Wealth Can Be Rebuilt And Recreated: Punit Goenka
Five months ago, Punit Goenka, Managing Director and CEO of Zee Entertainment Enterprises, unveiled Zee 4.0, the company's strategy and vision for the future. In his first ever interview since then, Goenka talks to Annurag Batra, Chairman and Editor-in-Chief, BW Businessworld about the new synergies that will drive the company, positioning of ZEE5 as a SVOD or subscription video on demand, company's valuation, future, lessons learnt during the pandemic and a lot more. Excerpts:
A new vision plan Zee 4.0 was announced recently. How did the need for a new strategy arise?
We are almost nearing three decades of our existence in this business. Being the pioneers in the industry, we have had our share of ups and downs. The pandemic gave me the time and perspective to plan the next stage of this company. That is what I tried to roll out in the open letter that I wrote on the Zee 4.0 strategy. The new plan was also more reflective on the last three decades and how the next decades are going to be. It also looks at how we, as a company, have grown over these three decades.
Most of the times we have grown in a not so structured manner but there have been times when we grew structurally also. Now was the time to think of how we are going to bring it all under one umbrella to get ready for the digital wave.
The Zee 4.0 announcement was followed by restructuring of your core team. Why do you believe the new structure is better for ZEEL?
It is purely to drive synergies. On one side content synergy to work across platforms is how one needs to drive it. Then on the other side monetisation of that on multiple platforms has to take place. Whether we like it or not, TV+Digital advertising and viewership is going to come. Whether it comes in six months or a year is the only difference. It is about synergies, making the company a leader.
The Covid pandemic gave a major push to all OTT players including ZEE5. How do you plan to leverage this further and how do you plan its positioning in the market?
Our focus going forward is going to be pure play. If you look at our revenues today, 80 per cent comes from subscriptions and that has shown that the consumer is willing to pay provided you give him good quality content consistently. The other way is to be very aggressive and go into a marquee property like sports, etc. My view is that it is not yet a profitable way of doing business and therefore we will stick to our core of storytelling attracting audiences across markets. Again, we have to replicate the success of not just Hindi but even regional in the ZEE5 plan. That is what led to the entire restructuring plan that we have announced recently.
We have gone away from a vertical way of functioning. There will be a separate team for TV and Digital con-tent but they will have to work under the same ecosystem. That is where we can bring the maximum synergies. What happens today is if you have a TV team running separately and a digital team running separately they don't talk to each other because their KPIs are very different. But if all the content teams are working together we can make a successful TV show, take it off the air and have an offshoot on Digital - which we have done with many. Some iconic shows were shut down and will be missed but at the end of the day, it was an economic call where the advertisers' critical mass and that content don't appeal to the masses.
A few of your competitors were technology companies who got into the content business. For you it was the other way round. Will we see ZEEL investing or doing something in technology platforms?
We will have to explore this area going forward. Already, we are evaluating a couple of companies where we had outsourced our work and want to take them in. That is the only way. For the longest period what the -lockdown showed us is that it doesn't matter where you are located. We are now creating a technical hub in Bangalore. It is the first time that an entire technology backend will be in Bangalore. Travel is cheaper and you get better talent.
Where would ZEE5 be in five years?
Maybe it will reach 80 million subscribers. This is possible. If we are going to have 700 million smartphone subscribers, then 80 million out of that is not a big number.
What are your views on OTT regulations?
These will certainly impact the content. Unfortunately, the way in which the government looks at these things is very myopic. They believe that if the content is sitting in an OTT platform then it is available free to the entire world which is not the case. All of the SVOD content that we are talking about is sitting behind the paywall. What is the government doing about other platforms? There are tonnes of content out there that is of offensive nature. They have started to ban apps but there is a long way to go. I don't like regulation especially in content; let us self-regulate. We did self-regulation for broadcasting which has been running for the last seven years. BCCC has been running for the last seven years-plus successfully.
Content is king and digital consumption has increased manifold. As someone who has been a part of this industry for decades, what are the big challenges for content creators now?
I think it's not just content, there is another thing that we have built into our entire DNA for the company going forward. For us, women empowerment is very critical. Eradication of poverty, rural development and disaster management are critical issues facing our country. And if we don't address these, we are not going to leave a legacy for our children. We have to do it within our company's DNA. We have a set target of how much we will give back to the environment, and last year we received 100 per cent green initiative results. We are the only Indian media company to turn 100 per cent green.
NTO 1.0 followed by NTO 2.0 came as disruptors for the media and entertainment industry. How do you think the industry was impacted?
The two stunted the growth this year. You will see that the prices of milk and other products went up but prices of channels have remained the same. While we are classified as an 'essential service' our pricing remains constant and we are unable to do much.
Do you see the ZEEL share price coming back to its historic levels?
My view is that a lot has changed since January 2019. So the context is completely new. If we have to see those levels we have to succeed in parameters that didn't exist before which are things like ZEE5, things delivering back on our guidance that has been lost on the back of a Covid year. Also, the general buoyancy of the economy has to come back for us to achieve those kinds of levels because the parameters have changed since then.
When will advertising growth return to pre-Covid levels?
First, we have to get back to the base that we lost. My view is that the next year will be taken to reset the base. It will take a year to bring the base back to the pre-NTO level.
This has been an unusual year for all of us. If you had to list out a few lockdown lessons, what would they be?
The biggest thing I learnt from the lockdown is that if you commit yourself to something then you need to stick to that, even if it is the biggest price you end up paying. The world is much more powerful than anything. Wealth can be rebuilt and recreated, there is enough of a lifetime for that.
