A Report on Business Strategies of Zee Telefilms(Trimester 4)

(PGDM-HR, 2009-2011)

Submitted To: Submitted By: (Group: 10)Prof. Warrier Deepshikha Satyarthi – 40

Edwin Thekkakera - 07Ketaki Pedgaonkar - 56Komal Rathore – 13Raveena Beniwal – 43Shailee Mehta - 35

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Acknowledgement

We would like to acknowledge and extend our heartfelt gratitude to the following persons who have m ade the completion of this Project possible:-

Our Professor , Prof. Warrior for assigning the appropriate topic and for his vital encouragement and guidance.

The Course co-coordinator for the constant reminders and much needed help she extended. The group members for assisting in the collection of the topics for the chapters. And our classmates and friends.

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Sr. No. Contents Page No.

1 History of the Company 4

2 Present Performance of the company

Market Capitalization

Strategies adopted for growth

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3 Present Competitive Strategy with regard to strategy models

Porter’s 5 forces Model

Industry Attractiveness Business Strength Matrix

BCG Matrix

Ansoff’s Matrix

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4 Future Perspective 42

TABLE OF CONTENTS

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HISTORY OF THE COMPANY

About Zee Entertainment Enterprises

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

programs 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 including USA,

Canada, Europe, Africa, the Middle East, South East Asia, Australia and New Zealand.

Zee, over the years has built a diverse portfolio of leading businesses and has driven

initiatives that increase efficiency at every juncture of development. Zee has established a

very strong consumer connect and is governed by a set of values that holds them in good

stead in the face of changing viewer environments.

Pioneer of television entertainment industry in India, Zee’s well known brands include:

Zee TV

Zee Cinema

Zee Premier

Zee Action

Zee Classic

Zee Smile

Ten Sports

Zee Sports

Zee Café

Zee Studio

Zee Trendz

Zee Jagran

Zee Marathi

Zee Bangla

Zee Telugu

Zee Kannada

Akash Bangla

Zee Talkies Zee Cinemalu Zee News

Zee Business

Zee News Uttarpradesh/Utranchal

Zee 24 Ghantalu

Zee News chatshisghad

Zee 24 Taas

24 Ghanta

Zing

Zee Sports

TEN Sports

Zee Premiere

Zee Aflam

Zee Salaam

9X

ETC Music

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ETC Punjabi

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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.

History and Key Milestones of Zee

The year 1992 ushered in an upheaval of sorts in the country. With the political, social and

economic landscape changing facades, an upsurge in the world of media and entertainment

was waiting to burst open. Subhash Chandra, one of India's leading entrepreneurs, created

Zee Telefilms Limited in October 1992. This enterprise was to act as the chief content

provider for Zee TV - India's first Hindi satellite channel. Zee Telefilms Limited (ZTL) is

now known as Zee Entertainment Enterprises Limited (ZEEL).

Soon after launching ZTL, Subhash Chandra entered into a joint venture with the STAR

group of companies to augment television broadcasting in India and deliver higher quality

of programming content. Meanwhile, Rupert Murdoch's News Corp Limited acquired the

rights to distribute STAR's satellite TV content making de News Corp a de facto partner of

Zee they together co-founded Siticable, a leading cable MSO. In March 2000 however, Zee

bought News Corp's stake in both the broadcasting business and Siticable.

2007: Zee Entertainment Enterprises Limited (ZEEL) gets listed as an independent company

2006: De-merger of Zee Telefilms Limited (ZTL) initiated

2003:

o Launches 5 new channels for the DTH market viz. Action cinema, Classic cinema, MX, Premier cinema and Smile TV,

o Entry into a distribution tie-up with Rajshri Pictures for theatrical distribution of films in India

o Launch of 'Trendz' - A premium fashion and style channel, targeted at the fashion conscious Indian consumer

2002: Acquires controlling stakes in ETC Networks Limited and Padmalaya Telefilms Limited

2001: Introduces Zee TV and Zee News as pay television offerings. 'Gadar - Ek Prem Katha' became highest grossing box office movie

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2000:o Launches Internet over Cable services - Becomes first cable company in India

to do soo Entry into content distribution joint ventures with MGM and Viacomo Launches pay bouquet of channels in the Asian region of working

1999:o Acquires News Corp's 50% stake in joint ventures of their television

broadcasting business tie-upo Launches regional channels

1998:o Launches Zee TV in the USo Institutes a prime award in the film segment called 'Zee Cine Awards'

1997: Launches Zee Music (originally called Music Asia)

1996:o Starts first cable channel in India - Siti Channelo Launches Zee TV, Africa

1995:o Commences Siticable operations Joint Venture with News Corpo Launches Zee News and Zee Cinemao Zee TV goes global - launches Zee TV, UK

1992: Launches Zee TV - Initial Public Offering of Zee Telefilms Limited

Company Facts

As India's first and the countries’ largest fully integrated media and entertainment

company, Zee Entertainment Enterprises Limited's unique combination of businesses and

growth opportunities both in India and globally, gives it a unique position in the global

media space. Through its channels, the company brings together the most valuable media

brands, which will support their commitment to deliver consistent growth.

Zee employs 1150 + employees which include ZEEL and its subsidiaries as per the 27th

Annual General Meeting held on August 18, 2009. Its corporate Office is located at Worli,

Mumbai while global offices are located at, Canada, Hong Kong, India, Singapore, South

Africa,

United Arab Emirates, United Kingdom and United States of America.

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Equity Shares of the Company are listed on The National Stock Exchange of India Limited

(NSE) and The Bombay Stock Exchange (BSE).

Zee was ranked 9th most popular brand within a decade of its launch, and is among the most popular brands in India and has established its mark by being first to:

Be listed a media company in India Launch a Hindi General Entertainment Channel in India - Zee TV Launch a Hindi Cinema Channel in India - Zee Cinema Corporatise the Hindi film industry with the costliest production and the highest

grossing Hindi movie in its time - 'Gadar - Ek Prem Katha’ Launch a 24 hour Hindi News Channel in India - Zee News, now operating as a

separate company called Zee News Limited (ZNL) Set up MSO operations at a national level - Siticable

Strengths of Zee

Over the years, while entertaining people, Zee had used and developed some strengths which has helped the company to excel in business and reaching out to the audience. The strengths being:

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 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

The company has got many awards including the following few:

'Global Indian Entertainment Personality of the Year' Dadasaheb Phalke Academy Trophy Entrepreneur of the Year BSE Award for Maximisation of Shareholders Wealth Businessman of the Year EMMA Award for best digital/cable channel in the United Kingdom for Zee TV by the

UK Brand Summit Zee TV UK was awarded the MACE (Multicultural Awards for Competitiveness and

Enterprise - Leadership in Best Practice)

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Ground Breaker Award from Multichannel News International for achievements in developing programme networks and related businesses

Strategies of Zee

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.

History of Strategies used by Zee to overcome/ face competition:

Zee has always adopted certain competitive strategies in relation to rival channels and the extent to which the channel has succeeded in its approach. Zee recorded unprecedented success during the initial years of its launch (1992-2000). However, in 2000, Star with its improved programming content succeeded in establishing itself as the No.1 entertainment channel. Sony also emerged as a strong competitor.

