Indiantelevision.com's interview with Zoom business head MK Anand
 
'The Merrill Lynch deal has given us a Rs 5 billion valuation'
Posted on 15 October 2008
 

After selling 25 per cent stake to Merrril Lynch for Rs 1.25 billion, Zoom is gearing up for more programme launches to race ahead of competition that has arrived in the form Showbiz and E24.

Targeting upscale audiences, the channel from the Bennett, Coleman & Co Ltd (BCCL) Group has increased its dosage of Bollywood-centric prime time content with a slate of new shows. Aided by a rise in ratings, Zoom is eyeing a revenue of Rs 1 billion this fiscal.

In an interview with Indiantelevision.com's Richa Dubey, Zoom business head MK Anand discusses the growth track of the channel and the need to push the Bollywood genre of content across different markets through the syndication route.

Excerpts:

 

Has Zoom Entertainment Network (ZEN) diluted 25 per cent stake to Merrill Lynch for Rs 1.25 billion?
We got a valuation of Rs 5 billion when Merrill Lynch bought this stake in around May-June. We are utilising this amount to develop stronger content for the channel. Some of the new shows are already launched and we will gradually unveil a few more.

Will you also not spend more on distribution as channels are finding it difficult to find space on choked analogue cable networks?
We are content with our present distribution. We will be utilising the money only for new programmes.

Why has Zoom shifted gear to Bollywood-centric shows?
Getting viewers closer to celebrity life was the whole idea on which Zoom was launched. The metamorphosis happened when we realised that 'celebrity' as a word in India is congruent with Bollywood.

Originally when we started, we were showing programmes based on popular influential people from all walks of life (corporate, sports, page 3). As we went along, we had to change and make it a Bollywood-centric channel because that is what people whom we target want to see. We tried to make the channel more holistic from the Bollywood point of view by showing many related things.

Even our lifestyle shows are centred arround Bollywood. We will, for instance, not have a cookery show. But if a Bollywood actor likes some particular food, then we will show him cooking something. So we will always look for a Bollywood element in whatever we show.

Was this metamorphosis dictated by the generic revenue limitations of a lifestyle channel?
The lifestyle content on Zoom was always negligible compared to the glamour factor.

Our programming budgets have definitely doubled over last year as our offerings have increased. Other than short form of content, we are now getting into longer formats which cost more.

But it is also important to note that we operationally broken even last year. This has happened in just three years of our existence!

Have advertisers been more supportive after Zoom shifted to a Bollywood-centric channel?
When we launched, an advertiser could not classify us in any category because we were the first ones in the space. But now we have been substantially increasing our rates even while other channels were dropping theirs. This has been possible because we have an ad sales team which is bigger than what a channel of this size would normally have. As a group we are very ad-focussed.

Our inventory is sold out. Some 300 clients must be active every year. We would be having 15-20 exclusive deals.

 
'When we started, we were showing programmes based on popular people from all walks of life. As we went along, we made it a Bollywood-centric channel because that is what people whom we target want to see'
 

What is your revenue target this year?
We are targeting Rs 1 billion this fiscal (August-July period). This is after taking into account revenues through ads, video ads and content syndication that we do with other broadcasters.

Whom does Zoom compare with when you pitch to clients?
We normally compare ourselves with Star Movies, MTV, HBO and 9XM.

These are the players focussed on this TG (target group) - SEC AB 1 million+ in the age group 15-34.

What are the positioning changes Zoom has undergone ever since its launch?
The Times of India Group as a whole has affinity with the urban upscale English speaking audiences. That has always been the Group's focus. Similarly when it came to TV, we decided not to go for a mass channel and invest heavily in it. Instead, we thought of launching something for the particular audience we have affinity with.

So we launched a channel catering to 1 million+ cities of India. Our weekly reach has gone up from 15-20 per cent in mid-2006 to 36 per cent this year.

As a brand we promised to deliver glamour and we have done that successfully. In terms of brand proposition, we have evolved in terms of our offerings.

How do you see Bollywoood evolving as a genre?
Bollywood shows are still evolving as a genre. It is the most popular content, after fiction shows and movies. Even news channels have special shows centred arround Bollywood.

We position ourselves as a generic channel for Bollywood.

How does Zoom source content?
We have a reporting team of about 40 people. They continuously shoot and get stories on Bollywood related stuff which is archived. That is the main store for us and we take footage from there and develop shows.

Our in house team uses them to produce shows like Zabar 10, Planet Bollywood. Besides, we also have external production houses which make shows for us. Bollywood Club is done by Optimystix, Bollywood Case Files is done by Moving Pictures Company. We give our archived stuff to them as well.

What is the movie acquisition strategy?
For the movies that we telecast, we acquire them from other channels or producers for limited airings.

What is the prime time on Zoom?
Advertisers identify prime time from 5 pm in the evening till 1 am. But from the viewers point of view, it lasts from 7 pm - 9:30 pm, the time band where we have launched our new shows. Our core prime time would be 8-9 pm where we will launch stronger shows.

Zoom also provides shows to other channels. How strong is this business?
Yes, we do shows for other channels. We have realised that the bank that we have is more than what we can use. So why not commercially exploit our content further?

We have not approached any Hindi channel, but we have some channels in the regional space who use our content. We have given our shows to ETV and Sun Network.

We also have two deals in Pakistan. We are doing a one-hour show for Safron TV in South Africa.

 
Will this not kill the exclusivity element on your channel?
Zoom enjoys more channel loyality as far as Bollywood content is concerned. We have a first mover advantage in the genre. We also have exclusive coverage. Besides, we can leverage exclusive tie ups which Bombay Times has with others.
 

What are the digital initiatives Zoom has undertaken?
We are looking at opportunities in the digital space. Our channel is made up of short form of content. Say three stories of four minutes each are clubbed in a half-hour episode. If we unstring these episodes and put these videos on internet, they become easy to download.

These small videos are more popular than the longer format due to lower streaming capacity in India. We unbundle the entire episode and put these videos on our site.

For further promoting them, we have started putting these videos on other websites. We realised that there was an opportunity in syndicating Bollywood content. This has, in fact, increased traffic on our video online content.

Realising the importance of this, we are looking at synergies now. We have an ad sales deal with these websites. We also promote our other shows through these videos. This makes the marketing of our shows easier and consumption increases.

 

Which are these websites?
Rediff iShare, Yahoo, Youtube and Nautanki TV. They have good traffic and for us they become a platform to share our shows.

We have an ad sales contract with all of them.

How big a challenge is distribution?
Distribution is key to the business. But since we also have the consumer pull factor, cable operators will find it difficult to dislodge us from their networks. The Bollywood genre is also expanding with other channel launches. In another 18 months, we can expect the genre to develop and be widely accepted.
 
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