risk analysis and business continuity planning of zee tv

8/8/2019 Risk Analysis and Business Continuity Planning of Zee TV

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Term Paper

Internal and Competitive analysis of Zee EntertainmentEnterprise Limited


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Table of Content

1.Introduction ............................................................................................................................. 3

2. Zees Mission ......................................................................................................................... 3

3. Company Profile..................................................................................................................... 3

3.1 ZEE is ............................................................................................................................... 3

3.2 Alliances & Partnerships .................................................................................................. 4

3.3 Zees 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 Cs of marketing......................................................................................................... 10

6.2 Ansoffs matrix............................................................................................................... 10

6.3 Segmentation .................................................................................................................. 11

6.4 Product Life cycle .......................................................................................................... 11

7. Competitive Analysis- .......................................................................................................... 12

7.1 Zees 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 ..................................................................................................................... 147.1 Porters Five Forces Model: Analyzing the Television Broadcasting Industry with

reference to Zee......................................................................................................................... 14

8.Conclusion ............................................................................................................................. 16
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Term Paper On Zee Entertainment Enterprise Limited

1.Introduction

The Zee Entertainment Enterprises Ltd. (NSE: ZEEL) is the largest media and entertainmentcompany 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 Indias leading television, media andentertainment 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 filmstars, Zee houses the worlds 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, Zees well known brands includeZee 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 inevery 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. Zees MissionAs 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

The largest producer and aggregator of Hindi programming in the world, with more than 80,000

hours of original programming in its archives. One of the most popular entertainment brands in India; was ranked 9th most popular brandwithin a decade of its launch.

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, theMiddle East, South East Asia, Australia and New Zealand.


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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. Tennisfans 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 cricketboards, 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.


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3.3 Zees portfolio of brands

Zee TV Hindi entertainment channel

Zee Cinema Hindi movie channel

Zee News Hindi news channel

Zee Muzic Music channelZee Caf English channel targeted at the urban and young audiences

Zee Studio English movie channel

Zee Marathi Marathi language channelZee Punjabi Punjabi language entertainment channel

Zee Bangla Bengali language channel

Zee Gujarati Gujarati language channelZee Trendz 24-hour premium fashion and style channel

Siticable Largest cable network in India with a reach of 7 million homes

Zed Learning solutions network of India

ZICA Leading animation studio in India

etc Music channeletc Punjabi Punjabi language channel

Kidzee Leader in pre-primary segment having 225 + centres across 100 cities in

India, Middle East, Singapore and IndonesiaZee Action 24-hour Hindi action movie channel

Zee Smile A light entertainment channel

Zee Classic A movie channel for black and white classic moviesZee Premiere A 24-hour movie channel featuring the latest Hindi movies

Zee Telugu A Telugu language channel

Zee Business Business news channel

Zee Sports Sports channel

Zee Jagran Channel for spiritual programmesZee Arabiya Channel in the Middle East

ZIMA Media education in the field of Direction, Acting, Writing

3. 4 Zees 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 financialperformance.

* 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.


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4. SWOT Analysis of Zee

* Leading broadcaster in India and overseasfor 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 leadersor strong contenders for the leadership Position* Diversified revenue streams: advertising and

subscription* Diversified customer base:across167 countries

* Operating the largest pay TV distributionplatform in the country, Zee Turner

* Large network gives tremendous leverage withadvertisers* Cost conscious approach towards business* Affiliate companies have leading presence

across the media value chain cable anddistribution, direct-to-home satellite services,

digital media amongst others.

Increased competition: The Hindi General

Entertainment space will become verycompetitive with the entry of the TV 18group, UTV, NDTV, INX Media.

Slow rollout of CAS: The government maydelay the rollout of CAS. The consumers mayshow some hesitation in opting for paid

channels and many viewers may opt only forFTA channels. Both these factors may cause adent 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 companys

DTH segment.

From Film Industry & Sports events.

Benefit from the robust growth of the

Entertainment and Media sector: The futureof the entertainment industry will be

decided on the interplay of a number offactors like consumerism, advertising spend,content, pricing, technology and regulation.

The television industry revenues areexpected 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 increasefrom 70 m homes in 2006 to around 113 mhomes by 2011.

Increased market share of General

entertainment channels in comparison toprevious year.

Zees main brand Zee TV Lagging behind Star

Plus & Colors: Its flagship channel 'Zee TV' isthe number three channel lagging behind StarPlus and colors.

Problem of attrition: The attrition rate in thecompany has increased. NDTV, UTV, INXMedia, TV 18- Viacom combine have entered

the Hindi General Entertainment space. AshviniYardi, 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 newreleases Excessive diversification into various

other genres like sports, regional channels may

loosen focus on flagship channel.

Favorable

Unfavorable

Strengths Weaknesses

ThreatsOpportunities

Internal

External


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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 inIndia. 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 deliveringlearning 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: 505537 Country: INDIA

Exchanges: BOM Major Industry: Recreation

Sub Industry: Radio & T.V. Broadcasts

2010 Sales21,997,825,000

(Year Ending Jan 2011).

Employees: 1,400

Currency: Indian Rupees Market Cap: 139,140,149,097

Fiscal Yr Ends: March Shares Outstanding: 977,794,442

Share Type: Ordinary Closely Held Shares: 360,210,736


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5.1 Financial Analysis-

Zee 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 themargins. During 2009-10, the regional entertainment channels generated a revenue of Rs 404crore 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 hasmaintained 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 theDecember quarter

Soaring Stock Prices in last one year


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5.2 Ratio Analysis (for FY 2009)-

Key Stats And Current Ratios

6. Marketing Strategies-

Joined 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 Indias First Interactive Marketing Campaign in the Hindi GECspace- the channel has decided to present the audience with Indias first-of-its kind

interactive marketing experience in the Hindi GEC space - A campaign that includesand 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.

RATIO COMPANY INDUSTRY

Earnings per Share 10.37 15.51

Dividends yield 1.03 1.04

Payoutratio 22.26 14.29

P/E ratio 27 18.91

Net Profit margin 16.38 -2.92

Return on Investments 11.38 6.05


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Zee TVs endeavor to strengthen its online presence through interactive applications onFacebook 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 TVs clutter-breaking marketing innovations have invariably grabbed eye-balls

6.1 5 Cs 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 Ansoffs matrix

Zee


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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


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7. Competitive Analysis-

7.1 Zees major brand ZEE TV Market share for the year 2009

7.2 Advertising share year 2009


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7.4 Market wise performance of top 6 general entertainment channels-2009

7.4 Customer Loyalty


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7.5 Perceptual Mapping

7. Risk Analysis

7.1 Porters Five Forces Model: Analyzing the Television Broadcasting Industry with

reference to Zee

Bindaas

Colors

Star, ZEE,

NDTVImagine,

Sony

DD

National

High Innovative Content

nsumer acceptance Low

Consumer acceptance high

Low Innovative Content


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Bargaining power of Buyers

Strength of ForceHigh

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 ForceHigh

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 marketenvironment (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)


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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 ForceMedium

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 roadcasting 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, StarPlus 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 K Cwearing 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 ageneral entertainment channel (GEC) to have sustained GRP momentum.

Competition remains intense, but how much would it hurt? We remain mindful of thecompetitive 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.

risk analysis and business continuity planning of zee tv

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