There are many factors that played a key role in the establishment of Zee as a successfully integrated media company including:

competition in the television media segment marketing strategies adopted by Star and Sony reasons for the success or failure of strategies

1. When it launched Zee TV, the content ranged from film-based to educational programs with a much wider choice of programs

2. Zee was catering to the needs of the vast Hindi-speaking Indian audience. Its mass appeal was in direct contrast with Star, as Star aired programs only in english

3. In 2005, Zee Telefilms Limited (Zee) was India's most broad-based TV channel network with an offering of 23 channels. The other major players like Star TV (Star) and Sony TV (Sony) offered less than half the number of channels offered by Zee. Zee's flagship channel, Zee TV was launched in 1992 and by 1994 Zee's prime-time audience share was 37% compared to 39% combined share of the national channel Doordarshan4 and a meager 8% share of the Star channels.

4. After its success in the domestic market, Zee, in 1995 ventured into the overseas market to capture the NRI audience.

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From its launch in 1992 till 2000, Zee commanded the highest market share. However, by mid 2000, competition from Star and Sony began to intensify, and in 2000 Zee recorded the lowest market share of 5.19%, with Star and Sony having a market share of 18.49% and 11.29% respectively.

5. Brand extension

6. Brand re-positioning: a new catch line-"Jiyo Zee bhar ke"

7. Re-branding: re-branding of the entire Zee range of brands. In line with this strategy, all the channels of Zee sported a new logo, and new on-air packaging and promotions were introduced. This sprucing up was expected to increase the TRP of all its channels.

As a part of this exercise, the three English channels were also renamed. dz was renamed ZEE Trendz, ZEE English became ZEE Café and ZEE Movie Zone was named Zee Studio. Also, Smile TV was now ZEE Smile and all the Alpha channels were prefixed with 'Zee' brand name.

8. Creativity in visual media

All this resulted in pushing its revenues up once again and share price rising steadily during the period 2003-04 too. All these moves were aimed at expanding its viewership.

9. Planned launch of two channels dedicated to news and cinema, respectively to counter the Sony and Star. To arrange the funds, it entered into a partnership with Rupert Murdoch (Murdoch), the man behind Star, in 1995. With this deal Murdoch acquired a 50% stake in Zee. Once the Zee-Star deal was finalized, Zee launched the nation's first round-the-clock Hindi news Channel - Zee News and a Hindi movies channel - Zee Cinema. Zee News aired news every hour and its programs ranged from interviews with corporate personalities to discussions on the country's social and political issues

10. To provide clean wholesome family entertainment: In September 1999, the Star and Zee partnership came to an end, and in order to compete with Star and Sony, Zee implemented a two-pronged strategy from September 2000 onwards with 2 elements:

a. Reform the programming contentb. Redefine the prime time band (which was usually taken to run from 9 PM to

11PM) by extending the programming slots to 45 instead of the existing 30 minutes

11. Launch of new program in the same genre as that of the competitor: In October 2000, Zee came out with "Sawaal Dus Crore ka" (SDCK), two months after KBC was launched

12. Zee also launched two new channels Zee English and Zee Movies in 2000.

13.Zee Movies was re-launched the same year as Zee MGM

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PRESENT PERFORMANCE OF THE COMPANY

Market Capitalization

Zee telefilms secured 9th position in the survey of India’s Top 50 companies by Market capitalization and it is the only company from the film industry in the top 50 list. The market capitalization in US is $ 3, 769.26 million and the sale is 4,759.30 million rupees. The sales growth (trailing for 12 months) is 30.44.

Valuation- The stock at Rs 262 in the quarterly review of 3Q FY’09 with target of Rs 307, which is in place. At the current price of Rs 312 ZEEL is trading at a PE of 29x FY’10 EPS of Rs 10.68.

The stock fell by more than 75 per cent in 2010 and now trades at a market capitalization-to-sales ratio of about two times, based on estimated sales of around Rs 240 crore that the company may achieve in FY11.

Zee News reported revenues of Rs 469.3 crore for the nine months of FY10. When the demerger was agreed in October 2009, the general entertainment channels contributed about 65 per cent of Zee News' revenues and 95 per cent of operating profits. Effectively, the company would now be a loss-making entity with only news channels in its fold.

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Of the six channels that are to be transferred to Zee Entertainment, Zee Marathi is a market leader in viewership while Zee Bangla is second in its market. Zee Telugu and Zee Kannada also figure among the top few channels in the respective regions, according to data from TAM Media Research.

Zee News derives over 80 per cent of its revenues from advertising. In the December quarter, the company saw its advertising revenues grow by 26.6 per cent over the previous period. This has been due to the strength of the viewership of its regional GEC channels.

With the demerger, there is likely to be a steep cut in advertising revenues as news by itself does.

Current fiscal performance

In FY’10 ZEEL reported total income of Rs 2197crore a growth of 1 % (Y0Y). The growth was mainly propelled by 9% growth in the subscription revenue. Advertisement revenue grew by only 1 % (YoY) mainly because of the slowdown in advertisement spends and increased competition in GEC space.

Total DTH subscription revenue grew by 94%. The DTH subscriber base increased from 5.5mn at the end of FY09 to 11mn at the end of FY’10. The analogue revenue remained flat for the year at Rs 335crore and international revenue declined by 7% owing to economic condition in international markets.

Investment Rationale:

Advertisement –back on growth track - ZEEL reported a growth of 54% (YoY) in Q4 FY’10, which resulted in 1% (YoY) growth in advertisement revenue. Total advertisement revenue in Q4 FY’10 was Rs 352crore and in FY’10 it was 1059.26crores.

DTH subscription ARPU down due to inclusion of RGEC’s- DTH revenue in Q4’FY10 was Rs 68.3crore, growth of 89 % (YoY). ZEEL reported DTH subscriber base of 11 million as on March 31st 2010. The ARPU of ZEEL came down to Rs 20.6 from Rs 23.47 because of inclusion of 6 RGEC’s. Overall subscription revenue of ZEEL was Rs 251.26crore in Q4 FY’10, a growth of 9 %( YoY). International subscription revenue de-grew by 9% (YoY) mainly because of slow economic recovery in international markets.

GRP ratings – improve significantly- The flagship channel of ZEEL, ZEE TV, and recorded average weekly channel share of 20% along with average weekly GRP of 265.

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Debt free balance sheet - ZEEL has pre paid debt of Rs 516crore in FY’10 bringing‐ its debt to equity ratio down to 0.015 from 0.27. Because of this pre payment in Q4‐ FY’10 the finance cost increased owing to pre payment charges paid.

REVENUE CONTRIBUTION -FY2010 Revenues: Rs 21,966 million. For the break up see the graph below.

Present Performance ZEE Telefilms:

Network viewership trends in the market: ZEE performance compared to Star and Sony viewership.

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The Viewership trends for Zee telefilms in the past and present scenario is also given in the graph below.

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Digital Revenue for the Zee Telefilms is in growing stage. The Graph below supports the data.

Market share of the Zee products- Comparison with other channels: Various regional channels of Zee telefilms

HINDI CINEMA CHANNEL– ZEE CINEMA is the leading Hindi movie channel in India.

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ZEE Cinema has the majority of share in Hindi cinema section one of the main reason is the “Sanivaar ki raat – Amitabh ke saath” – this have the biggest property across the hindi movie channels.

In Hindi Movie Genre, it has 4 channels viz. Zee Cinema, Zee Premier, Zee Action and Zee Classic. Zee Cinema has been a leader in its genre from the time of its inception and commanded 31% weekly average channel share during the year. Thechannel has the largest film library in the country and is a strong favourite with the viewers as also the advertisers.

