Term Paper Internal and Competitive analysis of Zee Entertainment Enterprise Limited
Table of Content 1.Introduction ............................................................................................................................. 3 2. Zee‘s Mission ......................................................................................................................... 3 3. Company Profile..................................................................................................................... 3 3.1 ZEE is ............................................................................................................................... 3 3.2 Alliances & Partnerships .................................................................................................. 4 3.3 Zee‘s portfolio of brands .................................................................................................. 5 4. SWOT Analysis of Zee .......................................................................................................... 6 5. Financial Performance ............................................................................................................ 7 5.1 Financial Analysis- ........................................................................................................... 8 5.2 Ratio Analysis (for FY 2009)-.......................................................................................... 9 6. Marketing Strategies- ............................................................................................................. 9 6.1 5 C‘s of marketing ......................................................................................................... 10 6.2 Ansoff‘s matrix............................................................................................................... 10 6.3 Segmentation .................................................................................................................. 11 6.4 Product Life cycle .......................................................................................................... 11 7. Competitive Analysis- .......................................................................................................... 12 7.1 Zee‘s major brand ―ZEE TV‖ Market share for the year 2009 ...................................... 12 7.2 Advertising share year 2009 ........................................................................................... 12 7.4 Market wise performance of top 6 general entertainment channels-2009 ..................... 13 7.4 Customer Loyalty ........................................................................................................... 13 7.5 Perceptual Mapping ........................................................................................................ 14 7. Risk Analysis – ..................................................................................................................... 14 7.1 Porters Five Forces Model: Analyzing the Television Broadcasting Industry with reference to Zee......................................................................................................................... 14 8.Conclusion ............................................................................................................................. 16
Term Paper On Zee Entertainment Enterprise Limited
1.Introduction The Zee Entertainment Enterprises Ltd. (NSE: ZEEL) is the largest media and entertainment company in India and is a subsidiary of Finnish media corporation Turner Group. The company's Chairman, Managing Director and Founder is Subhash Chandra and its Chief Executive Officer is Puneet Goenka Zee Entertainment Enterprises Limited is one of India‘s leading television, media and entertainment companies. It is amongst the largest producers and aggregators of Hindi programming in the world, with an extensive library housing over 80,000 hours of television content. With rights to more than 3,000 movie titles from foremost studios and of iconic film stars, Zee houses the world‘s largest Hindi film library. Through its strong presence worldwide, Zee entertains over 500 million viewers across 167 countries. Pioneer of television entertainment industry in India, Zee‘s well known brands include Zee TV, Zee Cinema, Zee Premier, Zee Action, Zee Classic, Ten Sports, Zee Sports, Zee Cafe, Zee Studio, Zee Trendz, Zee Jagran, Zing, ETC Music and ETC Punjabi. The company also has a strong offering in the regional language domain with channels such as Zee Marathi, Zee Bangla, Zee Telugu, Zee Kannada, Zee Talkies and Zee Cinema. The Zee stable owns an integrated range of businesses. All of these in singularity adhere to the content-to-consumer value chain model of media and entertainment business. Zee is a pioneer in every aspect of content aggregation and distribution through traditional media like satellite and cable and new media like the internet, in India. Mission and Vision of Zee group
2. Zee’s Mission As a Corporation, we will be profitable, productive, creative, trendsetting and financially sound with care and concern for all our viewers and stakeholders namely advertisers, cable operators, producers and production houses.
3. Company Profile 3.1 ZEE is º The largest producer and aggregator of Hindi programming in the world, with more than 80,000 hours of original programming in its archives. º One of the most popular entertainment brands in India; was ranked 9th most popular brand within a decade of its launch. º One of the largest Indian programming content distributors with an estimated reach of more than 500 million viewers in over 167 countries including USA, Canada, Europe, Africa, the Middle East, South East Asia, Australia and New Zealand.
3.2 Alliances & Partnerships 1) Zee Turner
A 74:26 joint venture between Zee and Turner International to distribute the Zee Turner pay channel bouquet in India and neighboring countries. A 74:26 joint venture between Zee and Turner International to distribute the Zee Turner pay channel bouquet.
