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ZEEL's Punit Goenka says ZEE5 to see peak investment in FY 20

The increased investment in ZEE5 will also impact the company’s overall content cost

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MUMBAI: Zee Entertainment Enterprises Ltd’s (ZEEL) digital venture touched 76.4 million monthly active users (MAU) in the first quarter of FY20 making the media conglomerate more bullish on its new bet. While the over-the-top (OTT) platform is coming up with a number of original shows in different languages, ZEEL MD and CEO Punit Goenka said this year will see the highest investment in ZEE5.

“This year will be the peak investment in ZEE5. I am not guiding for any specific number for ZEE5,” Goenka said in an earnings call after Q1 results. He also noted that the company’s margins guidance is factoring in the losses on account of ZEE5, or any other investment that they may have. Content costs, which are already rising, will be impacted due to the ramp-up in ZEE5.

Goenka also re-emphasised his confidence in the company’s ability to monetise ZEE5. Though revenue is in accordance with its plans and targets, it isn’t enough to have a significant impact on the top-line.

The streaming service had a global daily active user (DAU) base of 6.6 million in June. It also witnessed a hike in user engagement as users spent an average of 33 minutes per day on the platform in contrast to 31 minutes per day in the last quarter.

“So, a part of the earlier quarter, the number I gave were only India numbers. Now that international has launched that also contributes to the MAUs. Yes, we did see an increase in India as well. But it got further strengthened with the international numbers,” Goenka commented on MAU growth.

Although there has been a sharp increase in ZEE5’s MAU in every quarter after its launch, Goenka said the company is not satisfied with the DAU-MAU ratio yet. While it ranges between 8 or 9 per cent, the industry standard is 25 per cent. He expects ZEE5 to touch this mark in six quarters’ time.

The current trend being OTT tying up with telcos, ZEE5 is yet to take a step in that direction. Out of the three large telcos, while it is yet to strike a deal with one, about 50 per cent partnership has been established with another. But, Goenka denied giving any particular completion timeframe for it.

On competitor Netflix’s newly-launched mobile-only plan, Goenka said, “It’s too early to comment as to how mobile-only will impact, because, in the end, that is just a pricing strategy that they have done. It does not really tell me too much about the content strategy. And therefore, as you will appreciate, for any OTT platform or content-driven business, the basic need is content. Until that does not change, life would not change significantly.”

A recent PTI report stated that ZEE5 is planning to test mobile-only packs too.

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