The Market Share of the various regional channels of Zee is given below:

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SPORTS CHANNEL - Includes two channels - viz. Zee Sports and Ten Sports (company has 50% stake in Taj TV Group, which owns the Ten Sports channel). With telecast rights to 5 cricket boards, which ensure coverage of cricket of all test playing countries, and over hundred days of cricket per year along with rights to exciting properties such as UEFA cup football, WWE wrestling, US Open tennis etc tied up, the sports business has emerged as a strong segment of the Company’s revenues, contributing to over 22% of the Company’s top line this year.

Refer to the Graph below:

MAHARASHTRA WEST BENGAL

ANDHRA PRADESH KARNATAKA

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STRATEGIES FOR GROWTH

Strategy in business can be understood to be split into three different levels: Corporate Unit level, Business Unit level and the Operational level, the main difference between them being due to their sphere of influence. A brief introduction to these levels is necessary for estimating the scope of strategy and the power it wields on various business and operational activities.

By definition, corporate level strategy concerns itself with the whole corporation as a unit and consequently, aims to answer the purpose or the mission of the organization.

Corporate level strategy makers analyze the commonalities of various business units and work to add value to the whole system besides individual growth of participating business units. In other words, corporate level strategy takes a view at the overall scope of an organization and how to enhance stakeholder value. Issues concerning the introduction of new products or expansion into new markets or segments are all a part of this strategic level. Assessing the value of a business unit in the overall portfolio of activities is also a corporate level decision alongside optimal resource allocation for units.

Corporate level strategy forms the trunk of the strategic decision tree and the management has to be fully aware of its implications as well as the sensitivity of all succeeding strategies, no matter at what level. It is of prime importance that corporate level strategy is fully aligned with the overall vision of the organization and the values and expectations of stakeholders. Any deviation can result in serious repercussions for the management as also the stakeholders. A detailed analysis of corporate level strategy shall be dealt with in detail later.

Business level strategies are essentially positioning strategies whereby businesses tend to secure for themselves an identity and position in the market. The aim here is to increase the business value for the corporate and stakeholders by increasing the brand awareness and value perceived by the customers. If we understand products or a services offered by a business unit as a deck of cards, then we can safely decipher that businesses do not have many suits to play with.

In fact, they can either focus on pricing or product differentiation to increase the perceived customer value. It is a different thing that for either of the suit there are many parameters that need to be studied which is a painstakingly complex and time consuming process.

The third level of strategy is the operational level which primarily is concerned with successfully implementing the strategic decisions made at Corporate and business unit level through optimal utilization of resources and competencies of the business unit. This level of strategy is extremely significant in shaping the success of other strategies as it translates strategic decisions into strategic actions by directly impacting the design of operational processes and networks, human and other resources etc.

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A thorough understanding of the three levels of strategy makes their strong co-dependence and non-hierarchical nature evidently clear. All strategies have to be in complete harmonization with each other since the success of one is inseparably linked to the other. So instead of being in a top-down order, the inter-linking can be visualized as a triangle with the three corners representing the three levels. The impact of one node on the other is judged by the flexibility of their relationship which further depends upon the success of the adopted business framework.

Strategies Adopted For Growth At Zee Enterprises Entertainment Limited

CORPORATE LEVEL STRATEGY:

Mission & Values

To be the leading round the clock airtime properties provider and delight the viewers not only through our general entertainment and infotainment channels, but also through quality cinema from our movie banners.

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.

ZEEL’S Values

Customer Focus:Our Company's strategies are driven by the needs of the customer. Our success can be measured by the satisfaction achieved by our customer

Excellence:We accord a high premium to maintaining superlative standards throughout our Company. We encourage our employees to come up with smarter ideas within the fastest possible time.

Creativity:Key to our value system is innovation and originality. We recognise and have a high regard for individual expression and creative freedom in our quest to provide customer satisfaction.

Integrity:We observe strict ethical standards through editorial independence and creative expression, in order to earn the trust of our viewers and subscribers.

Growth Driven:

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We are committed to delivering consistent revenue and cash flow growth in order to provide our shareholders a good return. Our objective is to grow our people, market and businesses around the world.

BUSINESS LEVEL STRATEGY:

1. Alliances & Partnerships

Zee's mission of continued sustainable growth has brought it thus far in the annals of the media and television history and looks to guide its sails towards a fine future too. An important aspect of keeping an eye on the future was to foster external acquisitions and alliances to gain access to quality content and technology. With the home-grown measures of revenue generation in place and functioning well, this move of external affiliations with parties that complemented Zee; in philosophy and in business brought in profits and goodwill alike.

a) 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..

b) 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.c) 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. BUSINESS STRATEGY DURING THE YEAR 2008-2009:

The year 2008-2009 gone by can be classified as two distinct parts: the first half from April to September and the second half from October to March. While the first half was fueled by growth and an enhanced competitive environment, the second half saw a slowdown in advertising revenues.

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The key elements of Zee’s strategy during the year 2008-2009 were:

(i) to take appropriate steps to safeguard its leadership position in a fiercely competitive environment

(ii) to concentrate on additional revenues from digital pay platforms(iii) rationalize on costs across different heads, especially towards the latter half of

the year(iv) fortify its expansion in the international markets (v) maintain consistently high standards of corporate governance

Appropriate steps to safeguard its leadership position in a fiercely competitive environment:

Over the years, Zee Network has been the only network to gain viewership share in the top 3 television networks of the country. The launch of new shows across network channels along with the tie up of cricket rights and current series rights of programs has helped ensure that in a highly fragmented environment, the network maintained and grew its dominance.

Concentrate on additional revenues from digital pay platforms:

India is a fast digitizing market and the consumer shift towards digital services is exhibited through the rampant expansion from 6 million pay DTH households at the beginning of the fiscal to 12 million pay DTH households at the end of it. The company gained substantially through this growth and revenues realized by the company for these consumers grew 93% over the last year.

Rationalize on costs across different heads towards the latter half of the year:

The belief at the Company has always been that higher spends will not necessarily result in sustained incremental viewership. Even in the wake of competition, the network maintained its cost structures though with increased competition our costs also moved up. The costs were however brought under check towards the fourth quarter of the year and are expected to further be brought under check going forward. The Company cut back on expansion plans such as Zee Next and Zee Entertainment Studios. Better negotiations with suppliers, efforts on manpower rationalization and stricter control on distribution spends will help in further keeping costs under check.

Fortify its expansion in the international markets:

While the network launched local language channels across various new territories in the previous fiscal, this fiscal saw the consolidation on this front, with the success of Zee Aflam

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for the Middle East region and Zee Music in the UK. The success of these channels has given the management confidence that low cost experiments such as these are an innovative way of expanding network strengths.

Corporate Governance:

Zee firmly believes that good governance is critical to sustaining corporate development, increasing productivity and competitiveness and creating shareholder wealth. The governance process should ensure that the available resources are utilized in a manner that meets the aspirations of all its stakeholders. Your Company’s essential charter is shaped by the objectives of transparency, professionalism and accountability. The Company continuously endeavors to improve on these aspects on an ongoing basis. With the increasing emphasis on transparency and accountability, standards have been set by various governing bodies on disclosure as well as judiciousness in conduct. Zee has always tried to go a step further in this direction.

A few CSR initiatives undertaken by the group:Zee Touch India Initiative:

Knowing that Zee entered millions of homes worldwide and was welcomed and cherished in each of them, it decided to put this reach and goodwill to some charitable use. Zee launched the Touch India Initiative by virtue of which various organisations and social bodies could air films focussing on social causes on all available Zee channels without paying for the airtime.

