ZEE5 Set to Gain Traction From Original Content

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ZEE5 and Sun NXT, the over-the-top (OTT) streaming platforms run by ZEE Entertainment Enterprises and Sun TV are “expected” to drive up the subscription revenues for the respective companies, say analysts. In the first quarter results of the current financial year, multiple analysts expect the broadcasters including ZEE Entertainment Enterprises and Sun TV to record a “sequential dip” in advertising revenues. However, the analysts say the broadcasters are set to witness a “sequential growth” in subscription revenues on the “back of OTT revenues momentum,” with TV subscriptions remaining “largely flat” on a quarter-on-quarter (QoQ) basis.

OTT Platforms Set to Drive Up Sun TV, ZEE Subscription Revenues

ICICI Direct on Thursday said in a report that Sun TV in its first-quarter results is “expected” to report a 3.5% increase in its subscription revenues on a QoQ basis. However, the retail broker and financial product distributor in India expects the broadcaster to report a “flattish” subscription revenues on a year-over-year (YoY) basis in its first quarter of its current financial year. The firm said that the Sun TV subscriptions revenues will largely be “driven” by its streaming platform Sun NXT.

Further, ICICI Direct said that the ZEE5 performance and the viewership trend are a “key monitorable” for ZEE Entertainment Enterprises in its first-quarter results.

“Reported subscription growth is expected at ~3.3% YoY (up 2.5% QoQ), largely owing to OTT revenue traction,” ICICI Direct said in its report on Thursday.

In late May, ZEE Entertainment Enterprises reported its 2021 fourth-quarter results, with its chief financial officer, Rohit Gupta, highlighting that the ZEE5 platform recorded Rs 110 crore in revenues during the quarter. It was also said that the ZEE5 platform for the month of March recorded 61 lakhs daily active users (DAU) while its global monthly active users (MAU) were at 7.26 crore.

Meanwhile, the Sun TV management in mid-June said in its fourth-quarter earnings call that the Sun NXT platform recorded a 40% to 50% increase in its MAU over the past six months. The company said that its subscription revenues in its quarter ended March 31, 2021, hit Rs 428.12 crore. However, the Sun TV management said that it would not offer “granular details for Sun NXT” as it is largely “riding on the content which has been created by Sun TV.”

Rival Streaming Platforms “key risks” for ZEE Entertainment Enterprises Says Analyst

In early July, Ashika Stock Broking in a report highlighted ZEE Entertainment Enterprises plans to produce “more original content” while also ramping up its movie production business. The flagship company of Ashika, a diversified financial services group, said that the move will enable the company to “gain traction for its ZEE5 business” and also “gain significant market share in its broadcasting business.”

“ZEE has been quick to deploy its OTT platform and content with a large number of consumers spending increasingly greater time on OTT,” Ashika Stock Broking said in its report. “The management has been agile in responding to changing trends is a positive sign.”

The firm also highlighted that ZEE Entertainment Enterprises is working on enhancing the “technology base for ZEE5” and that the platform will “continue to premier movies going ahead apart from originals.”

In late May, Punit Goenka, the managing director of ZEE Entertainment Enterprises said that the company has been “behind the curve” and that it will be working on enhancing user experience.

“We have drawn up a technology and product roadmap, in order to upgrade this digital platform to the next level,” Goenka said in the fourth-quarter earnings call. “I believe ZEE5 will certainly see an all-round improvement in performance over the next few quarters.”

Ashika Stock Broking said that it has a “positive review” on ZEE Entertainment Enterprises due to its “recovery in advertisement revenue and company’s focus on OTT.” However, the firm in its report also said that the rival streaming platforms are among the “key risks” for ZEE Entertainment Enterprises.

“Competition from digital video streaming platforms could hurt the revenue growth,” Ashika Stock Broking said in its report.

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Born in India, Yogesh loves to travel and has lived in multiple countries including New Zealand and Canada. His bylines can be found on various newspapers and blogs throughout the world, including Vancouver Sun, Surrey Now-Leader, Daily Hive , Investing News Network and Rach F1.

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