CORPORATE ZEE 30 06 06.qxp 03/806 11:26 AM Page 36 Corporate The zest in Zee Through a series of changes, Zee Telefilms has moved rapidly ahead. Ryan Rodrigues reports few years ago the average Telefilms, softer changes were introduced. benefit from the increased management viewer in India had written off The traditional rectangular Zee logo was focus on respective businesses," it says. Zee Telefilms as a potential given a contemporary look, with bends and Next was a Merrill Lynch report. "Zee TV A No 1. A media and entertain- curves to target a younger audience. has finally overtaken Star Plus in the 9-10 ment company, it had been a market leader Headquarters shifted from the suburbs to a pm band in the first week of June with its in the Indian television space for long. But swanky building in the centre of the city. shows beating Star Plus after six years," it stiff competition had started to take its toll. Today behind the glass walls of this says. "Developments reinforce our view At its offices in Mumbai, senior managers two-storey structure, executives buzz that improving content and platforms will would walk in - and then they walked out. around with purpose in their feet. be key triggers to sustain Zee's premium One successful show on rival Star TV, fol- The verdict first came from TAM valuations." lowed by a serial onslaught, had whittled Ratings in June. The industry's audience Stock analysts' now stick their necks down homegrown Zee from prime position measurement system lists 10 Zee shows in out for Zee; the company has become a to No 3. the country's top 100. By doing just this, hot pick. Subhash Chandra, the compa- "Things weren't good," says an ana- Zee has crowned itself into second place in ny's chairman and managing director, lyst. "Massive investments in programming general entertainment, a position occupied credits it to the changes that have come weren't paying and distribution was by Sony for the past four years. Three through. "You need to constantly reinvent ignored," he adds. Back at the Zee office, recently launched serials - Jabb Love Hua, to be relevant to the new consumer," Ashish Kaul, vice-president of the corpo- Kasamh Se, and Saath Phere - in primetime he says. rate brand development group, agrees slot, have seen TRP ratings jump from Chandra roped in Pradeep Guha from things went awry. "But change was the three to six. the popular daily the Times of India as chief word," he says. Then in mid-June came a report from executive officer in early 2005, to focus on Among the first moves, the parent com- Enam Securities India Research, which the content business. In almost the same pany was restructured. Then down the line calls Zee an 'outperformer'. "Post restruc- breath he brought in son Punit Goenka and at its largest group company, Zee turing we believe that the company will brother Laxmi Goel, to serve as full-time A SURGE IN RATINGS: Popular shows Kasamh Se, Saath Phere, and Jabb Love Hua 36 CORPORATE ZEE 30 06 06.qxp 03/806 11:26 AM Page 37 At 100,000 IN THE PULSE subscribers a SUBHASH CHANDRA, now 56, was born in Hisar, month, Zee has Haryana, a northern state in India. The son of Nandkishore pulled it off Goenka, a cottonseed trader, he was the eldest of seven in the children and grew up prepar- ing to be an engineer. But by direct-to-home the age of 19 he took a liking business. for business, and started a vegetable oil unit. Chandra's big break came in 1976. When Food directors. Then he moved from the manag- Corporation of India began to ing director's seat to that of chairman. expand storage capacity, he "Having the right people, in the right posi- took up an order to cover the tion, doing the right things is today a criti- produce with polythene cal factor at Zee," he says. sheets. This gave him expo- Chandra has seen all the ups and sure to both food grains and downs at Zee. And if reinvention is the packaging. Soon he shifted word of the day, then all his re-engineering into exporting food grains by year-end will come in full force. In fact, through his firm Rama by March 2007 the company itself will Associates, where some cease to exist. Russian deals proved very profitable. ee Telefilms is being pieced into three Then further diversification parts. Its distribution business will be continued. After a visit to a Z REINVENTING ZEE: Chairman and managing director called Wire and Wireless India (WWI). The packaging exhibition in 1981, Subhash Chandra general entertainment business will be Chandra began manufacturing called Zee Entertainment Enterprises. And laminated tubes through his firm, Essel In all this Chandra has