Some of the Public Service Ads featured are:

º Campaign on breast cancerº Campaign for the visually impairedº Campaign for HIV/AIDS for the international Aids dayº Aids awareness campaign by Mukti Foundationº Campaign on pulse polio

Education:

Ekal Vidyalaya Foundation of India (EVFI) is a charitable organisation dedicated to emancipating nearly 8 lakh tribal children through one teacher schools across 26,000 villages in India by way of imparting free education and developmental means of life. Zee has taken EVFI under its aegis and all its group companies and employees either individually or collectively have embraced a number of these schools. This initiative has

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been fuelled by Mr. Subhash Chandra's vision of eradicating illiteracy from the tribal areas of India by 2011. To that end, Zee also publicises all the good work being done by Ekal through its channels.

Spiritual Uplift:

Zee is a staunch supporter of the belief that happiness in family life, peace and efficiency at work comes from peace of the mind. The group has supported the Global Vipassana Foundation for years. Vipassana is said to be a 2500 year old non-sectarian, rational process of mental purification through self observation (introspection and abstinence). These courses have helped many an individual to experience spiritual well-being and peace within. The group also has taken a policy decision of granting 12 days leave to all employees desirous of attending the Vipassana course.

Meditation Camps:

A large number of people have benefited from the regular 1 day meditation workshops and courses that the group organises for children and adults alike.

FUNCTIONAL LEVEL STRATEGY:

i. Internal Control Systemsii. Human Resources

iii. SAMWAD

Internal Control Systems:

The Company has in place adequate internal control systems, commensurate with its size and nature of operations so as to ensure smoothness of operations and compliance with applicable legislation.

The Company has a well-defined system of management reporting and periodic review of businesses to ensure timely decision-making.

It has an internal audit team with professionally qualified financial personnel, which conducts periodic audits of all businesses to maintain a proper system of checks and control.

The management information system (MIS) forms an integral part of the Company’s control mechanism. All operating parameters are monitored and controlled. Any material change in the business outlook is reported to the Board. Material deviations from the annual planning and budgeting, if any, are reported to the Board on quarterly basis.

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An effective budgetary control on all capital expenditure ensures that actual spending is in line with the Capital Budget.

Human Resources:

The Company seeks respects and values the diverse qualities and backgrounds that its people bring to it and is committed to utilizing the richness of knowledge, ideas and experience that this diversity provides.

The work environment is stimulating and development of core competencies through formal training, job rotation and hands on training is an ongoing activity.

SAMWAD: An employee engagement initiative.

Cultural, academic and experiential diversity imparts enormous richness to Zee. On the same coin, Zee benefits from freely allowing this diversity to foster the growth of knowledge and the applicability of new ideas. People at Zee are the true assets. Harbouring respect and mutual admiration for similarities and differences alike is the mantra of perfect synchrony at Zee. Embracing differences is an integral part of Zee's culture. A key element of success here is creating and maintaining an inclusive environment.

The work environment at Zee is stimulating. Formal training, on the job experience and developing core competencies are stepping stones to corporate excellence at Zee. Individuals of high calibre and intelligence have taken up challenges over so many years and have found the perfect supporting foil at work to accomplish them and place Zee right at the top. There is enough scope and more to take up assignments at both Indian and international levels because of the fast expanding profile of Zee's various businesses. These multi-dimensional businesses are looked after by a resource base of cross-functional managers with diverse portfolios which entail immense responsibilities.

To intensify the culture of excellence and inculcate a sense of ownership, Zee has introduced a stock option plan for our employees who reach a desired level of performance.

To boost this harmonious exchange of intellect and experience, the Chairman of ZEEL, Subhash Chandra initiated SAMWAD. SAMWAD is concurrent with ‘conversation', 'interlocution', 'news information', 'message' and 'dialogue'.

The Chairman's views on SAMWAD are as follows:

Conventional wisdom isn't always the right answer. There is the need to improvise, experiment and innovate. In a lot of companies, this conservative approach is deeply

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embedded in the system and it becomes very difficult to question precedent and tradition. SAMWAD is a facilitating agent to re-engineering our way of working on profitable terms.

There is a change that is imminent with the regards to the way we think, react and decide. Our way forward is with altering the way we treat and deploy our key assets (material, human, intellect). This collectively will result in achieving excellence across our group companies.

For this change to bear fruition, a paradigm shift in the way we look at life has to occur. SAMWAD provides a platform to arrive at a shared vision towards managing ourselves.

SAMWAD will enable the work environment to be stress-free and good-work worthy. The larger goal of this effort is to almost ensure the prosperity of individuals alongside the prosperity of the company.

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PRESENT COMPETITIVE STRATEGY ACCORDING TO DIFFERENT MODELS

Porter’s Five Forces Model

About the model

The model originated from Michael E. Porter's 1980 book "Competitive Strategy: Techniques for Analyzing Industries and Competitors." Since then, it has become a frequently used tool for analyzing a company's industry structure and its corporate strategy.

In his book, Porter identified five competitive forces that shape every single industry and market. These forces help us to analyze everything from the intensity of competition to the profitability and attractiveness of an industry. 

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1. Threat of New Entrants - The easier it is for new companies to enter the industry, the more cutthroat competition there will be. Factors that can limit the threat of new entrants are known as barriers to entry. Some examples include:

o Existing loyalty to major brands o Incentives for using a particular buyer (such as frequent shopper programs) o High fixed costs o Scarcity of resources o High costs of switching companies o Government restrictions or legislation

2. Power of Suppliers - This is how much pressure suppliers can place on a business. If one supplier has a large enough impact to affect a company's margins and volumes, then it holds substantial power. Here are a few reasons that suppliers might have power:

o There are very few suppliers of a particular product o There are no substitutes o Switching to another (competitive) product is very costly o The product is extremely important to buyers - can't do without it o The supplying industry has a higher profitability than the buying industry

3. Power of Buyers - This is how much pressure customers can place on a business. If one customer has a large enough impact to affect a company's margins and volumes, then the customer hold substantial power. Here are a few reasons that customers might have power:

o Small number of buyers o Purchases large volumes o Switching to another (competitive) product is simple o The product is not extremely important to buyers; they can do without the

product for a period of time o Customers are price sensitive

4. Availability of Substitutes - What is the likelihood that someone will switch to a competitive product or service? If the cost of switching is low, then this poses a serious threat. Here are a few factors that can affect the threat of substitutes:

o The main issue is the similarity of substitutes. For example, if the price of coffee rises substantially, a coffee drinker may switch over to a beverage like tea.

o If substitutes are similar, it can be viewed in the same light as a new entrant.

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5. Competitive Rivalry - This describes the intensity of competition between existing firms in an industry. Highly competitive industries generally earn low returns because the cost of competition is high. A highly competitive market might result from:

o Many players of about the same size; there is no dominant firm o Little differentiation between competitors products and services o A mature industry with very little growth; companies can only grow by stealing

customers away from competitors

Porter’s Five Forces Model and Zee Entertainment Enterprise

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Threat of New Entrants:

Zee Entertainment Enterprise as a whole has threat from 3 new entrants namely:

Yash Raj Films who have gotten into the business of producing and directing programs for television. Although they do not have any channels of their own they are going to be sole suppliers to Star TV. This is a cause of major worry for Zee as they have a lot of in – house productions which will now compete with the Yash Raj Film productions. However, Zee will bank on one of the factors of Barriers to entry i.e. Loyalty of existing viewers to Zee to reduce the threat of new entrants.

