Term Paper

Internal and Competitive analysis of Zee Entertainment

Enterprise Limited
 Table of Content
1.Introduction ............................................................................................................................. 3
2. Zee‘s Mission ......................................................................................................................... 3
3. Company Profile..................................................................................................................... 3
3.1 ZEE is ............................................................................................................................... 3
3.2 Alliances & Partnerships .................................................................................................. 4
3.3 Zee‘s portfolio of brands .................................................................................................. 5
4. SWOT Analysis of Zee .......................................................................................................... 6
5. Financial Performance ............................................................................................................ 7
5.1 Financial Analysis- ........................................................................................................... 8
5.2 Ratio Analysis (for FY 2009)-.......................................................................................... 9
6. Marketing Strategies- ............................................................................................................. 9
6.1 5 C‘s of marketing ......................................................................................................... 10
6.2 Ansoff‘s matrix............................................................................................................... 10
6.3 Segmentation .................................................................................................................. 11
6.4 Product Life cycle .......................................................................................................... 11
7. Competitive Analysis- .......................................................................................................... 12
7.1 Zee‘s major brand ―ZEE TV‖ Market share for the year 2009 ...................................... 12
7.2 Advertising share year 2009 ........................................................................................... 12
7.4 Market wise performance of top 6 general entertainment channels-2009 ..................... 13
7.4 Customer Loyalty ........................................................................................................... 13
7.5 Perceptual Mapping ........................................................................................................ 14
7. Risk Analysis – ..................................................................................................................... 14
7.1 Porters Five Forces Model: Analyzing the Television Broadcasting Industry with
reference to Zee......................................................................................................................... 14
8.Conclusion ............................................................................................................................. 16
 Term Paper On Zee Entertainment Enterprise Limited

1.Introduction

The Zee Entertainment Enterprises Ltd. (NSE: ZEEL) is the largest media and entertainment
company in India and is a subsidiary of Finnish media corporation Turner Group. The company's
Chairman, Managing Director and Founder is Subhash Chandra and its Chief Executive Officer
is Puneet Goenka
Zee Entertainment Enterprises Limited is one of India‘s leading television, media and
entertainment companies. It is amongst the largest producers and aggregators of Hindi
programming in the world, with an extensive library housing over 80,000 hours of television
content. With rights to more than 3,000 movie titles from foremost studios and of iconic film
stars, Zee houses the world‘s largest Hindi film library.
Through its strong presence worldwide, Zee entertains over 500 million viewers across 167
countries. Pioneer of television entertainment industry in India, Zee‘s well known brands include
Zee TV, Zee Cinema, Zee Premier, Zee Action, Zee Classic, Ten Sports, Zee Sports, Zee Cafe,
Zee Studio, Zee Trendz, Zee Jagran, Zing, ETC Music and ETC Punjabi. The company also has
a strong offering in the regional language domain with channels such as Zee Marathi, Zee
Bangla, Zee Telugu, Zee Kannada, Zee Talkies and Zee Cinema.

The Zee stable owns an integrated range of businesses. All of these in singularity adhere to the
content-to-consumer value chain model of media and entertainment business. Zee is a pioneer in
every aspect of content aggregation and distribution through traditional media like satellite and
cable and new media like the internet, in India. Mission and Vision of Zee group

2. Zee’s Mission
As a Corporation, we will be profitable, productive, creative, trendsetting and financially sound
with care and concern for all our viewers and stakeholders namely advertisers, cable operators,
producers and production houses.

3. Company Profile
3.1 ZEE is

º The largest producer and aggregator of Hindi programming in the world, with more than 80,000
hours of original programming in its archives.
º One of the most popular entertainment brands in India; was ranked 9th most popular brand
within a decade of its launch.
º One of the largest Indian programming content distributors with an estimated reach of more
than 500 million viewers in over 167 countries including USA, Canada, Europe, Africa, the
Middle East, South East Asia, Australia and New Zealand.
3.2 Alliances & Partnerships

1) Zee Turner

A 74:26 joint venture between Zee and Turner International to distribute the Zee Turner pay
channel bouquet in India and neighboring countries. A 74:26 joint venture between Zee and
Turner International to distribute the Zee Turner pay channel bouquet.

