Who Will It Be For Zee?

Ever since Subhash Chandra-led Essel Group announced its decision to sell 50 per cent stake in Zee Entertainment Enterprises to a strategic partner, and after the whys and hows of it have been explained, the puzzle that has been bothering everyone is: Who could be the suitor here?
When Annurag Batra, Chairman and Editor-in-chief, BW Businessworld spoke to Chandra about the divestment plans, the latter said, “This bride has many suitors,” in response to that question.
Names like Facebook, Amazon, Comcast, Apple and Jio, are doing the rounds. However, if the grapevine is to be believed, it could be one of the three -- Jio, Amazon or Apple.

According to Karan Taurani, VP, Elara Capital, “The strategic partner could be either Jio, or a VoD player (Amazon or Apple) or a foreign media company that will add to Zee’s content investment initiatives for TV and digital.”

Taurani believes that the partnership will strengthen Zee further. “This is a positive move in terms of future growth prospects, as an MNC or a large-scale player will give tough competition to global VoD giants such as Netflix and others,” he said.

It will be interesting to see how the partnership would pan out in terms of regional content as Zee has a vast portfolio of regional content. “We are awaiting more details on the strategic announcement and believe that transformation towards a digital-based company will only have a positive impact on the valuation multiples of Zee.”

The three-suitor theory was seconded by another senior industry expert.

Talking about the collaboration, the expert, who did not wish to be named, said, “Television has become passe and so everything is being done in the digital space now. Their primary focus is on the digital business; i.e. getting somebody on board to share funding responsibility and content obligations.”

The possibility of the partnership focusing on the digital platform was highlighted by yet another media expert.

“In my view, the focus will be much on digital. As we move forward, we might see much deeper investment getting into the digital business. In a way, it is aligned with the industry trends that will take shape in the next 5-10 years.”

It is not difficult to understand why experts believe that the focus of the partnership could be digital. According to a recent report by BCG, the Indian OTT space is hyper competitive and has attracted varying types of players which offer varied value propositions to the consumers and have different business models. There are multiple business models evolving in India.

 And so, it is not surprising that all large successful broadcasters in India have launched their own OTT platforms — Hotstar, Voot, Sony Liv and Zee5. These broadcasters have put their extensive TV content libraries online and have supplemented it by additional content through licensing and originals. Most of these players and models have evolved and entered the market in the past five years. The year 2017 saw the first burst of big money being deployed in Indian content on OTT.
Whatever be the contours of the deal, it will be keenly watched by other big content players in the country.