Zee5, the over-the-top (OTT) streaming platform run by Zee Entertainment Enterprises is “showing early signs of success on expected lines.” The development was shared by Punit Goenka, chief executive officer at Zee Entertainment Enterprises in the first quarter earnings call on Friday. Goenka highlighted that the company released “two big properties” in its first quarter including Radhe, an Indian film starring Bollywood actor Salman Khan. Further, the company also released the “much-awaited episode” of Friends Reunion on its streaming platform resulting in a “sharp jump” in its user base. Goenka said that the company has “built a very strong content line up for Zee5” and it is “confident of building further” on the improvements recorded by the company in its first quarter.
Zee5 to Offer “Wider Choice of Premium Content”
Zee Entertainment Enterprises in its first quarter earnings update said that Zee5 recorded 8.02 crore global monthly active users (MAU) and 71 lakhs global daily active users (DAU) in June. In its previous quarter, the company said that its global MAUs and DAUs on its streaming platform were at 7.26 crore and 61 lakhs respectively.
Goenka also highlighted that the streaming platform was released in the United States during its first quarter and that the company is “delighted” with the response it received in its new market.
“With Zee5, we now look to offer this audience as well as the younger demographics, access to much deeper and wider choice of premium content,” Goenka said in the first quarter earnings call on Friday.
Rohit Gupta, chief financial officer at Zee Entertainment Enterprises said in the earnings call that the Zee5 platform is “building momentum on all key metrics.” The Zee Entertainment Enterprises CFO also said that the annual pack users now account for over 40% of its gross user additions each month, indicating the “increasing traction on the platform.” Crucially, Gupta said that the Zee5 platform recorded over Rs 1 billion in revenue in the first quarter of its current financial year.
“The increased momentum on subscription revenue was largely offset by the impact of COVID on the advertising revenues,” Gupta said in the first quarter earnings call.
Additionally, it was also highlighted in the first quarter earnings update that the company released 11 original shows and movies during the quarter on its streaming platform.
“It takes a lot of effort,” Goenka said. “There's a lot more technological advancement that is needed on the platform and we are nowhere close to being perfect or the gold standard. So, we have [a] lot more work to be done there and we already have a plan in place for the rest of the year.”
Goenka said that the company will have to release “good quality content” each quarter for its user base to “keep ramping” up and also for its users to stay with the platform. Further, Goenka said that the company is targeting around 20% to 25% market share in the OTT space.
Zee5 Expected to Contribute Around 35% Revenue by 2025
Prabhudas Lilladher, a research-based financial services company on Saturday said in a report that the Zee5 streaming platform is likely to emerge as the “future growth engine in changing content consumption landscape.”
Meanwhile, Dolat Capital, the financial firm engaged in the trading markets, said that Zee Entertainment Enterprises recorded a “weak” performance in its first quarter.
“But more than performance, the outlook has been tepid,” Dolat Capital said in a report on Friday.
Zee Entertainment Enterprises in its earnings update for its first quarter highlighted that the advertisement revenues dipped 22.7% in the quarter as compared to its prior year quarter. Further, the company highlighted that it has a 17% pan India market share in the first quarter of the current financial year as compared to 18.9% market share in the previous quarter.
However, Goenka said that the company has “decided to continue to invest” in both its digital and its broadcasting segments “despite slower recovery” in advertisement revenues. Crucially, Goenka expects Zee5 to contribute around 30% to 35% of the overall revenue of Zee Entertainment Enterprises.
“In digital, we continue to offer differentiated shows and blockbuster movies,” Goenka said. “These investments would drive our market share, putting us in good stead when recovery takes place.”