| NOTICE | DIRECTORS’ REPORT | CORPORATE GOVERNANCE REPORT | MANAGEMENT DISCUSSION AND ANALYSIS | MANAGEMENT DISCUSSION AND ANALYSIS OVERVIEW Zee Entertainment Enterprises Limited (ZEE) (BSE Code: 505537, NSE Code: ZEEL.EQ) is one of India’s largest vertically integrated media and entertainment company. The Company was formed in 1982. ZEE was the first company to launch a satellite channel in India and from being a single channel for a single geography today operates multiple channels across multiple geographies in different languages and genres. The Company’s programming reaches out to over 670 million viewers across 169 countries. ZEE channel portfolio, across various genres in the Indian market, includes: i. Hindi Entertainment: Zee TV, Zee Smile, 9X ii. Hindi Movies: Zee Cinema, Zee Premier, Zee Action, Zee Classic iii. English Entertainment, Movies and Life style: Zee Studio, Zee Café, Zee Trendz iv. Regional Language Entertainment: Zee Marathi, Zee Bangla, Zee Bangla Cinema, Zee Talkies, Zee Telegu, Zee Kannada, ETC Punjabi, Zee Tamil v. Sports: TEN Cricket, TEN Action, TEN Sports, TEN Golf vi. Religious and Alternate Lifestyle: Zee Jagran, Zee Salaam vii. Music: Zing, ETC viii. Niche and Special Interest: Zee Khana Khazana and Zee Q ix. HD: Zee TV HD, Zee Cinema HD, Zee Studio HD, TEN HD 62 ANNUAL REPORT 2012-13 CORPORATE OVERVIEW OPERATIONAL OVERVIEW BOARD & MANAGEMENT REPORTS FINANCIAL STATEMENTS Apart from the channels listed above which are available in India, the Company also broadcasts 29 dedicated channels in the international markets. ZEE has 5 channels, viz. Zee Cinema, MEDIA AND ENTERTAINMENT INDUSTRY The Indian Media and Entertainment Industry witnessed a slow growth in 2012. The Zee Premier, Zee industry grew from ` 728 billion in 2011 to ` 821 billion in 2012, registering a growth rate of Action, Zee Classic 12.6%. Television sector grew from ` 329 billion in 2011 to ` 370 billion in 2012, registering a growth of 12.5%. (Source: FICCI-KPMG Indian Media and Entertainment Industry Report and Zee Cinema 2013). HD. ZEE has the Total advertising spend across media was ` 327 billion in 2012. Television contributes 38% largest film library in of Media & Entertainment industry advertising revenues. In the light of continued economic slowdown, advertising revenues saw a growth of 9% in 2012 as against 13% in 2011. the country and its FY2013 was a defining year for the television media sector in many ways. The biggest movie channels are transformation was the implementation of Digital Addressable System (DAS) in the 42 a strong favourite largest cities of India. At the end of March 2013, there were an estimated 33 million digital pay TV homes on DTH and an estimated 16 million homes on digital cable, up from with the viewers as 29 million DTH and 4 million digital cable homes in March 2012. Digitisation of cable is well as advertisers. expected to bring in transparency and increase subscription revenues for Multi System Operators (MSOs) and broadcasters. It is also expected to reduce carriage fees, building a case for the launch of niche channels and investment in content for existing channels. Developments and refinements in viewership measurement systems may affect the way advertising is distributed among channels. BUSINESS PROFILE ZEE is an integrated media and entertainment company engaged primarily in broadcasting and content development, production and its delivery via satellite. The Company has 32 channels that serve the widest array of content in India and is the leading broadcaster across the country. ZEE is also the pioneer in the international markets with 29 dedicated channels serving Indian content across 169 countries. Leadership across different Genres: In the Hindi GEC genre, Zee TV is the flagship product from ZEE. The Hindi GEC space continued to see sustained competition amongst the top four channels with extremely dynamic channel rankings. Zee TV continued to be a leading channel in the Hindi General Entertainment genre with an average weekly channel share of 19% amongst top six GECs and average weekly Gross Rating Points (GRPs) of 218. Key shows like Pavitra Rishta successfully completed 1,000+ episodes. During the year, the channel launched various new successful shows in different genres. Fear Files, launched in the thriller genre, was very well received by the audience. India’s ZEE ENTERTAINMENT ENTERPRISES LIMITED 63 | NOTICE | DIRECTORS’ REPORT | CORPORATE GOVERNANCE REPORT | MANAGEMENT DISCUSSION AND ANALYSIS | MANAGEMENT DISCUSSION AND ANALYSIS Best Dramebaaz was completely new format launched for the first time over 400 exclusive titles under its belt, Zee Bangla Cinema offers a on Indian TV by Zee TV. DID Lil Masters-2 and Dance ke Super Kids were mixed bag of commercial blockbuster and alternative cinema. both weekend slot leaders garnering an average of 4+ GRPs during the > Zee Kannada GRPs garnered 222 GRPs with 18% market share, season. thereby