ZEE NETWORK: OPENING UP ITS HORIZONS

With the Indian ad market not showing much growth, the Zee Network is going ahead with its plans to go digital and make its bouquet of channels subscription oriented. The thinking within the group is that the only way to increase the network's revenues is by asking cable operators to pay for the Zee TV bouquet which includes Zee TV, Zee India TV, Music Asia, and Zee Cinema. Currently, only Zee Cinema is bringing in some subscription revenues as a basic subscription channel. With the exception of Music Asia, the other three channels are jointly owned by Zee TV promoter Subhash Chandra and Rupert Murdoch.

The company recently placed a full-page ad in a local daily seeking to employ a CEO-designate and eight executive presidents. Among the eight presidents which the company is seeking to employ, one will look after the Zee TV cable operator franchise while another will be responsible for individual subscribers of a direct-to-home service. The team of eight's role will be to steer the group into synergistic activities such as direct-to-home, telecom, Internet and electronic commerce. Zee TV officials state that the people selected will initially focus on encryption of the Zee TV channel bouquet and creating subscription packages for cable operators.

There are several reasons why the Zee Network is taking this route. First is the slow demise of Asiasat-1, which is at the fag end of its life. The second reason is the transponder rental savings, which can be derived from moving to a digitally encrypted format. The third relates to subscription revenues and has already been mentioned above.

The Zee Network's move towards pay television is going to have a major impact on the Indian cable TV landscape. The Star TV Network has started the movement towards digital pay television in India. That process will accelerate when Zee TV chooses to go pay. As Zee TV is the most popular private satellite TV channel in India, viewer pressure will be intense on cable operators to continue its carriage even if they have to subscribe to it. Cable ops will be forced to invest in Zee TV digital receiver-decoders. Some may even use the opportunity to go in for addressability. This in turn will have a ripple effect on other cable ops to consider going in for the same.

The Indian cable television market will gain some maturity. Demand for digital equipment and subscription management systems will simply take off. As a pay TV channel Zee TV will also bring about changes in the Indian advertising market. Precise penetration numbers will enable it to be used as a more effective advertising vehicle. Zee Network chairman Subhash Chandra had announced earlier this year that the company was open to tie-ups with strategic partners which would help his network foray into the digital era.