2) Ten Sports

Ten Sports and Zee Sports combine, have give the viewers a lot of action in the past years and
have become a force to reckon with in the sports entertainment business. Popular events like
WWE, UEFA Champions and League Football have made inroads into the Indian market. Tennis
fans enjoy the grand slams with a series of ATP 500 and a multitude of other events. For indoor
sports fan, the channel has showcased the world poker tour and darting events. Cricket being
nothing less than a religion in India, Ten Sports has acquired the rights to of the ten cricket
boards, giving it over 100 days of cricket a year. This is the maximum number of days of cricket
across sports channels. The right to these 5 boards; Sri Lanka, Pakistan, South Africa, West Indie
and Zimbabwe are with Ten Sports for the next 4 years.

3)ETC Network

ETC Networks Limited (ETC.BO) is a media company listed on the Bombay stock exchange
operating two television channels, ETC Music and ETC Punjabi in India. Zee acquired a 51%
stake in June 2002. Zee acquired a 51% stake in June.
3.3 Zee’s portfolio of brands

Zee TV Hindi entertainment channel

Zee Cinema Hindi movie channel
Zee News Hindi news channel
Zee Muzic Music channel
Zee Café English channel targeted at the urban and young audiences
Zee Studio English movie channel
Zee Marathi Marathi language channel
Zee Punjabi Punjabi language entertainment channel
Zee Bangla Bengali language channel
Zee Gujarati Gujarati language channel
Zee Trendz 24-hour premium fashion and style channel
Siticable Largest cable network in India with a reach of 7 million homes
Zed Learning solutions network of India
ZICA Leading animation studio in India
etc Music channel
etc Punjabi Punjabi language channel
Kidzee Leader in pre-primary segment having 225 + centres across 100 cities in
India, Middle East, Singapore and Indonesia
Zee Action 24-hour Hindi action movie channel
Zee Smile A light entertainment channel
Zee Classic A movie channel for black and white classic movies
Zee Premiere A 24-hour movie channel featuring the latest Hindi movies
Zee Telugu A Telugu language channel
Zee Business Business news channel
Zee Sports Sports channel
Zee Jagran Channel for spiritual programmes
Zee Arabiya Channel in the Middle East
ZIMA Media education in the field of Direction, Acting, Writing

3. 4 Zee’s Strategies
* Inspire creativity
* Continue to run our business as best in class, with viewer satisfaction as the ultimate goal.
* Enhance our leadership position in the genres we compete.
* Continuous innovation to stay ahead of the curve and seize growth opportunities
* Invest in the business in a focused, disciplined way and achieve superior financial
performance.
* To use the strong cash flows of our business to improve returns to shareholders
* Reaffirm our commitment to highest level of integrity and professionalism throughout our
business.
 4. SWOT Analysis of Zee
Favorable
* Leading broadcaster in India and overseas
for South East Asian content
* First mover advantage across genres
* Widest offering of channels by a single
broadcaster in the country
* Across genres, our channels are either leaders
Internal or strong contenders for the leadership Position
* Diversified revenue streams: advertising and
subscription
* Diversified customer base:across167 countries
* Operating the largest pay TV distribution
platform in the country, Zee Turner
* Large network gives tremendous leverage with
advertisers
* Cost conscious approach towards business
* Affiliate companies have leading presence
across the media value chain cable and
distribution, direct-to-home satellite services,
digital media amongst others.
External
Strengths
Benefit from the robust growth of the
Entertainment and Media sector: The future
of the entertainment industry will be
decided on the interplay of a number of
factors like consumerism, advertising spend,
content, pricing, technology and regulation.
The television industry revenues are
expected to grow from the present size of Rs
191 bn to Rs 519 bn by 2011
Digitization (rollout of CAS and DTH)
means that cable penetration will increase
from 70 m homes in 2006 to around 113 m
homes by 2011.
Increased market share of General
entertainment channels in comparison to
previous year.
Opportunities
Unfavorable
Zee‘s main brand Zee TV Lagging behind Star
Plus & Colors: Its flagship channel 'Zee TV' is
the number three channel lagging behind Star
Plus and colors.
Problem of attrition: The attrition rate in the
company has increased. NDTV, UTV, INX
Media, TV 18- Viacom combine have entered
the Hindi General Entertainment space. Ashvini
Yardi, Senior Vice President (Programming),
resigned to join competitor Viacom ¡V TV 18
combine.
Weak on programme packaging
―Me too‖ approach
Lack of hugely popular Non-fiction realty
shows.
Zee Cinema is not capable to show new
releases Excessive diversification into various
other genres like sports, regional channels may
loosen focus on flagship channel.
Weaknesses
Increased competition: The Hindi General
Entertainment space will become very
competitive with the entry of the TV 18
group, UTV, NDTV, INX Media.
Slow rollout of CAS: The government may
delay the rollout of CAS. The consumers may
show some hesitation in opting for paid
channels and many viewers may opt only for
FTA channels. Both these factors may cause a
dent in the subscription revenues of Zee TV
Lower advertisement rates in the IPL week .
The I & B ministry plans to setup a separate
regulator to monitor content on TV channels.
Threat from Google TV /IPTV to company‘s
DTH segment.
From Film Industry & Sports events.
Threats
5. Financial Performance