2) Ten Sports
Ten Sports and Zee Sports combine, have give the viewers a lot of action in the past years and have become a force to reckon with in the sports entertainment business. Popular events like WWE, UEFA Champions and League Football have made inroads into the Indian market. Tennis fans enjoy the grand slams with a series of ATP 500 and a multitude of other events. For indoor sports fan, the channel has showcased the world poker tour and darting events. Cricket being nothing less than a religion in India, Ten Sports has acquired the rights to of the ten cricket boards, giving it over 100 days of cricket a year. This is the maximum number of days of cricket across sports channels. The right to these 5 boards; Sri Lanka, Pakistan, South Africa, West Indie and Zimbabwe are with Ten Sports for the next 4 years.
3)ETC Network
ETC Networks Limited (ETC.BO) is a media company listed on the Bombay stock exchange operating two television channels, ETC Music and ETC Punjabi in India. Zee acquired a 51% stake in June 2002. Zee acquired a 51% stake in June.
3.3 Zee’s portfolio of brands Zee TV Zee Zee News Zee Muzic Zee Café Zee Studio Zee Marathi Zee Punjabi Zee Bangla Zee Gujarati Zee Trendz Siticable Zed ZICA etc etc Punjabi Kidzee Zee Action Zee Smile Zee Classic Zee Premiere Zee Telugu Zee Business Zee Sports Zee Jagran Zee Arabiya ZIMA
Hindi entertainment channel Cinema Hindi movie channel Hindi news channel Music channel English channel targeted at the urban and young audiences English movie channel Marathi language channel Punjabi language entertainment channel Bengali language channel Gujarati language channel 24-hour premium fashion and style channel Largest cable network in India with a reach of 7 million homes Learning solutions network of India Leading animation studio in India Music channel Punjabi language channel Leader in pre-primary segment having 225 + centres across 100 cities in India, Middle East, Singapore and Indonesia 24-hour Hindi action movie channel A light entertainment channel A movie channel for black and white classic movies A 24-hour movie channel featuring the latest Hindi movies A Telugu language channel Business news channel Sports channel Channel for spiritual programmes Channel in the Middle East Media education in the field of Direction, Acting, Writing
3. 4 Zee’s Strategies * Inspire creativity * Continue to run our business as best in class, with viewer satisfaction as the ultimate goal. * Enhance our leadership position in the genres we compete. * Continuous innovation to stay ahead of the curve and seize growth opportunities * Invest in the business in a focused, disciplined way and achieve superior financial performance. * To use the strong cash flows of our business to improve returns to shareholders * Reaffirm our commitment to highest level of integrity and professionalism throughout our business.
4. SWOT Analysis of Zee
Favorable
Internal
* Leading broadcaster in India and overseas for South East Asian content * First mover advantage across genres * Widest offering of channels by a single broadcaster in the country * Across genres, our channels are either leaders or strong contenders for the leadership Position * Diversified revenue streams: advertising and subscription * Diversified customer base:across167 countries * Operating the largest pay TV distribution platform in the country, Zee Turner * Large network gives tremendous leverage with advertisers * Cost conscious approach towards business * Affiliate companies have leading presence across the media value chain cable and distribution, direct-to-home satellite services, digital media amongst others.
External Strengths
Benefit from the robust growth of the Entertainment and Media sector: The future of the entertainment industry will be decided on the interplay of a number of factors like consumerism, advertising spend, content, pricing, technology and regulation. The television industry revenues are expected to grow from the present size of Rs 191 bn to Rs 519 bn by 2011 Digitization (rollout of CAS and DTH) means that cable penetration will increase from 70 m homes in 2006 to around 113 m homes by 2011. Increased market share of General entertainment channels in comparison to previous year.
Opportunities
Unfavorable
Zee‘s main brand Zee TV Lagging behind Star Plus & Colors: Its flagship channel 'Zee TV' is the number three channel lagging behind Star Plus and colors. Problem of attrition: The attrition rate in the company has increased. NDTV, UTV, INX Media, TV 18- Viacom combine have entered the Hindi General Entertainment space. Ashvini Yardi, Senior Vice President (Programming), resigned to join competitor Viacom ¡V TV 18 combine. Weak on programme packaging ―Me too‖ approach Lack of hugely popular Non-fiction realty shows. Zee Cinema is not capable to show new releases Excessive diversification into various other genres like sports, regional channels may loosen focus on flagship channel.
