Zee Entertainment Enterprises (ZEEL) recently rolled out its freemium over-the-top (OTT) platform ZEE5 and appointed Tarun Katial as its India CEO. He talks to Anirban Roy Choudhury about the OTT space and the company’s roadmap ahead. Edited excerpts:
There is this perception that traditional broadcasters rely on catch-up TV for their digital platforms, while Netflix and Prime Video focus on original concepts. Isn’t it a drawback for traditional players eyeing OTT?
In India, traditional broadcasters are best placed to enter the OTT space. If we take the example of Netflix or Amazon (Prime Video), 70-80% of the content on those platforms is also broadcast network content from the US. All of them started as premium platforms that allowed one to catch-up broadcast network content on-the-go. The strength of network broadcast content, which has a great affinity and has been built over the years, is what they relied on to build their businesses; and they continue to rely on it even today.
For us as well it is largely the same; we have good broadcast network content in India. We create original content in so many different languages and that makes for a good stepping stone for an OTT player. But in the US, Netflix happened to be a cheaper alternative and that is why people logged in for catch-up broadcast content. In India, broadcast content on TV is cheaper…That is why all the broadcast content on ZEE5 is available for free .
How can platforms monetise then?
It can be through premium content which has different storylines and is segmented differently — segmentation that is not possible on TV. TV appeals to a broad demographic and is targeted at masses. When it comes to digital, we can segment and target adult males, younger teens or millennials and speak their language. Digital enables us to find different segments, different tastes, different affinities and that is what makes SVoD different from the mass content on TV.
Do we have an understanding of the kind of content that gets one to pay? Which age groups are more likely to pay?
Original content in India of any volume is not more than six months old and we are in a very early stage. At this stage, we are doing a fair amount of content that 18-24 year-olds prefer, in addition to the 20-34 age bracket too. It is aimed largely at males because they tend to not have enough on broadcast TV for them. All our content is created around specific insights we have about our consumers. Our understanding is that volume and differentiated content is what will get people to pay and subscribe.
Which regional markets have you identified as important at this stage? Do you think regional consumers will pay for content?
That would be Marathi, Bangla, Tamil, Telugu and Bhojpuri. There are a few reasons why we shortlisted these markets. The first is that obviously digital penetration is very high in these markets. Then there is a large population available in such markets; Zee has a great presence here so we get a good bouquet of base level content. The average GDP of these markets is higher than that of the country. The propensity to pay is higher, the penetration of luxury goods is higher, there is a very high penetration of the local film industry and box office collections here give you an indication that the people are willing to pay for entertainment.
ZEE5 was one of the last players to enter the OTT space. How will you compensate the delay?
Saying that we entered the market late is incorrect, as Ditto TV and OZEE existed. Also, anybody who walks in late has the ability to learn from everybody else’s mistakes and that’s really the compensation. Our ability to draw future features, understanding consumer needs, our taste in both technology and content makes it easier for us.
Sports happens to be a big driver of subscription revenue. Is ZEE5’s absence in this area a big weakness?
I believe you need to look at your strengths rather than your weaknesses. It would be foolish of me to say that sports is irrelevant, but we have our strength which is our wide offering of content and I believe there is a place for everybody. Ours is a mix of SVoD and AVoD. I would say at an overall level, it is a great offering.