Warner Bros. : When Warner Bros. launched its channel in India in collaboration with Turner , Zee felt the heat as both Zee Studio and Zee MGM now faced major competition from Warner Bros. In order to overcome this competition, Zee relaunched Zee MGM which concentrated on showing only old movies. Also a game plan was decided for Zee Studio wherein, blockbusters would be shown to decide whether they drive in the audience or not. Zee Studio‘s aim was to have fresh line up of films and hence active negotiations with several US and British studios were started. Also, Every Thursday, Saturday and in weekend afternoons Zee Studio has four new properties. The weekend afternoon showcase is called Absolute Studio. This is family showcase that has been created. Besides, Zee also came out with 15 new films. Some of them have aired before but they are new to Zee Studios. They created a library of independent films.

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Bargaining Power of Cust omers:ViewersAdverti sersCable TV ( DTH)

Threat of New Entrants:Yash Raj FilmsWarner Bros.Neo Sports

Bargaining Power of Suppliers:BalajiNimbus

Threat of Substit utes:InternetRetail ChainsMult iplex

Competitors:Star TV

ViaCom18

These are films that are high in quality. They received critical acclaim though they may not have blown the box office away.

Neo Sports was launched in India, it became India’s leading sports channel within its first week of launch. This put Zee’s Zee Sports in trouble and major action was called for. As a result, Zee Entertainment Enterprise acquired a majority stake hold in TEN SPORTS and within no time Ten Sports gained the top spot thus getting ZEE back on track.

Power of Suppliers:

Zee Entertainment faces major competition from Star TV. Previously Balaji used to provide content only for Star Plus. As a result, the GRP’s of Zee took a major hit.

However, Zee decided to invest more into Balaji for content and hence acquired serials like Pavitra Rishta , Hum Paanch , Kya Dill Mein Hai etc. Balaji telefilms thus became an open market wherein the channels who paid the most acquired the rights to air the content. Once Balaji started developing content for Zee TV other Zee SBU’s like Zee Telegu , 9x also followed.

Power of Customers:

Viewers

When it comes to the success of any channel or serial, the decision lies with the audience or the viewers. So is the case with Zee Entertainment Enterprise wherein its viewers decide the success of any of its channel or serial.

In today’s competitive entertainment industry, Zee has stayed in competition with others and ahead of competition in few cases by adopting the following strategies with its viewers:

Flooding the market with its different channels providing regional, national and international entertainment having drama series, reality shows, television movies, theatrical films, specials and daytime dramas, sports coverage, regional and international language based entertainment.

Zee Entertainment Enterprises entered into a joint venture with Mail.com Media Corporation (MMC), a leading digital media Company based in Los Angeles, USA in February, 2010. This JV marks the launch of an online and mobile entertainment portal. The new content-centric portal will offer users a broad range of exciting entertainment viewing options and other leading portal applications. Eg : Zee Cinema became the first ever Hindi movie channel to launch mobile gaming.

Relanching Zee TV with serials and programs depicting the different nuances and moods of women to compete with Colours and Star Plus.

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Consciously focused on improving efficiencies in content acquisition, one of the biggest cost elements to attract and retain viewers from all segments.

Advertisers and DTH

Due to the economic slowdown in the past couple of years, Zee decided to shift its focus from Acquiring revenue from advertisers to acquiring revenue from Subscription from DTH. As result advertising contributed only to 47% of the total as compared to 70% previously and DTH contributed a major share in the revenue.

Threat of Substitutes

In today’s world, people prefer to visit malls and multiplexes rather than sit at home and watch the serials with the same themes. In order to avoid monotony and retain viewers from all markets , ZEEL has achieved geographical spread and share of eyeballs through constant evolution, continued alignment with changing tastes and audience expectations, investment in new technology platforms and creation as well as aggregation of content.

Competitive Rivalry

ZeeL is a very vast business and hence every SBU of ZeeL has competitors. However Star TV and Viacom 18 are the major competitors for ZEEL. While Star TV is and old competitor ViaCom18 is a new entrant and even then has given ZEEL very tough competition especially in the Hindi entertainment and Music Sector. As a result, ZEEL has to constantly evolve and provide services that cater to all the market , have innovative product designs and most importantly offer a diverse menu of programs and channels that please every viewer palate. And acc. To the Annual Report 2010 , ZEEL has succeed in convincing its viewers that they are there to stay.

INDUSTRY ATTRACTIVENESS BUSINESS STRENGTH MODEL

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INDUSTRY ATTRACTIVENESS

HIGH MEDIUM LOW

HIGH INVEST SELECTIVE GROWTH GROW/LET GO

MEDIUM SELECTIVE GROWTH

GROW/LET GO HARVEST

LOW GROW/LET GO HARVEST DIVEST

As ZEEL is one of the media and entertainment industry, it stands medium on the Business Strength axis and high on the Industry Attractiveness axis. As a part of its Corporate Strategy, it started with many regional channels. According to ZEEL’s management the regional entertainment genre is a nascent vertical. Given the regional diversity in language, culture and literature in India, there exists exponential growth potential of media consumption in local languages. This is reflected in the rapid proliferation and growing viewership of regional media. Increasing advertisers' preference in regional media justifies the consuming potential of regional media audience.

Zee Entertainment is already the leading provider of entertainment content across genres in the Hindi and English languages. With leading channels like Zee Marathi, Zee Bangla, Zee Telugu and Zee Kannada within its fold, Zee Entertainment would now have an unparalleled reach across the country in the fast growing regional markets.

This acquisition also provides ZEEL the opportunity to take the regional channels international and expand revenue streams further. This move is part of ZEELs continuing efforts to improve long-term shareholder value.

Regional GEC

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BUSS

INES

S ST

REN

GTH

Zee Marathi

Zee Marathi was launched in 1999 as the Marathi GEC to cater to the erudite Marathi audience. Being targeted to the highly passionate and culture driven Maharashtrians, Zee Marathi evolved over the years by bringing in soaps and reality shows that were unseen before on any Marathi platform. The channel is viewed by 17 million people across Maharashtra via C& S. It is also a clear leader in the Marathi GEC space.

Not only the shows touched the hearts of the audience but also proved to be trend setters in their own rights. Shows like Vahinisaheb, Ya Sukhano Ya became a part of the channel identity and a part of everyday life for the viewers. Reality shows like Eka Peksha Ek, Sa Re Ga Ma Pa and Hapta Band in the recent times have cut across various segments to be appreciated by a diverse mix of audience spanning across children, the youth and the adults alike. It has also drawn the Hindi GEC audience from time to time with its immense popularity and compelling programming.

The channel's byline "Mee Marathi Zee Marathi" spells out the essence of the channel. It communicates its positioning as one's young companion in every day life that gives the viewer a reason to smile and rejoice at all times in life.

Zee Talkies

Zee Talkies launched on 25th August 2007, is the first ever 24-hour Marathi Movie channel.

Zee Talkies satiates the passion for films of the Maharashtrian movie buff! Zee Talkies promises a non-stop show of movies, stars, music and everything about Marathi movies.

Marathi Cinema is just as old as Indian Cinema. Marathi Cinema has been on an upswing as it is witnessing a golden era from 1913 until today. Thus Marathi Cinema has always been an integral part of a Maharashtrian household and will continue to be so.

Zee Talkies, rightly positioned as "Maharashtracha Mahacinema" is the Number.1 Marathi Movie channel. The channel is viewed by 11.9 million viewers through C&S on an average across the week. It is an attempt to carry forward this legacy of great personalities and productions of Marathi Cinema by presenting quality movies spanning over the entire era of Marathi movies.

