Language expansion will help Zee carve out micro-niches that can lead to recurring and paying subscribers in the long run, said Utkarsh Sinha, Managing Director, Bexley Advisors.
The bet on regional channels continues for television networks as regional markets and GECs (General Entertainment Channels) are considered as growth drivers in the entertainment category.
This is why Zee Entertainment last week announced the launch of four new regional channels which includes a Punjabi GEC, considered as the first GEC in Punjabi language.
But this comes at a time when viewership saw a downtrend this year due to economic slowdown and the New Tariff Order (NTO) coming into effect.
For 2019, it is expected that the growth drivers would be sports and news. Plus, entertainment segment’s contribution could be around one percent to the overall growth in the television space.
Hence, the question arises whether going regional and launching four new channels this year was a right move by Zee?
According to Utkarsh Sinha, Managing Director, Bexley Advisors, a boutique, early stage investment bank, it was HBO that pioneered a trend back in the day of having niche audiences, which were very attached to a particular show, and displayed remarkable loyalty.
He said that the value proposition is that once audiences are on the platform for the content they really want, they are recurring paying subscribers who will likely stay on and consumer other content.
“One may call this 'diversification through micro-niches', and Zee's foray may be categorized as such. The language expansion helps it carve out micro-niches that can lead to recurring and paying subscribers in the long run, and lead to cross-selling of other content as well,” he added.
Also, if we go by BARC (Broadcast Audience Research Council) data for 2018, growth of regional GEC was the defining trend last year.
The four south language markets between themselves matched up to Hindi GEC viewership in absolute size. While Hindi GECs grabbed a share of 43 percent, Tamil and Telugu took 15 percent share each, Kannada contributed nine percent and Malayalam GECs contributed five percent.
Other markets like Bangla, Marathi, Odia, Bhojpuri and Punjabi also posted strong growth last year in the GEC content segment. The growth was fueled by increasing TV penetration and availability of content in local languages.
Hence, the bet on Punjabi GEC also looks like a good move.
“Punjabi is a potent language for a platform and not only for the native Indian Punjabi speaking audience, but also for the diaspora that is spread across the world and is keen to pay for Indian content. In all probability, this will help with monetization and lead to the creation of monetizable and leverageable content diversity which will be a critical asset in the long term,” said Sinha.
Also, when it comes to advertising on GEC channels, three languages including Hindi, Tamil and Kannada corner 49 percent of total ad volumes, with Hindi GEC accounting for the single largest share, according to BARC India report titled ‘What India Watched 2018’.
“When distribution is multi-platform and content differentiation is key to creating a brand identity, focusing on regional languages becomes important. However, the key differentiation will be the quality of the content. We are moving away from the lowest-common-denominator content format of typical soaps of the 'saas-bahu' variant. Audience today whether for regional languages or Hindi or English, demand high quality content with great production values,” said Sinha.
Last year, content trends on regional language channels saw a shift from kitchen politics and family dramas to more contemporary and urban topics.This is why Sinha thinks that if “Zee is able to back the regional diversification through a strong content backbone; this play should be very useful.”Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.