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Breaking News : Expanding our bouquet makes us successful: Barun Das, CEO, Zee News
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In an interview with ET Now, Barun Das , CEO, Zee News Ltd , talks about post de-merger performance, ad rates and subscription revenues.

Give us a sense of post de-merger how the performance of the news channels has been, and have ad revenues panned out? Also, how would the quarters ahead look like?

Post the de-merger we wanted to consolidate our news operations during the first two quarters and we exceeded our own expectations. Even compared to the last quarter, the first two quarters were not really comparable. Last year first quarter we had the general election. This year we were not blessed with that. Despite that in first quarter we showed a 50% growth in advertising revenue which obviously stood out in the news industry as you would know.

Even this quarter, which is traditionally the dullest quarter for advertising industry, we are happy to see a 16.3% growth in advertising revenue and the next quarter is obviously the best quarter amongst the four quarters for advertising industry with the festive period boosting the activities amongst clients. So we definitely look far better quarters ahead, but even this quarter we are quite satisfied with our performance with the 7 crore EBITDA positive despite the losses of 3 channels.

Give me a sense of how have ad rates behaved? Have the rates also picked up or has it been more inventory that you have been able to sell out to potential advertisers?

There is a mother channel and there are other channels which have also grown over the period. So the ad rate question of yours should apply differently to various genres. For the national Hindi news channel, I do not think the ad rates have increased over the last year and a half because of fragmentation etc.

How we countered that is by coming up with various innovative solutions which effectively boost the net ad rate and for our regional channels, I think it is a combination of both larger number of advertisers coming on the regional channels as well as steady incremental growth of advertising rate that has resulted in the growth for advertising revenue.

How would it shape up in the next couple of quarters? Are you seeing increased traction?

Yes. This year in the first quarter the activities amongst the news channel advertisers were far better than what we expected and, therefore, we could even grow despite no election this year. Second quarter there was a lull of activities amongst news channel advertisers, but third quarter we are far more gung-ho about as well as the fourth quarter because the traction would go through the fourth quarter. In fact, to tell you the truth at this point in time we would be planning for the fourth quarter because we see our third quarter is quite secured.

How have subscription revenues behaved and I am just wondering if digitisation is helping you boost this revenue stream? If yes, then how would it shape up in the next few quarters as well?

Yes. Subscription revenue is growing. In fact, DTH subscription revenue has grown by about 6%. The entire subscription revenue contributes about 31% of our total revenue bouquet and going forward digitalisation would certainly help. The proliferation of DTH is definitely coming as a boon for news channels which are paid news channels and we ourselves were quite surprised by seeing what is the pull of some of the regional channels on certain DTH platforms when we put certain channels on à la carte basis on certain DTH platforms.

My understanding is that eventually one of the largest USP of DTH platforms would be what is the variety they offer. For instance, if I am Bengali I stay in Delhi and my relatives coming into Delhi, a DTH platform would not be a coveted one for us unless and until all the leading Bengali channels are there. So that is why we are focusing on content and not really the other means of jumping in hierarchy of viewership share and DTH would definitely boost the subscription revenue as well as our added enhanced activity in the analog domain.

As you know our distribution activities is handled by Zee Turner that is a constant negotiation and constant strategising on ground. The challenge there is to increase the declaration as we all know and fortunately the subscription revenue are not dependent on seasonality of advertising. So there would be a steady growth and our focus is very much there. One of the key success factors for our company is our focus on subscription revenue.

Assuming that you stay at these levels or probably just slightly up the kind of cash flows and the revenue numbers or the profitability numbers, would there be any fundraising plans that you would need to undertake in the next couple of quarters?

This level is not rally representative. You need to break it up, let’s say, between the existing channels and newly-launched channels. Our overall EBITDA margin is about 9%, but we have given the figures for existing paid channels barring the 3 newly launched channels.

There we are clocking about 32% odd of EBITDA share which is extremely satisfactory and which is the level that we wish to reach with all our businesses, including the newly-launched channels and at this current level that way we have planned our company even in the past that we make the existing channels work reach their breakeven target or close to their breakeven target and as the fund is generated, we come up with other expansion plans. Therefore, we reduce the dependence on one mother channel or the existing channels. We expand our bouquet and that is what makes us successful going forward.

I am just taking that there is no fundraising plan, right?

No immediate plan of fundraising at this point of time, but that depends on our future planning.

Source: The Economic Times

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