Zee Talkies presents the biggest library of Marathi masterpieces. Right from the old classics like Sadhi Manase, Jagachya Pathiwar, Chhatrapati Shivaji, Molkarin, Gulacha Ganpati to the most critically acclaimed - "Shwaas" and also all the latest blockbusters from the world of Marathi Cinema.

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Zee Bangla

Zee Bangla, Zee Network's second regional channel, was launched on 15th September 1999 as Alpha Bangla. Alpha Bangla was the first Bangla Satellite channel. The core objective of the channel from its inception was to meet the entertainment needs across TGs.The channel rightly captures quintessential Bangla sensibilities, with elements of aspiration and entertainment in its content mix delivering something for everyone.

Zee Bangla's programme mix cater to a wide spectrum of TGs - cookery show, family game show, comedy and family drama series, blockbuster Bengali movies, children's animation and mythological series. Zee Bangla is the pioneer of reality shows and has presented Bangla entertainment scenario with concepts & formats like Dadagiri Unlimited - a unique quiz show with participants representing all the 19 districts of Bengal with Sourav Ganguly as the anchor for the first time ever on India Television.

 Other reality shows pioneered by Zee Bangla are dance reality show Dance Bangla Dance, standup comedy show Mirakkel, mother - child game show Star of Bengal and the Bengali version of Sa Re Ga Ma Pa.The fictions presented by Zee Bangla have always been contemporary; reflecting Bengali ethos in tune with audience preferences. The popularity of Zee Bangla arises from its understanding of culture and beliefs which is depicted in the mega hit daily soaps like Ek Akasher Niche, Nayantara, Pratimba, Raat Bhor Brishti, Khela, Rajpath, Asambhav, Khona, Agnipariksha... the journey continues.

Various socio-religious days are celebrated with innovative properties like Zee Bangla Maha Pujo (Durga Pujo), Natuner Daak (Bengali New Year), Bishwa Bhora Gaan (World Music Day),Zee Bangla Carnivals across districts of Bengal to name a few . Zee Bangla is present in the lives of its viewers throughout the year - be it International Women's Day, Holi, Durga Pujo, Diwali or Violence against Women through heart catching messages...Jibon Maane Zee Bangla (Zee Bangla is reflection of life)

Zee Bangla's new channel packaging was launched on 2nd October, 2009. The channel's constant endeavor is to remain connected to viewers' lives.

Zee Telugu

Sarikotha Velugu... Zee Telugu - Truly a New Light! Zee Telugu, as the caption suggests 'Sarikotta velugu', a Telugu phrase that conveys the meaning 'New Light'.  

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Zee Telugu, the channel created with a vision to provide wholesome entertainment to entire family, has become a very popular channel amongst all age groups today. The programs range from devotional, music, dance, comedy, and blockbuster movies to reality shows.

Zee Telugu is the first southern regional channel from Zee family. In just 4 years of its inception, soared high on popularity charts and proved how creative ideas, constant innovation and a feel for popular taste could usher in a radical change in viewership patterns. Being a strong contender for No.2 in Telugu GEC, Zee is striving to consolidate its position. There are over 15 million patrons to Zee Telugu across the globe.

Sa Re Ga Ma Pa, a singing sensation is one such reality show, which showcases the immense talent hidden in aspiring and upcoming singers from the state of Andhra Pradesh. Aata, the ultimate dance show is an exceptional dance competition, successfully running its fifth series 'Aata 5 Juniors’. Loved by all and enjoyed by many has made this program the channel driver for Zee Telugu.

Besides, Zee Telugu has exclusive women programs like Mee Inti Vanta - a cookery show, showcasing the very best culinary talent from across the state; religious programs like Bhakti Samacharam etc. are leading in respective genres.  

With the stupendous success in the non - fiction segment, now Zee Telugu is expanding its feature programming lineup into fiction segment with interesting serials. Jhansi Lakshimi Bai, Lethamanasulu and Tholi Prema are some of the recent launches as a step forward to strengthen our fiction bands.

When it comes to family entertainment, comedy plays a vital role. Krishnavataralu and Happydays have the right balance of comedy, emotion and drama makes it a wholesome entertainment.

Besides blockbuster movies, Zee Telugu reserves rights entertain its audience with many good and well-presented movies. Having said that, now ZEE Telugu can air a great range of Telugu films, especially blockbusters, from recent successes to all-time hits.

Identifying the pulse of the audience, reaching to its interiors is what Zee Telugu is all about.

Zee Kannada

Zee Kannada, a part of Zee Entertainment Enterprises Limited (earlier known as Zee Telefilms Ltd.), has unleashed a new era in Kannada entertainment. Launched on May 11,

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2006, the channel has redefined family television entertainment, emerging as a canvas for creative expression.

In an era of multi-channel viewing, Zee Kannada's innovative concepts and all new approach, offers more value to viewers. The programmes have been conceived keeping in mind viewer feedback as well as the demography of the state. Thus capturing the needs, moods, sentiments and aspirations of Kannadigas. The channel’s strategy stands apart as a true testament to viewer participation.The primetime content is a novel blend of fiction and non-fiction programmes, featuring renowned names from the Kannada entertainment industry, like Hamsalekha, Rajesh Krishnan, Malavika Avinash, Chaya Singh, Varsha and many others. Change is constant at Zee Kannada and fresh ideas and energy are the life blood. With an outstanding team of executives and an excellent line-up of talent, the channel builds unique and successful partnerships with the goal of launching creative content. Zee Kannada strives to discover and showcase new creative talent and to push the boundaries, in its run to be the leading entertainment choice for the Kannada speaking populace. Zee Kannada is a tribute to the spirit of Kannadigas.

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BCG MATRIX

ABOUT THE MATRIX

Companies that are large enough to be organized into strategic business units face the challenge of allocating resources among those units. In the early 1970's the Boston Consulting Group developed a model for managing a portfolio of different business units (or major product lines). The BCG growth-share matrix displays the various business units on a graph of the market growth rate vs. market share relative to competitors:

      BCG Growth-Share Matrix

Resources are allocated to business units according to where they are situated on the grid as follows:

Cash Cow - a business unit that has a large market share in a mature, slow growing industry. Cash cows require little investment and generate cash that can be used to invest in other business units.

Star - a business unit that has a large market share in a fast growing industry. Stars may generate cash, but because the market is growing rapidly they require investment to maintain their lead. If successful, a star will become a cash cow when its industry matures.

Question Mark (or Problem Child) - a business unit that has a small market share in a high growth market. These business units require resources to grow market share, but whether they will succeed and become stars is unknown.

Dog - a business unit that has a small market share in a mature industry. A dog may not require substantial cash, but it ties up capital that could better be deployed elsewhere. Unless a dog has some other strategic purpose, it should be liquidated if there is little prospect for it to gain market share.

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The BCG matrix provides a framework for allocating resources among different business units and allows one to compare many business units at a glance. However, the approach has received some negative criticism for the following reasons:

The link between market share and profitability is questionable since increasing market share can be very expensive.

The approach may overemphasize high growth, since it ignores the potential of declining markets.

The model considers market growth rate to be a given. In practice the firm may be able to grow the market.

These issues are addressed by the GE / McKinsey Matrix, which considers market growth rate to be only one of many factors that make an industry attractive, and which considers relative market share to be only one of many factors describing the competitive strength of the business unit.