Weaknesses
Increased competition: The Hindi General Entertainment space will become very competitive with the entry of the TV 18 group, UTV, NDTV, INX Media. Slow rollout of CAS: The government may delay the rollout of CAS. The consumers may show some hesitation in opting for paid channels and many viewers may opt only for FTA channels. Both these factors may cause a dent in the subscription revenues of Zee TV Lower advertisement rates in the IPL week . The I & B ministry plans to setup a separate regulator to monitor content on TV channels. Threat from Google TV /IPTV to company‘s DTH segment. From Film Industry & Sports events.
Threats
5. Financial Performance Zee Entertainment Enterprises Limited (ZEEL) is an integrated media and entertainment company engaged primarily in broadcasting and content development, production and its delivery via satellite. The Company has 15 channels that serve an array of content choices in India. The Company operates in three segments: Broadcasting and content (B & C), which principally consists of developing, producing and procuring television programming and film content and delivering via satellites, thereby earning revenues by way of advertisement and subscription revenues and syndication; Education, which principally consists of delivering learning solutions and training to various segments of the society, and Film Production, which principally consists of production and distribution of films. Effective March 29, 2010, Zee News Ltd. demerged its Regional General Entertainment Channel Business Undertaking and transferred its operation to Zee Entertainment Enterprises Limited.
Ticker: Exchanges: 2010 Sales Currency:
Fiscal Yr Ends: Share Type:
505537 BOM 21,997,825,000 (Year Ending Jan 2011). Indian Rupees March Ordinary
Country: Major Industry: Sub Industry:
INDIA Recreation Radio & T.V. Broadcasts
Employees:
1,400
Market Cap: Shares Outstanding: Closely Held Shares:
139,140,149,097 977,794,442 360,210,736
5.1 Financial AnalysisZee TV has gone through restructuring and has bought six regional entertainment channels from Zee News. This helped the company promote its channel more aggressively and improve the margins. During 2009-10, the regional entertainment channels generated a revenue of Rs 404 crore and an EBITDA of Rs 126 crore. This translates to an EBITDA margin of 31.2%, higher than that of standalone Zee TV. Analysts say the acquisition will enhance the earnings of the company. Another aspect that worked in favour of ZEE is the improving ad revenue and growing viewership. Despite intense competition from sports programmes and other Hindi networks, Zee TV continues to dominate the Hindi general entertainment space with a share of 20%. It has maintained its dominance on the weekly rating charts with an average of 19 shows in the top 100 programmes. It also kept programming and operating costs under control. as a percentage of revenue, these costs came down to 40.1% in the January-March period from 43.4% in the December quarter Soaring Stock Prices in last one year
5.2 Ratio Analysis (for FY 2009)Key Stats And Current Ratios
RATIO
COMPANY
INDUSTRY
Earnings per Share
10.37
15.51
Dividends yield
1.03
1.04
Payout ratio
22.26
14.29
P/E ratio
27
18.91
Net Profit margin
16.38
-2.92
Return on Investments
11.38
6.05
6. Marketing StrategiesJoined hands with rajshri pictures for distribution of films in domestic market. Cable as well as satellite distribution Developing region centric ads –an innovative strategy The life-size microphones and ‗College Ka Singing Superstar‘ initiatives were of a comprehensive 360* campaign.‖ Channel has created ‗Sa Re Ga Ma Pa Music Zones‘ at select bus stops across the city. The entire bus stop will have Sa Re Ga Ma Pa branding, lights along with a music setup replete with speakers and associated paraphernalia. Zee TV launches India‘s First ―Interactive‖ Marketing Campaign in the Hindi GEC space- the channel has decided to present the audience with India‘s first-of-its kind ―interactive‖ marketing experience in the Hindi GEC space - A campaign that includes and involves the audience in shaping the show at every stage. The first leg of this campaign calls out to viewers to participate in the naming of the new show.
Zee TV‘s endeavor to strengthen its online presence through interactive applications on Facebook and Twitter or the Dance India Dance channel on Youtube that went on to become the ―Most viewed channel on YouTube‖ for a sustained period of time, no doubt Zee TV‘s clutter-breaking marketing innovations have invariably grabbed eye-balls 6.1 5 C’s of marketing Collaborators: With ETC and Turner group Competitors: Star, Colors, SET India Company: Products: Entertainment, sports , music, movies, sports, Life style channels, DTH, Distribution , Education sector etc. Customers: Indian and abroad viewers Context: Light entertainment and sports.