Zee Entertainment Enterprises Limited (ZEEL) is an integrated media and entertainment

company engaged primarily in broadcasting and content development, production and its
delivery via satellite. The Company has 15 channels that serve an array of content choices in
India. The Company operates in three segments: Broadcasting and content (B & C), which
principally consists of developing, producing and procuring television programming and film
content and delivering via satellites, thereby earning revenues by way of advertisement and
subscription revenues and syndication; Education, which principally consists of delivering
learning solutions and training to various segments of the society, and Film Production, which
principally consists of production and distribution of films. Effective March 29, 2010, Zee News
Ltd. demerged its Regional General Entertainment Channel Business Undertaking and
transferred its operation to Zee Entertainment Enterprises Limited.

Ticker: 505537 Country: INDIA

Exchanges: BOM Major Industry: Recreation
Sub Industry: Radio & T.V. Broadcasts
21,997,825,000
2010 Sales Employees: 1,400
(Year Ending Jan 2011).
Currency: Indian Rupees Market Cap: 139,140,149,097
Fiscal Yr Ends: March Shares Outstanding: 977,794,442
Share Type: Ordinary Closely Held Shares: 360,210,736
5.1 Financial Analysis-

Zee TV has gone through restructuring and has bought six regional entertainment channels from
Zee News. This helped the company promote its channel more aggressively and improve the
margins. During 2009-10, the regional entertainment channels generated a revenue of Rs 404
crore and an EBITDA of Rs 126 crore. This translates to an EBITDA margin of 31.2%, higher
than that of standalone Zee TV. Analysts say the acquisition will enhance the earnings of the
company.

Another aspect that worked in favour of ZEE is the improving ad revenue and growing
viewership. Despite intense competition from sports programmes and other Hindi networks, Zee
TV continues to dominate the Hindi general entertainment space with a share of 20%. It has
maintained its dominance on the weekly rating charts with an average of 19 shows in the top 100
programmes. It also kept programming and operating costs under control. as a percentage of
revenue, these costs came down to 40.1% in the January-March period from 43.4% in the
December quarter

Soaring Stock Prices in last one year

 5.2 Ratio Analysis (for FY 2009)-

Key Stats And Current Ratios

RATIO COMPANY INDUSTRY

Earnings per Share 10.37 15.51

Dividends yield 1.03 1.04

Payout ratio 22.26 14.29

P/E ratio 27 18.91

Net Profit margin 16.38 -2.92

Return on Investments 11.38 6.05

6. Marketing Strategies-

Joined hands with rajshri pictures for distribution of films in domestic market.

Cable as well as satellite distribution

Developing region centric ads –an innovative strategy

The life-size microphones and ‗College Ka Singing Superstar‘ initiatives were of a

comprehensive 360* campaign.‖

Channel has created ‗Sa Re Ga Ma Pa Music Zones‘ at select bus stops across the city.
The entire bus stop will have Sa Re Ga Ma Pa branding, lights along with a music setup
replete with speakers and associated paraphernalia.

Zee TV launches India‘s First ―Interactive‖ Marketing Campaign in the Hindi GEC
space- the channel has decided to present the audience with India‘s first-of-its kind
―interactive‖ marketing experience in the Hindi GEC space - A campaign that includes
and involves the audience in shaping the show at every stage. The first leg of this
campaign calls out to viewers to participate in the naming of the new show.
 Zee TV‘s endeavor to strengthen its online presence through interactive applications on
Facebook and Twitter or the Dance India Dance channel on Youtube that went on to
become the ―Most viewed channel on YouTube‖ for a sustained period of time, no doubt
Zee TV‘s clutter-breaking marketing innovations have invariably grabbed eye-balls

6.1 5 C’s of marketing

Collaborators: With ETC and Turner group

Competitors: Star, Colors, SET India
Company: Products: Entertainment, sports , music, movies, sports, Life style channels, DTH,
Distribution , Education sector etc.
Customers: Indian and abroad viewers
Context: Light entertainment and sports.