BCG MATRIX FOR ZEE TELEFILMS

For the purpose of this project, the BCG matrix has been divided into two parts. The first matrix gives us information about the positioning of different SBU’s of Zee Telefilms in the BCG matrix and the second matrix explains the positioning of the different products within the SBU’s in the BCG matrix.

BCG Matrix of Zee Telefilms according to SBU’s

Star - Hindi entertainment & Hindi movies

Zee TV and Zee Cinema are one of the leaders in hindi entertainment channels with high market share of viewership as well as high business growth rate. These channels contribute highest revenue in Zee telefilms.

Cash Cow – English Entertainment & English Movies

Channels like Zee Café and Zee Studio have high market share but have low growth. The most widely viewed English Channel in India, it has garnered a large market share among the English speaking and viewing audience.

Question Mark – Zee Sports , Lifestyle and Music

Channels like Zee sports, Zee Jagran and Zee Music have high growth rate but low market share.

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Dog – Zee International

International channels of Zee has low market share as well as low business growth rate as compare to other competitive channels. These channels are not contributing well in the revenue of Zee Telefilms and also does not have credible viewership.

BCG Matrix of Zee Telefilms according to Products

Star - Ten Sports , Zee TV, Zee Cinema

Zee Cinema is the leading Hindi movie channel in India holding 31% market share and high growth rate as compare to other competitive Hindi movie channels. Zee TV, market share stands at 19% and it is one of the foremost channels across varying time bands. Showcasing abundant understanding of Indian culture, Zee TV’s success is reflected in its popularity with its with the changing preferences of the channels audiences. Ten Sports combine, have given 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 madeinroads into the Indian market Ten Sports has acquired the rights to five of the ten cricketboards, giving it over 100 days of cricket a year. This is the maximum number of days of cricket across sports channels. The rights to these 5 boards; Sri Lanka, Pakistan, South Africa, West Indies and Zimbabwe are with Ten Sports for the next 4 years.

Cash Cow – Zee Studio

Zee Studio has brought quality cinema to the discerning Indian audience. In February 2009,Zee studio acquired telecast rights to the prestigious awards ceremories such as, The Screen Actors Guild Awards ‘09 and Live From The Red Carpet Academy Awards ‘09.

Question Mark – Zee Sports

March 2005 saw the launch of Zee Sports, India’s first privately owned sports channel Four years on the go since it’s inception, Zee Sports has left a blazing trail and has evolved into one of the biggest forces on the sports entertainment front for the Indian audience. Zee Sports is having 22% of market share which is inferior compare to other competitive sports channels but have high growth rate.

Dog – Zee Urdu, Zee Telugu

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Zee Telugu and Zee Urdu is having 18% and 15% of market share respectively, which is very much inferior than other competitive channels and also have very low business growth rate. The company’s focus is on the development, production, distribution and marketing of films in Hindi and regional languages like Marathi, Telugu, Tamil, Kannada and Bengali etc.

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ANSOFF’S MATRIX

Existing Products New Products

Existing markets

MARKET PENETRATION

Zee sports renamed as ten action+ dedicated to football only

PRODUCT DEVELOPMENT

Introduced Zee trendz a fashion and style channel

New Markets

MARKET DEVELOPMENT

Introduction of zee gujarati in the UK where gujarati community is the second largest Indian community in UK

DIVERSIFICATION

Ten Sports

Market Penetration

The firm seeks to achieve growth with existing products in their current market segments, aiming to increase its market share.

Most recently Zee Sports has been renamed as Ten Action+ and this channel is dedicated only for football. They have got the right to cover big matches like champions league, la liga etc. They are aiming to get into the market through broadcasting the most watched sports in the world.

Market Development

The firm seeks growth by targeting its existing products to new market segments.

Zee introduced Zee Gujarati in UK where the gujarati community is the second largest Indian community

Product Development

The firm develops new products targeted to its existing market segments

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Zee introduced Zee Trendz a fashion life style channel catering for the niche class.

Diversification

The firm grows by diversifying into new businesses by developing new products for new markets

Zee started Ten Sports and made their entrance in the sports broadcasting area.

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FUTURE PERSPECTIVE

INDUSTRY WISE

The Indian Media and Entertainment (M&E) industry stood at US$ 12.9 billion in 2009 registering a 1.4 per cent growth over last year, according to a joint report by KPMG and an industry chamber. Over the next five years, the industry is projected to grow at a compound annual growth rate (CAGR) of 13 per cent to reach the size of US$ 24.04 billion by 2014, the report stated. Additionally, the gaming segment is expected to be the fastest growing sector in the M&E industry. The sector showed a 22 per cent growth in 2009 and is expected to grow at a CAGR of 32 per cent to reach US$ 705.2 million by 2014, while the animation segment is expected to record a CAGR of 18.7 per cent in the next five years as per the joint report.

Television

According to the figures released by an industry chamber in March 2010, the Broadcast and Television (TV) sector comprised over 43 per cent of the overall M&E sector wherein the total size of the television sector accounted for US$ 5.7 billion. The broadcast sector is on a strong growth path and the outlook for advertisement expenditure is on a rise for the television sector.

A report by research firm Media Partners Asia (MPA) stated that India is poised to become the world's largest direct-to-home (DTH) satellite pay TV market with 36.1 million subscribers by 2012, overtaking the US. Furthermore, in its report titled 'Asia Pacific Pay-TV and Broadband Markets 2010', MPA said India's DTH subscriber base will increase from 17 million in 2009 to 45 million by 2014 and 58 million by 2020.

Anil Dhirubhai Ambani Group's company, Reliance MediaWorks (RMW) has signed a memorandum of understanding (MoU) with IMAGICA Corp of Japan for film processing services. Under this alliance, RMW, on behalf of IMAGICA, would provide film restoration, image processing and enhancement and high definition (HD) conversion services to the Japanese clients. IMAGICA Corp would work with RMW's Los Angeles-based subsidiary Lowry Digital, which has handled projects for leading studios like Walt Disney, Paramount Pictures, MGM and 20th Century Fox. RMW would be doing the processing job for IMAGICA either in India or in California in the US.

Digital Media

The digital technologies and their innovative applications have changed the entertainment sector considerably, especially the content production and its quality. Internet has also emerged as the latest revenue stream and has become one of the fastest growing advertising medium and has made a significant impression on the entertainment industry.

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Officials in the Information and Broadcasting Ministry have planned a roadmap for making broadcasting operations completely digital. The Telecom Regulatory Authority of India (TRAI) has suggested a three-stage process for digitisation, wherein tier one cities would be covered by 2013, tier two cities by 2014 and tier three cities by 2017. They further stated that the digital transmission helps in enhancing the audio and picture quality.

Madison Media bagged the media buying account of US carmaker General Motors (GM), estimated at more than US$ 22.1 million. GM, the third biggest ad spender among auto companies in the country after Maruti Suzuki and Hyundai Motor, has given the account to Madison for a period of three years.

