BIG's contribution is less than 100 basis points to the top line and nothing to the bottom line. The changes in BARC have helped but we cannot quantify that.
After several attempts, you seem to have hit a sweet spot in films with Sairat, Secret Superstar, Qareeb Qareeb Singlle…
We restarted the studio in 2010, burnt a lot of cash and shut it down within a year (Zee has produced Gadar: Ek Prem Katha among other films). In movies, the good film-makers want to work with us. (A bulk of the big hits in Marathi comes from the Zee stable, a direct result of Zee Marathi’s dominance in the state). A high single-digit per cent of our revenue this year (FY18) came from the films. We have a policy. If the budget is Rs 200 million or more, we co-invest and then co-own the IP (intellectual property).
ZEE5 is your fourth in digital...
In digital, we have consolidated Ditto TV (the subscription service) and OZEE (ad-driven). Nobody can predict what will happen in the next two years. If there is no turnaround in five years, maybe we will sit down and say let us do a Hulu (Hulu is a streaming service launched by several broadcasters together in the US), or we will go to Netflix. Today, nobody is giving content to Amazon or Netflix. ZEE5 will work across languages, movies and originals. By March 2019, we should be the number one entertainment app.
What is the deal with sports? Have you given up on it?
We have a non-compete clause with Sony till 2021 (Zee sold Ten Sports to Sony in 2017). So, we are out till then anyway. Also, most of the key properties are signed up till 2022-2023. If the economics of the business change, if Uday Shankar (Star India CEO) manages to make it pay off, then why not (re-enter sports)
Big growth and margin levers
At the top line, all three are rising — broadcast, films and digital. In India, the price points and conversion ratios are low. They are much higher internationally. So, digital will erode the bottom line for some time. Film business, again, is a top line driver. We may move from five-six to eight-nine films but it is not Ebitda depleting. The TV business continues to grow, though subscription is low. So, a large part of the growth comes from the broadcasting and digital.
The Trai tariff order and what its passing could mean for you.
In medium-term, the tariff order is good for business because what it allows us to charge is better than the current prices.
How critical is a consolidated metric now that streaming has taken off?
A consolidated metric is critical when penetration (of online) goes up. Currently, it is fine. But, BARC should get it (BARC is working on Ekam, a consolidated measure that will combine TV and digital viewership). The past five years were spent de-risking the broadcasting business. Now, the next five years will be spent de-risking the business from broadcasting.
What makes you unhappy? What is your biggest worry?
Every time, when I read the market wrong. For example, when DAS (digital addressable system or digitisation of cable) happened, the estimate was that it would lead to a doubling of average revenue per users (ARPUs) for all of us. That has not happened. My biggest worry is the same that it was 12 years ago (when he joined Zee TV) — the people. In this business, one wrong person can set you back.