a few things to the last cluster of regional channels will Packaging. In 1988, he formed Pan his credit. He seized an opportunity come under the third company, its news India Paryatan to develop amusement whenever he sensed one, and has been channel Zee News. Like Zee Telefilms, all and theme parks. First was EsselWorld a first mover in each field. These fields three entities will be listed on the (1988) and then Water Kingdom were as diverse as media and packag- exchanges as separate companies. (1998), both in Mumbai. French archi- ing, but the performance has been This move will address the current tect Jean Michel Rouls designed Water remarkably sound in each. Chandra had "mashed up" situation. At the Essel Group, Kingdom to give it a "tropical theme of zero knowledge about programming, a lost jungle temple". The park has distribution and film rights when he got entertained more than 11 million visitors into broadcasting. But that did not stop till date. him. Now there's Zee Interactive In 1990, after a casual meeting with a Learning System (ZILS) that provides friend at Doordarshan, the state-owned learning solutions to segments of educa- terrestrial network, Chandra set up a tion like the Internet, multimedia, print broadcasting business, and India's first and television. satellite channel, Zee TV. He outbid The takeover and merger of Swiss pack- many top businessmen, and signed a aging company Propack with Essel has lease deal for a transponder on Asiasat today formed Essel Propack, the largest with Richard Li, then chief of Star TV, producer of laminated tubes in the for $5 million. Later he set up a satellite world. It has manufacturing units in business Agrani which, in a $300-mil- India, Egypt, China, Germany, lion project, signed a contract for India's Philippines, Indonesia, Venezuela, first private sector satellite, a geosta- Colombia and Mexico. And Zee tionary, C & Ku band satellite from Telefilms, despite setbacks in the past, French company Alcatel. is heading for the top again. 37 CORPORATE ZEE 30 06 06.qxp 03/806 11:26 AM Page 38 CORPORATE and projects are being identified. Changing Colours in $ million The focus on the general entertainment Year Sales PAT business has already started to pay divi- 2005 282 69 dends. Bringing the marketing and pro- 2006 309 47 gramming teams together has helped Zee 2007* 417 66 to sell its content better. Analysts say Zee 2008* 488 85 had the right content all along, but could * Estimates. Source: ENAM Securities India Research not bring in viewers due to stiff competi- tion. A stronger marketing technique is Chandra's umbrella company for all his now doing the trick. businesses, the strategists are sure this will At Zee News, director Laxmi Goel says give rise to new opportunities. Says Rajiv the functioning of the organisation will Garg, Essel Group CEO (corporate strategy remain more or less the same. "It has just and finance): "Huddled together under Zee, taken a different avatar," he says. Goel some businesses were not given the right feels the splitting of Zee Telefilms will ben- strategic focus. In cable, for instance, we efit each company. "We are now free to felt that we were not doing justice to its take independent decisions on expansion, growth potential." which will always be guided by market Garg is referring to WWI, which will be forces," he adds. As far as regional chan- Zee's distribution business. The ace up its nels are concerned, they will play their PREPARED FOR A FIGHT: vice-president, corporate brand development group Ashish Kaul sleeve is SitiCable, a cable company with a part south of the state of Maharashtra, subscriber base of seven million. What where few people watch Zee in Hindi. started out at Zee through the acquisition The forming of Zee News is also in line up separate, smaller companies to cater to of a small cable company in the state of with Indian regulatory requirements (its different states in India. Andhra Pradesh is today a fully-fledged turnover is expected to be about $40 mil- And, mind you, all this is in addition to business. lion). Other newly-launched channels like Zee's huge fan following in the overseas "Internationally, a cable company's val- Zee Telugu apart from existing channels Indian community. With nearly 500,000 uation is estimated at $1,000 to $1,500 a like Alpha Gujarati and Alpha Kannada will subscribers, the overseas business subscriber," says an analyst. Even at a come under this entity. While it costs accounts for a large part of the total num- conservative estimate, this makes WWI a around $3 million to launch a new channel ber of DTH subscribers.