Government Initiatives

The Government has initiated the following measures:

The government has allotted US$ 50.13 million in the current Five-Year Plan (2007-2012) for various development projects for the film industry. The funds will be utilised to set up a centre for excellence in animation, gaming and visual effects

The Consolidated FDI Policy document brings forth the following guidelines for the M&E industry:

Cable Network: Foreign investment, including FDI, NRI and PIO investments and portfolio investments are permitted up to 49 per cent for cable networks under Government route subject to Cable Television Network Rules, 1994 and other conditions as specified from time to time by Ministry of Information and Broadcasting (I&B)

Direct–to-Home: Foreign investment, including FDI, NRI and PIO investments and portfolio investments are permitted up to 49 per cent for Direct to Home under Government route. Within the limit of 49 per cent, FDI will not exceed 20 per cent. This will be subject to such guidelines/terms and conditions as specified from time to time by Ministry of Information and Broadcasting (I&B)

The total direct and indirect foreign investment including portfolio and foreign direct investment in Headend-In-The-Sky (HITS) Broadcasting Service shall not exceed 74 per cent. FDI upto 49 per cent would be on automatic route and beyond that under government route. This will be subject to such guidelines/terms and conditions as specified from time to time by Ministry of Information and Broadcasting (I&B)

FDI policy in the Up-linking of TV Channels is as under:

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o Foreign investment of FDI and FII up to 49 per cent would be permitted under the Government route for setting up Up-linking HUB/ Teleports;

o FDI up to 100 per cent would be allowed under the Government route for Up linking a Non-News & Current Affairs TV Channel;

o Foreign investment of FDI and FII up to 26 per cent would be permitted under the Government route for Up-linking a News & Current Affairs TV Channel subject to the condition that 48 the portfolio investment from FII/ NRI shall not be "persons acting in concert" with FDI investors, as defined in the SEBI(Substantial Acquisition of Shares and Takeovers) Regulations, 1997

INDUSTRY FACTS:

1. The Indian Media and Entertainment (M&E) industry stood at US$ 12.9 billion in 2009 registering a 1.4 per cent growth over last year, according to a joint report by KPMG and an industry chamber. Over the next five years, the industry is projected to grow at a compound annual growth rate (CAGR) of 13 per cent to reach the size of US$ 24.04 billion by 2014, the report stated

2. According to the figures released by an industry chamber in March 2010, the Broadcast and Television (TV) sector comprised over 43 per cent of the overall M&E sector wherein the total size of the television sector accounted for US$ 5.7 billion. The broadcast sector is on a strong growth path and the outlook for advertisement expenditure is on a rise for the television sector.

3. A report by research firm Media Partners Asia (MPA) stated that India is poised to become the world's largest direct-to-home (DTH) satellite pay TV market with 36.1 million subscribers by 2012, overtaking the US. Furthermore, in its report titled 'Asia Pacific Pay-TV and Broadband Markets 2010', MPA said India's DTH subscriber base will increase from 17 million in 2009 to 45 million by 2014 and 58 million by 2020.

ADVANTAGE INDIA:

1. Improving entertainment infrastructure: Increasing investments by the private sector and foreign media and entertainment (M&E) majors have enhanced India’s entertainment infrastructure.

2. Digital revolution: Digitisation and technological advancements across the value chain are improving the quality of content and reach

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3. High production volumes: Producing more than 1,000 films annually, India is the largest producer of films in the world. There are more than 500 TV channels in the country, requiring 30 hours of fresh programming per week.

4. Favourable demographics: India is among the world’s youngest nations, as more than 52 per cent of its one billion-plus population is less than 25 years of age. This aspiring age group, with increasing disposable income levels, has given impetus to the entertainment industry.

5. Liberal government policies:A liberalised foreign investment regime and other regulatory initiatives are resulting in a conducive business environment. Policy and regulatory frameworkTV

In 2004, the Telecom Regulatory Authority of India (TRAI) was appointed as a regulator for the TV industry.

Up to 100 per cent FDI is permitted in TV channels.

The rollout of DTH TV licences and GoI-mandated digital conditional access systems (CAS) initiated the digitisation process.

The recently announced Headend-in-the-Sky (HITS) policy and a concessional customs duty of 5 per cent on importing digital headend equipment is expected to give further impetus to the digitisation process.

TELEVISION INDUSTRY AS A WHOLE:

Huge domestic demand

• Increasing international demand

• Investment in regional markets

• Investment in new media

• Development of content for a specific target audience

• Alliances and partnerships

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ZEEL’s Immediate Concern:

• Reducing Zeel's dependence on Zee TV: One can't undermine the contribution of our flagship brand in our bouquet of channels. With the regional GECs, we will, of course, have more driver channels in the bouquet such as Zee Marathi, Zee Bangla and Zee Telugu. Nonetheless, Zee TV’s contribution to the overall ad pie of Zeel will be in the region of 35-37 per cent.

• Focusing on more Youth oriented shows

• Strategies to face rise of the two Star regional channels: In the Bengali GEC space, Zee Bangla has lost its leadership position to Star Jalsha, but, over the last couple of months, ZEEL has undertaken new initiatives and the channel is looking up again. More importantly, ZEEL’sfocus has been to ensure profitability and towards that end we are, even today, writing much more revenues than Star Jalsha. This is primarily because of our two-pronged strategy: optimal inventory utilisation and appropriate pricing. One of the noteworthy propositions of Zee Bangla is its high unduplicated viewership. All of this has helped us ensure against loss of any campaign. Having grown, we now hope that Star Jalsha increases its rates to sustain the market expansion.In Marathi, ZEEL is almost three times that of our nearest competitor. Zee Marathi is a clear leader and is well complemented by Zee Talkies, both in terms of revenues and viewership.

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• IP protection and monetisation : Entertainment companies will try to protect and monetise their intellectual property (IP). For instance, content producers and broadcasters can jointly own content and explore ways to tap revenues from different streams. Alternatively, broadcasters whose content reaches vast audiences in various countries would ensure effective monetisation of these rights.

• Digitisation : The industry is adopting digital technologies to overcome distribution inefficiencies, reduce the cost of distribution and curb piracy. With local cable operators (LCOs) and multi-system operators (MSOs) going digital and the advent of DTH and Internet Protocol Television (IPTV), companies are likely to be presented with vast opportunities in the long run through value-added services provided on these digital media. Companies will have to digitise their content and become digitally enabled to fully leverage such opportunities.

• To make up for the lost deal with AIFF: ZEEL has big concern in getting its lost deal back as it has effected both its viewership and revenues.

EXCERPTS: AIFF, whose deal with Zee is to run till 2014, felt that it did not get the desired publicity or coverage for its showpiece I-League.  Delayed payments from Zee Sports did not help matters and  after Praful Patel took over as the AIFF president the federation decided to review the deal.Even though the deal is till 2014, there is a clause to review it after five years and taking advantage of it the AIFF has decided to terminate the contract. A top AIFF official told IANS that Patel and secretary-general Alberto Coalco held several rounds of meetings with Zee Sports officials to amicably end their association.

"We have realised the reach of Zee Sports was not good enough to promote the sport, the I-League in particular. Now that we have promised our new sponsors Panasonic India's eight international games a year, besides I-League, we do not want to take chances with the television coverage," the official said.

The official said that RIL-IMG will step in as the new marketing and telecast partner."RIL-IMG will be our new marketing and telecast partner. They will now sell our telecast rights and hopefully we will get a good revenue," he said.

RIL and IMG Worldwide, the world's leading sports marketing and management company, earlier this year formed a joint venture, IMG Reliance Pvt Ltd to develop, market and manage sports and entertainment in India.

As a first step, IMG Reliance Pvt Ltd has already decided to sponsor the under-15 team for four years.

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"The team will train at IMG's base in Florida for four years and it is surely be a big step towards youth development. Since forging the joint venture earlier this year they had shown their interest in football and we will have more tie-ups in future," the official said.The AIFF has also signed a memorandum of understanding (MOU) with Modi Entertainment, owned by B.K. Modi, to host an international tournament next year.

The AIFF has held two meetings with officials of the Modi Entertainment and the plan is to host an eight-team tournament next year.

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