We see high single-digit to low double-digit growth this fiscal: Punit Goenka

Zee Entertainment Enterprises Ltd (ZEEL) has posted a 63% rise in its net profit for the April-June quarter. Punit Goenka, managing director and chief executive officer of the company, in an interview with Swati Khandelwal, said he expects some improvement in advertising revenues both for the company and the industry in the coming quarters. Excerpts

What have been the highlights of the April-June quarter and what were the major triggers for your performance?

First of all, subscription revenue increased by 47% in the quarter. Due to it, our overall revenues have been very good. Advertising revenues have been better than the industry. We have delivered a 4.2% growth for domestic and 3.6% growth for the full company, both are better numbers. We have delivered a good Ebidta margin of 32%.

Do you expect to maintain this performance in the second and third quarters?

I expect some improvement in advertising revenues, both for us and the industry. We are already seeing a better second quarter. For the whole year, I expect the growth to be in high single-digit to low double digits. On the subscription side, we estimate a 25% growth on an annualised basis. We are negotiating some deals, which may fructify in one-two months.

How was the impact of tariff order on advertisements?

There was a big impact of the order. In the industry too, everybody's reach has fallen, especially of pay channels. It is coming back slowly now. Since there was cricket this quarter, advertisers thought they could safely go after properties that have high reach. They definitely got its benefit and also of elections too. As an entertainment company, we did not get it. Both were non-events for us. Yet our growth is better than the industry, and would continue in the next quarter too.

How was the performance of ZEE5?

It has done very well. Our monthly active users have grown to 76.4 million. Daily users, which we are declaring for the first time, are around 6.6 million. We have now launched ZEE5 on the global level with a hard launch in some markets and soft launch in some.

Please update us on the performance in the regional markets? Do you plan to launch any new channels?

Our growth is largely coming from the regional market. Our market share is increasing in the South. We are improving in Tamil Nadu and have become No.1 channel in Karnataka. Viewership is improving in Kerala. Besides this, we have planned two-three new channels in regional markets this year. We want to launch at least a Kannada and Tamil movie channel. And If there is time, we will launch a Punjabi channel, too.

How are your other businesses such as Zee Music and Zee Studios performing? What is your outlook for the entire year?

Zee Music is looking very good. In fact, it will become profitable this year. Till last year we were investing in it. Zee Studios will also be profitable this year. Our latest film Article 15 has done very well. Our first Tamil venture is releasing on August 6, which is a remake of the film Pink. We have a strong pipeline. This year we will release around eight films. There is one international film also in the kitty.

Do you plan to implement Netflix model to increase the ZEE5 subscription?

There is a whole section for subscription in ZEE5. All the original series and premium movies are behind paywall, which we call subscription content on demand. It is being priced Rs 99 per month, or Rs 999 per year. Already we have such service available.

What is the update on the stake sale in Zee Entertainment Enterprises Ltd? What are the plans?

We have moved much ahead. We have got a binding offer from those with whom we were in discussions with, and are expecting another binding offer this week itself. As soon as both the offers come to us, the family will take a view. We will definitely speak with you.

― Zee Media Newsroom