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Higher production values of OTT content won't put pressure on TV biz: Punit Goenka

ZEE5 global launch will happen in a phased manner.

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MUMBAI:  With the growth of OTT market, all the big four broadcasters in India have ramped up their investment in digital ventures. To woo the online viewers, OTT platforms are producing high cost shows especially when it comes to originals. While there have been concerns that higher production values of OTT content might affect the content cost of TV business, Zee Entertainment MD and CEO Punit Goenka does not foresee such a scenario in his case.

Starting from Amazon Prime’s Inside Edge to Netflix’s Sacred Games, ZEEL’s digital venture ZEE5’s Karenjit Kaur, the star cast, and content quality clearly indicates the high budget of the shows, though the exact numbers have never been revealed.

Speaking in an earnings call, Punit Goenka said,“In terms of quality, I think it's comparable to what television quality is because we use the same equipment. It will not put pressure on the television part because the sheer volume of television content that is being produced and the economies of scale that is being achieved there versus what we are producing for digital, the delta is far apart.” But he agreed that the content being made for digital platforms is of higher production value because of outdoor shoots and bigger stars.

Zee crates 500 hours of original content every week for broadcast while that is a mere 800 hours for the whole year on digital. “There is no per hour concept there, it is all story and concept-based content cost,” he added.

After creating a buzz in the Indian market thanks to its regional content, ZEE5 is expected to be launched globally soon. Commenting on that, Goenka said the global rollout will be completed in a phased manner. By the end of this fiscal year (FY 19), it will be available globally.

Goenka is very hopeful of Zee5’s international success."If ZEE5 does cannibalise our existing subscription revenue in international markets I will be very happy with that because that's a direct ownership of the customer that the company gets rather having it through a distributor. So that's a good problem if it happens that way and that is one of the parts of our strategy of going global with ZEE5,” he said.

With the technological disruptors, the entertainment industry is always in a flux. 10 years ago, the entry of DTH players changed the industry. Then the increasing internet consumption with the entry of Jio bought another disruption. Now, as Jio with its FTHH connection eyes at  50 to 100 million households, there could be some structural changes especially affecting the broadcasters. However, that possibility does not concern Goenka.

“My view has always been, even when DTH came 10-11 years ago, that all technologies will coexist in a country of our size. So, cable will also coexist, DTH will coexist and even ZEE5 will work. So, it's all going to be different services at different price points. For a content company like us, it doesn't really matter because at the end all three are pipes. So, as long as my content is relevant, I will still get my value from consumer payout,” he said confidently.

However, with a realistic view, he expects ZEE5 to break even in next five years in stark contrast to several players who expect to break even within two-three years. According to him not only ZEE5 but the industry is still now in investment mode and there isn’t a chance to breakeven in the first three years.

Almost every OTT player has already struck deals with telecom players, but ZEE5 has not yet signed any telecom deal in India or overseas. Till the time it isn’t getting the right value of its content, there won’t be any such negotiation.

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