ZEE5 to increase originals by 2X, investment in content to be up by 50% in 2022

Representative image.

Zee Entertainment’s digital arm ZEE5 will ramp up its originals portfolio and increase investments in content significantly in 2022.

Manish Kalra, Chief Business Officer, ZEE5 India said the number of originals on the streaming platform will be 2x of last year.

"Last year a lot of shoots were stalled by virtue of COVID. So, there is a lot of that inventory and we have commissioned new inventory. On the movies front, we had doubled down on that last year and in 2022 we will continue the momentum," he told Moneycontrol.

Launched in 2018, ZEE5 has completed four years. In its fifth year, it will strengthen its focus on regional markets as well as content.

"South of India is coming across nicely for us. Tamil, Telugu and Kannda are looking up. We will invest and ensure we have a good lineup for south of India. Also, with movies, Punjabi content continues to be the focus for us. Regional will stay as our strength, regional investments will grow and Hindi is a big part of the consumption story and we will double down there," said Kalra.

The platform, which offers content in 12 languages, has plans to increase investments in regional content from 15 percent to 30-40 percent, according to a Confederation of Indian Industry (CII) and Boston Consulting Group (BCG) report.

In terms of overall investments in content in 2022, Kalra said it will be significantly higher in 2022.

"Investments in content will be at least 50-60 percent more versus last year. There will be good focus between originals and movies and investment will be 50-50 on originals and movies," added Kalra.

But ZEE5 will not be looking at non-fiction properties. "It is something we have not dabbled in. We offered (TV show) Survivor in Tamil on linear TV and we had an uncut version of that on Zee5. So, we will definitely do Survivor in more languages. But no big property on the non-fiction side. We want to focus on fiction and movies," he noted.

On the user-base growth, Kalra pointed out that ZEE5 has crossed 100 million monthly active users (MAUs) across the globe and on the subscription video on demand (SVOD) side, the OTT player has seen 100 percent year-on-year growth.

"Focus is on opening up tier II-III markets. Users are looking at more and more content every weekend and users are getting trained for that. So, every week there will be a new piece of content which may or may not be Hindi but across the four-five languages we are focusing on," said Kalra.

The task is cut out for ZEE5 which has a 13.2 percent market share in SVOD and around 2.4 percent market share in the advertising video on demand (AVOD) space.

According to analyst Karan Taurani, senior vice-president, Elara Capital, while consumption and user growth metrics are compelling in digital business, monetization challenges persist as revenue growth is 23 percent YoY (for ZEE5) despite a low base compared to peers in video advertising.

Taurani said that video ad spend in India is growing at 35-40 percent YoY.

He added that profitability concerns persist on digital given higher content cost. "Sharp increase in content cost on digital due to a fragmented OTT space will further restrict earnings growth. We believe the merger with Sony will be the key trigger for getting synergy benefits on converging growth-based TV business and digital OTT space, wherein a common go-to-market strategy can propel better revenue growth performance in highly competitive space," added Taurani.

For its fourth anniversary, ZEE5 is offering premium web series for free for three days between February 12 and 14. The platform has also launched a new feature called Spark under which it will offer many of its web series to AVOD users.