ZEE5 Targets Strategic Expansion to Enhance Growth and Minimize Losses

ZEE5, the streaming service from Zee Entertainment, is focusing on family-friendly content, improving its technology, and optimizing costs through efficient content production to grow its business and reduce losses, as stated by a senior executive.

This strategy has allowed the platform to boost both advertising and subscription revenues while lowering costs. It anticipates that advertising revenue will grow following a correction in ad rates within the industry and an increase in Connected TV (CTV) viewership. On the subscription front, it has teamed up with Vodafone Idea and is in advanced talks with Bharti Airtel.

In the quarter ending in June, ZEE5 cut its operating loss by 48%, bringing it down to ₹177 crore, while revenue rose by 16% to ₹223 crore. Over the 12 months ending in March, revenue grew by 24% to ₹919 crore, although the operating loss held steady at ₹1,105 crore.

"We are committed to enhancing efficiency and overall productivity while still pursuing growth. It’s a fascinating challenge, as consumers have numerous options, so we need to deliver top-notch content without overspending like others in the industry," said Manish Kalra, Chief Business Officer of ZEE5.

ZEE5 has pinpointed Hindi, Bangla, Tamil, and Telugu as crucial markets for original web shows and movie acquisitions. The platform also intends to introduce original content in Kannada, Malayalam, and Marathi, having previously concentrated only on movie acquisitions in these regions.

Kalra highlighted that nearly 40% of ZEE5's subscriptions originate from cities outside the top 20, with regional content making up over 50% of the platform's total viewing time. This emphasis on regional content has been instrumental in broadening their audience.

On the technology front, ZEE5 has made important advancements to enhance the user experience. The technology team in Bengaluru has been focusing on refining the recommendation engine and utilizing machine learning to deliver more accurate results. 

Drawing from its roots in producing family-oriented television content, ZEE5 is adopting a similar approach while ensuring that storytelling and creativity remain uncompromised.  

"In the past 12 months, our content has featured very little profanity and no intimate scenes. Indian consumers enjoy good plots, complex characters, and layered stories. However, they want content that can be enjoyed with family, as India remains largely a single-TV household," Kalra explained. 

In terms of original movie production, ZEE5 is focused on creating content that delivers a strong return investment. Kalra mentioned this includes negotiating the considerably better deals with production houses and managing actor fees.

Kalra also pointed to emerging trends in the OTT industry, such as Connected TV and 4K streaming. He stated that while there are 35 million CTV households in the country, only 25 million are internet connected. 

He mentioned that 75% of ZEE5's paid subscribers prefer watching content on CTVs, while 82% of free content is consumed on mobile devices. Furthermore, 20% of ZEE5 users stream content in 4K, and almost 80% of the platform's content library is offered in 4K resolution.