In early1997 (much before India's largest vertically integrated media company Zee Telefilms actually bought out Rupert Murdoch's shareholding in three joint ventures for $ 300 million in a cash and stock deal), Subhash Chandra, after an interview to financial daily Business Standard, was discussing the state of the television industry with the two journalists concerned.

Zee Telefilms CMD Subhash Chandra

The off-the-record conversation was in a small room in the rather more spartan office Zee had in South Delhi in those days. Chandra, who had loosened his tie, was in an expansive mood and lit one of his trademark "bidis". He then casually remarked: "How big a story will it be if we buy out Star from the existing joint ventures and go it alone?" The jaws of one of the journos, who had also borrowed a 'bidi' from Chandra, dropped and the 'bidi' fell on the carpet. "Watch it, bhai," Chandra quipped, without showing any emotions, and added, "I am just thinking aloud and trying to think big. Is such a thing possible?"

It was in March 2000 that Chandra finally closed the deal on the "thought" and bought out Murdoch. The tale symbolises the spirit of Chandra - to think big and pull off whatever he sets his mind to in the face of adversity.

Cut to 2002. Zee Telefilms (total revenue for FY 2001-02 ending March 31: Rs 10.76 billion) stood at the crossroads - reeling under the aftershocks of the disastrous relaunch of flagship Zee TV in August 2001that failed to perk up the TRPs or the market. The only positive seemed to be that having plunged so low, from here on, there was only one way to go - up!

It was in the midst of the doom and gloom at Zee TV that Chandra launched his biggest masterstroke of 2002 - the Playwin online lottery, initially with Sikkim state lotteries. By year-end he had added Karnataka and Maharashtra. And the money was rolling in. As the year drew to a close Playwin was generating Rs 200 million in revenues a week!

Thursday blockbuster 'Mujse Dosti Karoge'

According to the industry grapevine, it was profits from Playwin that Chandra used for another audacious gamble in the second half of the year. That was the Thursday blockbuster film programming strategy. Soaps between Sunday and Wednesday, premiere the latest movies on Thursdays at prime time, celebrity shows on Fridays and events on Saturdays was a completely new programming matrix that Zee introduced. Rs 500 million is what Zee is reported to have sunk in for its movie acquisition plan.

And it delivered results. The 'Thursday premieres' ("Har Ghar Par Premiere") strategy, and the snippets announcing the results of Playwin Lotto games pulled Zee permanently into the Top 100 TVR lists at long last. The days of the one-off entries were finally over.

For a change, Zee also backed the ploy with the right sort of a communication strategy, an area where it had been hopelessly outclassed by the likes of Star and Sony in the past. The advertisement campaign for the Thursday premier films cost the company in the region of Rs 70-100 million, but it was worth it.

Media buyers that indiantelevision.com spoke to said Zee TV was getting an average effective ad rate between Rs 75,000 to Rs 80,000 per 10 second spot when its movies were being telecast. Industry sources also indicated that ad secondage during the Thursday Premiere is just over 3,000 seconds and, therefore, it is reasonable to assume that Zee would be raking in around Rs 24 million in advertising per movie.

Some premier brands that were inactive during September 2002 on Zee came on board in October. However, Zee also created some controversy when it got into a spat with rival channels and IMPAA over the acquisition of Bollywood blockbusters.

While the blockbuster movies strategy can be said to have delivered, the same can't really be said for Zee's regular programming initiatives. It's a bit of a paradox that while Zee has been consistent in its stand that the TRP data do not properly reflect its viewership, especially when you travel a bit beyond the "TRP" towns, plotlines of its new shows were clearly targeted at the city-centric SEC A+B audience types. "Kittie Party, Lipstick, Love Story, are names that come to mind as they appear to explore sexual politics in supposedly high society life.

Monthly wise break up of Zee shows in C&S top 100

There was also the personality driven show "Jeena Isi Ka Naam Hai" that was doing fairly well but a change of anchors (from Farooque Shaikh to Suresh Oberoi) and a lawsuit from two US based companies pulled it back. The allegation was that the programme was copy of "This Is Your Life" and it has been airing on American television since 1952.

Zee TV president Apurva Purohit

Zee News director Laxmi Goel

One may say, so what? Even KBC was an Indianised version of Who Wants To Be A Millionaire? The difference of course being that Star had acquired the telecast rights from holder Celador to telecast KBC.