retaining the No. 3 position in the Karnataka market with top In the Hindi Movie Genre, ZEE has 5 channels, viz. Zee Cinema, Zee performing shows like Kaas Ge Toss, Mummy No. 1, Radha Kalyana Premier, Zee Action, Zee Classic and Zee Cinema HD. ZEE has the largest & Paravathi Parameshwara. film library in the country and its movie channels are a strong favourite with > Zee Telugu is the No.1 GEC channel in the weekday Primetime fiction the viewers as well as advertisers. During the year popular movies like band between 1800-2030hrs on the back of slot leaders like Pasupu Agneepath, Joker, English Vinglish and Agent Vinod were premiered on Kumkuma and Muddu Bidda. It also bagged 4 State Nandi Awards Zee Cinema. Agneepath premiere was one of the highest rated premieres including a Golden Nandi for Pasupu Kumkuma. The Nandi Award is of this year amongst all Hindi Movie channels, with a rating of 4.7 TVR. the highest award ceremony for excellence in Telugu Cinema, Telugu The Company’s sports offerings include 5 channels viz. TEN Cricket, Theatre and Television, presented annually by Government of Andhra TEN Action, TEN Sports, TEN Golf and TEN HD. TEN has telecast rights Pradesh. to 5 cricket boards, which ensure coverage of cricket of all test playing Further strengthening our position in the niche/ special interest genre, countries, along with rights to exciting properties such as UEFA cup the Company launched ZeeQ, India’s first edutainment channel, aimed at football, WWE wrestling, US Open Tennis etc. TEN is a clear leader in children in the age group of 4 to 14 years. The channel will address the the non cricket genre with a 52% viewership share in FY2013. The sports educational need gaps through an engaging mix of home produced and business has contributed to over 13% of the Company’s top line this year. acquired content. ZEE will manage ZeeQ’s broadcast operations, while Zee Café, Zee Studio and Zee Trendz are Company’s English language Zee Learn will look after the content and channel management. offerings. Zee Café has the rights to the latest series programming of super- This year the Company brought in a refreshed avatar of its 24-hour food hit shows while Zee Studio has tied up with leading studios from across channel Zee Khana Khazana with the tagline ‘Ab Khana Sawal Nahi, the globe. The channels continue to strengthen the network subscription Lajawab Hai!’ featuring shows that define and refine the culinary expertise bouquet. During the year, the channels showcased popular international that has become synonymous with “Food”. With a content of new shows shows and live mega events like Miss Universe 2012. Zing, the music and Breakfast Xpress, Food Ka Mood, Bacha Party and Ab Har Koi Chef, Zee lifestyle offering of the Company, showcases popular Bollywood oriented Khana Khazana is One-stop destination for Food for all. properties. The content on Zing revolves around the world of music, lifestyle, movies and celebrities. GLOBAL PRESENCE Zee Marathi, Zee Talkies, Zee Bangla, Zee Bangla Cinema, Zee Telugu, The Company reaches more than 670 million viewers globally and in 169 Zee Kannada, ETC Punjabi and Zee Tamil are regional language offerings countries worldwide. Internationally, subscription is a key driver of revenues and enjoy significant market share in their respective markets. for ZEE and international subscription revenues contributed significantly to > Zee Marathi improved its viewership share and became consistent ZEE’s total revenues in this financial year. No. 2 player in Marathi GECs with average weekly GRPs of 188 and Zee Network dominates the International South Asian (SA) Business market share of 27% for FY13. True to its brand value, Zee Marathi globally. Zee TV continues to lead in US, Middle East & Africa’s in terms brought to the audiences fresh and appealing shows through Uncha of viewership within the SA channels. During the year, the Company Mazha Jhoka, Maharashtrachi Lokhdhara, Mala Saasu Havi and Tu undertook various initiatives to further strengthen its dominance in the Tithe Mee. The channel premiered block buster movie “Kaksparsh”, geographies where it operates. the highest rated movie across all GECs in the year 2012. Key highlights during the year include: > Zee Bangla continues to be a strong player in the Bangla GEC space. > In the US, ZEE TV HD continues to stand out as the first South Asian It exited the year as No. 1 Bangla channel in Digital CS 4+ market. channel launched in HD Zee Bangla is the market leader in non-fiction genre with 78% market share, driven by shows like Dance Bangla Dance Junior 2012, Sa Re > Zing was launched on Rogers, while Zee Salaam and Zee Tamizh Ga Ma Pa 2012 and Mirakkel Akkel Challenger 7. were launched on Bell Fibe in Canada > Further expanding its share in the Bengal market, the Company > In Europe, the first locally produced British Asian drama series ‘Cloud launched Zee Bangla Cinema, a 24-hour Bangla movie channel.