6.2 Ansoff’s matrix

Zee
6.3 Segmentation

Segmentation is based upon observable characteristics of consumers. Major segmentation

variables used-Geographic. Behavior, psychographic, demographic

6.4 Product Life cycle

ZEE
7. Competitive Analysis-
7.1 Zee’s major brand “ZEE TV” Market share for the year 2009

7.2 Advertising share year 2009

7.4 Market wise performance of top 6 general entertainment channels-2009

7.4 Customer Loyalty

 7.5 Perceptual Mapping

High Innovative Content

Bindaas Colors

Consumer acceptance Low Consumer acceptance high

Star, ZEE,
NDTV
DD Imagine,
National Sony

Low Innovative Content

7. Risk Analysis –
7.1 Porters Five Forces Model: Analyzing the Television Broadcasting Industry with
reference to Zee
Bargaining power of Buyers
Strength of Force—High
Buyers (end users as well as advertisers) do not face significant switching costs and are
extremely price sensitive
Viewers' tastes frequently change, providing little loyalty to any particular network
Advertising buyers dictate television programming choices
The customers are fragmented, so their bargaining power is low
ZEE itself is a leading DTH operator with ―Dish TV‖ hence can reach directly to its
buyers(viewers) without bargaining of any intermediary( Cable operators)
But The rollout of CAS and DTH services will enable the consumer to choose the
channels that he wishes to view increasing his bargaining power.

Bargaining Power of the Suppliers

Strength of Force-- Low- Medium

Since most suppliers to Broadcasters have either been acquired/ have a tie-up with the
broadcaster, the bargaining power of suppliers is low. For ex- Viacom has acquired
Paramount.
However ZEE TV commissioned the UTV group for producing content of around 250
hours once it became popular.
However, Independent content providers pose a major challenge to online revenue model
The supplying industry comprises a large number of small operators
The service is undifferentiated and can be replaces by substitutes
There is huge competition among the content providers to Channel Like Zee. So suppliers
have limited scope of bargaining.

Threat of New Entrants

Strength of Force—High
Higher the competition in an industry, the easier it is for other companies to enter this
industry. In such a situation, new entrants could change major determinants of the market
environment (e.g. market shares, prices, customer loyalty) for Zee at any time. There is
always a latent pressure for reaction and adjustment for Zee TV in this industry. The threat of
new entries will depend on the extent to which there are barriers to entry. These are typically
High start-up capital is a big de motivator
New entrants have difficulty accessing distribution channels.
New entrant has some problems finding skilled employees, materials, and suppliers.
Serviceable used equipment is expensive.
Long-lasting economies of learning and scale also de motivate the potential new entrant
Economies of scale (minimum size requirements for profitable operations)
 Brand loyalty of customers
Scarcity of important resources, e.g. qualified expert staff
Access to raw materials is controlled by existing players
Distribution channels are controlled by existing players

Threat of Substitutes
Strength of Force—Medium
A threat from substitutes exists if there are alternative products with lower prices of better
performance parameters for the same purpose. They could potentially attract a significant
proportion of market volume and hence reduce the potential sales volume for existing players.
This category also relates to complementary products. Similarly to the threat of new entrants,
the threat of substitutes is determined by factors like

The relative price for performance of substitutes

Customers incur no incur switching costs.
Also, adequate substitutes are available.
Possibly, One Broadcasting medium substitute for the other(movies as a replacement
for TV) Pirated content is a decent(and free substitute).
Other free time activities be could be substitutes (concerts, games, gambling)
Internet TV could be emerged as a big substitute in near future.

8.Conclusion

Zee TV is back at #3 with 176 GRPs. According to the data released by TAM, Star
Plus remained the #1 channel with 336 GRPs, followed by Colors at #2 with 258
GRPs. Zee TV and Sony both gathered 176 GRPs for the week. Impact of KBC
wearing off. Sony had displaced Zee TV from the #3 slot following the launch of
Season 4 of the internationally successful game show Who Wants to be a Millionaire
on 11 October 2010. Even so, four weeks after the launch of the show, the GRP
(viewership) ratings of the channel have started slipping.
Performance of fiction shows crucial for loyal eyeballs. Fiction soaps adjoining
celebrity-hosted shows need to get sampled and build a loyal viewership base for a
general entertainment channel (GEC) to have sustained GRP momentum.
Competition remains intense, but how much would it hurt? We remain mindful of the
competitive intensity in the broadcasting space. Even so, our 15% advertising revenue
growth forecast for the company in FY12 adequately captures the fragmentation of
the ad revenue pie.