ZEE, in its illustrious history of 27 years, has not only created a multi-faceted entertainment content company but has also played a pivotal role in shaping India’s media and entertainment industry. Today, ZEE stands on the threshold of a new beginning, to create a stronger version of itself and define the future of the media & entertainment landscape in the country.
MD & CEO
The last financial year has been a year of transformation. A year of leaving behind our old selves, creating a newer version and taking a leap to create a legacy that will elevate the Company to greater heights. The new beginning, which I term as ZEE 4.0, will be the harbinger of enhanced consumer focus, further innovation in content creation, and leveraging technology to deliver a heightened entertainment experience to all our consumers across multiple consumption platforms.
The mantra at ZEE has always been to lead by example, and we have demonstrated that effectively through our success across markets and businesses. Every challenge we faced on this path was met with an equal determination to overcome and forge ahead. Though we cannot go back and alter our decisions, no one can stop us from creating a brand new future.
I have shared my vision for ZEE 4.0 in my ‘Open Letter’, harboring a sharper, leaner and greener version of the Company. The five pillars of the new ZEE 4.0 or the 5G approach as I have termed it, will encompass a robust focus on – Governance, Granularity, Growth, Goodwill and Gusto. As a first step in this direction, the Board of the Company has been reconstituted with new members who bring in the required blend of experience and expertise. I am confident that a Board with majority independent directors will be instrumental in setting the standards for corporate governance going forward. We have also adopted a more granular and transparent approach for business reporting which will help all stakeholders make well-informed decisions. We will be rolling out detailed disclosures of business KPIs, segmental reporting, a refreshed Corporate Social Responsibility (CSR) policy, and measurable ESG goals, to achieve the same.
Over the years we have grown, vertically and horizontally, becoming one of the most loved content brands in India and around the world. Going forward, we will continue to maintain a sharp focus on growth as we invest our time and energy in maximizing our core, expanding into adjacent spaces and exploring new areas of business. We have initiated a strategy exercise within the Company to carve a 5-year roadmap, to transform the organization and its strategic approach with consumer centricity and profitable growth as the two cornerstones.
All our plans and strategies would not fructify unless we nurture our most important asset – our people. I truly believe that one does not build a business; but builds people who then build the business. ZEE is extremely fortunate to have a strong professional leadership team at the helm to drive this new strategy forward with renewed energy and gusto.
The unprecedented times brought upon by the COVID-19 pandemic are leaving us with a lot of food for thought. Businesses across the globe have suffered unprecedented losses and some are going through extremely difficult situations. We have been more fortunate, and I believe the primary reason for that has been our unrelenting focus on customer centricity. The speed and agility with which our teams adapted to the situation have been instrumental in maintaining business continuity and ensuring undisrupted entertainment to our viewers. We believe that in this rapidly evolving media & entertainment landscape, only the ones who adapt to change will survive in the future. These will be the companies which succeed in adapting themselves best to the environment while ensuring a strong hold on the pulse of their consumers and a keen eye on growth and profitability.
“ZEE 4.0, will be the harbinger of enhanced consumer focus, further innovation in content creation, and leveraging technology to deliver a heightened entertainment experience to all our consumers across multiple consumption platforms.”
FY20 was a year of highs and lows for our business. While we reported a decline in our advertising revenue for only the second time in more than a decade, on the operating front we achieved new feats. Our broadcast business now has the widest language footprint in the country, making it a truly pan-India network for consumers. New Tariff Order upset the equilibrium in the distribution space with the slew of changes it introduced. However, the network not only withstood the challenges of the transition, it emerged much stronger post implementation, expanding its reach and revenue in most markets. ZEE5 took giant leaps towards becoming India’s leading digital entertainment platform. Over a short period, ZEE5 has become the biggest producer of digital exclusive content in the country. It is also gradually strengthening its presence outside India, which will help us remain relevant in markets which are transitioning to digital. Zee Music Company continues to grow, and I am happy to report that it turned profitable last year, validating our decision to venture into music publishing business 5 years ago. Zee Studios fell short of our expectations for the in-house production business, but the distribution segment delivered a string of successful films.
Despite a decline in advertisement revenues, the topline of the Company grew by 2.5%. This domestic subscription led growth is a reflection of the increasing balance of our revenue portfolio. The macro-economic slowdown experienced last year, coupled with the fall in consumer demand led to a decline in advertising. In India, brands still look at advertising as a cost to be incurred in good times and not as a lever for building resilient consumer connect. As we move into an extremely cluttered world, we will see a gradual change towards a more holistic approach which has advertising as an integral part of the brand.
Meanwhile, our aim is to insulate the growth of the Company from the macro-economic cycles, as far as possible, by offering holistic solutions to our partners. Despite the slowdown, we continued to invest in growth opportunities which will enable us to grow ahead of the industry once the economy recovers. Continued investments coupled with the fall in advertisement revenue led to a decline in EBITDA margin to 27.5%. Next fiscal is also going to be challenging, as advertising revenue will decline further in the first half due to the impact of COVID-19. However, I believe that this phase is just a blip in India’s long-term growth story, and the economy will bounce back with vigor once the impact of the pandemic subsides.
The pandemic left many vulnerable to its harsh impact, and in such times, we focused on the need to come together and support each other. Acknowledging the work done by frontline workers, we stepped up our efforts in all directions to support the nation in strengthening its medical infrastructure, providing essential equipment like ambulances, personal protective equipment kits, oxygen humidifiers and daily meals to families affected by the pandemic. As a responsible player in the media & entertainment sector, we also ensured that the lives and livelihoods of the daily wage earners in our content production ecosystem were least impacted, by supporting them financially during the lockdown. The Company also used the massive reach of its network to increase awareness about the pandemic.
I would like to thank all the shareholders for their continuous trust in the Company. It is your undying faith that enables us to strive towards achieving greater heights, growing at a faster clip than the industry, and generate higher value year on year. I would also like to thank all our partners who help us in creating content, ensuring its delivery to the consumers and most importantly monetizing it. And lastly, I would like to convey my gratitude to all our people, who relentlessly work towards turning our vision into reality. It is the confidence in their collective ability that enables me to say with conviction that we are on our way to successfully build a new version of ZEE.
Until then, celebrate endings, for they precede new beginnings. For us at ZEE, a new and exciting journey has just begun.