There was also the motormouth Shekhar Suman's revamped and reworked version of Sony's Movers and Shakers that appeared on Zee in the Simply Shekhar avatar.

None of the shows discussed have been able to crack the Top 100 list as yet (one-offs do not count) and it will be left to the new shows launching in the coming months to make that impact.

Kudos for the new strategy however, has come from an unlikely source. "The latest (programming) revamp appears to be well thought-out, different and interesting, in our view. We believe that the downside from the current strategy will be limited," Morgan Stanley in a report on Zee Telefilms said towards the end of the year, adding, "The current (programming) revamp is different from those in the past and we like this. The management appears to be moving in the right direction."

'Kittie Party': a soap with urban sensibilities

What led to such optimism? Just about a year after group broadcasting CEO Sandeep Goyal's gamble to throw up 24 new shows during Zee TV's relaunch in August 2001 fell flat, promoter Subhash Chandra decided to take over the reins as chairman and managing director and cobbled together a core team, including Zee TV president Apurva Purohit and Yogesh Radhakrishnan (from ETC which had been taken over by Zee Telefilms), that discussed and thought out life-saving strategies for the group and the flagship channel. Goyal was also relieved of his post in the latter half of 2002, after some comical denials.

'Lipstick': Adult treatment

Along with Chandra's direct entry into day-to-day activities, Zee also saw the re-entry of Chandra's brothers, Jawahar and Laxmi at Siti Cable and Zee News, respectively.

The okaying of CAS by Parliament (Chandra was the first to support the government initiative) also augurs well for Zee. In FY2002, the Zee-Turner (a 74:26 joint venture between Zee Telefilms and Turner International India) bouquet of 16 channels received domestic subscription revenue of approximately Rs 1.3 billion. According to Zee's Q2 results, domestic pay revenues were Rs 369 million. Extrapolating those numbers for the calendar year 2002, domestic distribution revenues would be approximately Rs 1.5 billion. In five years time, with hopefully 50 per cent penetration of CAS, even at the same average price of Rs 2.6 per channel, subscription revenue would increase to Rs 18 billion. This would represent a more than ten-fold increase in revenues. However if we project price increase in line with industry trends, the revenue accruing to Zee could be much higher.

The bad news for Zee in the distribution arena of course was that HBO exercised the pullout option at and defected to Sony from Turner in the New Year. Zee-Turner had its own riposte in successfully being able to woo CNBC India to its fold from Sony, though at hefty minimum guarantee. CNBC India will formally shift to the Zee-Turner fold after 31 March 2003.

CAS' passage has also led to revision of subscription rates by various networks. Two days after CAS was okayed by Indian Parliament's Upper House, Zee-Turner announced a change in its pricing structure. Instituting what it called a "three layer dual pricing strategy", it hiked the subscription rates of its package from Rs 42 to Rs 50 for the complete bouquet of 16 channels, effective 1 January, 2003. However, the price will increase with every new addition of channels, Zee-Turner asserted. UK-based Realty TV is slated to join the Zee-Turner platform and test signals are on at the moment. Zee is also actively hunting for a replacement for HBO and Cinemax is the name that is being heard the most often.

As far as the other channels are concerned, Zee Cinema, the Alpha regional channels and Zee News are doing well enough for themselves. So much so that Zee news is now talking of increased revenues and more offerings (Laxmi Goel says he is confident of Rs 700 million in ad revenues this fiscal.

Two acquisitions that Zee made last year are expected to help drive business in the international markets and down south. Zee bought over both ETC Networks Ltd as well as Padmalaya Telefilms.

International business is looking up especially with the addition of ETC Punjabi to the bouquet as it is supposed to drive subscription among Punjabi-speaking NRIs in the UK, US and Canada big time. The Padmalaya acquisition is expected to help synergies in the south as well as boost the film making division that Zee wants to expand after the super success of home production Gadar in 2001. But the results will only reflect after sometime.

All in all, the picture is looking far better for Zee at the beginning of 2003 than it did at the beginning of 2002. As Purohit aptly summed up, "Advertisers are keen to repose their trust in Zee's offerings. 2002 was the year when Zee reiterated to its various constituents that it meant business and was a committed long-term. Watch out for more in 2003."

Also read
Zee TV statistics for 2002 (Week1-46) (Source TAM India) - Channel shares in different regions, in SEC A and penetration
Zee TV Top 10 programmes for 2002 (till 28 December 2002) (as per TAM India)
Subhash Chandra guest column - "The focus will be on identifying new opportunities"

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