CAS regime. As far as subscription revenues go, growth might slow down in the near term but the long-term prospects are bright (assuming the bouquet remains pay), adds the report.

On the positive front, the JP Morgan report expects to see quite a smart rise in Siticable's revenues from its current levels, given the revenue-sharing mechanism. This should give an additional fillip to Zee's earnings, says the report.

It is time to wait and watch!

Latest Reads
Sony Pictures Networks India (SPN) to telecast the India Tour of Ireland 2018 live and exclusive on SONY SIX and SONY TEN 3 channels

Sony Pictures Networks India (SPN) has announced that it has acquired the exclusive media rights to telecast the 2018 India Tour of Ireland that comprises two T20Is to be played on June 27 and June 29, 2018, in Malahide, Ireland.

Television TV Channels Sports
TLC to show Masterchef Canada season 5

TLC, a part of Discovery, has announced the telecast of the fifth season of the culinary competition series Masterchef Canada from 26 June in India.

Television TV Channels Factual & Documentary
&pictures to screen the Indian spy thriller ‘Naam Shabana’ on Saturday, 29th June at 9.30pm

A spinoff of the 2015 box office hit Baby, Naam Shabana follows the life and journey of a spy. Directed by Shivam Nair, the thriller features Taapsee Pannu as Shabana Khan along with Akshay Kumar, Prithviraj Sukumaran, Anupam Kher and Manoj Bajpayee essaying pivotal characters. &pictures, Naye...

Television TV Channels Movie Channels
Big Trunk Communications bags digital mandate of Discovery Kids channel in India

Big Trunk Communications, a Mumbai-based full-fledged creative digital agency, has acquired digital duties for Discovery Kids channel in India.The business was won as part of a pitch against leading digital agencies.

Television TV Channels Kids
Zee Tamil strengthens its weekend programming

MUMBAI: Zee Tamil, the tamil general entertainment channel of ZEEL, recently announced its decision to spruce up its fiction bands for weekends.

Television TV Channels Regional
Times Television Network elevates Nivedita Oak to DGM

Times Television Network (TTN) has elevated Nivedita Oak to deputy general manager - influence. Earlier, Oak was the regional head for Zoom, FCT and branded content. She has been working with the Times Network for the last 11 years.

Television TV Channels People
History TV18 to release third film in ‘Special Operations India' series

History TV18, a pan-Indian television channel, is to create a documentary on counter-terrorist operation at Pathankot air base named Special Operations India: Pathankot. This one-hour documentary will be aired on June 25 at 9 pm.

Television TV Channels Factual & Documentary
CNBC-TV18 successfully concludes the 8th edition of the ‘India Healthcare and Wellness Awards 2018’

NBC-TV18, India’s leading English business news channel along with ICICI Lombard hosted the 8th edition of the ‘Indian Healthcare and Wellness Awards 2018’ at The Grand Hyatt, Mumbai.

Television TV Channels News Broadcasting
MN+ to air Indian Television premier of ‘Tulip Fever’

MN+, the Gold Class of Hollywood Movies from the Times Network, brings to the viewers, for the first time on Indian television, the celebrated romantic historical saga– ‘Tulip Fever’. The movie will premiere on Sunday, 24th June at 1 pm and 9pm on MN+.

Television TV Channels English Entertainment

Latest News

Load More

Sign up for our Newsletter

subscribe for latest stories