6.2 Ansoff’s matrix
Zee
6.3 Segmentation Segmentation is based upon observable characteristics of consumers. Major segmentation variables used-Geographic. Behavior, psychographic, demographic
6.4 Product Life cycle
ZEE
7. Competitive Analysis7.1 Zee’s major brand “ZEE TV” Market share for the year 2009
7.2 Advertising share year 2009
7.4 Market wise performance of top 6 general entertainment channels-2009
7.4 Customer Loyalty
7.5 Perceptual Mapping High Innovative Content
Bindaas
Colors
Consumer acceptance Low
Consumer acceptance high
DD National
Star, ZEE, NDTV Imagine, Sony
Low Innovative Content
7. Risk Analysis – 7.1 Porters Five Forces Model: Analyzing the Television Broadcasting Industry with reference to Zee
Bargaining power of Buyers Strength of Force—High Buyers (end users as well as advertisers) do not face significant switching costs and are extremely price sensitive Viewers' tastes frequently change, providing little loyalty to any particular network Advertising buyers dictate television programming choices The customers are fragmented, so their bargaining power is low ZEE itself is a leading DTH operator with ―Dish TV‖ hence can reach directly to its buyers(viewers) without bargaining of any intermediary( Cable operators) But The rollout of CAS and DTH services will enable the consumer to choose the channels that he wishes to view increasing his bargaining power. Bargaining Power of the Suppliers Strength of Force-- Low- Medium Since most suppliers to Broadcasters have either been acquired/ have a tie-up with the broadcaster, the bargaining power of suppliers is low. For ex- Viacom has acquired Paramount. However ZEE TV commissioned the UTV group for producing content of around 250 hours once it became popular. However, Independent content providers pose a major challenge to online revenue model The supplying industry comprises a large number of small operators The service is undifferentiated and can be replaces by substitutes There is huge competition among the content providers to Channel Like Zee. So suppliers have limited scope of bargaining. Threat of New Entrants Strength of Force—High Higher the competition in an industry, the easier it is for other companies to enter this industry. In such a situation, new entrants could change major determinants of the market environment (e.g. market shares, prices, customer loyalty) for Zee at any time. There is always a latent pressure for reaction and adjustment for Zee TV in this industry. The threat of new entries will depend on the extent to which there are barriers to entry. These are typically High start-up capital is a big de motivator New entrants have difficulty accessing distribution channels. New entrant has some problems finding skilled employees, materials, and suppliers. Serviceable used equipment is expensive. Long-lasting economies of learning and scale also de motivate the potential new entrant Economies of scale (minimum size requirements for profitable operations)
Brand loyalty of customers Scarcity of important resources, e.g. qualified expert staff Access to raw materials is controlled by existing players Distribution channels are controlled by existing players Threat of Substitutes Strength of Force—Medium A threat from substitutes exists if there are alternative products with lower prices of better performance parameters for the same purpose. They could potentially attract a significant proportion of market volume and hence reduce the potential sales volume for existing players. This category also relates to complementary products. Similarly to the threat of new entrants, the threat of substitutes is determined by factors like
The relative price for performance of substitutes Customers incur no incur switching costs. Also, adequate substitutes are available. Possibly, One Broadcasting medium substitute for the other(movies as a replacement for TV) Pirated content is a decent(and free substitute). Other free time activities be could be substitutes (concerts, games, gambling) Internet TV could be emerged as a big substitute in near future.
8.Conclusion Zee TV is back at #3 with 176 GRPs. According to the data released by TAM, Star Plus remained the #1 channel with 336 GRPs, followed by Colors at #2 with 258 GRPs. Zee TV and Sony both gathered 176 GRPs for the week. Impact of KBC wearing off. Sony had displaced Zee TV from the #3 slot following the launch of Season 4 of the internationally successful game show Who Wants to be a Millionaire on 11 October 2010. Even so, four weeks after the launch of the show, the GRP (viewership) ratings of the channel have started slipping. Performance of fiction shows crucial for loyal eyeballs. Fiction soaps adjoining celebrity-hosted shows need to get sampled and build a loyal viewership base for a general entertainment channel (GEC) to have sustained GRP momentum. Competition remains intense, but how much would it hurt? We remain mindful of the competitive intensity in the broadcasting space. Even so, our 15% advertising revenue growth forecast for the company in FY12 adequately captures the fragmentation of the ad revenue pie.
